Eastern District of Kentucky
Press releases recorded for this federal judicial district.
Physician Employees and Owners of Tennessee Pain Clinic Indicted for Drug Trafficking and Money LaunderingRead the Press Release
The indictment alleges the illegal drug trafficking resulted in a death
LONDON, Ky. – In a federal indictment unsealed yesterday, two owners of a Hixson, Tenn., pain clinic and two physicians working at the clinic have been charged with conspiring to illegally distribute prescription narcotics – including oxycodone and oxymorphone – in Eastern Kentucky. The indictment further alleges that their drug trafficking conspiracy resulted in a death. The clinic, the Tennessee Pain Institute (TPI), closed shortly after a search warrant was executed in May 2016.
The owners of TPI, Anwar Mithavayani, 54, and Pete Tyndale, 46, both of South Florida, are charged in the superseding indictment, along with two physicians working at the clinic: Timothy Gowder, 70, of Oak Ridge, Tenn. and Gary Moore, 66, of Ooltewah, Tenn. Gowder and Moore were initially charged in the case in May 2017. The indictment also charges the four with multiple counts of money laundering. The superseding indictment, returned by a federal grand jury on January 25, 2018 alleges that the defendants received more than $8 million as a result of their drug trafficking. Two others, James Bradley Combs, 40, of Woodbine, Ky., and Larry Karr, 73, of Keavy, Ky., have also been charged for their alleged roles in the offenses.
Robert M. Duncan, Jr., U.S. Attorney for the Eastern District of Kentucky; Chris Evans, Special Agent in Charge, Drug Enforcement Administration; Christopher Altemus, Acting Special Agent in Charge of IRS, Criminal Investigation Division; Andy Beshear, Kentucky Attorney General; and Richard W. Sanders, Commissioner of Kentucky State Police, jointly announced the charges.
The DEA, the IRS Criminal Investigation Division, the Kentucky Attorney General’s Office, and the Kentucky State Police conducted the investigation, with support from Appalachia HIDTA’s Diversion Task Force. Assistant U.S. Attorney Greg Rosenberg represents the United States in the case.
The trial is currently set for April 30. If convicted, Mithavayani, Tyndale, Gowder, and Moore face a minimum of 20 years in prison and a maximum of life imprisonment. However, any sentence following a conviction would come after the Court considers the U.S. Sentencing Guidelines and relevant federal statutes.
Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which government must prove guilt beyond a reasonable doubt.
California Couple Sentenced for Drug Trafficking and Firearm OffensesRead the Press Release
LEXINGTON, Ky. - A couple from Fresno, Cal. has been sentenced to federal prison for drug and firearm offenses. Chief U.S. District Judge Karen K. Caldwell formally sentenced the couple on Wednesday, February 7, 2018.
Jessica Acosta, 29, and Luis R. Morales-Montanez, 27, were each sentenced to 15 years in prison, for possession with the intent to distribute 500 grams or more of methamphetamine, cocaine, and marijuana. Both were also convicted of possessing nine firearms, during and in furtherance of the drug crimes. Both forfeited ownership of the firearms, $42,507 in cash, and a 2013 Chevy pickup truck.
In their guilty pleas, Acosta and Morales-Montanez previously admitted that they traveled from Fresno, to Lexington and established a residence on Larkin Road in early 2017. They then possessed with intent to distribute marijuana and cocaine from the residence. They also admitted that the cash found was proceeds of the distribution of drugs and that the 2013 truck and nine firearms were used in furtherance of the distribution of drugs. Additionally, on October 25, 2017, a federal jury convicted both of possessing with the intent to distribute more than half a kilogram of crystal methamphetamine, which they had concealed in another apartment near their Larkin Road address.
Under federal law, both Acosta and Morales-Montanez must serve 85 percent of their prison sentences; and upon release, they will each be under the supervision of the United States Probation Office for five years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Christopher Evans, Special Agent in Charge, DEA; and Acting Chief of Police Ron Compton, Lexington Police Department, jointly announced the sentences.
These cases were prosecuted as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
Michigan Men Sentenced for Conspiracy to Distribute Oxycodone and a Firearm OffenseRead the Press Release
LEXINGTON, Ky., - Two Detroit men have been sentenced to federal prison for drug and firearm offenses. U.S. District Judge Danny C. Reeves formally sentenced each, on Friday, February 2, 2018.
Marcella Lorenzo Dunbar, 37, was sentenced to 105 months in prison for conspiracy to distribute oxycodone and being a felon in possession of a firearm.
Gerald Jones, 31, was sentenced to 51 months in prison for conspiracy to distribute oxycodone.
Dunbar and Jones previously admitted that they had traveled from Detroit to Winchester in late 2016, and began selling oxycodone to local users. Dunbar also admitted renting a house in Winchester so that he and Jones could sell oxycodone. When arrested, Dunbar and Gerald Jones were found in possession of 1,550 oxycodone pills for sale, a firearm, and $4,750 in drug proceeds. Dunbar also admitted that he had previously been convicted of a felony and was prohibited from possessing a firearm. Dunbar and Jones pleaded guilty to the charges in October 2017.
Under federal law, Dunbar and Jones must serve 85 percent of their prison sentences; and, upon release, they will be under the supervision of the United States Probation Office for 5 years and 3 years, respectfully.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Michael Klinger, Field Office Director, Department of Homeland Security, Detroit; Richard Sanders, Commissioner of the Kentucky State Police; and Clark County Sheriff Berl Perdue, Jr., jointly announced the sentences.
These cases were prosecuted as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
The Department of Homeland Security, Kentucky State Police, and the Clark County Sheriff’s Office conducted the investigation. Assistant United States Attorney Roger W. West represented the United States.
Former Kentucky River Regional Jail Deputy Jailer Pleads Guilty to Civil Rights Violation for Using Excessive Force Against an InmateRead the Press Release
LEXINGTON, Ky. – A former deputy jailer at an Eastern Kentucky jail has entered a guilty plea to a federal criminal civil rights charge related to his role in an unprovoked assault of a pretrial detainee.
Jarrod Allen Lucas, 28, entered his guilty plea today, before U.S. District Chief Judge Karen K. Caldwell.
In his plea, Lucas admitted that, on October 10, 2011, he assaulted an inmate immediately after his Supervisor - Damon Hickman - punched the inmate on the side of his head. Hickman struck the inmate with such force that he broke his hand and caused the inmate’s ear to bleed. Lucas and another supervisor, Matthew Amburgey, then knocked the inmate to the ground and repeatedly kicked him. Lucas admitted that he kicked the inmate without justification.
The Kentucky River Regional Jail houses pretrial detainees from Perry and Knott Counties. As a deputy jailer, Lucas was responsible for the custody, care, safety and control of the inmates at the jail.
Hickman pleaded guilty last year for his role in a separate assault at the same jail. The victim of that assault died.
Amburgey pleaded guilty last week for his role in the October 10, 2011, assault involving Lucas and Hickman.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; John M. Gore, Acting Assistant Attorney General for the Civil Rights Division; and Amy Hess, Special Agent in Charge, Federal Bureau of Investigation, jointly made the announcement.
The FBI conducted the investigation. Assistant U.S. Attorney Hydee Hawkins of the United States Attorney’s Office and Trial Attorney Sanjay Patel of the Civil Rights Division prosecuted this case on behalf of the federal government.
Sentencing for Lucas is scheduled for May 1, 2018, at 2:00 p.m. in Lexington. He faces up to 12 months imprisonment. The U.S. District Court will consider the U.S. Sentencing Guidelines and the federal statutes before imposing sentence.
Two Men Illegally Residing in Lexington Convicted of Drug Trafficking, Firearms, and Immigration OffensesRead the Press Release
LEXINGTON, Ky. – Two Mexican nationals, illegally residing in Lexington, were convicted by a federal jury yesterday, following a two-day trial in U.S. District Court. Fernando Rafael Lara Salas, who had previously used the alias of Jesus Ruiz Vega, age 40, and Jorge Macias Pedroza, age 30, were each convicted of conspiracy to distribute more than five kilograms of cocaine, possession with intent to distribute multiple controlled substances, including fentanyl, methamphetamine, and tramadol, as well as being an alien in possession of a firearm. In addition, Lara Salas was also convicted of possession with intent to distribute more than five kilograms of cocaine, possession of a firearm in furtherance of a drug-trafficking crime, possession of a firearm as a convicted felon, and unlawfully entering the United States after previously being deported for a felony drug possession offense.
The joint investigation by federal and state law enforcement into the drug trafficking activities of both defendants began in August 2016 and culminated with the execution of search warrants, at the homes of both defendants and a cargo trailer used by both men. The searches resulted in the seizure of 6 kilograms of cocaine, 4 kilograms of tramadol, residual amounts of fentanyl, more than 50 grams of methamphetamine, and two 9 mm firearms. Lara Salas also had approximately $110,000 in U.S. currency seized from his residence. Lara Salas was illegally present in the United States at the time of his arrest, due to his prior deportation resulting from a previous conviction on a federal drug possession charge. Macias Pedroza was also illegally present in the United States at the time of his arrest. The investigation was a cooperative effort led by investigators with the Drug Enforcement Administration (DEA); the Department of Homeland Security, Immigration and Customs Enforcement (ICE); and the Lexington Police Department.
“The defendants in this case were dealing in massive quantities of dangerous drugs,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “The number of overdose deaths in our community continues to rise, and the quantities of illegal drugs involved in this criminal conspiracy were placing many lives in danger. Without the outstanding work of our law enforcements partners, this prosecution would not have been possible. Their efforts removed these drugs from our streets, made our community safer, and saved lives. Prosecuting those who deal in this scourge to our community will continue to be a core priority of our Office.”
United States Attorney Duncan; Darrell Christopher Evans, Special Agent in Charge, DEA Louisville; Shawn Byers, Assistant Field Office Director, ICE; and Ron Compton, Acting Chief of Police, Lexington-Fayette County Division of Police, jointly announced the jury’s verdict.
The sentencing hearings for both defendants are currently scheduled for May 4, 2018, at the federal courthouse in Lexington. Lara Salas faces 25 years to life in prison and Pedroza faces 10 years to life. The U.S. District Court will consider the U.S. Sentencing Guidelines and the federal statutes before imposing sentence.
Corbin Man Found Guilty of Devising Murder-for-Hire SchemeRead the Press Release
LONDON, Ky. — William Timothy Sutton, 55, of Corbin, Ky., has been convicted of four counts of interstate murder-for-hire and one count of possession of firearms by a convicted felon. The verdict came yesterday, following six days of trial, which included testimony from all four intended victims of the scheme. The jury deliberated for less than two hours in reaching its verdict.
The evidence at trial established that, in March of 2017, while incarcerated in the Whitley County Detention Center, Sutton offered to pay a fellow inmate forty thousand dollars ($40,000) to murder the Whitley County Attorney, the Whitley/McCreary County Commonwealth’s Attorney, and two ex-girlfriends. The evidence further established that Sutton mailed a letter to a relative from jail, asking the relative to provide the would-be hitman with one of Sutton’s own firearms to further the scheme. Law enforcement became aware of the plan, interceded, and ultimately arrested Sutton.
“The despicable conduct in this case not only victimized four individuals, but was a brazen attack upon the judicial process and the rule of law,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “Protecting the public from violence and ensuring the integrity of our system of justice are core principles of the Department of Justice and central priorities of our Office. In our efforts to make our community safer, we will continue to confront and prosecute criminal conduct that undermines these principles. I want to commend the work of our valued law enforcement partners, whose efforts made this prosecution possible.”
Sutton is scheduled to be sentenced on May 30, 2018. He faces up to ten years on each offense. However, any sentence would be imposed only after the Court has considered the U.S. Sentencing Guidelines and the applicable statutes.
US Attorney Duncan; Stuart Lowrey, Special Agent In-Charge, ATF; and Commissioner Rick Sanders of the Kentucky State Police, jointly announced the jury’s verdict.
The ATF and the Kentucky State Police conducted the investigation preceding the indictment. Assistant United States Attorney W. Samuel Dotson represented the United States.
Westbank Drug Dealer Pleads GuiltyRead the Press Release
U.S. Attorney Duane A. Evans announced that TOSH TOUSSAINT, age 27, has pleaded guilty to one count of possession with the intent to distribute cocaine base, in violation of Title 18, United States Code, Section 841(b)(1)(C), and one count of possession and use of a firearm in furtherance of drug trafficking, in violation of Title 18, United States Code, Section 924(c).
TOUSSAINT faces a sentence of up to 20 years in the Bureau of Prisons, at least three years of supervised release, and a fine of up to $1,000,000 as to the drug trafficking crime in Count One, and a sentence of at least five (5) years up to life in the Bureau of Prisons, consecutive to any other sentence, five years of supervised release, and a fine of up to $250,000 for the firearm crime in Count Two.
Sentencing for TOUSSAINT has been set for May 17, 2018 at 10:00 a.m. before Judge Nannette Jolivette Brown.
On November 13, 2013, members of the Jefferson Parish Sheriff’s Office and the New Orleans the FBI’s Gang Task Force arrested TOUSSAINT when they found him in possession of approximately 10 grams of cocaine base (crack cocaine) and Taurus 9mm semi-automatic handgun.
The U.S. Attorney wishes to thank the hard work of the FBI’s New Orleans Gang Task Force and the Jefferson Parish Sheriff’s Office in investigating this matter. Assistant United States Attorney Myles Ranier is in charge of the prosecution.
Lexington Man Sentenced to 60 Months for Arson of Qdoba RestaurantRead the Press Release
LEXINGTON, Ky. - Bennie Davis, 21, of Lexington, was sentenced today to 60 months in federal prison, by United States Senior District Court Judge Joseph M. Hood, for arson of a commercial building. Davis was also ordered to pay restitution, in the amount of $250,000.
Davis previously admitted that, on April 25, 2017, he forcibly entered the Lexington Qdoba Mexican Eats Restaurant on Nicholasville Road, after the store had closed. Davis admitted that he had been an employee of the store, but had been fired just before the arson. Davis started the primary fire in the back room and stole a cash drawer from the safe. Davis pleaded guilty to the charges in October of 2017.
Under federal law, Davis 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 Stuart Lowrey, Special Agent in Charge of the ATF, jointly announced the sentence.
The ATF and the Lexington Fire Department conducted the investigation. Assistant United States Attorney Roger W. West represented the United States.
Cincinnati Man Sentenced to Life Imprisonment for Distributing Carfentanil that Resulted in DeathRead the Press Release
LEXINGTON, KY. – Robert Lee Shields, 30, of Cincinnati, was sentenced today by U.S. District Court Judge Danny C. Reeves to serve two terms of life imprisonment for distribution of carfentanil that resulted in death and serious bodily injury.
Shields was convicted after a jury trial in Lexington in July 2017. The jury found Shields guilty of all counts, including conspiracy to distribute carfentanil, fentanyl and heroin, distribution of carfentanil resulting in death and distribution of carfentanil resulting in serious bodily injury.
Shields co-defendant, Wesley Scott Hamm, was found guilty of the same charges. Hamm was recently sentenced by Judge Reeves to serve terms of imprisonment of 420 months as to each of the counts of distribution resulting in death or serious bodily injury, and 240 months for the conspiracy charge. All counts were ordered to run concurrently.
The charges against both Shields and Hamm resulted from multiple near-fatal overdoses and one fatal overdose in Montgomery County in August 2016. The investigation revealed that the lethal substance was carfentanil, a drug commonly used as a general anesthetic for large animals, such as elephants. It is 100 times more potent than fentanyl, and 10,000 times more potent than morphine.
“Reducing access to opioids is a top priority for the Department of Justice,” said United States Attorney Robert M. Duncan, Jr. “We are committed to this fight by aggressively prosecuting drug traffickers that spread their poison in our communities. The sentences imposed should send a strong message that illegally distributing lethal drugs will not be tolerated in the Eastern District of Kentucky. If you distribute drugs and cause a death, you could spend the rest of your life in prison. I want to commend the federal and local agencies that worked in partnership to investigate this case. Without their quick action, more lives could have been lost.”
Under federal law, Hamm must serve 85 percent of his prison sentence. There is no parole in the federal system which will mean that Shields will serve life for his sentences.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Christopher D. Evans, Special Agent in Charge, DEA Louisville, Fred Shortridge, Montgomery Co Sheriff and Chief David Charles, Mt. Sterling Police Department. jointly made the announcement today after the sentencing hearing.
Investigators with the Drug Enforcement Administration, the Montgomery County Sheriff’s Department, and the Mt. Sterling Police Department conducted the investigation that led to the arrest, prosecution and conviction of both Shields and Hamm. Assistant United States Attorney Todd Bradbury represented the United States.
Paris Man Pleads Guilty to Conspiracy to Distribute Crack CocaineRead the Press Release
LEXINGTON, Ky. — Cole Lee Rankin, 24, of Paris, pleaded guilty today to Conspiracy to Distribute Cocaine Base.
In his guilty plea, Rankin admitted that he had, on several occasions, distributed cocaine base, in Harrison County and Bourbon County, Kentucky, between March 2015 and September 2016.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Stuart Lowery, Special Agent in Charge, ATF; Richard Sanders, Commissioner Kentucky State Police; Burl Purdue, Clark County Sheriff; and Shain Stephens Harrison County Sheriff, jointly announced the guilty plea.
The ATF, Kentucky State Police, Clark County Sheriff’s Department, and Harrison County Sheriff’s Department conducted the investigation. Assistant United States Attorney Lauren Tanner Bradley represented the United States in the case. The case is part of the Project Safe Neighborhoods (PSN) Program, a Department of Justice initiative to reduce violent crime through partnerships between federal, state, and local law enforcement. The goal of the PSN Program is to use these partnerships to make communities safer.
Rankin will appear for sentencing before Chief United States District Judge Karen K. Caldwell in Lexington, on April 20, 2018, at 1:30 p.m.
Rankin faces a mandatory minimum sentence of five years and a maximum prison sentence of 40 years. The Court, however, will impose any sentence after consideration of the U.S. Sentencing Guidelines and the applicable federal statutes.
Former Supervisory Deputy Jailer at Kentucky River Regional Jail Pleads Guilty to Assaulting an InmateRead the Press Release
LEXINGTON, Ky. – A former supervisory deputy jailer at an Eastern Kentucky detention center has entered a guilty plea to a federal charge related to his role in an unprovoked violent assault of a detainee.
Matthew B. Amburgey, 29, entered his guilty plea today, before U.S. District Chief Judge Karen K. Caldwell.
In his plea, Amburgey admitted that, on October 10, 2011, he used excessive force against a pretrial detainee at the Kentucky River Regional Jail, after he witnessed another Supervisory Deputy Jailer, Damon Hickman, assault the inmate without justification during the booking process. Hickman punched the inmate on the side of his head with such force that it broke his hand and caused the inmate’s ear to bleed. Amburgey and other deputies then knocked the inmate to the ground and repeatedly kicked him. Amburgey admitted that he kicked the inmate without justification.
The Kentucky River Regional Jail houses pre-trial detainees from Perry and Knott Counties. As a supervisory deputy jailer, Amburgey was responsible for the custody, care, safety and control of the inmates at the jail.
Hickman pleaded guilty last year for his role in a separate assault at the same jail. The victim of that assault died.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; John M. Gore, Acting Assistant Attorney General for the Civil Rights Division; and Amy Hess, Special Agent in Charge, Federal Bureau of Investigation, jointly made the announcement.
The investigation was conducted by the FBI. Assistant U.S. Attorney Hydee Hawkins of the United States Attorney’s Office and Trial Attorney Sanjay Patel of the Civil Rights Division prosecuted this case on behalf of the federal government.
Sentencing for Amburgey is scheduled for April 12, 2018 at 1:00 pm. He faces up to 12 months imprisonment. The U.S. District Court will consider the U.S. Sentencing Guidelines and the federal statutes before imposing sentence.
Lexington Man Sentenced to 175 Months for Receiving Child PornographyRead the Press Release
LEXINGTON, Ky. – A Lexington man, Matthew Ryan Murdoch, 35, has been sentenced to 175 months in federal prison, to be followed by a lifetime term of supervised release, for knowingly receiving child pornography.
On Monday, Senior United States District Judge Joseph M. Hood formally sentenced Murdoch, who must serve 85 percent of his federal prison sentence.
Murdoch previously admitted that, in October of 2016, he knowingly received images of child pornography, by using the uTorrent program on is Android device. A forensic examination of Murdoch’s device revealed approximately 4,367 still images and 24 videos of child pornography.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Steven L. Igyarto, Special Agent in Charge, Department of Homeland Security - Homeland Security Investigations; and Kentucky Attorney General Andy Beshear jointly announced the sentence.
The investigation was conducted by the Cyber Crimes Branch of the Department of Criminal Investigations within the Kentucky Office of the Attorney General and the Department of Homeland Security – Homeland Security Investigations. The United States was represented by Assistant United States Attorney David Marye.
Four Lexington Men Sentenced for Heroin / Fentanyl and Gun CrimesRead the Press Release
LEXINGTON, Ky. – Three Lexington men, Arian L. Brown, Marion L. Brown, III, and Steven D. Harvey, were sentenced for their involvement in separate heroin and fentanyl distribution crimes. A fourth Lexington man, Christopher D. Washington, was sentenced for being a convicted felon in possession of a firearm. Each was formally sentenced by U.S. District Judge Danny C. Reeves, on Friday, January 12, 2018.
Arian L. Brown, 34, was sentenced to 30 years in prison for possession with intent to distribute 40 grams or more of fentanyl and heroin.
Arian Brown previously admitted that, in August 2016, he possessed 57 grams of fentanyl and 67 grams of heroin that he intended to distribute. Arian Brown had also previously been convicted, in 2010, of attempting to possess with the intent to distribute 500 grams or more of cocaine. Arian Brown pleaded guilty to the heroin and fentanyl charges in September of 2017.
Marion L. Brown, III, 29, was sentenced to 40 years in prison and 4 years of supervised release for distributing fentanyl resulting in serious bodily injury and being a convicted felon in possession of firearms.
In April 2017, Marion Brown acknowledged selling a quantity of fentanyl that resulted in a non-fatal overdose. Law enforcement officers executed a search warrant at Brown’s residence and discovered drug trafficking paraphernalia, two pistols, and a rifle. Marion Brown admitted that he had previously been convicted of trafficking in heroin. Marion Brown pleaded guilty in July 2017.
Steven D. Harvey, 33, was sentenced to over 18 years (220 months) in prison and 8 years of supervised release for possession with intent to distribute 100 grams or more of heroin. According to court records, in June 2017, Harvey was found in possession of 798 grams of heroin, which was intended for distribution. Harvey pleaded guilty in September 2017.
Christopher D. Washington, 23, was sentenced to 33 months in prison and 3 years supervised release for being a convicted felon in possession of a firearm. Washington previously admitted that, in June 2017, while in the company of Steven D. Harvey, Washington unlawfully possessed a .40 caliber semiautomatic pistol. Washington pleaded guilty in September 2017.
Under federal law, each must serve 85 percent of his prison sentence.
“Combatting the opiate and opioid epidemic and reducing the potential for violent crime, by removing firearms from convicted felons, are top priorities for the Department of Justice,” said United States Attorney Robert M. Duncan, Jr. “The sentences imposed should serve as a deterrent and send a strong message that such conduct is not tolerated in the Eastern District of Kentucky. I want to commend the investigative agencies involved in each of these cases. As a result of the hard work of dedicated law enforcement professionals, dangerous drugs were removed from our streets, firearms were seized from those who were illegally possessing them, and lives were potentially saved.”
United States Attorney Duncan and Darrell Christopher Evans, Special Agent in Charge, DEA Louisville, jointly announced the sentences.
The investigations were conducted by the DEA Lexington Task Force and the Lexington Police Department. The United States was represented by Assistant United States Attorney Cynthia T. Rieker, in the Arian Brown case, and by Assistant United States Attorney Gary Todd Bradbury, in the Marion L. Brown, III, Steven D. Harvey, and Christopher Washington cases.
These cases were prosecuted as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
Frankfort Man Pleads Guilty to Conspiracy to Distribute Cocaine and a Firearm OffenseRead the Press Release
FRANKFORT, Ky. — Jonathan L. Courtland, 35, of Frankfort, pleaded guilty today to Conspiracy to Distribute Cocaine and being a Convicted Felon in Possession of a Firearm.
In his guilty plea, Courtland admitted that he had engaged in several instances of cocaine distribution in Frankfort, Kentucky, between December 2016 and April 2017. He also admitted that, on April 24, 2017, he possessed a handgun, even though he had previously been convicted of one or more felony drug offenses.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Amy Hess, Special Agent in Charge, Louisville FBI; Richard Sanders, Commissioner Kentucky State Police; and Chief Travis Ellis, Frankfort Police Department, jointly made the announcement today after Courtland entered his guilty plea.
Federal Bureau of Investigation, Kentucky State Police, and Frankfort Police Department conducted the investigation. Assistant United States Attorney Roger W. West represented the United States in the case. The case is part of the Project Safe Neighborhoods (PSN) Program, a Department of Justice initiative to reduce violent crime through partnerships between federal, state, and local law enforcement. The goal of the PSN Program is to use these partnerships to make communities safer.
Courtland will appear for sentencing before United States District Court Judge Gregory F. Van Tatenhove in Frankfort, on April 19, 2018, at 2:30 p.m.
Courtland faces a minimum mandatory sentence of 15 years (180 months) on the firearms offense and a maximum prison sentence of 30 years on the cocaine offense. However, the Court will impose any sentence after consideration of the U.S. Sentencing Guidelines and the applicable federal statutes.
Pikeville Man Sentenced to 87 Months for Receiving Child PornographyRead the Press Release
PIKEVILLE, Ky. – A Pikeville man, Craig T. Anderson, 29, has been sentenced to 87 months in federal prison, to be followed by a 25-year term of supervised release, for knowingly receiving child pornography.
On December 28, 2017, United States District Judge David L. Bunning formally sentenced Anderson, who must serve 85 percent of his federal prison sentence.
Anderson previously admitted in federal court that, in February of 2015, he knowingly received images of child pornography by accessing The Onion Router (TOR) network and saving child pornography images in his “TOR Browser” directory. A forensic examination of Anderson’s laptop computer revealed approximately 577 unique images of child pornography on his computer. The investigation was part of a nationwide operation conducted by the FBI. As a result of its investigation, the FBI obtained a search warrant for Anderson’s parents’ residence and seized his computer.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky and Amy Hess, Special Agent in Charge, Federal Bureau of Investigation jointly announced the sentence.
The investigation was conducted by the FBI. The United States was represented by Assistant United States Attorney David Marye.
U.S. Attorney’s Office Collaborates with Local and State Partners to Provide Law Enforcement TrainingRead the Press Release
LEXINGTON, Ky. - The U.S. Attorney’s Office announced today the completion of three successful training events, promoting partnership and cooperation among federal, state and local law enforcement agencies and emphasizing efforts to combat civil rights violations and organized drug trafficking.
Over a two-week period in late November and early December, the Office sponsored three training sessions for over 150 law enforcement officers, prosecutors and victim advocates from local, state and federal law enforcement.
The first training session was a collaboration with the U.S. Attorney's Office for the Western District of Kentucky to train federal, state and local officers on the rules and best practices for criminal discovery. This training is conducted annually to inform law enforcement officers about emerging issues involving the proper collection, preservation, and production of evidence used in criminal prosecutions.
In the second training, the Office collaborated with the Fayette Commonwealth Attorney, the Federal Bureau of Investigation and the Department of Homeland Security to train federal, state and local officials on the prosecution of federal and state civil rights offenses. Topics covered included voter fraud, hate crimes, human trafficking, labor trafficking, law enforcement misconduct and civil investigations, such as fair housing and American with Disabilities Act violations.
In the third training, Office personnel, along with members of the Drug Enforcement Administration, provided training to federal, state and local narcotics officers as part of the Organized Crime Drug Enforcement Task Force, a federally supported program aimed at dismantling and disrupting drug trafficking and other criminal organizations.
“I am proud to support the men and women of law enforcement, including by partnering with them to provide training to our colleagues,” said United States Attorney Robert M. Duncan, Jr. “The recent training events highlight our Office’s strong partnerships with local, state, and federal law enforcement. These close working relationships with various law enforcement agencies tremendously benefit the communities that we serve.”
The U.S. Attorney’s Office will continue to provide important training events. For more information about future trainings, Please contact the Community Relations Unit or visit the Office website at www.justice.gov/usao-edky.
Lexington Man Sentenced to 20 Years for Inducing A Minor to Produce Child PornographyRead the Press Release
LEXINGTON, Ky. – A Lexington man, Steven Michael Smith, 35, has been sentenced to 20 years in prison, to be followed by a life term of supervised release, for inducing a minor to produce sexually explicit images of themselves and transmit those images to him.
On Monday, Senior United States District Judge Joseph M. Hood formally sentenced Smith. Judge Hood also ordered that Smith’s federal sentence run concurrently with a 15- year sentence he was ordered to serve following convictions in Madison Circuit Court, for Rape Third Degree, Sexual Abuse First Degree, and Intimidating a Participant in the Legal Process, in 2012. Smith must serve 85 percent of his federal prison sentence.
Smith previously admitted in federal court that, in May of 2010, he persuaded, induced, coerced and enticed the minor victim to produce and send him the sexually explicit images.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Amy Hess, Special Agent in Charge, FBI; Richard Sanders, Commissioner, Kentucky State Police; and David Gregory, Chief of the Berea Police Department, jointly announced the sentence.
The investigation was conducted by the FBI, KSP, and Berea Police Department. The United States was represented by Assistant United States Attorney David Marye.
Ashland Man Sentenced to 15 Years for Distributing Child PornographyRead the Press Release
ASHLAND, Ky. – A Catlettsburg man, Steven Darrell Duncil, 36, has been sentenced to 15 years in prison, to be followed by a 20-year term of supervised release, for knowingly distributing child pornography.
On Monday, United States District Judge David L. Bunning formally sentenced Duncil, who had previous felony convictions for Prohibited Use of Electronic Communications to Procure a Minor (Sex Offense) and Criminal Attempt of Unlawful Transaction with a Minor in the First Degree, from 2007. Duncil must serve 85 percent of his federal prison sentence.
Duncil previously admitted in federal court that, in June of 2016, he knowingly distributed images of child pornography via ChatStep, a web chat service. The investigation was initiated by a CyberTipline report from the National Center for Missing and Exploited Children (NCMEC). The Kentucky State Police Electronic Crimes Branch (ECB), in coordination with the Internet Crimes Against Children (ICAC) Task Force obtained a search warrant for Duncil’s residence after investigating the report.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Steven Igyarto, Special Agent in Charge, Department of Homeland Security-Homeland Security Investigations; and Richard Sanders, Commissioner, Kentucky State Police, jointly announced the sentence.
The investigation was conducted by the DHS-HSI and KSP-ECB. The United States was represented by Assistant United States Attorney David Marye.
Ashland Bank Executive Pleads Guilty to Bank FraudRead the Press Release
ASHLAND, Ky. – On Monday, a former bank executive admitted in federal court that he executed a 17-year scheme to defraud Town Square Bank of more than a million dollars.
Martin Ross, 52, pleaded guilty to one count of bank fraud before United States District Court Judge Bunning. Ross admitted he developed and executed a scheme to defraud Town Square Bank, where he used to work. Ross admitted that between May 2000 and July 2017, he used fake names and documentation to obtain fraudulent loans that he would then use to pay his personal debts and expenses. According to the plea agreement, Ross obtained 15 fraudulent loans over the past 10 years, with an outstanding loss of $1,415,082.
Ross was charged by way of information, waiving his right to indictment by a federal grand jury.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, Joseph E. Moriarty, Special Agent in Charge, Federal Deposit Insurance Corporation, Office of Investigations, Chicago Region, Amy Hess, Special Agent in Charge, Federal Bureau of Investigation, Louisville Field Office and Todd Kelly, Chief of Police, Ashland Police Department, jointly announced the guilty plea.
The investigation was conducted by the Ashland Police Department, the FDIC, and the FBI. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Kate K. Smith.
Ross is scheduled to be sentenced on April 16, 2018. He faces up to 30 years in prison and a maximum fine of $1,000,000. However, any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the applicable federal statutes.
Four Individuals Indicted for Distribution of FentanylRead the Press Release
LEXINGTON, Ky. — A federal grand jury has indicted four individuals for drug crimes related to the distribution of large quantities of fentanyl. Gadiel Ortiz-Flores, age 39, of Lawrenceburg, Ky., Brian Walker Hensley, age 38, also of Lawrenceburg, Ky., Miguel Alberto Esparza, age 29, of Lexington, and Megan Nicole Slone, age 24, also of Lexington, were indicted yesterday for both conspiracy and distribution offenses related to fentanyl. Fentanyl is an extremely potent opioid, which is as much as 80 to 100 times more potent than morphine and 25 to 100 times more potent than heroin.
The indictment alleges that, beginning in August 2017 and continuing through December 5, 2017, the four named defendants conspired to distribute 400 grams or more of fentanyl in Fayette and Anderson counties. The indictment further alleges distribution of fentanyl in Fayette County, on specific dates in August, September, and November 2017. Finally, the indictment charges each of the defendants with possessing 400 grams or more of fentanyl with the intent to distribute it.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and Chris Evans, Special Agent in Charge, DEA, jointly announced the return of the indictment.
The investigation preceding the indictment was conducted by the DEA and the Anderson County Sheriff’s Department. The indictment was presented to the grand jury by Assistant United States Attorney Todd Bradbury.
Appearances for the defendants, before the United States District Court, have not yet been set. If convicted, each defendant faces a maximum sentence of life in prison. However, any sentence following conviction would be imposed by the Court, after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.
An 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.
Atlanta Georgia Man Convicted of Conspiracy to Distribute OxycodoneRead the Press Release
LEXINGTON, Ky. — Yesterday, Stanford Coleman, 49 of Atlanta, Georgia was convicted of Conspiracy to Distribute Oxycodone. The jury returned its guilty verdict after 4 days of trial.
The evidence at trial established that, between January 2015 and May 2017, Coleman was supplying large quantities of 30 milligram Oxycodone pills to people in Mt. Sterling and Montgomery County.
United States Attorney Robert M. Duncan, Jr., Special Agent in Charge, Stuart Lowery, ATF Louisville, Commissioner Richard Sanders, Kentucky State Police, and Police Chief David Charles, Mt. Sterling Police Department, jointly announced the verdict.
Coleman was remanded to the custody of the U.S. Marshals and is scheduled to be formally sentenced on March 23, 2018. The investigation was conducted by the ATF, the KSP, and the Mt. Sterling Police Department. The United States was represented by Assistant United States Attorney Roger West.
Matthew Shaffer Sentenced to 35 Years for Conspiring to Distribute Methamphetamine and Firearm OffensesRead the Press Release
COVINGTON, Ky. — Matthew Wesley Shaffer, 39, of Walton, Ky., was sentenced today, to 35 years in prison, by United States District Court Judge David Bunning. In August of 2017, Shaffer was convicted by a jury of two counts of conspiracy to distribute methamphetamine, possession of methamphetamine with intent to distribute it, possession of a firearm by a convicted felon, and possession of a firearm in furtherance of drug trafficking.
At his trial, Shaffer was identified as the president of the Florence, Kentucky, chapter of the Iron Horsemen motorcycle club and as a national enforcer for that organization. He has multiple prior felony convictions. The evidence at trial further established that Shaffer directed a group that was transporting large amounts of crystal methamphetamine from California to Northern Kentucky and distributing it, during 2015 and 2016. The evidence also established that, on August 25, 2016, Shaffer possessed more than 180 grams of crystal methamphetamine in his Walton, Kentucky residence, along with two loaded firearms, body armor, and $8,920.00 in currency. Additionally, the evidence established that Shaffer led a group of individuals who smuggled approximately ten grams of crystal methamphetamine into the Boone County Detention Center for distribution, in October 2016. The jury convicted him after five days of trial.
“This investigation and prosecution highlights the importance of a strong partnership between local, state, and federal law enforcement in reducing violent crime and drug trafficking activities,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “Our communities are made safer through the cooperative efforts of law enforcement, and I commend the officers and agents for their hard work and dedication on this case and others like it.”
Under federal law, Shaffer 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 ten years.
United States Attorney Duncan; Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration; and Stuart Lowrey, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives, jointly announced the sentence.
The investigation was conducted by the DEA, the ATF, and the Northern Kentucky Drug Strike Force. The United States was represented by Assistant United States Attorney Tony Bracke.
Adair County Man Indicted on Fraud Charge Relating to Oil and Gas Investment SchemeRead the Press Release
LEXINGTON, Ky. – A federal grand jury in Lexington has indicted an Adair County man, on a charge of conspiracy to commit mail fraud, wire fraud and securities fraud, arising out of an oil and gas exploration investment scheme. As alleged in the indictment, from 2007 until 2017, Ronnie C. Rodgers, 62, of Columbia, Ky., solicited investors in oil and gas production programs involving oil and gas leases, in South Central Kentucky and Tennessee. He solicited these investors under various business names, including Rick-Rod Oil Company, Inc.; Big South Resources; Big South Energy; Hydro & Green Global Energy, LLC; and R&R Plus, LLC.
The indictment alleges a scheme in which Rodgers and his associates profited from misappropriating investor money, rather than from the sale of oil and gas. Rogers is alleged to have obtained money from the investors by making false representations and by failing to advise them of facts, which were material to their investments. These misrepresentations included predictions about the amount of expected oil production, statements about when the investors could expect a return of their investment, claims that oil was already being produced, and other similar misrepresentations. According to the indictment, Rodgers also failed to disclose that he was a convicted felon; that he had been enjoined by state authorities from selling oil and gas investments; and that he had mostly drilled dry wells.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Chris White, Assistant Inspector in Charge, U.S. Postal Inspection Service; and Charles A. Vice, Commissioner of the Kentucky Department of Financial Institutions, jointly announced the indictment. The indictment results from a joint investigation by the United States Postal Inspection Service and the Kentucky Department of Financial Institutions.
An 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.
Fugitive Lawyer Facing 12 Year Sentence in $550 Million Social Security Fraud Scheme Captured and Arraigned on Multiple Escape ChargesRead the Press Release
A former Social Security disability lawyer who was apprehended abroad and returned to the United States was arraigned today on charges stemming from his escape from home confinement and his failure to appear for sentencing following his March 2017 guilty plea in a social security disability benefits fraud scheme. He immediately began serving the previously imposed 12-year prison sentence, which was ordered in his absence in June 2017.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Special Agent in Charge Amy S. Hess of the FBI’s Louisville, Kentucky Field Division and Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division made the announcement.
Eric Christopher Conn, 57, of Pikeville, Kentucky, and his alleged accomplice, Curtis Lee Wyatt, were charged in connection with Conn’s escape in a seven-count indictment returned on Sept. 6, 2017, in the Eastern District of Kentucky in Lexington. Conn entered pleas of not guilty. Both he and Wyatt are scheduled to proceed to trial on Feb. 12, 2018.
The indictment charges Conn and Wyatt with one count each of conspiracy to escape and one count each of conspiracy relating to Conn’s failure to appear for his sentencing. Conn is also charged with one count of escape and one count of failing to appear. The indictment alleges that Conn, while on home confinement after pleading guilty to two federal offenses but before being sentenced, escaped from custody by severing an electronic monitoring device from his ankle during a court-approved visit to Lexington on June 2, 2017, and fled to the Mexican border. According to the indictment, Conn ultimately failed to appear for his sentencing hearing on July 14, 2017.
Conn was also charged last year, along with a former Social Security administrative law judge and a former clinical psychologist, in an 18-count indictment charging conspiracy, mail and wire fraud, false statements, money laundering and other related offenses in connection with a $550 million Social Security disability fraud scheme. The indictment alleges that from October 2004 to Feb. 13, 2012, Conn and others conspired to defraud the government by, among other things, submitting false and fraudulent medical documentation to the SSA in order to have the SSA pay claimants’ retroactive disability benefits, continue to pay claimants’ disability benefits in the future, award Medicare and Medicaid benefits to claimants and pay Conn’s attorney fees. According to the indictment, the conspirators intended that the SSA disburse more than $550 million in disability benefits in more than 2,000 cases to claimants in Kentucky and elsewhere, irrespective of the claimants’ actual entitlement to benefits.
The former Social Security administrative law judge named in that indictment, David Black Daugherty, pleaded guilty in May 2017 to a two-count information charging him with receiving illegal gratuities, and was sentenced on Aug. 25, 2017, to four years in prison. The former clinical psychologist, Alfred Bradley Adkins, was found guilty following a six-day trial in June 2017 of one count of conspiracy to commit mail fraud and wire fraud, one count of mail fraud, one count of wire fraud and one count of making false statements, and was sentenced on Sept. 22, 2017, to 25 years in prison.
Conn previously pleaded guilty on March 24, 2017, to a two-count information charging him with theft of government money and paying illegal gratuities, and was sentenced in absentia on July 14, 2017, to 12 years in prison on those charges. Although Conn began serving his 12-year sentence, he remains charged under the original indictment.
On Saturday, Dec. 2, 2017, Conn was taken into custody without incident in La Ceiba, Honduras with assistance from the Agencia Tecnica de Investigaciones Criminales de Honduras (ATIC) and the FBI’s Legal Attaché in San Salvador. Since Conn’s escape, the FBI has worked diligently with U.S. Probation, the U.S. Marshals Service, U.S. Customs and Border Protection, the SSA-OIG, the Kentucky State Police, Lexington Police, Pikeville Police, University of Kentucky Police, and the Luna County (New Mexico) Sheriff’s Office to locate and apprehend him. The Criminal Division’s Office of International Affairs provided valuable assistance to the investigation of Conn’s escape.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI and SSA-OIG investigated the case. Trial Attorney Dustin M. Davis of the Criminal Division’s Fraud Section and Trial Attorney Elizabeth G. Wright of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case.
Robert M. Duncan, Jr. Sworn in as United States AttorneyRead the Press Release
LEXINGTON, KY. – Robert M. Duncan, Jr. has taken the oath of office to become the United States Attorney for the Eastern District of Kentucky. He was nominated by President Donald Trump on August 3, 2017, and confirmed by the United States Senate on November 9, 2017. Duncan took the oath of office from Chief Judge Karen K. Caldwell of the United States District Court for the Eastern District of Kentucky.
“I am humbled and honored to have been appointed by President Trump and confirmed by the United States Senate to serve as the United States Attorney for the Eastern District of Kentucky,” Duncan stated. “It is my great privilege to serve with the dedicated and talented members of the United States Attorney’s Office, men and women who are committed to the principles of justice, fairness, and the rule of law. As a native Kentuckian and career prosecutor, I understand the unique challenges facing our District, including the devastation of lives caused by drug trafficking and the tragic consequences of violent crime. I am committed to working with our partners and colleagues in law enforcement to help make our communities safer through the vigorous and fair enforcement and prosecution of the laws of the United States.”
As United States Attorney, Robert M. Duncan, Jr. is the top-ranking federal law enforcement official in the Eastern District of Kentucky, which encompasses the 67 easternmost counties in the Commonwealth, has a population of approximately 2.2 million, and includes the cities of Lexington, Covington, Frankfort, Ashland, Pikeville, Somerset, and London. Duncan will serve as the twenty-third presidentially appointed United States Attorney for the Eastern District of Kentucky, which was created in 1901.
Duncan will oversee a staff of 83 employees, including 39 attorneys, 36 non-attorney support personnel, and 8 contract employees. The office is responsible for prosecuting federal crimes in the District, including crimes related to terrorism, public corruption, child exploitation, firearms, and narcotics. The office also defends the United States in civil cases and collects debts owed to the United States.
Prior to his appointment, Duncan had served for more than a decade as an Assistant United States Attorney in the Eastern District of Kentucky. Beginning in 2011 and continuing until his appointment as United States Attorney, Duncan focused on the prosecution of Organized Crime Drug Enforcement Task Force cases, working with federal, state, and local law enforcement personnel to disrupt and dismantle complex drug trafficking and money laundering organizations operating in the District and elsewhere. From 2007 to 2013, Duncan served as coordinator of the office’s Project Safe Neighborhoods Program, a Department of Justice initiative to reduce gun and gang crime through education, community outreach, and prosecution.
During his career as a federal prosecutor, Duncan handled a wide array of criminal and appellate matters, including cases involving violent crimes, immigration offenses, public corruption, white-collar offenses, environmental crimes, and child exploitation offenses. Duncan also served as the Professional Responsibility Officer for the office, providing advice about legal ethics. Duncan joined the United States Attorney’s Office in January 2005.
Prior to becoming a federal prosecutor, Duncan served as a law clerk to Senior United States District Court Judge Henry R. Wilhoit, Jr., in Ashland, Kentucky.
Duncan is a member of the Kentucky Bar Association and admitted to practice law in Kentucky. He is also admitted to practice before the Supreme Court of the United States, the United States Court of Appeals for the Sixth Circuit, and the United States District Court for the Eastern District of Kentucky. Duncan has served as President of the Kentucky Chapter of the Federal Bar Association and on several civic, educational, and philanthropic boards.
Robert M. Duncan, Jr., grew up in Inez, in Martin County, Kentucky, along the Commonwealth’s border with West Virginia. Duncan graduated from Sheldon Clark High School in Inez in 1996. He graduated from Centre College in Danville, Kentucky, in 2000 with his B.A. in English and minor in History. Duncan received his J.D. in May 2003 from the University Of Kentucky College of Law in Lexington, Kentucky.
Duncan, his wife, Valerie, and their children live in Lexington.
Children's Advocacy Center of the Bluegrass to Receive Funds Resulting from Federal Government's Forfeiture and Sale of Residence Owned by Two Men Convicted of Child AbuseRead the Press Release
Photo taken by U.S. Attorney's Office - EDKY Officials in the picture from Left to Right: Acting U.S. Attorney Carlton S. Shier, IV, Lou Anna Red Corn, Fayette County Commonwealth Attorney, Amy Hess, Special Agent in Charge, FBI Louisville, Chief Mark G. Barnard, Lexington Police Department, Lieutenant Ann Welch, Lexington Police Department, Winn Stephens, Executive Director, Children's Advocacy Center of the Bluegrass, Kimberly Kidd, Special Agent, FBI, Sue Thornton, Paralegal Contractor, U.S. Attorney's Office Forfeiture Unit and Wade Napier, AUSA, U.S. Attorney's Office Forfeiture Unit.Local law enforcement partners that participated in the criminal prosecution
to share forfeited funds with local Children’s Advocacy Center
LEXINGTON, Ky. – The United States Attorney’s Office, the Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section, the FBI, the Fayette Commonwealth Attorney’s Office, the Lexington Police Department, and the Children’s Advocacy Center of the Bluegrass (CAC) jointly announced today that a portion of proceeds from the sale of the Lexington residence owned by two men convicted of child abuse will be shared with the CAC.
Beginning in 2014, the Fayette Commonwealth’s Attorney’s Office prosecuted brothers Jack and Jerry Cassidy for possession of child pornography and for the sexual abuse of six minor victims, which dated back to the 1970s. The Cassidys met their abuse victims through volunteer work in the Lexington community. The victims were 15 years of age or younger at the time of the abuse and much of that abuse occurred at the brother’s Lexington residence, which is located on Mason Headley Road. The Lexington Police Department’s investigation of the case began when emergency personnel and police were called to the residence in August 2014. Upon their arrival, the police found that the Cassidys had documented their abuse of victims, in diaries and other writings, and had evidence of that abuse on display in the house.
Both brothers entered guilty pleas to nine criminal counts, which included possession of child pornography, sexual abuse, sodomy and indecent and immoral practices (a pre-penal code offense). Fayette Circuit Court Judge Kimberly Bunnell has sentenced both men to 20 years in state prison, the maximum allowed by Kentucky law.
In 2015, the United States Attorney’s Office filed a civil forfeiture action against the Mason Headley residence, asserting that the home had facilitated the interstate transport of minors for the purpose of sexual assault. Federal civil asset forfeiture law allows the federal government to file lawsuits against property that has been used to facilitate a violation of federal law, or is otherwise the proceeds of a federal criminal violation. The Cassidys agreed to the forfeiture of their residence, which was then awarded to the federal government and eventually sold by the United States Marshals Service.
Through the federal government’s asset forfeiture equitable sharing program, the FBI is permitted to share up to 80 percent of the net proceeds of forfeited assets, with the local law enforcement partners who participated in the investigation and prosecution of the case. In turn, local law enforcement partners are each permitted to transfer their shared funds, up to $25,000 per year, to community-based organizations that serve a law enforcement purpose.
In this case, the FBI has shared the maximum amount allowed from the sale of the residence with its two local partners in the investigation: the Lexington Police Department and the Fayette Commonwealth Attorney’s Office. Both of these partners have elected to transfer the maximum amount of their shared funds to the CAC this year ($50,000 in total), with remaining shared funds being transferred next year.
The CAC is a community-based organization that advocates on behalf of children alleged to have been abused; assists in the coordination of investigations of child abuse, by providing a location for forensic interviews and medical examinations; promotes the coordination of services for children alleged to have been abused; and provides, directly or by agreement, services that include forensic interviews, medical examinations, mental health and related support services, court advocacy, consultation, and training.
“These men committed appalling offenses against minor victims and used their home to facilitate their criminal conduct,” said Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky. “We were able to use the tools available to us under federal law to forfeit an instrument of their cruelty and, with the assistance of our valued law enforcement partners, convert it into a genuine benefit to future child abuse investigations in our community and the provision of essential services to victims of child abuse.”
“Under Kentucky law, our office could not obtain forfeiture of the property where these horrible acts occurred,” said Lou Anna Red Corn, Fayette Commonwealth’s Attorney. We are fortunate in Lexington to have law enforcement agencies that work together like this, and as result of these shared funds, we are turning something horrible into something healing for child sexual abuse victims.”
“Detectives in our Special Victims Section utilize the Children’s Advocacy Center nearly every day,” said Lexington Police Chief Mark Barnard. “The CAC provides a nurturing, friendly and safe environment to observe child interviews and meet with families and counselors. Our partnership with the CAC plays a necessary and important role in investigating and prosecuting crimes against young victims. Central Kentucky law enforcement agencies have come to rely on the CAC, so this financial contribution to support its mission of reducing the trauma experienced by child victims of sexual abuse was simply the right thing to do.”
“The Children’s Advocacy Center of the Bluegrass is honored to receive these funds,” said Winn Stephens, Executive Director of the Children’s Advocacy Center of the Bluegrass. “We are going to change the narrative of this story. What started as a horrible crime will ultimately result in helping hundreds of children overcome the abuse they suffered. These funds will also be utilized to aid in the investigation and prosecution of child abuse cases and to make sure other individuals who hurt our most vulnerable citizens are swiftly brought to justice.”
Somerset Men Sentenced for Methamphetamine Trafficking and Firearms PossessionRead the Press Release
LEXINGTON, Ky. – Jason Whitis, 41, Robbie Neal Whitis, 34, and Joshua Kelley Pyles, 33, each of Somerset, Ky., were sentenced today, by Senior United States District Judge Joseph M. Hood, for conspiring to distribute 50 grams or more of methamphetamine. Robbie Whitis and Pyles were also sentenced for possessing a firearm in furtherance of the methamphetamine conspiracy. Jason Whitis was sentenced to 200 months in prison; Robbie Whitis was sentenced to 75 months; and Pyles was sentenced to 120 months.
Jason Whitis and Robbie Whitis previously pleaded guilty, on August 7, 2017, and admitted that they conspired with each other and Pyles to distribute approximately 220 grams of methamphetamine. The methamphetamine was intended for distribution in the Somerset area. The methamphetamine was discovered during a traffic stop of a vehicle occupied by all three defendants, in Fayette County, on April 26, 2017. During the traffic stop, Robbie Whitis and Pyles were each found in possession of a firearm. Robbie Whitis then admitted that he possessed the firearm for protection, in furtherance of the drug crime. Pyles was found guilty after a jury trial, in August of this year.
Under federal law, all three men must serve 85 percent of their prison sentences. Following their release, they will then be under the supervision of the United States Probation Office.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; Timothy J. Plancon, DEA Special Agent in Charge; and Richard Sanders, Commissioner, Kentucky State Police, jointly made the announcement.
The investigation was conducted by the DEA and the Kentucky State Police. The United States was represented by Assistant United States Attorneys Robert M. Duncan, Jr., and Lauren Tanner Bradley.
Former Supervisory Deputy Jailer at Kentucky River Regional Jail Sentenced to over 10 Years Imprisonment for Charges Related to the Death of A Detainee and Obstruction of JusticeRead the Press Release
WASHINGTON – Justice Department announced today that a former supervisory deputy jailer at the Kentucky River Regional Jail (KRRJ), Perry County, Kentucky, has been sentenced to 126 months in federal prison related to his role in an unprovoked violent assault of a detainee.
United States District Judge Karen K. Caldwell formally sentenced Damon Wayne Hickman, 40, on his conviction. Under federal law, Hickman must serve 85 percent of his prison sentence. Following the completion of his prison term, he will be under the supervision of the United States Probation Office for three years.
On Nov. 9, 2016, Hickman entered a guilty plea to using excessive force against the detainee, resulting in bodily injury, and to deliberately ignoring the detainee’s serious medical needs, also resulting in bodily injury, and obstruction of justice. On May 11, 2017, William Curtis Howell, 60, was convicted of the same offenses after a jury trial, and he is scheduled to be sentenced in United States District Court on Dec. 19, 2017. Hickman was also convicted of obstruction of justice for creating a fake medical log to cover up his and Howell’s misconduct.
According to evidence and testimony presented during Hickman’s pretrial hearings and Howell’s jury trial, on July 9, 2013, at the Kentucky River Regional Jail in Hazard, Kentucky, Hickman and Howell violently beat Larry Trent, 54, a pretrial detainee, and left him in his cell, seriously injured and bleeding from an open head wound. Trent ultimately died from injuries sustained during the beating. Trent was in custody for a DUI charge. Hickman, who was initially charged along with Howell, pleaded guilty prior to trial and testified against Howell.
The assault started when Howell and Hickman opened the door to Trent’s cell to remove a sleeping-mat, and Trent ran out of the cell. Howell tased Trent, and after Trent was brought to the floor, Hickman, without justification, violently kicked Trent in the ribs. Hickman and Howell continued their assault after Trent was carried back to the area outside of his cell. Both deputies, without justification, punched, kicked, and stomped on Trent. Witnesses further testified that, before closing the cell door, Howell stepped into Trent’s cell and kicked Trent in the head while Trent was on the floor and posing no threat. After the assault, Hickman and Howell had other inmates clean up Trent’s blood from the floor and walls outside of his cell.
The evidence further revealed that Trent was lying motionless in his cell with blood all over his face. However, Hickman and Howell willfully failed to provide medical attention, because they did not want to get in trouble. Approximately four hours after the beating, another employee at the jail discovered Trent’s lifeless body. Paramedics were summoned and Trent was transported to a local hospital, where he was later pronounced dead.
“Corrections officers throughout the country carry out their duties in a responsible manner on a daily basis,” said Acting Assistant Attorney General John Gore. “Attacks like this one dishonor those responsible corrections officers and is a violation of civil rights, and the Department of Justice will prosecute such misconduct.”
“The criminal conduct in this case was a disgraceful breach of public trust, a grave disservice to truly dedicated law enforcement personnel, and an appalling violation of a man’s civil rights,” said Acting U. S. Attorney Carlton Shier. “Holding law enforcement officials accountable for violations of the public trust we place in them is absolutely critical to making our communities safer.”
Autopsy results presented at trial showed that Trent died from internal bleeding caused by a displaced pelvic fracture, and from blunt force trauma to his head, torso, and extremities.
According to evidence presented at pretrial hearings for Hickman and at an unrelated jury trial of another KRRJ supervisory deputy jailer, Kevin Asher, Hickman and Asher assaulted another pre-trial detainee at the same jail in 2012. On Oct. 19, 2017, Asher was sentenced to 108 months imprisonment for his involvement in that unrelated inmate assault.
The Kentucky River Regional Jail houses pre-trial detainees from Perry and Knott Counties. As a supervisory deputy jailer, Hickman was responsible for the custody, care, safety and control of the inmates at the jail.
Carlton S. Shier, IV, Acting U.S. Attorney for the Eastern District of Kentucky; John M. Gore, Acting Assistant Attorney General for the Civil Rights Division; and Amy Hess, Special Agent in Charge, Federal Bureau of Investigation, jointly made the announcement.
The investigation was conducted by the FBI and the Kentucky State Police. Assistant U.S. Attorney Hydee Hawkins of the United States Attorney’s Office and Trial Attorney Sanjay Patel of the Civil Rights Division prosecuted this case on behalf of the federal government.
Former Qdoba Employee Pleads Gulity to ArsonRead the Press Release
LEXINGTON, Ky. – A Lexington, Ky., man has entered a guilty plea to a federal arson charge, which involved a fire at a local business where he had previously been employed.
Bennie C. Davis, 21, entered his guilty plea today, before Senior U.S. District Judge Joseph M. Hood.
In his guilty plea, Davis admitted that, on April 25, 2017, he entered the Qdoba Restaurant located on East Tiverton Way, in Lexington, after the store had closed and then set fire to the building. Davis had been recently discharged from a management position with Qdoba, a position he had held for several years.
Acting U.S. Attorney Carlton S. Shier, IV; Stuart Lowery, Special Agent in Charge, ATF; and Kristin Chilton, Chief of the Lexington Fire Department, jointly announced the guilty plea.
The ATF and the Lexington Fire Department conducted the investigation. Assistant U.S. Attorney Roger West prosecuted the case on behalf of the federal government.
Davis will be sentenced on February 29, 2018 and faces a minimum sentence of five years. He must serve at least 85 percent of his prison sentence.
Central Kentucky Pharmacist Sentenced for Conspiracy to Distribute Oxycodone and Money LaunderingRead the Press Release
LEXINGTON, Ky. – A Central Kentucky pharmacist, who owned and operated Hometown Pharmacy of Georgetown, has been sentenced to eight years in federal prison, followed by two years of home incarceration as a term of his supervised release, for Conspiracy to Distribute Oxycodone and Money Laundering.
Chief United States District Judge Karen K. Caldwell formally sentenced Michael Ingram, 37, of Cynthiana, Ky., earlier today. Ingram must serve 85 percent of his sentence. Ingram has also forfeited in excess of $450,000 stemming from his criminal conduct.
In his July 2017 guilty plea, Ingram admitted that, while operating Hometown Pharmacy of Georgetown, he illegally distributed and dispensed oxycodone, by filling forged prescriptions from outside Kentucky. Ingram also admitted that his distribution and dispensation of these pills was outside the scope of pharmaceutical professional practice and was not for a legitimate medical purpose. Ingram further admitted that he used the proceeds of those illegal oxycodone sales to purchase the property now housing an additional business, Hometown Pharmacy of Cynthiana.
“We continue to see corrupt medical professionals choose profit over medical judgment and callously fuel an opioid epidemic that has decimated our state,” said Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky. “This despicable conduct does enormous damage, both to individuals struggling with addiction and to our communities as a whole. Combatting this epidemic requires that we be clear: these egregious breaches of professional trust are criminal conduct that will be prosecuted.”
Acting United States Attorney Shier; Mark McCormack, Special Agent in Charge, FDA Office of Criminal Investigations; Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration; and Tracey D. Montaño, Special Agent in Charge, IRS, Criminal Investigation, jointly announced the sentence. The case was prosecuted by Assistant United States Attorneys Andrew Smith and Cynthia Rieker
Three Members of Nicholasville Family Sentenced for Conspiracy to Defraud Nicholasville BusinessRead the Press Release
LEXINGTON, Ky. – Joyce Minton, 65, Aaron Brooke Warren, 43, and James Minton, 70, all of Nicholasville, Ky., have been sentenced, respectively, to 97 months, 46 months, and 18 months in federal prison, for defrauding a Nicholasville business. They were also ordered to forfeit the proceeds of their crimes and to pay restitution to their victims.
Senior United States District Judge Joseph M. Hood formally sentenced the Mintons and Aaron Brooke Warren yesterday. They must serve 85 percent of their prison sentence.
In June, according to evidence presented at their trial, James Minton, Joyce Minton, and Aaron Brooke Warren conspired to defraud their longtime employer, Clark Machine Tool and Die, of Nicholasville. The criminal conspiracy took place from February 2000 through May 2016 and stole over $1,500,000. The conspirators defrauded the business by using company checks and credit cards to purchase personal items, by cashing and keeping company petty cash checks, by issuing themselves extra paychecks, and by inflating their paychecks. They also kept money that customers had paid the company for work, converting those funds to their personal use. Joyce Minton was the office manager and bookkeeper for the company; Aaron Brooke Warren was the company’s shop supervisor; and James Minton was a contractor.
The jury convicted Joyce Minton of 46 counts of conspiracy, mail fraud, bank fraud, and money laundering; Aaron Brooke Warren was convicted of 34 counts of conspiracy, mail fraud, and money laundering; and James Minton was convicted of seven counts of conspiracy and mail fraud.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; Amy Hess, Special Agent in Charge, Federal Bureau of Investigation; Chris White, Assistant Inspector in Charge, United States Postal Inspection Service; and Richard W. Sanders, Commissioner of the Kentucky State Police, jointly announced the sentences. Assistant U.S. Attorneys Neeraj Gupta and Ken Taylor prosecuted the case on behalf of the federal government.
Former Deputy Jailer at Kentucky River Regional Jail Sentenced to 108 Months in Prison for Assault of Inmate and Obstruction of JusticeRead the Press Release
WASHINGTON – A former supervisory deputy jailer at the Kentucky River Regional Jail has been sentenced to 108 months in federal prison and three years of supervised release related to his role in an unprovoked violent assault of a detainee who was being held at the jail, and for subsequently covering up the beating.
Yesterday, United States District Judge Karen K. Caldwell formally sentenced Kevin Eugene Asher, 32, on his conviction. Under federal law, Asher must serve 85 percent of his prison sentence. Following the completion of his prison term, he will be under the supervision of the United States Probation Office for the London, KY office of the Eastern District of Kentucky.
On April 12, 2017, a jury convicted 32-year-old Kevin Asher of deprivation of civil rights under color of law, and obstruction of justice.
According to evidence and testimony presented during the jury trial, in November 2012, Asher and another deputy jailer, Damon Wayne Hickman, physically assaulted Gary Hill, a 55-year-old inmate who was being held following an arrest for a misdemeanor charge of disorderly conduct.
According to testimony, Deputies Asher and Hickman approached Hill after Hill had run the faucet in his jail cell to the point where water had spilled out onto the floor. Hickman testified at trial that he punched Hill in the face, causing Hill to fall onto the floor. Hickman further testified that while Hill was curled up in a fetal position, he and Asher began kicking Hill. Asher and Hickman then immobilized Hill in a restraint chair and Hickman continued to beat him. Evidence established that following the brutal assault, the deputies failed to obtain any medical treatment for Hill who had received numerous injuries.
The jury also found that Asher obstructed justice by filling out an incident report at the jail in which he falsely claimed that Hill had slipped and fallen onto the floor and that no physical force had been used against him.
The Kentucky River Regional Jail houses pre-trial detainees from Perry and Knott Counties. As a supervisory deputy jailer, Asher was responsible for the custody, care, safety and control of the inmates at the jail.
Carlton S. Shier, IV, Acting U.S. Attorney for the Eastern District of Kentucky; John M. Gore, Acting Assistant Attorney General for the Civil Rights Division; and Amy Hess, Special Agent in Charge, Federal Bureau of Investigation, jointly made today’s announcement.
“Nothing justifies or excuses the defendant’s outrageous conduct in this case,” said Acting Assistant Attorney General John Gore. “When deputy jailers make the corrupt choice to violate our Constitution and laws, the Justice Department will prosecute such misconduct, just as it did here.”
“This type of criminal conduct not only causes real injuries to victims, but tarnishes the work of truly dedicated law enforcement personnel,” said Acting U.S. Attorney Carlton Shier. “Prosecuting this type of disgraceful conduct is critical to making our communities safer. We simply must hold officials accountable for violations of the public trust that was placed in them.”
“Law enforcement officers are given tremendous power to enforce the law and ensure justice. Preventing abuse of this authority is necessary to protect the rights of our citizens and maintain confidence in law enforcement,” said Amy Hess, Special Agent in Charge of the FBI’s Louisville Office. “Mr. Asher’s sentence shows that the FBI will aggressively investigate color of law and civil rights violations, to hold those with the responsibility for upholding the law accountable to it.”
The investigation was conducted by the FBI and the Kentucky State Police. Assistant U.S. Attorney Hydee Hawkins of the United States Attorney’s Office and Trial Attorney Sanjay Patel of the Civil Rights Division prosecuted this case on behalf of the federal government
Frankfort Man Sentenced to 23 Years for Producing Child PornographyRead the Press Release
FRANKFORT, Ky. – A Frankfort man has been sentenced to 23 years in federal prison, for producing sexually explicit images of a minor and then sending them to another man.
Yesterday, United States District Judge Gregory F. Van Tatenhove formally sentenced Matthew Craig Fosson, 41, on his conviction. Under federal law, Fosson must serve 85 percent of his prison sentence. Following the completion of his prison term, he will be under the supervision of the United States Probation Office for life.
In his guilty plea earlier this year, Fosson admitted that, in August 2016, he produced sexually explicit images of a minor female, who was in his custody and care. He sent those images to a Pennsylvania man, who in turn sent sexually explicit images of another minor female to Fosson.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky and Amy S. Hess, Special Agent in Charge of the FBI Louisville Field Division, jointly announced the sentence.
Wallingford Woman Indicted for Crop Insurance FraudRead the Press Release
LEXINGTON, Ky. – A Wallingford, Ky. woman was indicted today for engaging in crop insurance fraud.
A federal grand jury in Lexington returned an indictment charging 62-year-old Debra Muse with one count of conspiring to violate federal law and 27 counts of making false statements to influence the Federal Crop Insurance Corporation (“FCIC”) and companies the FCIC reinsures.
The indictment alleges that Muse, a crop insurance agent that contracted with Rural Community Insurance Services (“RCIS”), agreed with tobacco farmers to make false statements and reports to the FCIC and companies the FCIC reinsures, in order to submit false claims for crop insurance indemnity payments. These false documents included false sales bills from Clays Tobacco Warehouse, where Muse also worked seasonally, and falsified tobacco grading reports. According to the indictment, for crop year 2014, the FCIC, through RCIS, paid out nearly $170,000 in indemnity payments to Muse’s clients, as a result of these false claims for crop damage that her clients’ tobacco crop did not suffer in the way reported to the United States Department of Agriculture.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; Karen Citizen-Wilcox, Special Agent in Charge, United States Department of Agriculture Office of Inspector General; Amy Hess, Special Agent in Charge, Federal Bureau of Investigation; Tracey D. Montano, Special Agent in Charge, Internal Revenue Service-Criminal Investigations; and Dwayne Depp, Director, Kentucky Department of Insurance Fraud Investigation Division, jointly announced the indictment.
The investigation preceding the indictment was conducted by the United States Department of Agriculture Office of Inspector General, United States Department of Agriculture Risk Management Agency, Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigations, and Kentucky Department of Insurance. The indictment was presented to the grand jury by Assistant U.S. Attorneys Kathryn M. Anderson and Erin M. Roth.
A date for Muse to appear in court has not yet been scheduled. For the conspiracy charge, Muse faces up to 5 years in prison and a fine of $250,000. For each charge of making false statements to the FCIC, she faces up to 30 years in prison and a fine of $1,000,000. However, any sentence following a conviction would be imposed by the Court, after its consideration of the U.S. Sentencing Guidelines and the federal 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.
Cincinnati Physician Convicted of Illegally Distributing OxycodoneRead the Press Release
Case involved illegal prescribing practices at a Georgetown, Ky. pain clinic
LEXINGTON, Ky. — Yesterday, Alan Arnold Godofsky, 61, of Cincinnati, was found guilty by a federal jury, on five counts of distributing oxycodone outside the scope of professional medical practice and not for a legitimate medical purpose. The jury returned its guilty verdict after seven days of trial.
The evidence at trial established that, from March 2011 through January 2012, Godofsky worked as a physician at Central Kentucky Bariatric and Pain Management, in Georgetown. The evidence further established that, during this period, Godofsky prescribed significant quantities of oxycodone pills to patients, outside the scope of professional medical practice and without a legitimate medical purpose. Specifically, the evidence established that he prescribed these drugs without conducting examinations, without obtaining informed consent, and to patients who had no legitimate medical need.
“Sadly, this case represents yet another example of a physician abdicating his professional responsibility to his patients, placing his own profit over sound medical judgment, and fueling the opioid epidemic,” said Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky. “Prescription opioid abuse has decimated our community and the prosecution of medical professionals who betray the trust of patients and illegally dispense these highly addictive medications has been, and will continue to be, a priority for our office. We appreciate the great work of our law enforcement partners in this case; without them, this important prosecution would not have been possible.”
Acting United States Attorney Shier; Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration; Andy Beshear, Attorney General of Kentucky; Richard Sanders, Commissioner, Kentucky State Police; and Steven Davis, Acting Inspector General, Kentucky Cabinet for Health and Family Services, jointly announced the verdict.
Godofsky is scheduled to be formally sentenced on January 24, 2018. The investigation was conducted by the DEA, the Kentucky Attorney General’s Office, the KSP, and the CHFS Office of the Inspector General. The United States was represented by Assistant United States Attorney Ron L. Walker, Jr.
Two Laurel County Men and Pulaski County Couple Charged in Armed KidnappingRead the Press Release
LONDON, Ky. – On Monday, a federal indictment was unsealed, charging two Laurel County men and a Pulaski County couple with drug, kidnapping, and firearms offenses.
On September 28, 2017, a federal Grand Jury, sitting in London, charged that Robert “Bobby” Hurley, III, of East Bernstadt, Ky.; Ronald Brandon “Hubcap” Hubbard, of London, Ky.; Roger Creech, of Somerset, Ky.; and Tracy Amanda Hamblin, also known as Tracy Creech, of Somerset, Ky., aided and abetted each other in the kidnapping of an unidentified victim, in May of this year. The indictment alleges that the group kidnapped the victim, for the purpose of assaulting them, and utilized a facility or instrumentality of interstate commerce to commit the crime. The indictment further charges the group with brandishing, using, and carrying a firearm, during commission of the crime.
The indictment has also charged each of the four with conspiracy to distribute methamphetamine, along with a fifth subject, Brian McDonald, who was not charged as part of the kidnapping. Additionally, Roger Creech, Brian McDonald, and Robert Hurley, III, were each charged with illegally possessing firearms.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; Stuart Lowrey, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF); Richard Sanders, Commissioner of the Kentucky State Police (KSP); and Greg Speck, Pulaski County Sheriff, jointly announce the indictment. The case was investigated by the ATF, KSP, and Pulaski County Sheriff’s Office.
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.
Eastern Kentucky Hospital System to Pay U.S. Government $150,000 to Settle Allegations that it Violated the Controlled Substances ActRead the Press Release
LEXINGTON, Ky. – Appalachian Regional Healthcare, Inc. (“ARH”) has agreed to pay the United States $150,000, to settle civil allegations that it unlawfully filled fraudulent prescriptions for stimulants and that it failed to make and maintain complete and accurate records of its controlled substances, in violation of the federal Controlled Substances Act.
The settlement resolves a civil lawsuit that was filed by the United States against ARH in May of 2016. In the lawsuit, the United States alleged that Harlan ARH Hospital Pharmacy knowingly filled fraudulent prescriptions for Schedule IV stimulants. Specifically, the United States alleged that ARH knew the prescriptions were fraudulent because ARH was aware that no doctor-patient relationship existed between the Harlan ARH Emergency Room physician, who was writing the prescriptions, and the ARH nurses and staff, who were filling the prescriptions at ARH pharmacies. The lawsuit further alleged that individuals in Harlan ARH’s management were made aware of the improper prescribing in 2010; yet, the Harlan ARH Hospital Pharmacy continued filling those prescriptions until 2014. The United States alleged that, as a result of these improperly filled prescriptions, ARH illegally dispensed thousands of stimulant pills to its employees and their family members.
The lawsuit further alleged that ARH failed to make and maintain complete and accurate records of its controlled substances at two other pharmacies, Hazard ARH Regional Medical Center Clinic Pharmacy and Middlesboro ARH Pharmacy, and that, because of that failure, Government auditors were prevented from being able to determine whether other controlled substances had been diverted for illegal use.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky and the Drug Enforcement Administration, Diversion Control Division jointly announced the settlement. The Diversion Control Division and the U.S. Attorney’s Office conducted the investigation of alleged violations. Assistant U.S. Attorneys Katherine Crytzer and Daniel Hancock represented the federal government in this case.
Hazard Physician and Wife Sentenced for Unlawful Distribution of Prescription Opioids and Health Care FraudRead the Press Release
FRANKFORT, Ky. – A Hazard, Ky. physician and his wife have been sentenced to 180 months in prison and 80 months in prison, respectively, following their federal convictions on multiple charges relating to the unlawful distribution of prescription opioids, health care fraud, and money laundering.
Yesterday, U.S. District Judge Gregory Van Tatenhove sentenced Dr. James “Ace” Chaney, 52, and his wife, Lesa Chaney, 51, on their convictions. In April 2016, a federal jury convicted Dr. Chaney of conspiracy to commit drug trafficking, 62 counts of illegal distribution of controlled substances, two counts of maintaining a premise for drug distribution, conspiracy to commit money laundering, 20 counts of money laundering, conspiracy to commit health care fraud and 84 counts of health care fraud. The same jury convicted Lesa Chaney, the President and CEO of Ace Clinique of Medicine LLC, of conspiracy to commit drug trafficking, two counts of maintaining a premise for drug distribution, conspiracy to commit money laundering, 20 counts of money laundering, conspiracy to commit health care fraud and 13 counts of health care fraud.
“This case is an example of a physician systematically betraying the trust of patients, placing his own profit over medical judgment, defrauding taxpayer-funded medical assistance programs, and fueling the opioid epidemic that has ravaged our state,” said Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky. “Dr. Chaney’s conduct has damaged our community immeasurably and has deprived government assistance programs of critical resources. Combatting health care fraud and prescription opioid abuse have been, and will continue to be, key priorities for our office. Without the great work of our law enforcement partners in this case, we would not have been able to prosecute this disgraceful scheme.”
From 2006 to 2014, James and Lesa Chaney owned and operated Ace Clinique of Medicine, in Hazard. The trial evidence established that Dr. Chaney pre-signed prescriptions for controlled substances, to be filled out by clinic staff while he was vacationing or otherwise not present at the clinic, and that Dr. Chaney knowingly provided prescriptions for controlled substances to individuals who were diverting the pills for sale and to individuals who were abusing the drugs. Dr. Chaney also required all of his patients to undergo monthly urine drug screening to test for the presence of the drugs he prescribed, as well as illegal narcotics. When the results showed the patients were not taking the prescribed pills, or were taking illegal narcotics, Dr. Chaney directed his staff to alter the test results to falsely indicate an appropriate result. These fraudulent test results were then submitted to Medicare, Medicaid and private insurers for payment.
The evidence at trial also showed that patients would frequently wait eight hours or longer, each month, to be seen by a health care provider at Ace Clinique. The examinations would then typically be of short duration and the patient would receive a prescription for controlled substances. The Chaneys would nonetheless bill for an office visit that falsely indicated a thorough physical examination had occurred. The evidence further showed that the Chaneys billed Medicare for work Dr. Chaney allegedly did while he was vacationing outside the United States.
The Chaneys billed Medicare and Medicaid nearly $88,000,000 during the period of the conspiracy, and received more than $21,000,000. The court ruled at the sentencing hearing that 60% of those payments resulted from the Chaney’s fraud, and they will be ordered to pay restitution back to Medicare and Medicaid, in an amount equal to what they fraudulently obtained.
Under federal law, the Chaneys must serve 85% of their prison sentences and will be under the supervision of the U.S. Probation Office for three years after their release from prison.
Acting United States Attorney Shier; Amy S. Hess, Special Agent in Charge of the FBI’s Louisville Field Office; and Richard Sanders, Commissioner of the Kentucky State Police, jointly announced the sentences.
Fourth Individual Sentenced in Scheme to Fraudulently Obtain Federal Tax RefundsRead the Press Release
LEXINGTON, Ky. – A Savannah, Ga. woman, who previously admitted to her role in a conspiracy to unlawfully obtain federal tax refunds, was sentenced today to 24 months in prison. She is the fourth and final defendant to be sentenced in this case.
Chief U.S. District Judge Karen Caldwell sentenced 57-year-old Lavonda Jones Hunt for conspiracy to commit mail and wire fraud and aggravated identity theft.
Hunt admitted to participating in a scheme to defraud the United States by receiving and redeeming federal tax refunds, in the names of other individuals, as a result of fraudulently filed tax returns. Co-conspirator Alreshia Blackmon, who worked for the Kentucky state penitentiary, admitted to supplying co-conspirators with personal identifying information of inmates, for the purpose of filing tax returns in their names. Co-conspirator Candice Casanova admitted to obtaining personal identifying information of numerous individuals through various means. Casanova further admitted to preparing and filing the false tax returns from Tampa, Florida, and then directing that the refund checks be sent to locations in Kentucky for Hunt, a then-Lexington resident, to retrieve. Hunt cashed these refunds with Azzam Maali, at his small grocery store, Progress Foods, which is located in Lexington, Kentucky. Maali charged a significant fee for cashing these obviously fraudulent refunds.
The other co-conspirators in this case have already been sentenced. Blackmon received a sentence of 12 months and 1 day; Casanova received a sentence of 51 months; and Maali received a sentence of 15 months.
Under federal law, Hunt, Blackmon, Casanova, and Maali must serve 85% of their prison sentences and will be under the supervision of the U.S. Probation Office for 1 to 3 years after their release from prison.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; Tracey D. Montano, Special Agent in Charge of the Nashville Field Office for the Internal Revenue Service-Criminal Investigations; and Jon Oldham, Resident Agent in Charge of the Lexington Resident Office for the United States Secret Service, jointly announce the sentences.
Nicholasville Man Sentenced to 41 Months for Counterfeiting Federal Reserve NotesRead the Press Release
LEXINGTON, Ky. – A Nicholasville, Ky. man was sentenced yesterday to 41 months in federal prison for manufacturing counterfeit Federal Reserve Notes.
U.S. District Court Judge Joseph M. Hood sentenced 39-year-old Thomas Johnson for counterfeiting obligations of the United States, by manufacturing Federal Reserve Notes.
Johnson admitted to manufacturing and selling counterfeit money. He manufactured counterfeit $10, $20, $50, and $100 bills and, either personally or through others, attempted to pass those bills at local retail establishments and fast food restaurants.
Under federal law, Johnson must serve 85% of his prison sentence and will be under the supervision of the U.S. Probation Office for three years after his release from prison.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; Jon Oldham, Resident Agent in Charge for the United States Secret Service Lexington Office; and Barry Waldrop, Nicholasville Police Department Chief of Police, jointly announced the sentence.
Fourth Individual Convicted in Scheme to Smuggle Contraband into Lexington Federal PrisonRead the Press Release
LEXINGTON, Ky. – A federal inmate pleaded guilty today, to bribing a corrections officer at the Federal Medical Center in Lexington, Kentucky (“FMC Lexington”) to smuggle prohibited items into the prison.
Keith Griffith, a 35-year-old federal inmate, pleaded guilty to conspiracy to introduce prohibited objects into a federal correctional facility and bribing a public official, making him the fourth individual convicted on charges relating to this scheme. On June 15, 2017, James Carrington of Winchester, Ky., a former corrections officer at FMC Lexington, pleaded guilty to bribery of a public official. That same day, another federal inmate, Amai Rawls, pleaded guilty to conspiracy to introduce prohibited objects into a federal correctional facility. On June 30, 2017, Stephanie Dukes of Louisville, Ky., pleaded guilty to bribing a public official. All four now await sentencing.
Between May 2015 and August 2016, Dukes purchased various items that federal inmates were not permitted to possess, at Griffith’s direction, and then paid Carrington to smuggle those items into FMC Lexington, where Griffith and Rawls were already serving sentences for federal offenses. Carrington would deliver the prohibited items to specific locations in FMC Lexington, where Griffith and Rawls would retrieve the items and personally use or consume the items or distribute them to other inmates. The prohibited items smuggled into FMC Lexington include MP3 players, cell phones, tobacco, dietary supplements, and synthetic marijuana.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; John F. Oleskowicz, Special Agent in Charge of the Chicago Field Office for the U.S. Department of Justice Office of the Inspector General; and Amy Hess, Special Agent in Charge of the Louisville Field Office for the Federal Bureau of Investigation, jointly announce the convictions.
Griffith will appear for sentencing on January 10, 2018 at 11:30 am. He faces a maximum of 15 years in prison. James Carrington and Amai Rawls will be sentenced on September 29, 2017. Carrington faces a maximum of 15 years in prison and Rawls faces a maximum of 1 year. Stephanie Dukes will be sentenced on October 4, 2017, and she faces a maximum of 15 years in prison. The Court must consider the U.S. Sentencing Guidelines and the applicable federal statutes before imposing a sentence.
Two Men Sentenced for Conspiracy to Distribute Crack Cocaine in Paris, KentuckyRead the Press Release
LEXINGTON, Ky. — Aaron T. Shakir, 36, and Tracey M. Thomas, 51, both of Paris, Ky., were sentenced today by United States District Judge Danny C. Reeves, for conspiring to distribute 28 grams of more of crack cocaine in Paris, during June and July 2016. Shakir was sentenced to 35 years in prison and Thomas was sentenced to 12 years in prison.
In May 2017, a federal jury found Shakir guilty of the drug conspiracy charge and substantive drug distribution charges. Shakir was also found guilty of illegally possessing a firearm during his drug trafficking. The jury convicted Shakir after a two-day trial. Thomas pleaded guilty, in May 2017, and admitted to conspiring with Shakir to distribute the crack cocaine.
Under federal law, Shakir and Thomas must serve 85 percent of their prison sentences. Upon release, both Shakir and Thomas will be under the supervision of the United States Probation Office for eight years.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; Stuart Lowery, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); and Richard Sanders, Commissioner, Kentucky State Police (KSP), jointly announced the sentence.
The investigation was conducted by the ATF and the KSP. The United States was represented by Assistant United States Attorneys Robert M. Duncan, Jr., and Cynthia T. Rieker.
Frankfort Man Indicted for Bribery of State EmployeeRead the Press Release
LEXINGTON, Ky. – A Frankfort, Ky., man was indicted today for charges alleging a scheme to bribe an employee of the Commonwealth of Kentucky.
A federal grand jury in Lexington returned an indictment charging 64 year-old James Sullivan with one count of conspiring to bribe and three counts of payments to influence an employee of a federally funded program.
The indictment alleges that Sullivan agreed to make cash payments to Timothy Longmeyer, to influence decisions that Longmeyer made while an employee of the Commonwealth of Kentucky.
As alleged in the indictment, Sullivan first offered to bribe Longmeyer in 2009. At that time, Sullivan represented a company that held a contract to administrate workers’ compensation claims filed by state employees. The Personnel Cabinet managed this program, giving Longmeyer oversight over the workers’ compensation contract. Between 2009 and approximately June 2015, Sullivan made multiple cash payments to Longmeyer, each time intending that Longmeyer would help with awarding, extending, and renewing the contract for Sullivan’s client. The indictment alleges that Sullivan made cash payments of $5,000 and $4,000 to Longmeyer, among other payments that were part of the conspiracy.
The indictment also alleges that Sullivan sought Longmeyer’s assistance on behalf of several private attorneys that Sullivan represented. Sullivan asked Longmeyer to identify opportunities for those attorneys to secure contracts to handle civil litigation for the Attorney General’s Office. Sullivan presented Longmeyer $1,000 in cash, intending to receive his assistance. Longmeyer is not alleged to have committed any criminal conduct while employed by the Kentucky Attorney General.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky, and Amy Hess, Special Agent in Charge, Federal Bureau of Investigation, jointly announced the indictment.
The investigation preceding the indictment was conducted by the Federal Bureau of Investigation. The indictment was presented to the grand jury by Assistant U.S. Attorney Andrew T. Boone.
A date for Sullivan to appear in court has not yet been scheduled. He faces up to 5 years in prison for the conspiracy charge and up to 10 years in prison for each of the bribery charges, and a maximum fine of $250,000 for each count. However, any sentence following a conviction would be imposed by the Court, after consideration of the U.S. Sentencing Guidelines and the federal statutes.
Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which government must prove guilt beyond a reasonable doubt.
Cynthiana Man Sentenced to 150 Months for Robbing Lexington Pharmacy and Possession with Intent to Distribute HydrocodoneRead the Press Release
LEXINGTON, Ky. — Miguel David Ayala, 38, of Cynthiana, Ky., was sentenced yesterday to 150 months in federal prison for robbing a pharmacy and possession with intent to distribute Hydrocodone . Ayala was also ordered to pay $3,219.61 in restitution.
Senior U.S. District Judge Joseph M. Hood formally sentenced Ayala after he was convicted by a jury, following a three-day trial. The evidence at trial established that, on July 8, 2015, Ayala robbed the Rite Aid Pharmacy on Executive Drive in Lexington, Kentucky. During the robbery, Ayala, who was armed with a handgun, stole approximately 4,000 Hydrocodone pills, a Schedule II controlled substance. The evidence also established that following the robbery Ayala possessed these stolen pills with intent to distribute them.
Under federal law, Ayala 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.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; Timothy J. Plancon, DEA Special Agent in Charge of the Detroit Field Division; Mark G. Barnard, Chief of the Lexington Division of Police; and Ray Johnson, Chief of the Cynthiana Police Department, jointly announced the sentence.
The investigation was conducted by the DEA, the Lexington Police Department, and the Cynthiana Police Department. The United States was represented by Assistant United States Attorney Robert M. Duncan, Jr.
Perry County Business Owners Sentenced for Defrauding and Extorting Their CustomersRead the Press Release
LONDON, Ky. – A Perry County couple, who owned several trucking companies, have both been sentenced to 56 months’ imprisonment, for defrauding and extorting more than 65 of their customers.
On August 14, 2017, U.S. Circuit Judge Amul Thapar, sitting by designation in the U.S. District Court for the Eastern District of Kentucky, sentenced 50-year-old Elliot Campbell on his convictions for wire fraud, conspiracy to commit wire fraud and conspiracy to commit extortion. Judge Thapar previously sentenced Melinda Campbell, 41, Elliot Campbell’s wife, on May 24, 2017. Under federal law, both will have to serve at least 85 percent of their 56-month sentences. They have also been ordered to pay $137,210.87 in restitution to their victims.
Both were found guilty of the charges following a jury trial in March of 2016.
The evidence at trial established that, from 2010 until 2012, the Campbells operated trucking companies and contracted with shipping brokers throughout the country to transport cargo freight. According to evidence, the Campbells induced shipping brokers to enter into contracts with special conditions, such as date-specific deliveries using a team of drivers or “dedicated loads” that would transport only a single customer’s cargo freight on a truck. Once the defendants obtained the cargo freight, however, they intentionally failed to fulfill the specified delivery conditions in the contract and then held the cargo hostage, by demanding payment prior to delivery. In response to complaints from shipping brokers, the Campbells created new companies and used false names to disguise and continue their fraudulent scheme, which inflicted significant financial harm on their victims.
Carlton S. Shier, IV, Acting U.S. Attorney for the Eastern District of Kentucky; Amy Hess, Special Agent in Charge, Federal Bureau of Investigation; and Thomas J. Ullom, Regional Special Agent-in-Charge, U.S. Department of Transportation Office of Inspector General, jointly announced the sentences.
Former IRS Revenue Officer in Prestonsburg Convicted of Defrauding United StatesRead the Press Release
ASHLAND, Ky. – A federal jury has convicted a former revenue officer assigned to the Prestonsburg, Ky., office of the Internal Revenue Service of defrauding, and making false statements to, the United States government.
On August 17, 2017, the jury returned its guilty verdict against 32-year-old Jason Helton of Louisa, Ky. U.S. District Judge David Bunning set Helton’s sentencing for December 18, 2017.
The evidence at trial established that on several occasions, from 2014 to 2016, Helton submitted false time sheets and false travel vouchers to the IRS, in order to receive salary, benefits, and travel expense reimbursements for work that he did not perform. Specifically, the evidence revealed that several taxpayers had confirmed that they did not receive visits from Helton on the dates he claimed to have visited and that Helton had falsely claimed to be reporting for work in the Prestonsburg office, on dates when he had not.
Carlton S. Shier, IV, Acting U.S. Attorney for the Eastern District of Kentucky and Rodney Davis, Special Agent in Charge, Washington Field Division, Treasury Inspector General for Tax Administration jointly announced the verdict.
Woodford County Man Sentenced to 28 Years for Distributing Fentanyl Resulting in Fatal OverdoseRead the Press Release
LEXINGTON, Ky. – The leader of a drug conspiracy in Versailles, Ky., has been sentenced to federal prison, for distributing fentanyl that resulted in the overdose death of a Woodford County woman.
Chief U.S. District Judge Karen K. Caldwell formally sentenced Luis Aguirre-Jerardo, age 29, of Versailles, Ky., to a term of 28 years. Aguirre-Jerardo had previously admitted that he distributed fentanyl – an extremely powerful opioid that can be as much as 50 times stronger than heroin – to Jolene Bowman, who died as a result of ingesting the drug. He specifically admitted that he distributed counterfeit pills, which were marked to resemble legitimate oxycodone tablets but instead contained the more-potent fentanyl. Aguirre-Jerardo distributed approximately 25 of these counterfeit pills to a co-Defendant, Gill Dewayne Garrett, who sold one to Jolene Bowman, causing her fatal overdose, on July 1, 2015, in Versailles. Garrett also pled guilty to the charge and was sentenced to 20 years. Aguirre-Jerardo pled guilty in August of 2016.
“This case is a direct result of the launch of our Overdose Prosecution Initiative and has taken both a dangerous drug dealer and his source of supply off our streets, for a very long time,” said Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky. “Eastern Kentucky has been devastated by opioid abuse and our office remains committed to its comprehensive approach to fighting the epidemic, including our continued emphasis on pursuing overdose prosecutions under federal law. The great work of our law enforcement partners in this case has helped make our overdose initiative a real success and a strong tool in combatting this scourge on our community.”
Under federal law, Aguirre-Jerardo must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the U.S. Probation Office for ten years.
Acting United States Attorney Shier; Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration; and Chief James Fugate, Versailles Police Department, jointly made the announcement.
The investigation was conducted by the Drug Enforcement Administration and the Versailles Police Department. The United States was represented by Assistant United States Attorney Todd Bradbury.
Lexington Real Estate Appraiser Sentenced for Conspiracy to Commit Wire Fraud and Making False StatementsRead the Press Release
LEXINGTON Ky. – A Lexington man, who pled guilty in May of 2017, was sentenced in federal court today, to five months in prison and five months home confinement. He was also ordered to pay a $5,500 fine.
Senior U.S. District Court Judge Joseph M. Hood sentenced 34-year-old Matt Garner for conspiracy to commit wire fraud and making false statements to a federal agency.
Matt Garner, 34, a former licensed real estate appraiser, made false statements in connection with appraisals he submitted for use by lenders in connection with federally-backed mortgages.
Garner owned and operated Lexington-based Garner & Associates. Between 2012 and 2016, his company was paid for more than 700 appraisals, on homes being purchased or refinanced in numerous counties surrounding Lexington and Owensboro, Ky. In his guilty plea, acknowledged that, in a significant percentage of these appraisals, he falsely certified on federal appraisal forms that he had personally visited the property and conducted the appraisal. , in fact, had paid unlicensed individuals a small portion of the appraisal fee to perform the appraisals.
Under federal law, Garner must serve 85 percent of his prison sentence. He will also be under supervision of the U.S. Probation Office for three years, following his term of incarceration.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky, and Amy S. Hess, Special Agent in Charge, Federal Bureau of Investigation, Louisville Field Office, announced the sentence today.
The Louisville Division of the Federal Bureau of Investigation conducted the investigation. Assistant U.S. Attorneys Ken Taylor and Kate Anderson represented the federal government
Covington Business Owner Sentenced to 66 Months for Food Stamp Fraud SchemeRead the Press Release
COVINGTON, Ky. – An Edgewood, Ky., woman, who was found guilty by a federal jury in January 2017, was sentenced today to 66 months in prison.
U.S. District Court Judge David L. Bunning sentenced 49-year-old Phyllis Tyler for Conspiracy to Commit Food Stamp Fraud, Food Stamp Fraud, and four counts of Money Laundering.
Tyler operated A&E Fashion’s and Beauty Supply LLC (A&E), a convenient store in Covington, Ky., which was an authorized food stamp retailer. The United States Department of Agriculture administers the food stamp program, formally called the Supplemental Nutrition Assistance Program (SNAP), which provides benefits to recipients who are eligible for assistance. Retail stores may participate in SNAP only with the authorization of the USDA, Food and Nutrition Service and may only accept and redeem food stamp benefits in connection with the sale of eligible food stamp items. Authorized retailers cannot accept food stamp benefits in exchange for cash. Food stamp recipients use an Electronic Benefit Transfer (EBT) card that maintains the benefit balance and can be used at any authorized retailer to redeem benefits.
According to the evidence at trial, from January 2, 2012 until June 26, 2015, Tyler made cash purchases of food stamp benefits from beneficiaries, paying half the value of the benefits actually on the EBT cards. She then redeemed the full benefits by conducting EBT transactions at her store, which triggered a direct reimbursement for the sale from the federal government to Tyler’s business bank account. She also used cards that she purchased for cash at other retailers, to buy items for her personal use or for inventory at her store. As a result of the fraud, Tyler was responsible for causing a $408,979.76 loss to the food stamp program. On four occasions, Tyler also transferred more than $10,000 in food stamp fraud proceeds through a financial institution, in violation of federal money laundering statutes.
Under federal law, Tyler must serve 85 percent of her prison sentence and will be under supervision of the U.S. Probation Office for three years following her term of incarceration.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky, Tracey D. Montaño, Special Agent in Charge, IRS Criminal Investigation, Nashville Field Office, and Chief Brian Carter of the Covington Police Department, announced the sentence today.
IRS Criminal Investigation, United States Department of Agriculture, Kentucky Cabinet for Health and Family Services and the Covington Police Department conducted the investigation. Assistant U.S. Attorneys Kathryn Anderson and Elaine Leonhard represented the federal government.
Richmond Man Sentenced to 33 Months for EmbezzlementRead the Press Release
LEXINGTON, Ky. – A Richmond, Ky., man, who previously admitted to embezzling money from several related commercial real estate companies in Lexington, has been sentenced to 33 months in federal prison.
Today, U.S. District Court Judge Joseph M. Hood sentenced 65-year-old Robert K. Chaffins for four counts of mail fraud. Chaffins was Vice President of the Asset Management Division of a conglomerate of related entities, namely Lex/108, LLC, Leestown Distribution, LLC, Melbourne Distribution Center, LLC, and 801 Realty, LLC. In this role, Chaffins was responsible for collecting various payments from tenants renting business space from these entities. Knowing some of the fees provided for in the leases were not being collected, he set up bank accounts in the name of these entities, billed the tenants for particular fees through the U.S. Mail, and deposited payments into the bank accounts for his personal use.
In total, from February of 2007 until January 28, 2016, Chaffins deposited $1,064,522.36 in checks intended for Lex/108, LLC, Leestown Distribution, LLC, Melbourne Distribution Center, LLC, and 801 Realty, LLC, into bank accounts he controlled. He used this money to make payments on a second home, a Mercedes Benz, investment and retirement accounts, and dozens of other personal expenses.
Chaffins pleaded guilty to the mail fraud charges in March 2017. Under federal law, he must serve 85% of his prison sentence and will be under the supervision of the United States Probation Office for three years following his term of incarceration.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; Jon Oldham, Resident Agent in Charge, United States Secret Service, Lexington Resident Office; and Chief Mark Barnard, Lexington Police Department, jointly announced the sentence.
The United States Secret Service and the Lexington Police Department conducted the investigation and Assistant United States Attorney Kathryn Anderson represented the United States.