Eastern District of Kentucky
Press releases recorded for this federal judicial district.
Cincinnati Man Sentenced to 130 Months for Trafficking Heroin in Pulaski CountyRead the Press Release
LONDON, Ky. - Stephen Ushery, Jr., of Cincinnati, was sentenced Wednesday to 130 months in federal prison, by United States District Judge Robert E. Wier, for conspiracy to distribute one kilogram or more of heroin.
The conviction followed a two and a half year investigation that established Ushery as a drug supplier, who traveled from his home in Cincinnati to distribute multi-ounce quantities of heroin to several other local drug dealers in the Pulaski County area. In his plea agreement, Ushery admitted that between 2015 and 2018, he was responsible for distributing over one kilogram of heroin into the Eastern District of Kentucky. Ushery’s heroin distribution conspiracy ended in September of 2018, when law enforcement arrested him and raided the apartment he was using as his base of drug distribution in Somerset, finding nearly 50 grams of heroin and over $5,000 in drug proceeds.
Several of Ushery’s co-conspirators have also been sentenced in connection with their heroin trafficking activities, including Chad Puchalski (sentenced to 180 months), Sonie Meatchem, Jr. (sentenced to 70 months), Diana Chiree Sullivan (47 months), Samantha Pointer (39 months), Kimberly Ann Sweeten (33 months), and Tyler Hargis (20 months).
Under federal law, Ushery must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for five years following his release.
“Combatting the trafficking of dangerous drugs, particularly heroin, is a fundamental priority for our Office,” said United States Attorney Robert M. Duncan, Jr. “The defendant’s transportation and distribution of significant quantities of heroin adversely impacted the lives of many in the Pulaski County area. I commend the work of the federal, state, and local law enforcement agencies involved in helping hold this defendant, and his co-defendants, accountable for their actions.”
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Dan Dodds, Acting Special Agent in Charge of the DEA; Sheriff Greg Speck, Pulaski County Sheriff’s Office; Chief Tony Duncan, Somerset Police Department; Director Wayne Conn, Lake Cumberland Drug Task Force; Commissioner Richard Sanders, Kentucky State Police; and Chief Brian Carter, Mt. Vernon Police Department, collectively announced the sentence.
The investigation was conducted by the DEA, the Pulaski County Sheriff’s Office, the Somerset Police Department, the Kentucky State Police, the Lake Cumberland Drug Task Force, and the Mount Vernon Police Department. The United States was represented by Assistant U.S. Attorney Andrew H. Trimble.
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Lexington Man sentenced to 10 Years in Prison for the Distribution of Fentanyl Causing an Overdose DeathRead the Press Release
LEXINGTON, Ky. – Harvey O. Isaac, 30, of Lexington was sentenced to 10 years in federal prison for the distribution of fentanyl that caused the overdose death of another by US District Court Judge Danny C. Reeves.
On April 12, 2017, Isaac and Shannon Hixon, 43, of Detroit, distributed a quantity of fentanyl to an individual identified as K.F., a U.S. Army veteran, who used the fentanyl and died as a result. The Lexington Police Department opened an investigation into the death that ultimately led to charges being placed against Isaac and Hixon.
Isaac was also sentenced to five years supervised release after his 10 years in prison.
On July 25, 2019, Hixon was found guilty, after a four day jury trial, of the distribution of fentanyl resulting in the overdose death of K.F., as well as conspiring to distribute oxycodone and fentanyl. Hixon is awaiting sentencing on December 6 before Chief Judge Reeves. Hixon faces a minimum of 20 years imprisonment, up to a maximum of life in prison.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, Dan Dodds, Acting Special Agent in Charge, DEA Louisville Field Division; and Chief Lawrence Weathers, Lexington Police Department jointly announced Isaac’s sentencing.
The investigation was conducted by the DEA and the Lexington Police Department. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Roger W. West and Assistant United States Attorney Todd Bradbury.
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Former Jackson County Treasurer Sentenced to Prison for Identity Theft and Wire Fraud SchemeRead the Press Release
The former treasurer of Jackson County, Kentucky, was sentenced today to 45 months in prison followed by three years of supervised release.
U.S. District Judge Claria Horn Boom sentenced Beth N. Sallee, 39, of McKee, Kentucky, in the U.S. District Court for the Eastern District of Kentucky. Sallee was also ordered to pay $161,808.23 in restitution for devising a multi-year scheme to defraud the Jackson County Fiscal Court of over $160,000 and for misusing the identity of a Jackson County employee to facilitate her theft.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, United States Attorney Robert M. Duncan of the Eastern District of Kentucky, Special Agent in Charge James Robert Brown Jr. of the FBI’s Louisville Field Division and Richard Sanders, Commissioner of the Kentucky State Police, made the announcement.
Sallee pleaded guilty on Feb. 4, 2019, to one count of wire fraud and one count of aggravated identity theft. As part of her plea, Sallee admitted that beginning in 2013, she misused her position to write a number of checks, totaling approximately $161,808.23, payable to herself without the approval of the Jackson County Fiscal Court. Sallee proceeded to either deposit these checks into her personal checking account or exchange these checks for cash. The unauthorized checks drew on various Jackson County Fiscal Court accounts, including the Department of Emergency Services grant, payroll and general fund accounts.
To enable her scheme, Sallee forged the signature of other Jackson County employees on unauthorized checks without their knowledge or permission. She later attempted to conceal her scheme by removing pages of Jackson County financial documents, obscuring page numbers with Wite-Out and requesting the deletion of check images from bank statements that were to be given to an auditor.
The FBI and the Kentucky State Police conducted the investigation. Trial Attorney Jessica C. Harvey of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Andrew T. Boone of the Eastern District of Kentucky prosecuted the case.
Former Jackson County Treasurer Sentenced to Prison for Identity Theft and Wire Fraud SchemeRead the Press Release
LONDON, Ky.—The former treasurer of Jackson County, Kentucky, was sentenced today to45 months in prison followed by three years of supervised release and ordered to pay $161,808.23 in restitution for devising a multi-year scheme to defraud the Jackson County Fiscal Court of over $160,000 and for misusing the identity of a Jackson County employee to facilitate her theft.
Beth N. Sallee, 39, of McKee, Kentucky, was sentenced in the U.S. District Court for the Eastern District of Kentucky by U.S. District Judge Claria Horn Boom. Sallee pleaded guilty on Feb. 4, 2019, to one count of wire fraud and to one count of aggravated identity theft. As part of her plea, Sallee admitted that beginning in 2013, she misused her position to write a number of checks, totaling approximately $161,808.23, payable to herself without the approval of the Jackson County Fiscal Court. Sallee deposited these checks into her own personal checking account or for cash. The unauthorized checks drew on various Jackson County Fiscal Court accounts, including the Department of Emergency Services grant, payroll, and general fund accounts.According to the plea agreement, in order to enable her scheme, Sallee forged the signature of other Jackson County employees on unauthorized checks without their knowledge or permission. She later attempted to conceal her scheme by removing pages of Jackson County financial documents, obscuring page numbers with white-out, and requesting the removal of check images from bank statements that were to be given to an auditor.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, United States Attorney Robert M. Duncan, Jr., for the Eastern District of Kentucky, and Special Agent in Charge James Robert Brown, Jr. of the FBI’s Louisville, Kentucky Field Division and Richard W. Sanders, Commissioner of the Kentucky State Police, made the announcement.
“This case presents another example of a selfish and corrupt official, who stole taxpayer money and spent it on herself,” said United States Attorney Duncan. “Disgraceful conduct like this erodes the public’s faith in government institutions and causes lasting damage. Combatting these betrayals of trust is critical, both to holding people accountable and to repairing the public’s faith. Prosecuting public corruption will remain a fundamental priority for our Office.”
The investigation was conducted by the FBI and the Kentucky State Police. Trial Attorney Jessica C. Harvey of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Andrew T. Boone of the Eastern District of Kentucky prosecuted the case.
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Lexington Man Sentenced to 97 Months for Buying and Selling Stolen Firearms as a Convicted FelonRead the Press Release
LEXINGTON, Ky. – Wayne Russell Fugate, 49, of Lexington was sentenced on Monday, by Chief United States District Judge Danny C. Reeves, to 97 months in federal prison for buying and selling stolen firearms and for being a convicted felon in possession of over 25 stolen firearms.
Beginning in 2017, the eastern Kentucky area, as well as areas in Tennessee and Ohio, experienced a number of vehicle break-ins where firearms were stolen. A law enforcement task force led to the arrest of Dario Adrian Mauriz-Cruz, 27, and Jeremy D. Stidham, 27, as suspects in these break-ins. The investigation determined that Fugate acted as a “fence” for Stidham and Cruz, buying stolen firearms from them.
According to Fugate’s plea agreement, investigators executed a search warrant at his residence in Lexington, in November 2017. There, they located 22 stolen firearms and over 2,000 rounds of ammunition. Further investigation recovered six more stolen firearms purchased by Fugate. Fugate admitted to selling firearms to at least 11 others. Fugate had a prior federal felony conviction for being an unlawful user of controlled substances in possession of firearms.
Both Stidham and Cruz pleaded guilty to federal firearms charges, in August 2019. Cruz, also a convicted felon, was sentenced to ten years in prison for his role in stealing the firearms. Stidham was sentenced to 100 months.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Tommy Estevan, Acting Special Agent in Charge for ATF Louisville Field Division; Richard W. Sanders, KSP Commissioner; Chief Lawrence Weathers, Lexington Police Department; Michael Helmig, Boone County Sheriff; Matt Sparks, Rowan County Sheriff; Ernie Kelty, Mercer County Sheriff; and Mike Coyle, Madison County Sheriff, collectively announced the sentencing.
The investigation was conducted by the ATF, Boone County Sheriff’s Office, the Kentucky State Police, Lexington Police Department, Madison County Sheriff’s Office, Mercer County Sheriff’s Office, and Rowan County Sheriff’s Office. The United States was represented by Assistant U.S. Attorney Roger W. West.
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Winchester Man Sentenced to 24 Months for Extorting Singapore GovernmentRead the Press Release
LEXINGTON, Ky. —Mikhy Farrera-Brochez, a 34-year-old man originally from Winchester, Kentucky, was sentenced to 24 months in federal prison Friday, by United States Chief District Judge Danny C. Reeves, for sending extortionate communications to the Government of Singapore and its Ministry of Health and using the means of identification of over 14,200 people as leverage in his extortion attempt.
According to trial testimony, Farrera-Brochez obtained access to a database belonging to the Singaporean Ministry of Health that listed the private identifying and medical information of thousands of people in Singapore living with HIV, including more than 50 U.S. citizens. Farrera-Brochez sent the database to his mother in Kentucky, and retrieved it when he returned to Kentucky in 2018.
On January 22, Farrera-Brochez sent an email to several officials of the Government of Singapore that included three links to places on the internet where he had put copies of the database. Farrera-Brochez made several demands in that email. On February 18, Farrera-Brochez sent a second email to officials of the Government of Singapore threatening to publish the database if his demands were not met.
Farrera-Brochez was convicted on June 4. In addition to the sentencing, Farrera-Brochez was also ordered to forfeit to the federal government the electronic devices and Google accounts that he used in his crimes. Upon release from prison, Farrera-Brochez will be on supervised release for 3 years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and James Robert Brown, Jr., Special Agent in Charge of the FBI, jointly made the announcement.
“The defendant’s conduct was serious and significant, affecting thousands of people across the world,” said United States Attorney Robert M. Duncan, Jr. “The defendant unlawfully obtained the private, personal identifying information of more than 14,000 people, including American citizens, and used this information in an attempt to extort the government of a foreign nation. Without the hard work of law enforcement personnel, the defendant could have caused significant additional harm, by publishing this personal and private information.”
The investigation was conducted by the FBI with assistance from the Kentucky State Police. The United States was represented by Assistant United States Attorney Dmitriy Slavin and Special Assistant United States Attorney James Chapman.
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Fayette County Man Sentenced to 33 Months for Firearms Straw PurchasesRead the Press Release
LEXINGTON, Ky. – Ronald Mark Harrison, 49, of Lexington, Kentucky, was sentenced to 33 months in federal prison on Friday, by United States District Judge Danny C. Reeves, for acquiring firearms through the making of false statements.
In June 2017 and February 2018, Harrison purchased several firearms from Bud’s Gun Shop in Lexington. During the purchases, Harrison provided false information to the store claiming to be the true purchaser of these firearms when, in fact, he was obtaining the firearms on behalf of a co-defendant, Lawrence Westbrook III, a convicted felon. These types of transactions are commonly known as “straw purchases” and are prohibited under federal law. Harrison previously pled guilty to two counts involving the acquisition of these firearms. As part of his plea, Harrison further admitted to obtaining other firearms and later trading them to Westbrook in exchange for narcotics.
On August 23, Westbrook pled guilty to charges involving the possession of methamphetamine with the intent to distribute, possession of a firearm by a convicted felon, and possession of a firearm in furtherance of a drug trafficking crime. Westbrook is set to be sentenced on December 13. He faces up to life in prison and a maximum fine of $5 million. However, any sentence will be imposed by the Court after consideration of the United States Sentencing Guidelines and applicable federal sentencing statutes.
Under federal law, Harrison must serve 85 percent of his sentence. Upon completion of his imprisonment, he will be under the supervision of the United States Probation Office for a period of 3 years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, Stuart L. Lowery, Special Agent in Charge, ATF, Louisville Field Division, and Lawrence Weathers, Chief of Police, Lexington Police Department, jointly made the announcement.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The PSN program was reinvigorated as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
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Newport Man Sentenced for Social Security FraudRead the Press Release
COVINGTON, Ky. – A Newport, Kentucky, man was sentenced in federal court on Thursday, by U.S. District Judge David L. Bunning, to five years of probation and 30 days of intermittent confinement for committing Social Security fraud.
According to his guilty plea, from July 2013 through April 2018, Robert Howard, 57, defrauded the Social Security Administration by continuing to fraudulently receive his father’s Title II Social Security benefits, after his father’s death, and knowingly concealing his father’s death from the SSA. Howard admitted to calling the Florence, Ky., SSA office and impersonating his deceased father, in an attempt to ensure wrongful continuation of monthly payments. The total amount that Howard fraudulently received from the SSA was $82,565.10. As part of the sentence, the district court ordered Howard to repay this amount in restitution.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Wayne R. Warren, Resident Agent-in-Charge, SSA Office of the Inspector General, Atlanta Field Division, jointly announced the sentence.
The investigation was directed by the SSA-OIG. The United States was represented by Special Assistant U.S. Attorney James T. Chapman.
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MEDIA ADVISORY: United States Attorney Robert Duncan Jr. to have Media Availability in Lexington on FridayRead the Press Release
LEXINGTON, Ky. – United States Attorney Robert Duncan will have press availability in Lexington on Friday, Sept. 27, 2019 at 3 p.m., along with Robert Brown, Jr., Special Agent in Charge of the FBI to discuss a sentencing.
Where: U.S. Attorney's Office
Eastern District of Kentucky
260 W. Vine Street, Suite 300
Lexington, Kentucky 40507
When: Friday, Sept. 27, 2019 at 3 p.m.
Latonia Man Sentenced to 40 Months for Identification Document Fraud and Aggravated Identity TheftRead the Press Release
COVINGTON, Ky. – A Latonia, Kentucky, man who previously admitted to illegally possessing nine Social Security cards and aggravated identity theft, was sentenced today to 40 months in prison, by U.S. District Court Judge David L. Bunning
Jesse Bryant, 37, pleaded guilty to the charges in June 2019. According to his plea agreement, at the time the identification documents were discovered in the vehicle that Bryant was driving, law enforcement also discovered stolen credit cards and equipment used to make or alter stolen identification documents.
Under federal law, Bryant must serve 85 percent of his/her prison sentence and will be under the supervision of the U.S. Probation Office for three years.
Robert M. Duncan Jr., United States Attorney for the Eastern District of Kentucky, and the Yvonne DiCristoforo, Special Agent in Charge for the United States Secret Service, jointly announced the sentence.
The investigation was conducted by the United States Secret Service. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Laura K. Voorhees.
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Woman Indicted for Attempting to Introduce Drugs to a Federal PrisonRead the Press Release
LONDON, Ky. – Keisha Pelote, 33, of Waldorf, Maryland, was indicted on Wednesday, on one count of possession with intent to distribute buprenorphine, aka Suboxone, and one count of attempting to provide it to an inmate in a federal prison.
The Indictment alleges that Pelote possessed the drug with the intent of distributing it and attempted to introduce it into FCI Manchester.
If convicted of the drug trafficking charge, Pelote faces up to 10 years of imprisonment, a $500,000.00 fine, and at least two years of federal supervised release. If convicted of attempting to introduce the buprenorphine into FCI Manchester, shefaces up to 20 years imprisonment, a $250,000 fine, and three years of federal supervised release.
Robert M. Duncan Jr., United States Attorney for the Eastern District of Kentucky, made the announcement after a federal grand jury in London returned the indictment.
Assistant United States Attorney R. Nicholas Rabold is prosecuting the case on behalf of the United States. The investigation preceding the indictment was conducted by the Bureau of Prisons, with the assistance of the Department of Homeland Security.
Pelote’s appearance before the United States District Court has not yet been set.
An indictment by a grand jury is an accusation only, and individuals charged in an indictment are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Bell County Man Sentenced for Methamphetamine TraffickingRead the Press Release
LONDON, Ky.- Charles R. Hubbard, 56, of Pineville, Kentucky, was sentenced to 94 months in federal prison Monday, for conspiring with others to distribute an aggravated amount of methamphetamine in Harlan County and Bell County, by U.S. District Judge Robert E. Wier.
According to Hubbard’s plea agreement, he participated in a methamphetamine distribution conspiracy from January 2018 through January 1, 2019. Hubbard’s plea agreement further states that he worked with Crystal Leach and others to procure methamphetamine in or around Tennessee for distribution throughout both Harlan County and Bell County. On January 24, 2018, Hubbard possessed over 50 grams of methamphetamine in Harlan County. On August 24, 2018, Hubbard possessed approximately 26 grams of methamphetamine in Bell County. As part of his plea, Hubbard forfeited $930.00 in drug proceeds.
Hubbard pleaded guilty to conspiracy to distribute 50 grams or more of a methamphetamine mixture on June 6.
Under federal law, Hubbard must serve 85 percent of his prison sentence. Hubbard will be under the supervision of the U.S. Probation Office for four years following his prison sentence.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, James Robert Brown, Special Agent in Charge, FBI Louisville Field Division, and Commissioner Richard W. Sanders, Kentucky State Police, jointly announced the sentence.
The investigation was conducted by the FBI London Office, KSP, Appalachian High Intensity Drug Trafficking Area (AHIDTA) Appalachian Narcotics Task Force, the Harlan County Sherriff’s Office, the Bell County Sherriff’s Office, and the Pineville Police Department. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Jenna E. Reed.
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Knox County Man Pleads Guilty to Illegally Distributing Prescription PillsRead the Press Release
LONDON, Ky.- A Flat Lick, Kentucky man, Jerry “Rabbit” Cox, 70, admitted to drug trafficking in federal court on Monday.
Cox pled guilty to distributing a quantity of pills containing oxycodone and hydrocodone, before U.S. Magistrate Judge Hanly A. Ingram. Cox admitted to selling oxycodone 30 mg pills to an informant on April 17, 2018, from his residence in Knox County, and hydrocodone pills from his business in Knox County on April 26, 2018.
Cox was indicted in June 2019.
Robert M. Duncan Jr., U.S. Attorney for the Eastern District of Kentucky, Daniel Dodds, acting Special Agent in Charge, DEA Louisville Field Division, and Commissioner Richard W. Sanders, Kentucky State Police, jointly announced the guilty plea.
The investigation was conducted by the Drug Enforcement Administration and the Kentucky State Police. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Jason D. Parman.
A sentencing date has not yet been set. He faces up to 20 years in prison and a maximum fine of $1 million. However, any sentence will be imposed by the Court after its consideration of the U.S. Sentencing Guidelines and the federal sentencing statutes.
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Three Men Sentenced for Transporting Large Amount Marijuana over State LinesRead the Press Release
Lexington, KY- Two Mexican Nationals, illegally residing in the U.S., and one Nicholasville, Ky., man, who previously admitted to transporting more than 100 kilograms of marijuana from Phoenix, Az., to Nicholasville, Ky., were sentenced on Thursday.
U.S. District Court Judge Karen Caldwell sentenced, Fabian Zavala-Romero, 42, Jonathan Mendoza-Ricardo, 30, and Jesus Sabino Castro-Quinones, 38, to 68 months, 68 months, and 60 months respectively. Another defendant involved in the case, Fabian Noperi, 35, is scheduled for sentencing in October.
According to plea agreements, Zavala, Castro, Noperi, and Mendoza, admitted that they conspired to transport marijuana from Phoenix to Nicholasville for the purpose of distributing the marijuana in Kentucky. The amount of marijuana they intended to distribute was more than 100 kilograms.
Under federal law, Zavala, Castro, and Mendoza must serve 85 percent of their prison sentence and will be under the supervision of the U.S. Probation Office for 4 years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, Steven L. Igyarto, Resident Agent in Charge for Homeland Security Investigations, and Todd Justice, Chief of Police for Nicholasville Police Department, jointly announced the sentence.
The investigation was conducted by Homeland Security Investigations and the Nicholasville Police Department. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Lauren Tanner Bradley.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The PSN program was reinvigorated as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
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Franklin County Man Sentenced to 18 Months for Making False Statement in Attempt to Purchase a Firearm Was Subject to Domestic Violence OrdersRead the Press Release
FRANKFORT, Ky. – On Tuesday, Joshua Bybee, 23, of Frankfort, Kentucky, was sentenced to 18 months in federal prison by United States District Judge Gregory F. Van Tatenhove for making a false statement in the acquisition of a firearm.
Bybee had previously pleaded guilty to one count involving the making of a false statement during the purchase of a firearm. On January 14, 2019, Bybee entered Dan’s Discount Jewelry and Pawn in Frankfort, a federally licensed firearms dealer, and attempted to purchase a 9mm pistol. In his attempt, Bybee represented that he was not legally prohibited from purchasing or possessing a firearm when, in fact, he was subject to two separate domestic violence orders from two different individuals. Both domestic violence orders restrained Bybee from harassing, stalking, or threatening individuals covered under the order. Additionally, both orders prohibited the Bybee from possessing a firearm while each order was in effect. Federal law prohibits the possession of firearms by persons subject to domestic violence orders. The business declined to sell the firearm to Bybee after a background check revealed the domestic violence orders.
Bybee must serve 85 percent of his 18 month sentence. Upon completion of his imprisonment, he will be under the supervision of the United States Probation Office for a period of three years.
“The making of false statements in an attempt to obtain a firearm is a serious felony offense, especially when the person is prohibited for possessing firearms by domestic violence orders,” said United States Attorney Robert M. Duncan, Jr. “The defendant attempted to conceal the existence of his domestic violence orders by misrepresenting his status to the federally licensed firearms dealer. Fortunately, the background check worked; it prevented the sale, kept the firearm out of the hands of a an individual already subject to two court orders due to violence, and helped prevent a more dangerous situation.”
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Tommy Estevan, Acting Special Agent in Charge, ATF, Louisville Field Division, jointly made the announcement.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The PSN program was reinvigorated as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
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Two Letcher County Men Sentenced for Methamphetamine OffensesRead the Press Release
London, KY- Shiloh Adams, 34, of Jeremiah, Ky., and Mitchell Adams, 35, of Whitesburg, Ky., were sentenced Tuesday, to 150 months in prison and 94 months in prison respectively, by United States District Judge Claria Horn Boom, for drug trafficking and possession of a firearm in furtherance of drug trafficking.
According to their plea agreements, in November 2018, the Adams’ traveled from Letcher County, Ky., to Louisville, Ky., to purchase methamphetamine for purposes of distribution in the Eastern District of Kentucky. Law enforcement stopped the Adams’ vehicle on the return trip to Letcher County. During a search of the vehicle, officers found over 50 grams of methamphetamine a .540 caliber pistol, and $10,249 in cash.
Shiloh Adams pleaded guilty to possession with intent to distribute 50 grams or more of methamphetamine and possession of a firearm in furtherance of drug trafficking. Mitchell Adams pleaded guilty to possession with intent to distribute 50 grams or more of methamphetamine.
Under federal law, the Defendants must serve 85 percent of their prison sentence. Shiloh Adams and Mitchell Adams will be under the supervision of the U.S. Probation Office for six years and five years respectively.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Tommy Estevan, Acting Special Agent in Charge, ATF, Louisville Field Division, jointly announced the sentence.
The investigation was conducted by the Louisville Police Department and the ATF’s Ashland Office. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Jenna Reed.
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Independence Man Convicted of Distributing Child PornographyRead the Press Release
Ft. Mitchell, Ky. – An Independence man was convicted late Thursday, by a federal jury sitting in Covington, of distributing child pornography.
The jury convicted Michael Clark, 49, after four hours of deliberations, following a four-day trial.
According to the evidence at trial, Clark distributed child pornography, on five different occasions, to a law enforcement officer via BitTorrent, which is a peer-to-peer file-sharing network. A search warrant was executed at Clark’s residence in April 2018. A computer was seized and a forensic examination revealed evidence of the child pornography.
Clark was indicted in in November 2018.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, Andy Beshear, Kentucky Attorney General, Steven L. Igyarto, Resident Agent in Charge for Homeland Security Investigations, and Michael “Spike” Jones, Sheriff of Kenton County Police Department, jointly announced the jury’s verdict.
The investigation was conducted by the Kenton County Police Department, the Kentucky Office of Attorney General, and Homeland Security Investigations. The United States was represented in the case by Assistant U.S. Attorney Elaine K. Leonhard.
Clark will appear for sentencing, before U.S. District Judge David L. Bunning, on January 3, 2020. He faces a maximum of 20 years in prison. However, the Court must consider the U.S. Sentencing Guidelines and the applicable federal sentencing statutes before imposing the sentence.
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Two Kentucky Men Convicted for Concealing Corporate Contributions to U.S. Senate CampaignRead the Press Release
A federal jury in Kentucky found two men guilty of conspiring to use more than $206,670 of corporate funds to make contributions to the campaign of a candidate for United States Senate and for causing the concealment of these contributions from the Federal Election Commission (FEC).
Assistant Attorney General Brian A. Benczkowski of the Department of Justice’s Criminal Division, U.S. Attorney Robert M. Duncan Jr. for the Eastern District of Kentucky and Special Agent in Charge James Robert Brown Jr. of the FBI’s Louisville Field Office made the announcement.
Following a five-week trial, the jury convicted Gerald G. Lundergan of Lexington, Kentucky, of one count of conspiracy, one count of making corporate campaign contributions, four counts of causing the submission of false statements to the FEC and four counts of causing the falsification of documents with the intent to obstruct and impede a matter within the FEC’s jurisdiction. The jury convicted Dale C. Emmons of Richmond, Kentucky, of one count of conspiracy, one count of making corporate campaign contributions, two counts of causing the submission of false statements and two counts of causing the falsification of documents with the intent to obstruct and impede.
According to the evidence presented at trial, Lundergan used the funds of S.R. Holding Company Inc. (S.R. Holding), a company he owned, to pay for services provided by consultants and vendors to a campaign for a United States Senate seat in the 2014 election cycle. The candidate for this seat was Lundergan’s daughter, Alison Lundergan Grimes. The evidence established that Lundergan caused the issuance of a number of payments from S.R. Holding funds for services that included audio-video production, lighting, recorded telephone calls and campaign consulting, between July 2013 and December 2015.
The corporate contributions also included monthly payments from S.R. Holding to Emmons and his company during this period. Emmons provided services to the campaign and sought and received compensation from Lundergan and S.R. Holding. Emmons also used the funds of his corporation, Emmons & Company Inc., to pay other vendors and a campaign worker for services rendered to the campaign. Those services included recorded telephone calls, technological support services, and other campaign-related expenses.
The evidence established that Lundergan and Emmons concealed these activities from other officials associated with the campaign. Their concealments caused the campaign unwittingly to file false reports with the FEC because the reports failed to disclose the source and amount of the corporate contributions.
Deputy Chief Robert J. Heberle of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Andrew T. Boone and Kate K. Smith are prosecuting the case.
Two Convicted for Concealing Corporate Contributions to U.S. Senate CampaignRead the Press Release
FRANKFORT, Ky. – A federal jury sitting in Frankfort found Gerald G. Lundergan, of Lexington, Ky., and Dale C. Emmons, of Richmond, Ky., guilty of conspiring to use more than $206,670 of corporate funds to make contributions to the campaign of a candidate for United States Senate and for causing the concealment of these contributions from the Federal Election Commission (FEC).
Brian A. Benczkowski, Assistant Attorney General of the Department of Justice’s Criminal Division; Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; and James Robert Brown, Jr., Special Agent in Charge of the Federal Bureau of Investigation’s Louisville Field Office, made the announcement.
After two hours of deliberations following a five-week trial, the jury convicted Lundergan of one count of conspiracy, one count of making corporate campaign contributions, four counts of causing the submission of false statements to the FEC, and four counts of causing the falsification of documents with the intent to obstruct and impede a matter within the FEC’s jurisdiction. The jury convicted Emmons of one count of conspiracy, one count of making corporate campaign contributions, two counts of causing the submission of false statements, and two counts of causing the falsification of documents with the intent to obstruct and impede.
According to the evidence presented at trial, Lundergan used the funds of S.R. Holding Company, Inc. (S.R. Holding), a company he owned, to pay for services provided by consultants and vendors to a campaign for a United States Senate seat in the 2014 election cycle. The candidate for this seat was Lundergan’s daughter, Alison Lundergan Grimes. The evidence established that Lundergan caused the issuance of a number of payments from S.R. Holding funds for services that included audio-video production, lighting, recorded telephone calls, and campaign consulting, between July 2013 and December 2015.
The corporate contributions also included monthly payments from S.R. Holding to Emmons and his company during this period. Emmons provided services to the campaign and sought and received compensation from Lundergan and S.R. Holding. Emmons also used the funds of his corporation, Emmons & Company, Inc., to pay other vendors and a campaign worker for services rendered to the campaign. Those services included recorded telephone calls, technological support services, and other campaign-related expenses.
“The jury’s verdict reinforces the fundamental principle that rules apply to everyone,” said United States Attorney Robert M. Duncan, Jr. “The defendants' actions were deliberately designed to evade reporting requirements that serve to protect the integrity and transparency of federal elections. Stated simply, they knew what they were doing was wrong. This prosecution would not have been possible without the dedicated work of the trial team and all our law enforcement partners.”
The evidence established that Lundergan and Emmons concealed these activities from other officials associated with the campaign. Their concealments caused the campaign unwittingly to file false reports with the FEC because the reports failed to disclose the source and amount of the corporate contributions.
“Fairly and honestly selecting our country's leaders is at the very foundation of our democracy, and the integrity of the system must be protected,” said James R. Brown, Jr., Special Agent in Charge Louisville Field Office. “Today's conviction should serve notice that FBI Louisville and the U.S. Attorney's Office are fully committed to investigating and prosecuting those who wish to corrupt the election process.”
The United States was represented by Assistant U.S. Attorneys Andrew T. Boone and Kate K. Smith and Deputy Chief Robert J. Heberle of the Criminal Division’s Public Integrity Section.
Lundergan and Emmons will appear for sentencing on January 22, 2020. They each face up to 5 years in prison for the conspiracy conviction, each corporate campaign contribution conviction, and each false statement conviction; up to 20 years in prison for each obstruction conviction; and a maximum fine of $250,000 per conviction. However, the Court must consider the U.S. Sentencing Guidelines and the applicable federal sentencing statutes before imposing the sentences.
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Richmond Man Sentenced to 130 Months for Armed Drug TraffickingRead the Press Release
LEXINGTON, Ky.—Edward J. Anderson, IV, 32, of Richmond, was sentenced Thursday to 130 months in federal prison, by United States District Judge Karen K. Caldwell, for possession with intent to distribute fentanyl and methamphetamine and possession of a firearm in furtherance of drug trafficking.
In September 2018, officers with the Madison County HIDTA Task Force, arrested Anderson outside his home in Madison County. During a search officers located approximately 8 ounces of fentanyl, approximately 24 ounces of methamphetamine, and a stolen 9mm handgun. During his plea, Anderson admitted the firearm possessed in furtherance of drug trafficking.
Under federal law, Anderson must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for three years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky and Tommy Estevan, Special Agent in Charge of the ATF Louisville Field Division, jointly made the announcement.
The ATF, Madison County HIDTA task force, and the Richmond Police Department conducted the investigation. The United States was represented by Assistant United States Attorney Cynthia T. Rieker.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The PSN program was reinvigorated as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
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Somerset Man Convicted of Running $2.2 Million Ponzi SchemeRead the Press Release
LONDON, Ky. – A Somerset, Ky., man was found guilty yesterday, by a federal jury sitting in London, of conspiring with co-conspirator Jason T. Castenir to run a complex and long-running Ponzi scheme. During the scheme, they defrauded dozens of victims out of over $2.2 million, through three fake investments.
After a brief deliberation following an eight-day trial, the jury convicted 58-year-old Rodney Scott Phelps of one count of conspiracy to commit wire fraud and 12 additional counts of wire fraud.
According to the evidence presented at trial, Rodney Scott Phelps and Jason Castenir created Maverick Asset Management LLC (“MAM”) in 2012, as a private-equity firm. Beginning around this time, and continuing until late 2014, Castenir and Phelps convinced a number of investors from across the country, including in Washington State, Ohio, Arizona, and Nevada, to invest in an opportunity to obtain an oil concession from the government of Belize. They boasted of vast experience in successful oil exploration ventures and promised investors royalties on any oil extracted and a considerable interest rate on their investment, all of which was to be backed by Phelps’s multi-million dollar trust, in the name of Phelps Family Trust. Investors raised hundreds of thousands of dollars for this investment, wiring those funds to MAM in Kentucky. Evidence at trial revealed that Phelps and Castenir had little experience with successful oil ventures; there was no sizeable Phelps Family Trust; and they used the money they raised for MAM operating expenses, to pay themselves, and to make Ponzi payments back to other victim-investors.
In a related scheme, Phelps convinced three victims from Tennessee to invest roughly $1.2 million with MAM to trade on various commodities markets, again boasting of MAM’s vast experience successfully trading on these markets, including with funds from the Phelps Family Trust, and convincing victims that the Phelps Family Trust backed their investment. Phelps and Castenir invested roughly one-third of this money on commodities markets, losing almost all of it in short measure, but sent victims accounting statements detailing profits on their investments. Phelps and Castenir spent the rest of the money on MAM operating expenses, personal profit, and Ponzi payments to other victim-investors.
In a third scheme, Phelps convinced two victims from Tennessee to pay $1 million to an escrow account earmarked for initiating the purchase of a casino in Tunica, Mississippi. Phelps had committed to likewise pay $1 million from the Phelps Family Trust to match the victim investment, but never did. Instead, Phelps and Castenir took this money from the escrow account to pay MAM operating expenses, invest on commodities and stock markets, personally profit, and for Ponzi payments to other victim-investors.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and James Robert Brown Special Agent in Charge of the Federal Bureau of Investigation-Louisville Division, jointly announced the verdict. The investigation was conducted by the Federal Bureau of Investigation, with assistance from the Commodities and Futures Trading Commission and the Internal Revenue Service-Criminal Investigation. The United States was represented by Assistant United States Attorneys Kathryn M. Anderson and Kenneth R. Taylor.
Phelps will appear for sentencing on December 3, 2019. He faces a maximum of 20 years in prison. Castenir had previously pleaded guilty for his role in these offenses, and others, on August 18, 2017. His sentencing is scheduled for September 24, 2019, and he likewise faces a maximum of 20 years in prison. However, the Court must consider the U.S. Sentencing Guidelines and the applicable federal sentencing statutes before imposing the sentences.
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Second Garrard County Man Sentenced to 60 months for Tax FraudRead the Press Release
LEXINGTON, Ky. – Warren Griffin, II, 50, of Lancaster, was sentenced to 60 months in federal prison Wednesday by United States District Judge Karen K. Caldwell for taking part in a $15 million employment tax fraud scheme.
Griffin will begin serving his new sentence after he finishes a 37-month term, from a 2018 conviction in the Southern District of Illinois, for being a felon in possession of a firearm. He must also pay the Internal Revenue Service (IRS) $2.8 million in restitution. Upon release from prison, Griffin will be on supervised release for three years.
According to his plea agreement, Griffin recruited and paid associates to open staffing companies and bank accounts, whose primary purpose was to hide from the IRS the fact that businesses run by Griffin and his co-defendant, Clarence Michel, Jr., had failed to pay $14,671,184 in owed federal payroll taxes. Griffin obtained $2,118,584 of that money. During this time, Griffin also underpaid his personal federal income taxes by $700,428.
Michel had previously pleaded guilty and been sentenced to 71 months in federal prison and ordered to pay over $19 million in restitution.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and William Chung, Special Agent in Charge, Internal Revenue Service – Criminal Investigation, jointly announced the sentence.
The investigation was conducted by the Internal Revenue Service-Criminal Investigation. The United States was represented by Assistant U.S. Attorney Dmitriy Slavin.
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West Virginia Pharmacist Found Guilty of Drug Trafficking in Eastern KentuckyRead the Press Release
PIKEVILLE, Ky.— Jackson Noel, a pharmacist operating Buffalo Drug Inc., in Buffalo WV., was found guilty on Tuesday of conspiring to dispense and distribute oxycodone and oxymorphone.
Proof at trial established that as part of the conspiracy Noel unlawfully dispensed oxycodone and oxymorphone pills from the pharmacy to out-of-state customers, including customers from Kentucky. Noel dispensed the pills on a cash only basis.
According to the indictment, Noel began conspiring and distributing the drugs in June 2015 through December 2016 in Pike County, the Eastern District of Kentucky, and elsewhere.
Noel will be sentenced in December 2019 and faces up to 20 years in prison, as well as a $1 million fine and at least three years of supervision after release.
“The defendant’s unlawful dispensing of powerful opioid pills contributed to the crisis currently affecting the Appalachian region, and our District, specifically,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “The jury’s verdict ensures that the defendant will be held accountable for his actions. I commend the efforts of the various law enforcement and regulatory agencies who played a role in this investigation.”
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Dan Dodds, Acting Special Agent in Charge of the DEA; and Richard W. Sanders, Commissioner, Kentucky State Police jointly announced the jury’s verdict.
The investigation was conducted by the DEA, KSP, Kentucky Office of the Attorney General, the Putnam County, West Virginia, Sheriff’s Office, and the West Virginia Board of Pharmacy. The United States was represented by Assistant U.S. Attorney Sam Dotson.
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Pulaski County Woman Sentenced to 33 Months as part of Department of Justice’s Elder Fraud CrackdownRead the Press Release
LONDON, Ky. – Mitzi Shawn Sears, 59, of Nancy, was sentenced to 33 months in federal prison Monday by United States District Judge Robert E. Wier for taking over half a million dollars from an elderly couple, as part of a bank fraud scheme.
Sears must pay $502,780.10 in restitution and forfeit her rights to a property she purchased with the victims’ money. Upon release from prison, Sears will be on supervised release for five years.
According to her plea agreement, Sears convinced the victims to buy a certain piece of real property in Pulaski County with her as an investment. Sears then told the victims that the property was part of a lawsuit and they needed to provide more funds to pay attorneys and others in order to finish the transaction, but the transaction never existed. To keep the victims unaware of the scheme, Sears pretended to be various people in phone calls and drafted fake emails. When the victims ran out of money to give to Sears, they took out a $40,000 loan and provided their bank with the false information that Sears had given to them.
Sears used those checks to purchase a different property in Nancy that she must now forfeit. Additionally, Sears forged 16 checks belonging to the victims.
“Working with our law enforcement partners, we are committed to holding accountable those who of engage in financial exploitation of elderly victims,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “The defendant’s fraud scheme deprived the victims’ of a substantial amount of money. The sentence imposed reflects the seriousness of her offense.”
U. S. Attorney Duncan, Special Agent in Charge James Robert Brown, Federal Bureau of Investigation, and Commissioner Richard W. Sanders, Kentucky State Police jointly announced the sentence.
The investigation was conducted by the Federal Bureau of Investigation and the Kentucky State Police. Assistant U.S. Attorney Dmitriy Slavin represented the United States.
This prosecution is part of the Department of Justice’s efforts, together with federal and state partner agencies, to investigate and combat elder financial exploitation and obtain restitution for vulnerable victims. For information on the Kentucky Elder Justice Task Force, including how to report abuses, please visit: https://www.justice.gov/usao-edky/elder-justice-task-force.
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Lexington Man Sentenced to 80 Months in Prison for Fentanyl TraffickingRead the Press Release
LEXINGTON, Ky. – Eldronte Domonique Washington, of Lexington, was sentenced Monday to 80 months in federal prison, by United States Senior District Judge Joseph M. Hood, for possession with intent to distribute 40 grams or more of fentanyl.
In December 2018, Lexington Police executed a search warrant on Washington’s residence and located 67 grams of fentanyl, multiple baggies, digital scales, three handguns (one stolen, one defaced), and $4,230 in cash. In his plea agreement, Washington admitted that he intended to distribute the fentanyl and further agreed to forfeit his interest in the handguns and currency. Washington pleaded guilty in May 2019.
Under federal law, Washington must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for four years following his release.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Dan Dodds, Acting Special Agent in Charge of the DEA; and Lawrence Weathers, Chief of the Lexington Police Department, jointly announced the sentence.
The investigation was conducted by the U.S. Drug Enforcement Administration and the Lexington Police Department. The United States was represented by Assistant U.S. Attorney David Kiebler.
This case was prosecuted as part of the Organized Crime and Drug Enforcement Task Force’s (OCDETF) Operation Synthetic Opioid Surge (SOS), a Department of Justice initiative designed to target trafficking of dangerous synthetic opioids.
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Danville Woman sentenced to 138 Months for Armed Drug TraffickingRead the Press Release
LEXINGTON, Ky. – Tanisha R. Berry of Danville, Ky., was sentenced by Senior United States District Judge Joseph M. Hood, to 138 months in federal prison, for possessing with the intent to distribute more than 50 grams of methamphetamine and more than 40 grams of fentanyl, as well as possession of a firearm in furtherance of drug trafficking.
On November 24, 2018, the Boyle County Sheriff’s Office, began investigating drug distribution activity at Berry’s residence in Danville. On November 25, 2018, a search warrant was executed at the residence. Berry was present and the search of her bedroom yielded 487 grams of methamphetamine and 66.7 grams of fentanyl. Underneath the mattress, in close proximity to the drugs, deputies located a loaded .380 caliber pistol. Deputies also located $4,179 in drug proceeds.
The investigation was conducted by the Boyle County Sheriff’s Office and the Drug Enforcement Administration. The United States was represented by Assistant U.S. Attorney Roger W. West.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Derek Robbins, Boyle County Sheriff; and Dan Dodds, Acting Special Agent in Charge, DEA Louisville Field Division, jointly announced the sentence.
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Versailles Man Pleads Guilty to Trafficking Fentanyl and HeroinRead the Press Release
LEXINGTON, Ky. – A Versailles, Ky., man admitted in federal court Monday to possession with intent to distribute fentanyl and heroin.
Damon Bristol Hardy, 33, pleaded guilty to possessing with intent to distribute fentanyl and heroin, before Chief United States District Judge Danny C. Reeves. As part of his guilty plea, Hardy confessed that on April 2, 2019, in Woodford County, he possessed and intended to distribute 6.8 grams of a mixture that contained fentanyl and heroin. Hardy also agreed to abandon $587 in cash and various drug paraphernalia seized from him. Hardy admitted that he threw the object that contained the controlled substances away from his body as he fled police.
Hardy also agreed that he has at least one prior felony drug conviction. According to the plea agreement, Hardy has been convicted for first-degree trafficking in a controlled substance (heroin) in Woodford Circuit Court. Due to his serious criminal history, Hardy is subject to an enhanced sentence.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Dan Dodds, Acting Special Agent in Charge, DEA Louisville Field Division; and Chief Mike Murray, Versailles Police Department, jointly announced the guilty plea.
The investigation was directed by the Versailles Police Department and the Drug Enforcement Administration. The United States was represented by Special Assistant U.S. Attorney James T. Chapman.
Hardy is scheduled to be sentenced on December 20, 2019, at 10:15 a.m., before Chief Judge Reeves in federal court in Lexington. Based on Hardy’s criminal history, he faces up to 30 years in prison, as well as a maximum fine of $2,000,000. However, any sentence will be imposed by the Court, after consideration of the U.S. Sentencing Guidelines and the federal sentencing statutes.
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Johnson County Man Pleads Guilty to Methamphetamine ChargesRead the Press Release
PIKEVILLE, Ky.- A Johnson County, Kentucky man admitted in federal court Friday that he conspired to distribute over 500 grams of methamphetamine.
Proctor Wayne Pennington, Sr., 65, pled guilty Friday to conspiring to distribute 500 grams of methamphetamine and distribution of methamphetamine, before U.S. District Court Judge Karen K. Caldwell.
Pennington admitted that from October 2018 through April 3, 2019, he conspired with others to distribute methamphetamine. According to the plea agreement, Pennington obtained the methamphetamine from a supplier in Louisville, Kentucky, and then distributed the methamphetamine to others in Johnson County. Law enforcement seized methamphetamine from Pennington on April 3, 2019, and Pennington was indicted in April 2019.
“Methamphetamine is a highly addictive, dangerous drug that is ruining many lives in eastern Kentucky,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “Our Office, along with our law enforcement partners, remain committed to holding methamphetamine traffickers accountable to the fullest extent of the law.”
According to the plea agreement, Pennington has a previous federal drug felony conviction for conspiring to distribute oxycodone. Because of the prior serious drug felony conviction, Pennington is subject to an enhanced sentence.
“The defendant’s significant drug trafficking undoubtedly contributed to the increased availability of methamphetamine in the region,” said U.S. Attorney Duncan. “The defendant’s prior conviction for drug trafficking makes his conduct in this case even more serious. As a prior convicted drug trafficker, he is likely facing a more severe sentence for his crimes.”
U.S. Attorney Duncan, Dan Dodds, Acting Special Agent in Charge, DEA Louisville Field Division, and Doug Saylor, Johnson County Sheriff, jointly announced the guilty plea.
The investigation was conducted by Drug Enforcement Administration and the Johnson County Sheriff’s Office. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Andrew H. Trimble.
Pennington is scheduled to be sentenced on December 16, 2019. He faces a minimum of 15 years in prison, with a maximum of Life, as well as a maximum fine of $20 million. However, any sentence will be imposed by the Court, after consideration of the U.S. Sentencing Guidelines and the federal sentencing statutes.
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Former Owner of Trailblazers, Inc. Pleads Guilty to Bankruptcy FraudRead the Press Release
LEXINGTON, Ky. – Barry E. Sanders,63, the former owner and CEO of Trailblazers, Inc., an auto and truck parts supply business formerly located in Lexington, pleaded guilty in U.S. District Court Monday to violating U.S. bankruptcy laws.
Appearing in U.S. District Court, Sanders admitted that while Trailblazers, Inc., was in the process of contemplating bankruptcy in the summer of 2013, he transferred $315,000 from the business to his personal banking accounts using four cashier’s checks. Sanders then knowingly concealed the receipt of those funds, by failing to report the cash transfers on Trailblazers’ corporate bankruptcy filings in August 2013, as was required by law.
“The defendant took advantage of a process designed to aid troubled businesses,” said United States Attorney Robert M. Duncan, Jr. “His conviction demonstrates that the government will not tolerate business owners violating the bankruptcy system for personal gain.”
U. S. Attorney Duncan and James Robert Brown, Jr., Special Agent in Charge, Federal Bureau of Investigation, jointly announced the guilty plea by Sanders.
The investigation leading to Sanders’ conviction was conducted by the Federal Bureau of Investigation. The United States was represented by Assistant U.S. Attorneys Erin Roth and Will Moynahan.
Senior U.S. District Court Judge Joseph M. Hood accepted the guilty plea of Sanders and set a sentencing date of December 9, 2019. Sanders faces up to five years in prison and a fine of $250,000. Before imposing a sentence, the Court will take into consideration the U.S. Sentencing Guidelines and federal sentencing statutes.
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South Carolina Man Pleads Guilt to Production and Receipt of Child PornographyRead the Press Release
PIKEVILLE, Ky. - A South Carolina man admitted in federal court Friday that he knowingly produced and received child pornography.
Jonathan Edward Manigault, 34, pleaded guilty to one count of production of child pornography and one count of knowingly receiving child pornography, before U.S. District Judge Karen K. Caldwell.
Manigault admitted he directed Christina B. Mitchell, of Pike County, to take photographs of a 3-year-old victim, engaging in sexually explicit conduct. Manigault provided Mitchell with specific, detailed instructions on what types of explicit photographs to produce and provide. According to the plea agreement, Mitchell transmitted the photographs of the minor to Manigault using the Facebook Messenger application. After receipt, Manigualt had Mitchell agree to produce additional images of underage victims.
Manigault and Mitchell were indicted on October 24, 2018.
Mitchell pleaded guilty to two counts of producing child pornography on August 26, 2019. According to her plea agreement, Mitchell produced sexually explicit images of a 3-year-old and 8-year-old victims.
“Protecting children from this unconscionable conduct is of the utmost importance to all law enforcement,” said United States Attorney Robert M. Duncan, Jr. “The defendant’s guilty plea today, and his co-defendant’s guilty plea in August, ensure that they will not have the opportunity to victimize other innocent children. I commend the efforts of law enforcement for their work in removing these dangerous individuals from our streets.”
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and James Robert Brown, Special Agent in Charge, FBI Louisville Field Division, jointly announced the guilty plea.
The investigation was conducted by the FBI. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Jenna E. Reed.
Mitchell’s and Manigault’s sentencing hearings are scheduled for December 16, 2019, in Pikeville. Mitchell faces up to 60 years in prison and Manigault faces up to 50 years in prison. Both defendants face a maximum fine of $250,000. However, any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal sentencing statutes.
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Montgomery County Man Indicted for Bank Fraud in Scheme to Convert Collateral on Loans from the Farm Service AgencyRead the Press Release
LEXINGTON, Ky. – A Montgomery County man was indicted Thursday on multiple counts of bank fraud in a scheme to avoid repaying more than $150,000 in loans from the Farm Service Agency (FSA), a division of the United States Department of Agriculture.
A federal grand jury in Lexington returned an 11-count indictment charging Steven Ray Williams, 57, with selling off secured loan collateral, including cattle and farm equipment, in the names of other individuals and then forging endorsement signatures on checks, all in order to avoid turning over the proceeds to the Farm Service Agency.
Williams was also charged with aggravated identity theft for using the means of identity of another person, without permission, in order to facilitate bank fraud.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Bethanne M. Dinkins, Acting Special Agent in Charge, Southeast Region, United States Department of Agriculture Office of Inspector General, jointly announced the indictment. The investigation preceding the indictment was conducted by the U.S. Department of Agriculture, Office of Inspector General. The indictment was presented to the grand jury by Assistant U.S. Attorney William Moynahan.
A date for Williams to appear in federal court has not yet been scheduled. He faces up to 30 years in prison and a fine of $1,000,000 on each bank fraud count. For the aggravated identity theft, he faces a prison sentence of two years. However, any sentence following a conviction would be imposed by the Court, after its consideration of the U.S. Sentencing Guidelines and the federal sentencing statutes.
Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
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Lexington Woman Indicted for Making Fake Bomb Threats to City’s 911 Emergency Response CenterRead the Press Release
LEXINGTON, Ky. – A Lexington woman was indicted Thursday for making multiple false bomb threats to Lexington’s 911 emergency response center.
A federal grand jury in Lexington returned a 3-count indictment charging 31-year-old Crystal Brotherton with intimidating individuals by making threats involving explosives and the destruction of buildings. The indictment specifically alleges Brotherton called Lexington’s 911 system and told the operator there were bombs at multiple business at an intersection off of New Circle Road. She allegedly demanded the businesses be evacuated in 15 minutes or “everyone will die.” According to the indictment, Brotherton made three calls to 911 around June 20 and 21, 2018, all involving similar threats of death and destruction.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; James Robert Brown, Jr., Special Agent in Charge, Federal Bureau of Investigation; and Lawrence Weathers, Chief of the Lexington Police Department, jointly announced the indictment. The investigation preceding the indictment was conducted by the Lexington Police Department and the Federal Bureau of Investigation. The indictment was presented to the grand jury by Assistant U.S. Attorney William Moynahan.
A date for Brotherton to appear in federal court has not yet been scheduled. She faces up to 10 years in prison and a fine of $250,000 for each charge. However, any sentence following a conviction would be imposed by the Court, after its consideration of the U.S. Sentencing Guidelines and the federal sentencing statutes.
Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
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Kentucky and Tennessee Residents Indicted on Federal Kidnapping ChargeRead the Press Release
Lexington, Ky. – A federal grand jury sitting in London has indicted Douglas M. Edmonson, 36, of Corbin, Kentucky; Dallas Anna Chain Perkins, 25, of Jellico, Tennessee; Bryanna Soper, 25, of Corbin, Kentucky; and Erik Peace, 32, of Corbin, Kentucky for kidnapping.
The charge stems from a yearlong investigation by the ATF, the Kentucky State Police, and the Williamsburg Police Department. According to the indictment, the defendants kidnapped Victim 1 on August 10, 2018, for the purpose of assaulting Victim 1. The defendants used a Facebook account to lure Victim 1 to a prearranged meeting place. The indictment further alleges that the defendants transported Victim 1 across state lines during the course of the kidnapping. Pursuant to the indictment, Victim 1 was held against her will into August 11, 2018.
If convicted the defendants face up to life in prison. Soper had her initial appearance on September 4, 2019. Edmonson, Perkins, and Peace will have initial appearances scheduled.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Stuart Lowrey, Special Agent in Charge ATF; Kentucky States Police Commissioner Richard Sanders; and Chief Wayne Bird, Williamsburg Police Department, jointly made the announcement.
The investigation was conducted by the ATF London Office, the Kentucky State Police, and Williamsburg Police Department. The United States is represented by Assistant United States Attorney Jenna E. Reed.
An indictment by a grand jury is an accusation only, and individuals charged in an indictment are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Four Men Indicted for Kidnapping Resulting in DeathRead the Press Release
LEXINGTON, Ky. – A federal grand jury sitting in Lexington has charged four men for their involvement in a kidnapping that resulted in the deaths of two Lexington men. Rosario Diaz Barraza, 29, Ramon Camacho Zepeda, 51, Josė Felix Tlatenchi, 37, and Tomás Tlatenchi, 37, were each indicted Thursday for offenses related to the kidnapping and homicide of Josė Olascoaga, 29, and Marco Antonio Tunai Ortiz, 27, both of Lexington.
The grand jury charged all four defendants with one count of conspiracy to commit kidnapping that resulted in death, and one count of interstate transportation of stolen vehicles. The indictment alleges that the charged offenses occurred on or about September 11, 2017, at a business located on Blue Sky Parkway in Lexington. The victims were discovered on September 14, 2017, in the trunk of a Volkswagen Jetta at the Blue Sky Parkway crime scene.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Daniel Dodds, Acting Special Agent in Charge, DEA Louisville; and Lawrence Weathers, Chief of Police, Lexington Division of Police, jointly announced the indictment. Assistant United States Attorney Todd Bradbury presented the indictment to the grand jury.
All four defendants are scheduled to appear in federal court, for their arraignment on the charges, on September 10, 2019 at 2:30 p.m. Each defendant faces a maximum sentence of life imprisonment. However, any sentence following a conviction would be imposed by the Court, after its consideration of the United States Sentencing Guidelines and applicable federal statutes.
An indictment is an accusation only. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Johnson County Man Sentenced to 65 Months for Embezzling from a Lexington BusinessRead the Press Release
LEXINGTON, Ky. – Franklin Fletcher, 55, of Oil Springs, Ky., was sentenced on Friday to 65 months in federal prison, by Chief United States District Judge, Danny C. Reeves, for wire fraud and aggravated identity theft. Fletcher was also ordered to pay $374,192.89 in restitution.
Fletcher pleaded guilty on May 9, 2019, and admitted to embezzling nearly $375,000 from his former employer, NYTIS Exploration, from September 2012 until March 2018. According to court records, Fletcher abused his authority as an Accounting Manager to generate checks that he would deposit into his own accounts. He engaged in a complicated series of actions to hide the stolen money from his employer. He further concealed his crime by writing the checks in another individual’s name and forging her signature on the endorsement line.
According to court documents, this was not Fletcher’s first act of embezzlement. Records indicate that from some point until 2009, Fletcher embezzled nearly $1,000,000 from his then-employer, again abusing his position in accounting at that Kentucky energy company. Fletcher paid a significant portion of the money he embezzled from NYTIS Exploration against the restitution agreement he had entered into with his prior employer.
Under federal law, Fletcher must serve 85 percent of his prison sentence, and upon his release, he will be under the supervision of the United States Probation Office for three years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky and Richard Ferretti, Special Agent in Charge for the United States Secret Service, jointly announced the sentence.
Pain Clinic Owner from South Florida Sentenced for Oxycodone Trafficking ConspiracyRead the Press Release
LONDON, Ky. – Pete Anthony Tyndale, 47, of Hollywood, Florida, was sentenced to 29 years of imprisonment by United States District Judge Robert E. Wier for conspiring to distribute oxycodone and other drugs, and for money laundering.
Tyndale was the co-owner of the Tennessee Pain Institute (TPI), a pain clinic that operated from 2011 to 2016 near Chattanooga. After a month-long trial earlier this year in federal court, a jury convicted Tyndale, his business partner Anwar Mithavayani, and physician Timothy Gowder, of operating TPI as a pill mill, and for money laundering related to proceeds from TPI. The three men were responsible for the illicit distribution of more than 1.6 million oxycodone 30mg pills, and hundreds of thousands of other narcotic pills and sedative pills, such as Xanax. Approximately half of TPI’s pill customers were traveling from eastern Kentucky.
In earlier proceedings this month, Judge Wier sentenced Gowder to 21 years of imprisonment and Mithavayani to 25 years of imprisonment. A third co-defendant, James Bradley Combs, 41, of Woodbine, Kentucky, received a 151-month sentence. Combs was convicted of possessing with intent to distribute oxycodone, and he was a regular customer at TPI. Another co-defendant, Larry Karr of Keavy, Kentucky, pled guilty to the oxycodone conspiracy charge in May of 2018 and was later sentenced to 108 months in prison.
Under federal law, Tyndale and his co-defendants each must serve 85 percent of their prison sentence. Upon release, they will be under the supervision of the United States Probation Office for three years.
“Today’s sentencing demonstrates our commitment to holding accountable, to the full extent of the law, those who would profit from the illicit distribution of highly addictive drugs like oxycodone,” said United States Attorney Robert M. Duncan, Jr. “Hiding behind the ruse of a ‘medical clinic’ will not protect any drug trafficker from facing the consequences of the substantial harm caused by their actions.”
U.S. Attorney Duncan, Special Agent in Charge D. Christopher Evans of the Drug Enforcement Administration’s Louisville Field Division, Special Agent in Charge Matthew Line of the Internal Revenue Service, Criminal Investigation Division, Andy Beshear, Kentucky Attorney General, and Richard W. Sanders, Commissioner of Kentucky State Police jointly announced the sentences.
The investigation was conducted by the DEA, the IRS and the Kentucky Attorney’s General Office as part of an Organized Crime Drug Enforcement Task Force. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney Gregory Rosenberg.
Fayette County Man Pleads Guilty to Firearm Possession While Fleeing from PoliceRead the Press Release
LEXINGTON, Ky. – On August 30, 2019, Marcellis Means, 23, of Lexington, Kentucky, plead guilty to one count of being a convicted felon in possession of a firearm in violation of 18 U.S.C. § 922(g) before U.S. Chief Judge Danny C. Reeves.
As part of his plea, Means admitted that on July 10, 2019, he was unlawfully in possession of a firearm after previously being convicted of a felony offense. On that date, a Lexington Police Officer made contact with Means and another occupant of a parked vehicle when Means exited the vehicle and began to flee from the officer. As part of his plea agreement, Means admitted that while fleeing, he attempted to get rid of the firearm which was eventually recovered by police. The firearm was loaded with one round of ammunition chambered.
The investigation was conducted by the Lexington Police Department in conjunction with the Kentucky State Police and agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, Stuart L. Lowery, Special Agent in Charge, ATF, Louisville Field Division, Lawrence Weathers, Chief of Police, Lexington Police Department, and Richard W. Sanders, Commissioner, Kentucky State Police, jointly made the announcement.
Means is scheduled to be sentenced on December 20, 2019. He faces up to 10 years in prison and a maximum fine of $250,000. However, any sentence will be imposed by the Court after consideration of the United States Sentencing Guidelines and applicable federal statutes.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The PSN program was reinvigorated as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Missouri Man Sentenced to 40 Months for Assault at Federal Medical CenterRead the Press Release
LEXINGTON, Ky. — Brandon Terelle Ewing, age 35, of St. Louis, was sentenced yesterday, to 40 months in federal prison, by United States District Judge Karen K. Caldwell, for an assault resulting in serious bodily injury. Judge Caldwell also ordered Ewing to pay $12,599.48 in restitution to the victim’s family.
Ewing previously admitted that, on January 18, 2018, at the Federal Medical Center in Lexington, he slapped the victim and used his forearm to push the victim backwards, causing the victim to hit his head on the bed railing. Ewing also admitted that, as a result of this conduct, the victim required medical treatment for a closed head injury, which caused the victim to fall into a coma, and ultimately resulted in the victim’s death. Ewing pleaded guilty to the charge in April of 2019.
Under federal law, Ewing must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for three years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and James Robert Brown, Jr., Special Agent in Charge, FBI (Louisville Division), jointly made the announcement.
The investigation was conducted by the FBI. The United States was represented by Assistant United States Attorneys Ron L. Walker, Jr. and Kyle M. Melloan.
Four Texas Mexican Mafia Members Sentenced for Attempted Murder and Assault with a Dangerous WeaponRead the Press Release
LONDON, Ky. – Eric “Big E” Flores, 38, of San Angelo, Texas, and Salomon Martinez, 44, of Eagle Pass, Texas, were sentenced this week, to 110 and 100 months respectively, by United States District Judge Robert E. Wier, for assaulting an inmate with a dangerous weapon. Co-defendants Rodney “Joker” Galindo, 38, of Odessa, Texas, and Michael “Taz” Morin, 52, of Austin, Texas, were sentenced to 300 and 262 months respectively, for attempted murder and possession of a prohibited object in the facility. Judge Wier also ordered Flores and Martinez pay victim restitution in the amount of $3,955.57. Galindo and Morin were ordered to pay victim restitution in the amount of $611,992.
Flores and Martinez were convicted by a federal jury in April of 2019. Galindo and Morin pled guilty in March of 2019. The evidence presented established that the Defendants were members of the MEXIKANEMI, Texas Mexican Mafia, and participated in the attempted murder and assault of two Arizona Mexican Mafia members, within United States Penitentiary (USP) Big Sandy. Both victims were repeatedly stabbed with metal shanks, in a cell block on June 17, 2018. The first victim sustained permanent and life-threatening injuries, including a depressed skull fracture and traumatic brain injury. The second victim sustained serious injuries that included a fractured scapula and significant stab wounds.
Under federal law, the Defendants must serve 85 percent of their prison sentences; and upon their release, they will be under the supervision of the United States Probation Office for three years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky and Hector Joyner, Warden of USP Big Sandy, jointly made the announcement. The investigation was conducted by the USP Big Sandy Special Investigative Services Office. The United States was represented by Assistant United States Attorney Jenna E. Reed.
U.S. Attorney Recognizes Efforts of DEA Operation Crystal MountainRead the Press Release
LEXINGTON, Ky. – Robert M. Duncan, Jr., the U.S. Attorney for the Eastern District of Kentucky, recognizes and commends the efforts of the DEA, for its Operation Crystal Mountain. Operation Crystal Mountain was a sweeping methamphetamine enforcement action that culminated in several impactful investigations this year. Since January, DEA special agents from the Louisville Field Division, with support from state and local law enforcement agencies across the region, have arrested 235 individuals on federal drug-related charges, seized more than $800,000.00 in cash and 52 firearms, and seized significant quantities of heroin, fentanyl, and other drugs. During this same timeframe, DEA assisted its state and local counterparts with the arrest of 140 additional offenders, on state-level drug charges.
“Methamphetamine is a dangerous drug and this enforcement operation demonstrates the hard work of our law enforcement partners, in their efforts to diminish its impact in Southeastern Kentucky and throughout the region,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “Our Office remains committed to using all available resources to combat methamphetamine trafficking. Working with the DEA and our state and local law enforcement partners, we will continue to prioritize the prosecution of these important cases and work to make our communities safer.”
For more information about the DEA and Operation Crystal Mountain, go to: https://www.dea.gov/press-releases/2019/08/20/dea-targets-methamphetamine-three-states-operation-crystal-mountain.
Boyle County Man Convicted of Production of Child Pornography and Distribution of MethamphetamineRead the Press Release
LEXINGTON, Ky. – Richard Eugene Derringer, 47, previously of Junction City, Kentucky was convicted by a jury, following a three-day trial, on Thursday, before Senior United States District Judge Joseph M. Hood. Derringer was found guilty of using a minor to engage in sexually explicit conduct, for the purpose of producing child pornography; conspiracy to use a minor to engage in sexually explicit conduct, for the purpose of producing child pornography; possession of child pornography; and distribution of methamphetamine. Derringer was acquitted of one count of attempted distribution of child pornography.
According to the evidence at trial, Jacquolyn Walls-Land, who previously pleaded guilty to one count of using a minor to engage in sexually explicit conduct for the purpose of producing child pornography, took videos of the minor female victim while Derringer sexually abused the victim. The sexual abuse, and recording of it, occurred on March 11, 2018. The evidence established that Derringer forced the minor victim to smoke methamphetamine with him, on multiple occasions, during an approximate 3-hour period while the sexual abuse occurred. Derringer even took hits of the methamphetamine himself and then exhaled into the minor victim’s mouth. The minor victim reported the sexual abuse and forced drug use to her mother, approximately 8 hours after the abuse ended, and the minor victim was taken to a local hospital, where she tested positive for methamphetamine.
Derringer is scheduled to be sentenced on November 25, 2019. He faces a mandatory minimum sentence of fifteen years in prison, and up to 30 years, on each of the conspiracy and production counts, up to 10 years on the possession of the visual depictions of the minor engaging in sexually explicit conduct, and not more than 20 years for the distribution of methamphetamine. He also faces fines of not more than $250,000 on the production-related offenses and $2,000,000 on the distribution of methamphetamine conviction. Additionally, he faces a mandatory minimum of five years, and up to life, of supervised release, following the service of his prison sentence. However, any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky: James Robert Brown, Jr., Special Agent in Charge, Federal Bureau of Investigation; and Richard Sanders, Commissioner, Kentucky State Police, jointly announced the jury’s verdict.
The investigation was conducted by the FBI and Kentucky State Police. Assistant U.S. Attorneys David Marye and Mary Melton represented the United States.
Substance Abuse Clinic Agrees to Pay Federal Government $200,494 to Settle Civil ClaimsRead the Press Release
LEXINGTON, Ky. – 2nd Chance, PLLC (“2nd Chance”), a substance abuse treatment center in Lexington, has agreed to pay $200,494 to resolve civil allegations that it violated the False Claims Act, a federal law that prohibits causing the submission of false or fraudulent claims to the federal government.
According to the settlement agreement, the United States alleged that 2nd Chance caused the submission of false claims to the Kentucky Medicaid program through its referral of urine drug testing services to Compliance Advantage, LLC, a toxicology laboratory in Nicholasville, Kentucky known as “CAL Lab.” CAL Lab provided 2nd Chance with a chemistry analyzer, which is a valuable piece of laboratory equipment that enabled 2nd Chance to perform some urine drug testing on-site beginning on or around October 3, 2016. On November 29, 2016, CAL Lab and 2nd Chance entered into a lease agreement that required 2nd Chance to pay CAL Lab a monthly fee for use of the analyzer. But, 2nd Chance did not make any payments for use of the analyzer until March 14, 2017.
Accordingly, for a five-month period, 2nd Chance received the benefit of the analyzer without paying for it. The United States alleged this was a substantial benefit to 2nd Chance: not only did 2nd Chance receive the benefit of the test results for use in patient care, 2nd Chance also received over $400,000 from Kentucky Medicaid for drug tests performed on the analyzer during this period.
For its part, CAL Lab received referrals for more complex drug testing from 2nd Chance’s physicians. CAL Lab then submitted claims for payment for that testing to Kentucky Medicaid, totaling close to $90,000. According to the settlement agreement, the United States alleged that these claims were false, because they were tainted by 2nd Chance’s acceptance and use of the chemistry analyzer without making lease payments to CAL Lab in violation of the Anti-Kickback Statute, a federal law that prohibits healthcare providers from accepting anything of value in exchange for the referral of services paid for by federal health insurance programs, including Kentucky Medicaid.
“Sweetheart deals paid for by taxpayers, as the Government alleged in this case, will not be tolerated,” said Derrick Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We will work with our law enforcement partners to investigate and prosecute organizations entering into such illicit arrangements.”
This case is part of a larger investigation into CAL Lab and affiliated individuals and entities. Earlier this year, in a criminal matter, Samuel L. Ford and Dinesh Goyal pled guilty to conspiracy to commit an offense against the United States in connection with their illegal billing arrangement with CAL Lab. Specifically, Ford, Goyal, and CAL Lab’s owner, Mason Routt, agreed that urine drug tests referred to and performed by CAL would be billed to certain federal health insurance programs using another laboratory’s billing information in order to evade payment restrictions placed on CAL by those insurers. Earlier this week, Mr. Ford was sentenced to 24 months in federal prison and 36 months supervised release for his role in this scheme. Mr. Goyal is scheduled to be sentenced on October 15, 2019.
In June 2018, CAL Lab agreed to a civil settlement with the United States that included the entry of a civil judgment against it and in favor of the United States in the amount of $2,816,015. As part that settlement, CAL Lab admitted that it violated the False Claims Act by knowingly failing to return to federal health insurance programs overpayments it received for specimen validity testing – a service not covered by Medicare or Kentucky Medicaid.
The Government’s work in this investigation illustrates its commitment to combatting health care fraud, waste, and abuse. Tips from all sources about potential fraud, waste, and abuse can be reported to the U.S. Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
The case against 2nd Chance was investigated by the Federal Bureau of Investigation, the U.S. Department of Health and Human Services, Office of Inspector General, and the U.S. Attorney’s Office for the Eastern District of Kentucky. Assistant United States Attorney Christine Corndorf represented the United States. The claims resolved by the settlement with 2nd Chance are allegations only; there has been no determination of liability.
Lexington Man Sentenced to 60 months for Trafficking FentanylRead the Press Release
LEXINGTON, Ky. – Jameel Sleet, 18, of Lexington, was sentenced today, to 60 months in federal prison, by United States District Judge Danny C. Reeves, for possession with intent to distribute fentanyl.
In November 2018, Sleet was stopped by Lexington Police, who found him with approximately 40 grams of fentanyl, 39 grams of cocaine, and 16 grams of crack cocaine. In his plea agreement, Sleet admitted that he intended to distribute the drugs. Sleet pleaded guilty in April 2019.
Under federal law, Sleet must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for four years following his release.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; D. Christopher Evans, Special Agent in Charge of the DEA; and Lawrence Weathers, Chief of the Lexington Police Department, jointly announced the sentence.
The investigation was conducted by the U.S. Drug Enforcement Administration and the Lexington Police Department. The United States was represented by Assistant U.S. Attorney David Kiebler.
This case was prosecuted as part of the Organized Crime and Drug Enforcement Task Force’s (OCDETF) Operation Synthetic Opioid Surge (SOS), a Department of Justice initiative designed to target trafficking of dangerous synthetic opioids.
Lexington Man Pleads Guilty to Trafficking FentanylRead the Press Release
LEXINGTON, Ky. – Maurice Love, 21, of Lexington, pleaded guilty in federal court today, before U.S. District Judge Danny C. Reeves, to possession with the intent to distribute fentanyl.
As part of his guilty plea, Love admitted that, on February 8, 2019, he possessed 83 grams of fentanyl, $2,620 in cash, a digital scale, and powder used to mix the fentanyl prior to distribution. Love also admitted that he intended to distribute the fentanyl to others. Love was indicted in May of 2019.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; D. Christopher Evans, Special Agent in Charge of the DEA; and Lawrence Weathers, Chief of the Lexington Police Department, jointly announced the guilty plea.
The investigation was conducted by the U.S. Drug Enforcement Administration and the Lexington Police Department. The United States was represented by Assistant U.S. Attorney David Kiebler.
Love is scheduled to be sentenced on December 6, 2019. He faces up to 40 years in prison and a maximum fine of $5,000,000. However, any sentence will be imposed by the Court, after its consideration of the U.S. Sentencing Guidelines and the federal statutes.
This case was prosecuted as part of the Organized Crime and Drug Enforcement Task Force’s (OCDETF) Operation Synthetic Opioid Surge (SOS), a Department of Justice initiative designed to target trafficking of dangerous synthetic opioids.
Fayette County Man Sentenced to 87 Months for Armed Drug TraffickingRead the Press Release
LEXINGTON, Ky. – Marquis Benjamin Lewis, 41, of Lexington, was sentenced to 87 months in federal prison today, by United States District Judge Danny C. Reeves, after pleading guilty to possessing cocaine and mixtures of heroin and fentanyl with the intent to distribute them, possessing a firearm as a convicted felon, and possessing a firearm in furtherance of drug trafficking.
On October 24, 2018, officers with the Lexington Police Department executed a search warrant at Lewis’s residence in Lexington. During the search, officers located quantities of cocaine and mixtures of heroin and fentanyl, packaged separately for distribution, along with various items of drug paraphernalia. In addition to the narcotics, officers also located a total of four firearms, two of which were stolen, dispersed throughout Lewis’s residence and vehicle. Lewis had a prior felony conviction and was prohibited from owning or possessing a firearm.
Under federal law, Lewis must serve 85 percent of his sentence. Upon completion of his imprisonment, he will be under the supervision of the United States Probation Office for a period of three years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Stuart L. Lowery, Special Agent in Charge, ATF, Louisville Field Division; and Lawrence Weathers, Chief of the Lexington Police Department, jointly made the announcement.
ATF and the Lexington Police Department conducted the investigation. The United States was represented by Assistant United States Attorney Francisco Villalobos II.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The PSN program was reinvigorated as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Eastern Kentucky Landscape Owner Sentenced for Violating the Fair Labor Standards Act and H-2A Visa ProgramRead the Press Release
ASHLAND, Ky. – Michael Anthony Wheeler, owner of Tri-State Lawn Care Inc. (Tri-State), has been sentenced to serve five years on unsupervised probation and ordered to pay $327,087 in back wages to 17 employees, for violating requirements of the Fair Labor Standards Act (FLSA) and the H-2A visa program.
According to his plea agreement, Wheeler pleaded guilty to willful violations of the FLSA’s overtime requirement and eight counts of making false statements on his H-2A applications. In addition, Tri-State and Wheeler agreed to a 10-year H-2A debarment, five years of third party monitoring, and $125,000 in fines and money judgments.
Tri-State – a landscaping, construction, flooring, heating and air company – provides residential and commercial services to Ashland, Huntington, West Virginia, and Portsmouth, Ohio.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Cheryl M. Stanton, Wage and Hour Administrator, U.S. Department of Labor’s Wage and Hour Division; Patrick S. Mills, Special Agent in Charge of the Chicago Field Office, U.S. State Department's Diplomatic Security Service; John Condon, Special Agent in Charge, Homeland Security Investigations and Richard Sanders, Commissioner, Kentucky State Police, jointly announced the sentence.
The investigation was conducted by the U.S. Department of Labor, including its Wage and Hour Division, Office of the Inspector General, and Office of the Solicitor, U.S. Department of State’s Diplomatic Security Service, Homeland Security Investigations and the Kentucky State Police. The United States was represented by Assistant United States Attorneys Hydee Hawkins and David Marye.
Ashland Physician and Substance Abuse Treatment Center Agree to Pay $1.4 Million to Resolve Civil ClaimsRead the Press Release
ASHLAND, Ky. – An Ashland addiction treatment specialist, Dr. Rose O. Uradu, and her substance abuse treatment center, Ultimate Care Medical Services, LLC d/b/a Ultimate Treatment Center, have agreed to pay $1.4 million to resolve civil allegations that they violated the Controlled Substances Act, and defrauded the Medicare and Kentucky Medicaid programs.
This settlement resolves a civil lawsuit alleging that Ultimate Treatment Center, at the direction of Dr. Uradu, sought and received payments from Medicare and Kentucky Medicaid for services that were not actually provided to patients. According to the Complaint, between January 2013 and September 2014, defendants billed these government programs for “evaluation and management” services, purportedly provided to patients who visited the clinic to receive daily methadone doses. To be reimbursed by Medicare and Kentucky Medicaid, evaluation and management services should include performance of an examination of the patient, a patient history, and medical decision-making. The United States alleged that Ultimate Treatment Center did not actually perform these services when patients received their methadone doses, but falsely documented the performance of these services, in the patients’ medical records, in order to create the false appearance that the reimbursement was justified.
The United States further alleged that, during the period July 2013 to December 2014, defendants billed Medicare and Kentucky Medicaid for complex urine drug testing that the clinic’s equipment was incapable of performing. The United States contended that Defendants’ submission of claims to Medicare and Kentucky Medicaid for services not provided as billed violated the False Claims Act, a federal law the prohibits submitting false or fraudulent claims for payment to the government.
In addition to false claims, the United States alleged that Dr. Uradu issued buprenorphine prescriptions to more patients than permitted by law for a three-month period in 2014. Buprenorphine is marketed under the brand names Suboxone and Subutex, and is used medically in the treatment of opioid addiction. Because buprenorphine has the potential for diversion and abuse by recreational users, it is a controlled substance regulated by law. Dr. Uradu was only permitted to treat 100 patients with buprenorphine drug products, but repeatedly exceeded her patient limit. According to the settlement agreement, the United States alleged that Dr. Uradu violated the Controlled Substances Act each time she wrote a prescription over her limit.
The Government’s work in this investigation illustrates its commitment to combating health care fraud and violations of controlled substances laws. Tips from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the U.S. Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477). Tips about possible violations of controlled substances laws can be reported at www.dea.gov/submit-tip.
The case against Dr. Uradu and Ultimate Treatment Center was investigated by the U.S. Drug Enforcement Administration, Federal Bureau of Investigation, and the Kentucky Attorney General’s Medicaid Fraud and Abuse Control Unit. The U.S. Department of Health and Human Services, Office of Inspector General assisted with the litigation. Assistant United States Attorneys Christine Corndorf and Meghan Stubblebine handled the matter for the United States.
The case is captioned United States v. Rose O. Uradu, M.D., et al., Case No. 0:18-cv-00066-HRW. The claims resolved by the settlement with Dr. Uradu and Ultimate Treatment Center are allegations only, and there has been no determination of liability.
Ashland Man Pleads Guilty to Representative Payee FraudRead the Press Release
Defendant was converting funds for personal care patients to his personal use.
ASHLAND, Ky. – Today, an Ashland man admitted in federal court that he unlawfully used representative payee funds, which were received on behalf of individuals living in the Artrip Personal Care Home in Ashland, Kentucky.
Mitchell Allen Artrip, 68, pleaded guilty to one count of representative payee fraud before United States District Court Judge David Bunning. Artrip admitted that, in his role as part owner of Artrip Personal Care home, he received representative payee benefits from the Social Security Administration on behalf of certain individuals living in his personal care home. According to the plea agreement, between November 2013 and November 2017, Artrip received representative payee funds for more than twenty individuals, totaling $241,142. Artrip admitted he spent a total of $97,806 of those representative payee funds on expenses unrelated to the use and benefit of the beneficiaries, including on his two rental properties and personal farm.
Artrip agreed pay $97,806 in restitution to the victims. The restitution will be divided among the victims according to the plea agreement. Pursuant to the plea agreement, Artrip also agreed to sell the personal care home and withdraw as the representative payee for any current Social Security beneficiaries within the next sixty days.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Wayne R. Warren, Acting Special Agent in Charge, Atlanta Field Division of the Social Security Administration, Office of Inspector General, jointly made the announcement. The investigation is part of the Department of Justice’s Elder Justice Initiative and was assisted by the Kentucky Elder Justice Task Force, which is comprised of federal, state, and local law enforcement and government agencies working together to protect the Commonwealth’s elderly population from fraud and abuse.
The investigation was directed by the SSA-OIG. The United States was represented by Assistant U.S. Attorney Kate K. Smith.
Artrip is scheduled to be sentenced on January 24, 2020 at 9:00 a.m., in federal court in Ashland. He faces up to five years in prison. However, any sentence will be imposed by the Court, after its consideration of the U.S. Sentencing Guidelines and the applicable federal statutes.
Detroit Man Sentenced to 292 Months for Conspiracy to Distribute Heroin and CarfentanylRead the Press Release
LEXINGTON, Ky. — Lamar Thornton, aka “Juice”, 26, of Detroit, was sentenced today, to 292 months in federal prison, by United States District Judge Karen K. Caldwell, for conspiracy to distribute heroin and carfentanyl.
In February 2019, a jury found Thornton guilty of participating in the conspiracy. The evidence at trial established that from July 2016 to January 2017, Thornton was a source of supply of heroin and carfentanyl and the Court ultimately found that, during the conspiracy, Thornton was responsible for 1.872 kilograms of heroin and 315 grams of carfentanyl. Thornton, who resided in Detroit, arranged for the heroin and carfentanyl to be distributed in Central Kentucky. The scope of this drug trafficking included an overdose in Central Kentucky. Thornton’s co-defendants, Jerrod Doolin, Jeffrey Ruggiero, Darmon Shaw, and Thomas Lehmann were previously sentenced for their participation in the conspiracy. Thornton has a prior conviction for trafficking in heroin and had absconded from parole.
“A critical component of our drug enforcement effort is the prosecution of out-of-state sources of supply and drug dealers who cause overdoses,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “We remain committed to prosecuting these important cases. The defendant’s distribution of heroin and carfentanyl endangered many lives and contributed to addiction in Central Kentucky, for the sake of profits. His callous conduct certainly warrants the lengthy sentence he received.”
Under federal law, Thornton must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for eight years.
United States Attorney Duncan and Christopher Evans, Special Agent in Charge of the DEA, jointly made the announcement.
The investigation was conducted by the DEA. The United States was represented by Assistant United States Attorneys Cynthia T. Rieker and Todd Bradbury.
Lexington Man Sentenced for Role in Health Care Fraud ConspiracyRead the Press Release
LEXINGTON, Ky. – On Monday, a Lexington man was sentenced, by Senior U.S. District Judge Joseph M. Hood, for his involvement in a health care fraud conspiracy. Samuel L. Ford, 40, was sentenced to 24 months in federal prison and 36 months of supervised release, for his role in submitting fraudulent claims for urine drug testing to insurers that administer the Kentucky Medicaid program.
Ford previously admitted to the conspiracy with Mason Routt, the owner of a toxicology laboratory in Nicholasville, Kentucky, known as C.A.L. Laboratory Services (“CAL”), and Dinesh Goyal, the owner of a separate toxicology laboratory in Owensboro, Kentucky known as Tristate Medical Laboratory (“Tristate”). CAL provided urine drug testing services for physician clients. Beginning in late 2015, health care organizations who administer the Kentucky Medicaid program placed payment restrictions on CAL’s claims seeking reimbursement for urine drug tests, due to concerns about the legitimacy of those claims. Ford acknowledged that these payment restrictions dramatically reduced CAL’s revenue.
Ford admitted that in order to evade these payment restrictions, in October 2016, he, Goyal, and Routt agreed that urine drug tests referred to and performed by CAL would be billed to the health insurance programs using Tristate’s billing information, falsely representing that the tests were performed by Tristate. In this way, CAL received reimbursements to which it was not entitled. Ford admitted in his plea agreement that these fraudulent claims caused Humana Caresource, Aetna Coventry Cares, and Anthem Blue Cross & Blue Shield Medicaid to suffer a combined loss of $1,378,449. As part of the sentence imposed today, Ford was ordered to repay that $1,378,449 as restitution, and will not be allowed to work in the medical billing field during his three years of supervised release.
Dinesh Goyal pled guilty to the same offense in July 2019, and is scheduled to be sentenced on October 15, 2019.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; James Robert Brown, Jr., Special Agent in Charge, Federal Bureau of Investigation, Louisville Field Office; and Derrick L. Jackson, Special Agent in Charge, Department of Health and Human Services, Office of Inspector General (HHS-OIG), Atlanta Field Office, jointly announced the sentence.
The investigation was conducted by the FBI and HHS-OIG. The United States was represented by Assistant U.S. Attorney Paul McCaffrey.