Eastern District of Kentucky
Press releases recorded for this federal judicial district.
Ft. Thomas X-Ray Technician Pleads GuiltyRead the Press Release
COVINGTON — An X-ray technician from Ft. Thomas, Ky., has admitted in federal court to defrauding state and federal health care programs out of thousands of dollars.
On Friday, Robert Moyer pleaded guilty today to health care fraud, before U.S. District Judge Amul Thapar.
According to court records, starting in June 2010 and continuing until December 2010, Moyer knowingly allowed an unlicensed individual to administer x-rays to Medicare and Medicaid patients from Kentucky and Ohio. He then falsified documentation to conceal who performed the x-ray service. Under federal law, health care benefit programs only reimburse medical professionals for services conducted by a licensed professional.
In total, Moyer filed more than 3,800 fraudulent claims worth $112,173.93.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Jack Conway, Kentucky Attorney General; Sylvia Mathews Burwell, , Department of Health and Human Services, Office of Inspector General, Office of Investigations; and Mike DeWine, Ohio Attorney General, jointly made the announcement.
The investigation was conducted by the Office of the Kentucky Attorney General, Medicaid Fraud and Abuse Control Unit; Department of Health Human Services, Office of Inspector General, Office of Investigations and the Ohio Attorney General’s Office.
Moyer will appear for sentencing on July 16, 2015 at 10:00 a.m. He faces a maximum of 10 years in prison. However, the Court must consider the U.S. Sentencing Guidelines and the applicable statutes before imposing a sentence.
Somerset Optometrist Found Liable for False Claims ActRead the Press Release
LEXINGTON - The U.S. Attorney’s Office announced today that a federal jury found Dr. Phillip Robinson, a Somerset optometrist, liable, under the False Claims Act, for seeking payment from the Medicare program for more than 11,000 unnecessary eye examinations he provided to nursing home residents.
On Friday, May 1, 2015, the jury reached its verdict, after three hours of deliberation, following a five-day trial. The jury found that the Medicare program lost $419,075 as a result of Dr. Robinson’s false claims. Under the False Claims Act, Dr. Robinson will be required to pay the federal government three times that amount, $1,257,225.
“Dr. Robinson's scheme to defraud the taxpayers betrays the standards we expect of our healthcare providers,” said U.S. Attorney Kerry B. Harvey. “His willingness to use many of our most vulnerable citizens to further his financial interests at the expense of our vital federally funded healthcare programs is particularly troubling. We will continue to use every available tool to protect the public treasury from this sort of abuse.”
Dr. Robinson provided eye care services at approximately a dozen nursing homes in Pulaski, Lincoln, and McCreary Counties, among other southeastern and south-central locations in Kentucky. Evidence presented at the trial established that, from January 1, 2007 to January 31, 2012, Dr. Robinson gave eye examinations to the vast majority of his nursing home patients, once a month, regardless of the patients’ condition or medical need. Medical experts testified that they were unaware of any other optometrists that provided eye exams with this frequency.
The evidence further established that Dr. Robinson caused the Medicare program to be billed for these exams. Because Medicare only pays for medically necessary exams, Dr. Robinson intentionally filed claims that represented each exam was necessary.
The jury concluded that Dr. Robinson was responsible for 11,085 false claims, submitted to Medicare for payment, for the unnecessary eye examinations.
In January 2015, Dr. Robinson’s practice group, Associates in Eye Care, agreed to pay the government $800,000 to settle related claims against it, thereby avoiding trial.
Health care providers found liable under the False Claims Act are typically excluded from further participation in federal health care programs such as Medicare and Medicaid. A decision about Dr. Robinson’s exclusion from federal health care programs will be made by the Department for Health and Human Services, Office of Inspector General (HHS-OIG).
This investigation was conducted by HHS-OIG, the Kentucky Office of Attorney General’s Medicaid Fraud and Abuse Control Unit, and the United States Attorney’s Office for the Eastern District of Kentucky. Assistant United States Attorneys Christine Corndorf, Andrew Smith, and Paul McCaffrey litigated the case on behalf of the federal government.
Mt. Sterling Man Sentenced to 150 Months for Distributing Thousands of Oxycodone PillsRead the Press Release
LEXINGTON — A Mt. Sterling, Ky., man, who previously admitted to being responsible for the distribution of 20,000 prescription pills in Montgomery County, has been sentenced to 150 months in federal prison.
On Friday, April 24, U.S. District Judge Danny C. Reeves sentenced Jeffrey Scott Wingate, 52, for possession with intent to distribute Oxycodone. Wingate was also ordered to forfeit approximately $200,000, several firearms, and two vehicles.
Judge Reeves also sentenced Charles Michael Spence, 39, of Mt. Sterling, to 81 months for conspiring to distribute Oxycodone. Spence acknowledged he was responsible for the distribution of 14,000 Oxycodone pills. Under federal law, both defendants must serve at least 85 percent of their prison sentence and will be under the supervision of the U.S. Probation Office for three years, following their release.
In November 2014, Wingate and Spence pleaded guilty to the drug charges and admitted that, from September 2013 through June 12, 2014, they conspired with co-defendant, Eric Gonzalez, aka Joel Ramon Hipolito, and others to distribute Oxycodone pills. Judge Reeves previously sentenced Gonzalez to 200 months in prison for his role in the conspiracy.
According to Wingate’s plea agreement, he also acknowledged that he conspired to distribute approximately 5 ounces of heroin.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky; Howard Marshall, Special Agent in Charge, Federal Bureau of Investigation; Rodney Brewer, Commissioner, Kentucky State Police; David Charles, Chief, Mt. Sterling Police Department; and Fred Shortridge, Montgomery County Sheriff, jointly made the announcement.
The investigation was conducted by the FBI, Kentucky State Police, the Mt. Sterling Police Department and the Montgomery County Sheriff’s Office. Assistant United States Attorney Robert M. Duncan, Jr., prosecuted this case on behalf of the federal government.
Covington Couple Sentenced for Heroin ConspiracyRead the Press Release
COVINGTON — A Covington, Ky., couple has been sentenced to federal prison for conspiring to distribute heroin in northern Kentucky.
U.S. District Judge David L. Bunning sentenced William Lovelace, 25, to 90 months for conspiracy and possessing a firearm in furtherance of a drug trafficking crime. Tonia Cross received a 24 month sentence for conspiracy. Under federal law, both defendants must serve at least 85 percent of their prison sentence, and upon release, Lovelace and Cross will serve terms of supervised release of 10 and 3 years, respectively.
Lovelace and Cross pleaded guilty in January of this year and admitted they conspired to distribute heroin in Campbell and Kenton Counties on multiple occasions, between May 1, 2014 and August 16, 2014.
Authorities arrested Cross and Lovelace on August 16, 2014, after observing Lovelace, armed with a handgun, sell heroin in Bellevue.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Howard S. Marshall, Special Agent in Charge, Federal Bureau of Investigation; and Colonel Wayne Turner, Chief of Police, Bellevue Police Department, jointly made the announcement today.
The investigation was conducted by the FBI’s Safe Streets Task Force and the Bellevue Police Department. Assistant U.S. Attorney Tony Bracke prosecuted this case on behalf of the federal government.
Madison County Man Sentenced to 10 Years for Heroin ConspiracyRead the Press Release
LEXINGTON — A Madison County man, who was previously convicted of heroin charges, has been sentenced to 10 years in federal prison.
U.S. District Judge Joseph M. Hood sentenced Neal Scott Stone, 39, for conspiracy to distribute heroin, distribution of heroin, possession with intent to distribute heroin, attempt to possess with intent to distribute one kilogram of cocaine, and violating the conditions of his supervised release from a previous crime. Judge Hood also sentenced Stone’s girlfriend, Catherine Leake, 28, to two years in prison for conspiring with Stone. Both defendants must serve at least 85 percent of their prison sentence.
A federal jury convicted Stone of the drug charges in January of this year and found that he conspired to distribute heroin from March 1, 2014 until May 13, 2014. Leake pleaded guilty to the conspiracy offense in January.
According to court documents, in May 2014, Leake distributed heroin, on Stone’s behalf, to another individual at a fast food restaurant in Richmond. Following the transaction, authorities arrested Stone and Leake. After executing a search warrant at Stone’s residence, authorities recovered several items associated with the drug conspiracy, including 71 grams of heroin.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, David Gregory, Chief of Police, Berea, Ky., and Joseph P. Reagan, Special Agent in Charge, DEA, jointly made the announcement.
The investigation was conducted by the Berea Police Department and the DEA. Assistant U.S. Attorney Cindy Rieker prosecuted the case on behalf of the federal government.
Owner of Pain Clinics in Florida and Georgia Admits to Conspiracy to Distribute Prescription Drugs to KentuckiansRead the Press Release
LONDON — The owner of two out-of-state pain clinics, that unlawfully distributed hundreds of thousands of prescription pills to thousands of Kentuckians, has pleaded guilty to drug charges in federal court.
On Tuesday, Joel Shumrak, 67, pleaded guilty to conspiracy to distribute oxycodone and alprazolam, and to laundering money. Shumrak has agreed to serve a prison term of 168 months, pending the Court’s approval. Shumrak has also agreed to forfeit approximately $7 million in proceeds from the conspiracy. He will be formally sentenced on August 4, 2015.
According to his plea agreement, from June 2008 until May 2014, hundreds of Kentuckians, from Clay, Laurel, Rockcastle, Pulaski, Floyd, Knox, Bell, Pike, Jefferson, Whitley, Madison, Montgomery, Fayette, Magoffin and other Kentucky Counties, visited Shumrak’s clinics in Tucker, Ga., and Broward, Fla., on a weekly basis, to unlawfully obtain prescription pills without a legitimate medical need. Shumrak admitted that these patients received little to no physical examinations before obtaining the drugs, and that many of the Kentucky patients distributed the drugs upon their return to Kentucky.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky; Joseph Reagan, Special Agent in Charge, DEA, Detroit Field Division; A.D. Wright, Acting Special Agent in Charge, DEA, Miami Field Division; and Daniel Salter, Special Agent in Charge, DEA, Atlanta Field Division, jointly made the announcement.
The investigation was conducted by the DEA in Kentucky, Georgia, Florida and Ohio. Assistant U.S. Attorney Sam Dotson prosecuted this case on behalf of the federal government.
Richmond Man Sentenced to 144 Months for Distributing Child PornographyRead the Press Release
LEXINGTON — A Richmond man, who previously admitted to making images of child pornography available for download on the internet, has been sentenced to 144 months in federal prison.
U.S. District Judge Joseph M. Hood sentenced 53-year-old Mark Douglas Taylor for distribution of child pornography and ordered him to be under the supervision of the U.S. Probation Office for 10 years following his release. Under federal law, Taylor must serve at least 85 percent of his sentence.
According to Taylor’s plea agreement, an undercover investigator with the Office of the Kentucky Attorney General, downloaded several files from the internet that she suspected contained child pornography. Law enforcement later identified Taylor’s computer as the source of the child pornography files. Then, in February 2014, law enforcement executed a search warrant at his residence and located numerous images depicting prepubescent children engaged in sexually explicit conduct on his computer.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Jack Conway, Kentucky Attorney General; and Howard Marshall, Special Agent in Charge of the FBI, jointly made the announcement today.
The investigation was conducted by the FBI and the Office of the Kentucky Attorney General. Assistant U.S. Attorney David A. Marye prosecuted this case on behalf of the federal government.
Career Offender Sentenced to 220 Months for Heroin Conspiracy in NewportRead the Press Release
COVINGTON — A federal judge has sentenced a Cincinnati man to 220 months in federal prison, for his role in a conspiracy that distributed heroin in Newport, Ky.
U.S. District Judge Amul Thapar sentenced Carlos Massengill, 45, for conspiracy to distribute heroin. Judge Thapar enhanced Massengill’s sentence because Massengill qualified as a career offender, due to his significant criminal history.
Massengill admitted that he and a co-defendant, Anquan Williams, 35, distributed heroin in Newport, on several occasions between April 2014 and July 30, 2014.
Williams was sentenced to 120 months in prison on April 2. Williams and Massengill pleaded guilty in December of 2014.
Under federal law, Massengill must serve at least 85 percent of his prison sentence, and he will be on supervised release for 10 years following his prison term.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Stuart L. Lowrey, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms & Explosives (Louisville Field Division), jointly made the announcement today.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Campbell County Drug Task Force. Assistant U.S. Attorney Tony Bracke prosecuted the case on behalf of the federal government.
Former Franklin County Deputy Sheriff Sentenced for TheftRead the Press Release
FRANKFORT — A former deputy of the Franklin County Sheriff’s Department, who previously admitted to using evidence collected from an investigation to pay for personal expenses, has been sentenced to 16 months in federal prison and two months of home incarceration.
U.S. District Judge Gregory F. Van Tatenhove sentenced Matthew Christian Brown, 32, for theft of government property and ordered him to pay $17,840.54 in restitution. Of that amount, $9,900 will be paid to the Franklin County Sheriff’s Department. Under federal law, Brown must serve at least 85 percent of his prison sentence; and following his release, he will be under the supervision of the U.S. Probation Office for three years.
According to his plea agreement, Brown, who also served as the chief narcotics officer, executed a search warrant at a suspect’s residence, where he seized a watch and a ring. Instead of logging those items as evidence, Brown kept them for himself. He further admitted that he sold the ring back to the suspect.
Brown served as a deputy sheriff from May 2007 until December 2012.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Rodney C. Brewer, Kentucky State Police Commissioner; and Howard Marshall, Special Agent in Charge, Federal Bureau of Investigation, jointly made the announcement today.
The investigation was conducted by the Kentucky State Police and the FBI. Assistant U.S. Attorney Hydee Hawkins prosecuted this case on behalf of the federal government.
Powell County Couple Sentenced to 41 Months for Manufacturing Counterfeit BillsRead the Press Release
LEXINGTON — A Powell County couple, that previously admitted to selling nearly $3,000 in counterfeit money, have both been sentenced to 41 months in federal prison.
On Wednesday, U.S. District Judge Danny C. Reeves sentenced Timothy Ray Profitt, 34, and his wife, Amanda Marie Profitt, 27, for counterfeiting securities of the United States. Under federal law, each defendant will have to serve 85 percent of their prison sentence.
According to their plea agreements, between September 26, 2013 and October 2, 2013, the Profitts manufactured 143 counterfeit bills, all in denominations of $20. They then sold $2,860 in counterfeit bills to others in Powell County, for less than the face value of the counterfeit money.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Craig Hutzell, Acting Special Agent in Charge, United States Secret Service, jointly announced the sentences.
The investigation was conducted by the U.S. Secret Service and the Winchester Police Department. Assistant U.S. Attorney Kate K. Smith prosecuted this case on behalf of the federal government.
Leader of Large Drug Conspiracy in Northern Kentucky ConvictedRead the Press Release
COVINGTON — The leader of a massive drug conspiracy that distributed large quantities of heroin and marijuana in northern Kentucky and southern Ohio has been convicted by a jury of multiple drug charges and other related offenses.
On Thursday, March 12, a federal jury convicted Alberto Lara-Chavez, 45, of Planada, Calif., of conspiracy to distribute 100 grams or more of heroin and 100 kilograms or more of marijuana, distribution of heroin and marijuana, possession of a firearm in furtherance of drug trafficking, possession of a firearm by an illegal alien, conspiracy to launder money, and engaging in a continuing criminal enterprise.
Felix Agundiz-Montes, 30, of Walton, Ky., was also convicted, of conspiracy to distribute 100 grams or more of heroin and 100 kilograms or more of marijuana, attempted distribution of marijuana, and conspiracy to launder money; and Jose Alberto-Lara, 23, of Planada, Calif., was convicted of conspiracy to distribute 100 kilograms or more of marijuana.
The jury returned the verdict after nine days of trial. The evidence established that from October 2012 through May 16, 2014, the defendants were members of a larger group that conspired to distribute heroin and marijuana in Kenton, Boone, Campbell, Gallatin, and Grant Counties in Kentucky as well as Hamilton, Brown, and Clermont counties in Ohio.
Evidence at trial established that the group shipped marijuana to this area from Texas and California and operated a large marijuana field in Sardinia, Ohio. The group brought heroin to this area from Columbus, Ohio for distribution. Evidence and court records showed that many of the members of the group were not legally present in the United States and had been brought here by other conspiracy members to sell narcotics. Many of them possessed firearms to protect the drugs and drug proceeds. The leaders of the group conspired to launder funds from the drug operation through bank deposits, wire transfers, and casino activity.
Lara-Chavez was the leader of the group and directed its local activities. Group members identified themselves as associates of a Mexican drug cartel.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Joseph Reagan, Special Agent in Charge, Detroit Field Division, Drug Enforcement Administration, jointly made the announcement.
The investigation was conducted by the Drug Enforcement Administration, the United States Postal Investigation Service, and the Internal Revenue Service. The United States was represented in the trial by Assistant United States Attorneys Tony Bracke and Jason Denney.
The defendants are scheduled to appear for sentencing before Judge Amul Thapar, in Covington, on July 1, 2015. Lara-Chavez faces a potential sentence of life imprisonment. Agundiz-Montes and Alberto-Lara face a maximum sentence of 40 years in prison. However, the sentences will be imposed by the court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.
Former Shelbyville Bank Vice President Sentenced for Misappropriating FundsRead the Press Release
LEXINGTON — A former vice-president of a Shelbyville bank has been sentenced to 12 months in prison, with an additional six months of home-incarceration, for misappropriating hundreds of thousands of dollars of bank funds.
On Tuesday, U.S. District Judge Gregory F. Van Tatenhove sentenced Roy T. Edwards to his prison term and also ordered him to pay $308,482 in restitution.
According to court documents, from March 2005 through November 2006, Edwards fraudulently authorized hundreds of thousands of dollars in loans to applicants who were not qualified based on their credit histories and the bank suffered financial losses based on the loans. More specifically, Edwards knowingly approved loan applications that contained false information regarding applicants’ income, employment, and assets.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Patrick T. Collins, Federal Deposit Insurance Corporation (FDIC), Office of Inspector General, jointly announced the sentence.
The investigation was conducted by the FDIC. Assistant U.S. Attorney Andrew Sparks prosecuted the case on behalf of the federal government.
Members of Floyd County Family Plead Guilty to Insurance FraudRead the Press Release
PIKEVILLE — Three members of a Floyd County family admitted in federal court that they attempted to defraud insurance companies out of thousands of dollars.
On Monday, Charles Ray Tackett, 42, his son, Michael Ray Tackett, 25, and his wife, Anna Grace McGuire Tackett, 27, pleaded guilty to wire fraud and conspiracy before U.S. District Judge Danny C. Reeves.
According to court documents, Charles Tackett devised a scheme to defraud insurance carriers, by fraudulently obtaining insurance on classic vehicles. Tackett admitted he purchased vehicles, including a 1971 Cadillac Deville and a 1972 Oldsmobile, and falsely reported to the insurance companies that the vehicles had been fully restored through a body shop, when no such work had been done to the vehicles.
Tackett claimed the cars were worth significantly more than their actual value and he obtained insurance based on the inflated value of the vehicles. After the vehicles were destroyed in a fire, Tackett attempted to recover money by filing a claim under the fraudulently obtained insurance policy.
Tackett also acknowledged he recruited his wife and son to join the conspiracy. Michael Tackett and Anna McGuire Tackett executed similar schemes involving a 1978 Chevy Monte Carlo, a 1979 Pontiac Trans Am, and a 1984 Pontiac Firebird.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Howard S. Marshall, Special Agent in Charge, Federal Bureau of Investigation, jointly announced the guilty pleas.
The investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Kate K. Smith represents the federal government in this case.
All three defendants are scheduled to be sentenced on June 22, 2015. They face a maximum prison sentence of 20 years and a maximum fine of $250,000. Any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
Former University of Kentucky Faculty Member SentencedRead the Press Release
A former employee of the University of Kentucky’s Veterinary Diagnostic Laboratory has been sentenced to 66 months in prison for downloading child pornography images onto his work-issued computer.
On Wednesday, U.S. District Judge Karen Caldwell sentenced 60 year-old Neil Mason Williams for receipt of child pornography. Under federal law, Williams will have to serve at least 85 percent of his sentence. Following his release from prison, Williams will be under the supervision of U.S. Probation Office for 20 years and he will have restricted access to a computer during this time period.
Williams pleaded guilty to the charge in December of last year, admitting that he used a file sharing program to download thousands of images of child pornography onto his work computer. The investigation started in February 2014, when staff members from the Information Technology Department noticed files downloaded on Williams’ computer that appeared to contain child pornography.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Howard S. Marshall, Special Agent in Charge, FBI; Jack Conway, Kentucky Attorney General; and Ray Larson, Office of the Commonwealth’s Attorney, jointly announced the sentence today.
The investigation was conducted by the FBI, the University of Kentucky Police Department, and the Office of the Kentucky Attorney General. Assistant U.S. Attorney David Marye, prosecuted the case on behalf of the federal government.
Members of International Conspiracy Sentenced to Combined 60 Years for Multi-Million Dollar Internet Fraud SchemeRead the Press Release
LEXINGTON — The perpetrators of an international wire fraud scheme, involving the fraudulent sale of automobiles over the internet, have been sentenced to combined terms of imprisonment totaling more than 60 years.
On Monday, U.S. Senior District Judge Joseph M. Hood sentenced the last of ten defendants involved in the criminal conspiracy. The scheme, which operated in Lexington and other places, originated in Eastern Europe, where conspirators used legitimate websites, such as eBay.com and Autotrader.com, to advertise non-existent vehicles for sale. The advertisements would list the used-vehicles for a competitive price. Once contacted by potential buyers, the conspirators would negotiate the price with victims, via telephone and e-mail.
After an agreement to purchase a vehicle was reached, conspirators instructed victims to wire the purchase funds to United States-based members of the conspiracy, through Western Union, MoneyGram, or a bank wire transfer. The conspirators would then pick up the funds using various forms of fraudulent identification. The United States-based conspirators kept some of the proceeds but wired the rest of the money to the international members of the conspiracy.
Within the United States, the conspiracy operated in Georgia, Ohio, Kentucky, Tennessee, Indiana, and Michigan. In all, more than 550 victims of the scheme, whose losses exceed $2,000,000, have been identified.
The defendants sentenced include Nicholas Corey Garner and Petrica Octavian Stoian. Garner was a leader of the conspiracy who recruited many of the United States-based defendants to join the scheme; he received 240 months in prison. Stoian is a Romanian national, who coordinated several aspects of the international portion of the conspiracy. He admitted to opening bank accounts in Hungary, using false identities, to receive proceeds of the fraud. In June of 2013, the United States extradited Stoian from Hungary, to face the fraud charges in this case. Stoian received 97 months in prison.
Other members of the conspiracy have been sentenced as follows: Dwayne Hardy, 72 months; Nathaniel Garner, 70 months; Harold Smith, 60 months; Brooks Sowell, 60 months; Sabrina Carmichael, 60 months; April Abrams, 36 months; and Eli Holley, 36 months (sentenced Monday). Jelahni Williams, who only participated in the conspiracy for three days, was sentenced to time-served.
Under federal law, each defendant must serve at least 85 percent of their prison sentence and will be under the supervision of the United States Probation Office for three years following their release.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Craig Hutzell, Acting Special Agent in Charge of the U.S. Secret Service, jointly announced the sentences.
The investigation was conducted by the U.S. Secret Service and Assistant U.S. Attorney Erin M. Roth prosecuted the case on behalf of the federal government.
Local Oil Operator Admits Role in Multi-Million Dollar Fraud SchemeRead the Press Release
FRANKFORT — A central Kentucky oil operator has admitted to his role in a scheme that defrauded investors nationwide out of millions of dollars.
On Tuesday, Mark Cornell pleaded guilty to securities fraud before U.S. District Judge Gregory Van Tatenhove. In January of this year, John G. Westine, Jr., a leader of the scheme, was convicted by a jury of mail fraud, money laundering conspiracy, and securities fraud. A third member of the scheme, Michael Hicks, pleaded guilty to mail fraud in November 2014. Westine and Hicks are scheduled to be sentenced in May.
In his plea agreement, Cornell admitted that his role in the scheme was to act as the local operator of a series of reworked wells for which production levels were exaggerated. Cornell was paid large sums of money by Westine and his associates to rework the wells and to provide guarantees of these excessive production levels. Those fraudulent guarantees were used by Westine and his associates to sell royalty interests in the wells to investors, via high-pressure telephone tactics.
In total the defendants defrauded approximately 200 investors nationwide out of more than $3,000,000.
The investigation started when investors submitted complaints to the Kentucky Department of Financial Institutions, Division of Securities.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Dugan Wong, Inspector in Charge of the U. S. Postal Inspection Service; and Charles Vice, Commissioner of the Kentucky Department of Financial Institutions, jointly announced the guilty plea.
The investigation was conducted by the U.S. Postal Inspection Service, including Postal Inspector Roberta Bottoms, and the Kentucky Department of Financial Institutions, Division of Securities.
Assistant U.S. Attorneys Ken Taylor and Neeraj Gupta are prosecuting this case on behalf of the federal government.
Cornell is scheduled to be sentenced in June. He faces a maximum sentence of 20 years imprisonment. The Court will impose a sentence after carefully considering the U.S Sentencing Guidelines and the federal statutes.
Former University of Kentucky Professor Pleads Guilty to Wire FraudRead the Press Release
LEXINGTON, KY - Dongping “Daniel” Tao, a former mining engineering professor at the University of Kentucky, admitted in federal court today that he defrauded the University out of tens of thousands of dollars, in items and services.
Tao, 54, pleaded guilty to one count of wire fraud, before U.S. District Judge Karen Caldwell. Tao also admitted that he defrauded Georgia-Pacific, LLC, a private company for whom he worked as a consultant.
Tao acknowledged that he received grant money from the University that was intended for research, on behalf of the College of Engineering, but Tao used the money for his consulting business, paying for travel, materials, and services. Tao then sought payment from his consulting clients, as reimbursement for expenses that he had actually used the University’s money to pay.
Tao also admitted that he fabricated and altered invoices, to show fictitious costs, and submitted those invoices to the University and Georgia-Pacific for payment. Tao then received payment for these fraudulent expenses.
According to his plea agreement, between 2010 and 2013, Tao fraudulently obtained $59,411.86 from the University and $2,280.00 from Georgia-Pacific
.Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Howard Marshall, Special Agent in Charge, FBI, jointly announced the guilty plea.
The investigation was conducted by the FBI, the UK Police Department, and the UK Internal Audit Department. Assistant U.S. Attorney Andrew T. Boone represents the federal government in this case.
Tao is scheduled to be sentenced on June 11, 2015 at 10:30 am. He faces a maximum prison sentence of 20 years and a maximum fine of $250,000. However, any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
Somerset Optometry Practice to Pay U.S. Government $800,000 to Settle False Claims Act ViolationsRead the Press Release
LONDON, KY - An optometry practice in Pulaski County has agreed to pay the U.S. Government $800,000 to settle civil allegations that it billed federal health care programs for medically unnecessary and worthless eye examinations provided to nursing home residents over the course of several years.
The U.S. Government contends that from January 1, 2007 to January 31, 2012, Associates in Eye Care P.S.C. (“AEC”), employed an optometrist, Dr. Philip Robinson, who provided routine, monthly eye examinations to almost all of his nursing home patients, regardless of their condition or medical need. Many of these examinations were medically unnecessary according to the government’s allegations.
“Federally funded healthcare programs provide an essential safety net for many of our most vulnerable citizens,” said Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky. “Those who abuse the system for personal gain jeopardize the programs on which so many rely. We are committed to using every available tool to protect these vital programs from fraud and abuse.”
The government also alleges that because of the high number of patients seen by Robinson on a daily basis, it was not possible for all of the patients to receive a legitimate eye exam. Therefore, the exams had no medical value. AEC billed Medicare and Medicaid for all eye examinations provided by Robinson to nursing home patients and received payment from those programs.
According to the settlement agreement, AEC violated the False Claims Act by knowingly seeking payment from federal health care programs for unnecessary and/or worthless medical services.
In addition to payment of the settlement amount, AEC has agreed to enter into an integrity agreement with the Department of Health and Human Services-Office of Inspector General (HHS-OIG), which obligates it to undertake substantial internal compliance reforms and to commit to a third party review of its claims to federal health care programs for the next three years.
Dr. Robinson is also a defendant in the United States’ False Claims Act complaint filed in May 2013. This settlement resolves the government’s claims against AEC, but does not resolve any claims for False Claims Act violations against Robinson. Robinson’s trial is scheduled to begin in April 2015. If he is found liable, Robinson would be responsible for paying back three times the amount of money Medicare and Medicaid paid for his unnecessary and/or worthless services and would be excluded from further participation in federal health care programs.
The investigation was conducted by the Department of Health and Human Services, Office of the Inspector General; the Office of the Kentucky Attorney General, Medicaid Fraud and Abuse Control Unit (“MFCU”), and the U.S. Attorney’s Office.
Columbus Man Pleads Guilty to 6 Armed Robberies in 4 StatesRead the Press Release
Defendant Robbed Two Banks in Ky.
COLUMBUS, OH - William J. McBride, Jr., 49, of Columbus, pleaded guilty in U.S. District Court to armed bank robberies in Ohio, West Virginia, Kentucky and Indiana.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, John Barrios, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, William J. Ihlenfeld, II, United States Attorney for the Northern District of West Virginia, John E. Kuhn, Jr., Acting United States Attorney for the Western District of Kentucky, Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Joshua Minkler, Acting United States Attorney for the Southern District of Indiana, announced the plea entered into today.
According to court documents, between June 21, 2014 and August 23, 2014, McBride robbed six different federally insured banks in five different federal jurisdictions while armed with a dangerous weapon.
McBride, at gunpoint, demanded and received more than $21,000 in cash total from the banks. The defendant did not wear any disguise during the robberies, and witnesses in each location described him similarly.
On August 23, 2014, a witness reported McBride’s license plate number upon seeing the defendant flee in his vehicle after robbing the Wesbanco Bank in St. Clairsville, Ohio. Law enforcement officials discovered the vehicle was registered to McBride and subsequently arrested him later the same day in a hotel in Columbus.
McBride pleaded guilty to six counts of armed robbery. He remains in custody.
Each count of armed robbery is a crime punishable by up to 25 years in prison.
U.S. Attorney Stewart commended the cooperative investigation by the FBI and other law enforcement agencies in each jurisdiction, as well as Assistant United States Attorney Sal Dominguez, who is representing the United States in this case.
Lexington Man Sentenced to 175 Months for Identity Theft and Tax Fraud ConspiracyRead the Press Release
LEXINGTON, KY - A Lexington, Ky., man, who previously admitted to leading a conspiracy to use stolen identities to file false federal income tax returns, has been sentenced to 175 months in prison.
On Wednesday, U.S. District Judge Danny C. Reeves sentenced 52-year-old David C. Pierce for wire fraud, aggravated identity theft, and conspiring to defraud the United States. Judge Reeves ordered $636,379 to be paid in restitution; of that amount, Pierce and another co-defendant are jointly and severally liable for $107,500. Under federal law, Pierce will have to serve at least 85 percent of his prison sentence.
Pierce previously pleaded guilty and admitted that he devised a scheme to obtain federal income tax refunds by fraud. Pierce accomplished this by creating false tax returns in the names of other members of his conspiracy and other individuals whose identities were stolen and supplied to him by his co-conspirators.
Pierce invented details about the lives of these taxpayers, including where they lived and worked, their incomes, and their expenses. He then filed these returns with the Internal Revenue Service (IRS), requesting that the tax refunds be directed to addresses and bank accounts belonging to him and other members of the conspiracy. During a two-year span, Pierce fraudulently claimed over $3.7 million in tax refunds and received over $600,000 in payments from the Internal Revenue Service.
Three of Pierce’s co-conspirators have also been sentenced for their roles in the conspiracy. Timothy Richard Smith, 51, was sentenced on Wednesday to 70 months imprisonment. Joyce Ann Estes, 44, received 51 months in prison on January 22, 2015. Stephen Lane Woodrum, 24, was sentenced to 48 months imprisonment on January 21, 2015. The final co-conspirator, Dwayne Ray Smith, has pleaded guilty to wire fraud, and aggravated identity theft, and conspiracy to defraud the United States. He is scheduled to be sentenced on February 11, 2015.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Christopher Henry, Special Agent in Charge, Internal Revenue Service, jointly announced the sentences.
The investigation was conducted by the Internal Revenue Service Office of Criminal Investigation. Assistant U.S. Attorneys Andrew T. Boone and Kate K. Smith prosecuted this case on behalf of the federal government.
Former Morgan County Judge-Executive Sentenced to 87 Months for Kickback SchemeRead the Press Release
FRANKFORT, KY - Timothy Alexander Conley, the former Morgan County Judge-Executive, was sentenced today to 87 months in federal prison for soliciting and accepting over a hundred thousand dollars in illegal kickbacks from a bridge contractor.
U.S. District Judge Gregory Van Tatenhove sentenced Conley for honest services mail fraud and ordered him to pay $130,000 in restitution. Judge Van Tatehnove ordered that Conley pay $104,000 to the Kentucky Transportation Cabinet and $26,000 to Morgan County. Under federal law, Conley will have to serve at least 85 percent of his prison sentence.
“Mr. Conley's reprehensible scheme betrayed the trust placed in him by the people of Morgan County,” said Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky. “He transformed his high public office into a criminal enterprise designed to line his pockets, at the expense of the citizens who elected him. The sentence imposed is an appropriate punishment for a man who so thoroughly abused the public trust, at a time when his community most needed honest leadership. Our office and our law enforcement partners will continue to use every tool available to fight public corruption in our district.”
Conley admitted at his guilty plea in August 2014 that, between early 2009 through August 2013, he rigged the county’s competitive bidding process to ensure that contracts for certain Morgan County bridges were awarded to PBTHNOJJ Construction, a Salyersville, Ky., bridge contractor owned by Kenneth and Ruth Gambill. Conley admitted that, as part of that scheme, he directed Kenneth Gambill to deliver kickbacks to him from the proceeds of PBTHNOJJ Construction’s bridge contracts. For example, in 2013, Conley secretly altered bid documents for three bridges to ensure that PBTHNOJJ Construction would receive the contract to build each bridge. Conley solicited $15,000 per bridge and accepted $45,000 in cash from Kenneth Gambill for the three bridges.
According to the plea agreement, these kickbacks were part of a scheme to defraud the citizens of Morgan County of their right to Conley’s honest services.
Kenneth and Ruth Gambill have each pleaded guilty and have been sentenced for conspiring to launder the proceeds of Conley’s kickback scheme.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Howard Marshall, Special Agent in Charge, FBI; and Jack Conway, Kentucky Attorney General, jointly announced the sentence today.
The investigation was conducted by the FBI and the Kentucky Attorney General’s Office. This case was prosecuted by Assistant U.S. Attorney Andrew T. Boone and trial attorney Jennifer Blackwell with the Public Integrity Section of the United States Department of Justice.
Clay County Man Convicted in Overdose Death CaseRead the Press Release
Conviction First of its Kind in the Eastern District of KentuckyLONDON, KY - A Clay County man has been convicted by a federal jury of illegally distributing prescription drugs that resulted in the death of another individual, Patty Smallwood.
Terry Smith, 54, was found guilty on Monday of distribution of a controlled substance resulting in death. The jury also convicted Terry's wife, Gerry, of conspiring with Terry and others to distribute oxycodone. In addition, Terry Smith was found guilty on a charge of possession of firearms by a convicted felon. The jury returned the verdict after four hours of deliberation, following five days of trial.
Of all the convictions in overdose death cases, this is the first one in the Eastern District of Kentucky that occurred without an autopsy report being used as evidence.
"This is an important victory in the effort to hold drug dealers accountable for the carnage they cause in our communities,” said Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky. “Overdose deaths are an unfortunate, but all too common, consequence of illegal drug trafficking. Federal law imposes a heavy penalty on drug dealers who cause a death. Our office and our law enforcement partners intend to seek that penalty whenever the proof warrants, even in the absence of an autopsy. Drug dealers should take heed-they will pay a heavy price for their callous disregard for human life."
Evidence at trial established that on or about September 9, 2011, Terry Smith had sponsored Patty Smallwood and others to travel to an out-of-state pain clinic called Georgia Health Associates in Tucker, Georgia to obtain oxycodone pills. Upon their return, Smith then paid for them to fill these prescriptions at the Community Drug Pharmacy in Manchester, Ky. These individuals then gave the pills to Smith who kept a portion for himself and divided the rest among the people that had made the trip.
The evidence further showed that Patty Smallwood took a portion of her pills that night, went to bed, and never woke up. She was found dead the following morning by her live-in boyfriend. Although an autopsy was not performed, toxicology reports reflected that, along with smaller levels of several other drugs, Smallwood had four times the therapeutic level of oxycodone in her system. In support of its case, the United States offered the testimony of a forensic toxicologist, who offered his expert opinion concerning the levels of drugs present in Ms. Smallwood’s system. The toxicologist testified that the oxycodone use was the likely cause of Ms. Smallwood’s death.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky and Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration jointly announced the conviction.
The investigation was conducted by the Drug Enforcement Administration.
Sentencing is scheduled for May 15, 2015. Terry Smith faces a mandatory sentence of life in prison for the overdose death offense. Gerry Smith faces a maximum of 20 years on the conspiracy offense. However, the court will carefully consider the U.S. Sentencing Guidelines and federal statutes before imposing sentence.
Floyd County Ambulance Services Company to Pay U.S. Government $948,000 to Settle False Claims Act ViolationsRead the Press Release
LEXINGTON, KY -An ambulance services company in Floyd County agreed to pay the U.S. Government $948,000 to settle civil allegations that it billed federal health care programs for medically unnecessary services over the course of several years.
According to the settlement agreement, from February 1, 2006 until December 31, 2012, Lafferty Enterprises, LLC, doing business as Trans-Star Ambulance Services, transported Medicare patients to and from dialysis clinics by ambulance when an ambulance transport was not medically necessary. The government contends that Trans-Star violated the False Claims Act by billing Medicare for routine, non-emergency ambulance transports provided to patients who were able to safely travel to and from the dialysis clinics by other means. Medicare covers non-emergency ambulance transports only when all other forms of patient transportation are considered a medical risk.
“It is vitally important that the resources available to federally funded healthcare programs be used only to pay for medically necessary services,” said Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky. “Our office and our agency partners are committed to protecting the integrity of these important programs on which so many of our citizens depend.”
In addition to the payment of the settlement amount, Trans-Star has agreed to enter into a corporate integrity agreement with the Department of Health and Human Services-Office of Inspector General (HHS-OIG), which obligates Trans-Star to undertake substantial internal compliance reforms and to commit to a third-party review of its claims to federal health care programs for the next three years.
The settlement was based on the penalties associated with the alleged violations and Trans-Star’s financial ability to pay.
The investigation and settlement stem from a complaint filed by a former owner of another ambulance company in eastern Kentucky, pursuant to the whistleblower provisions of the False Claims Act, which permit private individuals to bring a lawsuit on behalf of the United States. The whistleblower, Kevin Fairlie, will receive $189,600.
The investigation was conducted by the Department of Health and Human Services, Office of the Inspector General; the Office of the Kentucky Attorney General, Medicaid Fraud and Abuse Control Unit (“MFCU”) and the U.S. Attorney’s Office.
Floyd County Man Sentenced to 320 Months for Conspiracy to Distribute Heroin,Cocaine and Prescription DrugsRead the Press Release
PIKEVILLE, KY - Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration; Jack Conway, Attorney General of Kentucky; Rodney Brewer, Kentucky State Police Commissioner; and Phillip Reed, Pikeville Police Chief, jointly announced today that a Floyd County man has been sentenced to 320 months in prison, for his role in a drug conspiracy involving heroin, prescription drugs, and cocaine.
Billy Shepherd, 41, was sentenced, on January 8th, following convictions for conspiracy to distribute and possession of heroin. U.S. District Judge Danny C. Reeves enhanced Shepherd’s sentence because Shepherd qualified as a career offender, based upon his significant criminal history. Shepherd has previously been convicted of first degree fleeing and evading police and first degree wanton endangerment. Under federal law, Shepherd will have to serve at least 85 percent of his prison sentence.
A jury convicted Shepherd in September 2014. According to evidence presented at trial, in 2013, law enforcement officers executed a search warrant on a vehicle in which Shepherd was a passenger. They found 21 grams of heroin, along with Oxycodone pills and cocaine, that belonged to Shepherd.
The evidence also established that Shepherd conspired, with five others, to distribute heroin in Floyd County. According to testimony, the conspirators made trips to Columbus, Ohio to buy ounce quantities of heroin for distribution.
All of Shepherd’s co-defendants have pleaded guilty and have been sentenced for their roles in the conspiracy.
The investigation was conducted by the DEA, London Field Division; the Kentucky Attorney General’s Office; Kentucky State Police; and the Pikeville Police Department. Assistant U.S. Attorney Todd Bradbury prosecuted this case on behalf of the federal government.
California Man Convicted of Running Multi-Million Dollar Fraud Scheme in KentuckyRead the Press Release
FRANKFORT, KY - Today, a federal jury convicted a California man of running a bogus oil production enterprise in Kentucky that defrauded investors, nationwide, out of millions of dollars.
The jury convicted John G. Westine, Jr., 69, for 26 counts of mail fraud and one count each of conspiracy to launder funds and securities fraud. Westine was acquitted on one mail fraud count. The jury reached its verdict after six and a half hours of deliberations, following nine days of trial.
According to testimony at trial, Westine and others lured money from investors by making false statements regarding an oil production business. The false statements led investors to believe that oil was being produced, when in fact it was not, and led them to believe that the oil companies had been in the oil production business for decades, when in reality they had only been in existence for less than a year.
Additionally, evidence at trial established that Westine had concealed from investors that he had served more than 22 years in federal prison, for a 1992 conviction for a similar fraud scheme in Ohio, and that he was on parole.
According to voluminous testimony and documents presented by prosecutors, Westine and others used aliases and fictitious company names to conceal their true identity from investors and authorities.
In total, Westine and others defrauded approximately 200 investors out of more than $3,000,000.
Westine’s co-defendant and half-brother, Michael Hicks, pleaded guilty to similar charges and testified for the government at trial.
The investigation started when investors submitted complaints to the Kentucky Department of Financial Institutions, Division of Securities.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Dugan Wong, Inspector in Charge of the U. S. Postal Inspection Service; and Charles Vice, Commissioner of the Kentucky Department of Financial Institutions, jointly announced the verdict.
The investigation was conducted by the U.S. Postal Inspection Service and the Kentucky Department of Financial Institutions,Division of Securities.
Assistant U.S. Attorneys Ken Taylor and Neeraj Gupta are prosecuting this case on behalf of the federal government.
Westine faces a maximum prison sentence of 20 years on each mail fraud count and 20 years for both the securities fraud and money laundering offenses. Under federal law, Westine will have to serve at least 85 percent of his prison sentence. The Court will impose a sentence after carefully considering the U.S Sentencing Guidelines and the federal statutes.
Lexington Woman Sentenced to 18 Months for Immigration and Labor ViolationsRead the Press Release
Defendant Harbored Undocumented Mexican Migrant for Labor on Tobacco Farm
WASHINGTON, DC - The Department of Justice announced today that Pedra Perez-Gumeta, 52, of Lexington, Kentucky, was sentenced to serve 18 months in federal prison by United States Senior District Court Judge Joseph M. Hood for harboring an undocumented Mexican migrant for labor at a tobacco farm, illegally re-entering the United States after deportation and failing to pay a minimum wage to the undocumented Mexican migrant. Judge Hood also ordered Perez-Gumeta to pay restitution to the Mexican migrant in the amount of $1,311 and mandatory special assessments totaling $210.
Perez-Gumeta previously admitted that she had brought a woman to Lexington from Mexico to provide the woman with a job. Perez-Gumeta also admitted that she knew the woman was from Mexico and not legally within the United States, nor was the woman able to work legally in the United States. Perez-Gumeta also admitted that she had been previously deported from the United States and that she had re-entered the United States illegally. Perez-Gumeta further admitted that she did not pay the woman for all of the labor the woman performed, instead keeping a portion of the woman’s wages for herself. Perez-Gumeta pleaded guilty to the charges in September of 2014. In sentencing Perez-Gumeta, the court found that the defendant used coercion in the course of harboring the undocumented Mexican woman for financial gain.
Under federal law, Perez-Gumeta must serve 85 percent of her prison sentence, and, upon release, will be under the supervision of the United States Probation Office for one year, unless she is deported.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Steven L. Igyarto, Resident Agent in Charge, Homeland Security Investigations (HSI), Department of Homeland Security (DHS), Rodney Brewer, Commissioner, Kentucky State Police (KSP), and Mark Barnard, Chief, Lexington-Fayette Urban County Government Division of Police, jointly made the announcement today after the sentencing.
The investigation was conducted by the DHS-HSI, the KSP, and the Lexington Police Department. The United States was represented by Trial Attorney Victor Boutros of the Civil Rights Division’s Human Trafficking Prosecution Unit and Assistant United States Attorneys Hydee R. Hawkins and David A. Marye.
Michigan Man Sentenced to 15 Years for Heroin and Gun ChargesRead the Press Release
LEXINGTON, KY -Norshawn Michael Duplessis, 40, of Detroit, Mich., has been sentenced to 15 years in prison, for possessing hundreds of grams of heroin and a firearm in Lexington.
On Wednesday, U.S. District Judge Danny C. Reeves sentenced Duplessis for possession with intent to distribute 100 grams or more of heroin and for possessing a firearm in furtherance of drug trafficking.
Duplessis previously admitted that he possessed over 400 grams of heroin and intended to distribute it. Duplessis further admitted that he possessed a .380 caliber pistol in furtherance of his drug trafficking crime. The heroin and firearm, along with approximately $57,000 in cash, were found by law enforcement in Duplessis’ Lexington apartment, during the execution of a search warrant.
Duplessis pleaded guilty to the drug charge in July of 2014 and to the gun charge in September of 2014.
Under federal law, Duplessis must serve at least 85 percent of his prison sentence, and, upon release, will be under the supervision of the United States Probation Office for eight years.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration, and Rodney Brewer, Commissioner, Kentucky State Police jointly made the announcement after the sentencing.
The investigation was conducted by DEA and KSP. Assistant United States Attorney, Robert M. Duncan Jr., prosecuted this case on behalf of the federal government.
Lexington Man Sentenced to 27 Months for Mail Fraud and Money Laundering ConspiracyRead the Press Release
LEXINGTON, KY - A Lexington, Ky., man, who previously admitted conspiring to defraud wireless telephone companies out of hundreds of smartphones, has been sentenced to 27 months in prison.
On Wednesday, U.S. District Judge Joseph M. Hood sentenced 56-year-old Michael Whiteside for conspiring with others to commit mail fraud and to launder the proceeds of his scheme.
Whiteside admitted that he participated in a conspiracy to defraud Verizon Wireless, and other wireless telephone companies, by using false pretenses to buy numerous smartphones, such as iPhones and Samsung Galaxies, at the discounted contract rates. Whiteside recruited and induced other individuals to buy smartphones and sign service contracts when, in fact, these individuals had no intention of honoring their contracts and paying monthly data services fees to the telephone companies. After the purchases, Whiteside took possession of the fraudulently obtained smartphones and shipped them overseas for resale, at substantially higher prices.
Whiteside’s spouse, Julia Whiteside, has also been convicted and sentenced for her role in the conspiracy. Whiteside’s son, Marques Whiteside, has pleaded guilty to mail fraud and money laundering conspiracies and is scheduled to be sentenced on January 5, 2015.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Paul R. Johnson, Special Agent in Charge, U.S. Secret Service, jointly announced the sentence.
The investigation was conducted by the Lexington Police Department and the U.S. Secret Service. Assistant U.S. Attorney Andrew T. Boone is prosecuting this case on behalf of the federal government.
Former Mayor of Martin Sentenced to 90 Months for Civil Rights Offenses, Fraud, Vote Buying and Identity TheftRead the Press Release
PIKEVILLE, KY - The former Mayor of Martin, Ky., has been sentenced to 90 months in federal prison for various crimes including civil rights offenses and identity theft.
On Monday, U.S. District Judge Amul Thapar sentenced the former mayor, Ruth Thomasine Robinson, 70, for conspiracy to violate civil rights, conspiracy to defraud the Social Security Administration, federal program fraud, aggravated identity theft and vote buying. Judge Thapar also sentenced Robinson’s husband, James “Red” Robinson, 64, to 40 months in prison for vote buying. Under federal law, the Robinsons must serve at least 85 percent of their respective prison sentences.
Thomasine Robinson was convicted in May of the vote buying and civil rights violations. According to evidence at the trial, Thomasine Robinson and her co-conspirators intimidated poor and disabled citizens in order to gain their votes during Robinson’s 2012 campaign for re-election. For instance, members of the conspiracy directed residents of public housing to vote by absentee ballot under the supervision of Thomasine Robinson or another member of the conspiracy. The conspirators also targeted residents of private housing owned and leased by Thomasine Robinson.
Trial testimony established that the conspirators completed absentee ballots, marking their choice of candidates, and instructing the voters to sign the pre-marked ballots. Voters who complied by voting for Thomasine Robinson received promises of better living arrangements and other considerations. Voters who did not comply faced eviction or the loss of priority for public housing. In addition, the evidence established that the defendants offered to pay several voters to vote for Thomasine Robinson.
Thomasine Robinson was convicted in February of the identity theft and fraud offenses. Evidence at the trial established that from 2006 until January 2013, Ginger Marie Halbert, a co-conspirator, was purportedly working on a volunteer basis with Thomasine Robinson; in reality, Halbert was secretly being paid with federal funds. The funds used to pay Halbert were intended for the Martin Community Center and the Martin Housing Authority. Some of the misdirected money was supposed to fund an after school program for city children. To conceal the scheme, the defendants allegedly arranged for the checks to be made payable to Halbert’s son.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Howard S. Marshall, Special Agent in Charge of the Federal Bureau of Investigation; Guy Fallen, Special Agent in Charge, Social Security Administration, Office of the Investigator General, Office of Investigations; and Jack Conway, Attorney General of Kentucky, jointly made the announcement today.
The investigation was conducted by the Federal Bureau of Investigation, Social Security Administration, and the Kentucky Attorney General’s Office. Assistant U.S. Attorneys Ken Taylor and Andy Boone prosecuted this case on behalf of the federal government.
Huntington Man Sentenced to 312 Months for Distribution of Heroin and Crack Cocaine in Boyd CountyRead the Press Release
ASHLAND, KY - A Huntington, W.Va., man, previously convicted of second degree murder, has been sentenced to 312 months in federal prison for trafficking in heroin and crack cocaine in Boyd County.
On Tuesday, December 9, U.S. District Judge David Bunning sentenced 32 year-old Jason C. Brown and ordered him to serve 15 years of supervised release following the completion of his prison term. Judge Bunning enhanced Brown’s sentence because Brown’s criminal history qualifies him as a career offender. Brown has a prior drug trafficking felony conviction and a conviction for second degree murder in West Virginia. Under federal law, he must serve at least 85 percent of his prison sentence.
Evidence at Brown’s trial in September of this year established that Brown sold heroin on multiple occasions to individuals in Boyd County between January 2013 and April 2013. He also sold crack in February 2013. Evidence also established that Brown fled Ashland once he learned of the warrant for his arrest on these matters.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Howard S. Marshall, Special Agent in Charge, Federal Bureau of Investigation, and Rodney Brewer, Kentucky State Police Commissioner, jointly made the announcement today.
The investigation was conducted by the Federal Bureau of Investigation’s Safe Streets Task Force and the Kentucky State Police. Assistant U.S. Attorney Tony Bracke prosecuted this case on behalf of the federal government.
Crab Orchard Man Sentenced 66 Months for Illegally Possessing over 100 Firearms and Stealing Thousands from Social SecurityRead the Press Release
LEXINGTON, KY - Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Stuart L. Lowrey, Special Agent in Charge for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); Tom Caul, Special Agent in Charge for the Social Security Administration (SSA), Office of the Inspector General; and Rodney Brewer, Kentucky State Police Commissioner, jointly announced today that a Lincoln County man has been sentenced to 66 months in federal prison, for illegally possessing more than 100 firearms and defrauding the Social Security Administration out of thousands of dollars.
U.S. District Judge Danny C. Reeves sentenced 46 year-old David Brummett, on Wednesday, November 26, for being a felon in possession of firearms and defrauding the SSA. Under federal law, Brummett must serve at least 85 percent of his prison sentence.
According to the plea agreement, in May 2013, Kentucky State Police (KSP) detectives searched Brummett’s home, pursuant to a warrant, and discovered 140 firearms. Because Brummett has a prior felony conviction, he is prohibited from possessing firearms. Brummett admitted he knew it was unlawful for him to possess firearms.
Additionally, Brummett, who had been receiving Social Security disability benefits, admitted that he intentionally failed to report some of his money and assets to the SSA so he could continue receiving financial assistance. According to court records, Brummett obtained $70,000 from SSA that he was not entitled to receive.
The investigation was conducted by ATF, KSP and the SSA. Assistant U.S. Attorney Hydee Hawkins prosecuted this case on behalf of the federal government.
Georgia Man Sentenced to 87 Months for Committing Tax Fraud and Identity Theft in LexingtonRead the Press Release
LEXINGTON, KY - A Lawrenceville, Ga., man, who previously admitted using the identities of other people to fraudulently collect federal income tax refunds, was sentenced today to 87 months in prison.
U.S. District Court Judge Danny C. Reeves sentenced 39 year-old James Changala Kaira for theft of public money, bank fraud, and aggravated identity theft. Judge Reeves also ordered Kaira to pay $588,129.62 in restitution. Under federal law, Kaira will have to serve at least 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for three years following the completion of his sentence.
Kaira previously admitted that from January 2013 until March 2014, he filed false tax returns using the identities of other taxpayers without the taxpayers’ knowledge. In some circumstances, he obtained tax refund checks that were issued to those taxpayers by the United States Treasury. He then forged the taxpayers’ signatures on the checks and cashed them at a money services business located in Lexington.
Kaira also admitted that between February and March of 2014, he committed bank fraud by using the false tax returns to obtain refund anticipation loans from one of several financial institutions. Information presented at the sentencing hearing established that Kaira fraudulently claimed $668,046.45 in tax refunds; of this amount, $588,129.62 was paid by the United States Treasury.
Kaira pleaded guilty to the charges in August of 2014.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Craig Hutzell, Acting Special Agent in Charge, U.S. Secret Service, and Christopher A. Henry, Special Agent in Charge, IRS, jointly announced the sentence.
U.S. Attorney’s Office Announces Landmark Year in Collections from Civil and Criminal Actions for Tax Payers in Fiscal Year 2014Read the Press Release
U.S. Attorney’s Office Helps Collects Over $182 Million – More Than 20 Times its Annual Budget
LEXINGTON, KY - Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, announced today that the U.S. Attorney’s Office, with assistance from its partnering agencies, recovered $182,247,824.53 from civil and criminal actions for Fiscal Year 2014.
The Office, which operates on an annual budget of less than $10 million, ranks near the top 10 percent of all U.S. Attorney Offices (94 offices nationwide) in total collections. The Office collected the money during the fiscal year that started October 1, 2013 and ended September 30, 2014. The Eastern District of Kentucky consists of 67 counties stretching from Southern Kentucky up to the Ohio border.
“Our office achieved unprecedented success in recovering funds for the taxpayers during the last fiscal year. This is not by accident; we have focused intensely on collecting money owed to the Government as a result of criminal activity or obtained from the federal treasury by fraudulent means”, said U.S. Attorney Harvey. “This is vital work in this age of limited resources and we take pride in recovering funds for the public treasury that far exceeds the entire annual budget for this office. I commend the dedicated public servants in our office as well as our agency partners for their remarkable success on behalf of the American taxpayer.”
Approximately $76 million was collected in False Claims Act (FCA) cases and related matters. These cases often involve the submission of fraudulent claims by healthcare providers to federal healthcare programs such as Medicare. Specifically, in May, King’s Daughters Medical Center agreed to pay $40.9 million to settle civil allegations related to unnecessary cardiac procedures. In January, St. Joseph’s Hospital agreed to pay more than $16 million to settle similar FCA allegations. The $76 million is the largest amount collected in FCA cases in the Office’s 114 year history.
“We elevated the priority of FCA cases in our office about four years ago and implemented that decision by devoting significantly more resources to this important area,” said Harvey. “The result vindicates that decision and is a credit to our staff who work these complex cases. Our efforts not only protect the federal treasury, but promote appropriate medical care based on the best interests of the patients as well.”
Attorney General Eric Holder announced Wednesday that the Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s Offices and the main litigating divisions in that same period.
The U.S. Attorneys’ Offices, along with the Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Burlington Man Sentenced to 128 Months for Drug and Weapons OffensesRead the Press Release
COVINGTON, KY - A Burlington man was sentenced to 128 months in federal prison today for manufacturing methamphetamine and possession of a short-barreled shotgun in furtherance of drug trafficking.
U.S. District Judge Amul Thapar sentenced 38 year-old Joseph Wagner to 128 months in prison and placed him on supervised release for 15 years after he completes his prison term. He also ordered the forfeiture of the shotgun and ammunition used in the offense.
Wagner previously pled guilty on June 30, 2014 and admitted to manufacturing methamphetamine and possessing a sawed-off shotgun to assist in his drug trafficking at a residence in Independence, Kentucky. A construction worker engaged to assist in rehabilitating the residence that Wagner was using to manufacture methamphetamine had an altercation with Wagner on December 17, 2013 and contacted police. Responding officers observed Wagner in possession of the sawed-off shotgun and surrounded the residence. Wagner held them at bay for over three hours before surrendering to police. Officers located the sawed-off shotgun and items confirming the manufacture of methamphetamine. Investigators located a witness who confirmed that Wagner had been manufacturing and distributing methamphetamine.
Under federal law, Wagner must serve at least 85 percent of his prison sentence. He will be on supervised release for fifteen years after completion of his prison term.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Stuart L. Lowrey, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms & Explosives (Louisville Field Division), jointly made the announcement today after the sentencing.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms & Explosives, the Independence Police Department and the Northern Kentucky Drug Strike Force. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney Tony Bracke.
U.S. Attorneys Announce Appointment of District Election OfficersRead the Press Release
LEXINGTON, KY - United States Attorneys Kerry B. Harvey and David J. Hale announced the appointment of Assistant United States Attorneys to serve as District Election Officers in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 4, 2014 general elections.
Assistant United States Attorney Ken Taylor has been appointed to serve as the District Election Officer (DEO) for the Eastern District of Kentucky and Assistant United States Attorney Josh Judd has been appointed to serve as the DEO for the Western District of Kentucky. In that capacity they are each responsible for overseeing their Districts’ handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
“Every citizen has a right to vote without interference or discrimination and to have that vote counted in a fairly conducted election,” stated Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky. “The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
“Ensuring free and fair elections depends in large part on the cooperation of the American electorate,” stated David J. Hale, United States Attorney for the Western District of Kentucky. “It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division of the Justice Department.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on Election Day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
In order to respond to complaints of election fraud or voting rights abuses on November 4, 2014, and to ensure that such complaints are directed to the appropriate authorities, AUSA/DEO Josh Judd will be on duty in Louisville while the polls are open. He can be reached by the public at the following telephone number: (502) 625-7049. AUSA/DEO Ken Taylor will be on duty in Lexington, while the polls are open and can be reached by the public at the following telephone numbers: (859) 685-4874 or (859) 321-9488.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on Election Day. The local FBI field offices can be reached by the public at (859) 246-4700 in Lexington and (502) 263-6000 in Louisville.
Complaints about ballot access problems or discrimination can be made directly to the Civil Rights Division’s Voting Section in Washington at 1-800-253-3931 or (202) 307-2767.
Louisville Man Sentenced to 156 Months for Possessing Cocaine with Intent to Distribute in Boone CountyRead the Press Release
COVINGTON, KY -A Louisville man was sentenced today to 156 months in federal prison for possessing crack cocaine in Northern Kentucky with the intent to distribute it.
U.S. District Judge Amul Thapar sentenced 58 year-old Edward L. Adams to 156 months in prison and placed him on supervised release for six years after he completes his prison term.
On December 18, 2013, Adams admitted to possessing almost 20 grams of crack cocaine at a hotel in Boone County with the intent to distribute it.
Adams entered his guilty plea on June 19, 2014. Under federal law, he must serve at least 85 percent of his prison sentence. He is classified as a career offender under federal law because of two prior felony drug trafficking convictions. This classification enhanced his sentence.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Howard S. Marshall, Special Agent in Charge, Federal Bureau of Investigation, jointly made the announcement after the sentencing.
The investigation was conducted by the Federal Bureau of Investigation Safe Streets Task Force and the Northern Kentucky Drug Strike Force. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney Tony Bracke.
Former Lexington Attorney Sentenced to 20 Years for Fraud, Obstruction of Justice, and Conspiracy to Distribute Controlled SubstancesRead the Press Release
LEXINGTON, KY -A former Lexington attorney was sentenced today to 20 years in prison for wire fraud, mail fraud, tax fraud, obstruction of justice, and distribution of synthetic marijuana..
U.S. Senior District Court Judge Joseph M. Hood sentenced 35-year-old Seth J. Johnston and ordered him to serve three years of supervised release following the completion of his prison sentence. Under federal law, Johnston must serve at least 85 percent of his prison sentence. Restitution will be determined at a later date. Johnston pleaded guilty to the charges in October of 2013.
“Mr. Johnston relentlessly pursued a course of criminal conduct that is breathtaking in both its scope and audacity,” said Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky. “He seemingly missed no opportunity to defraud those with whom he dealt; often abusing his status as an attorney to do so. The sentence imposed today is just punishment for reprehensible conduct that victimized so many who placed their trust in Mr. Johnston.”
In a related hearing held on September 4th and 5th, 2014, Judge Hood found that Johnston engaged in multiple fraud schemes, resulting in a total loss amount of over $4 million dollars, to more than 250 victims, and that his crimes involved the abuse of a position of trust. In addition, Judge Hood found that Johnston had violated a prior order of the court and had engaged in obstructive conduct, including instructing others in the commission of criminal activity.
Johnston previously admitted that he was responsible for collecting money for plaintiffs in a civil lawsuit, as part of a settlement regarding the diet drug Fen-Phen. Johnston diverted $14,963.15 of the collected money for his personal use. Angela Ford, the Lexington attorney representing the plaintiffs in the lawsuit, hired the law firm where Johnston worked to garnish assets of the defendants in that lawsuit, William Gallion, Shirley Cunningham and Melbourne Mills, Jr. This fraud scheme started in 2008 and continued through 2010.
In addition, Johnston admitted to defrauding Ford when she hired Johnston to establish multiple corporate bank accounts to hold $3.5 million of Ford’s money. Johnston acknowledged that he diverted a significant amount of Ford’s money for his own personal gain, some of which he used to purchase property for other clients. To cover up this scheme, Johnston provided Ford with fraudulent bank documents regarding the status of her money.
Johnston also admitted that in 2010 he perpetrated a scheme to defraud the residual heirs of an Estate for which he provided representation. According to court records, he diverted approximately $1.1 million dollars that should have gone to the residual heirs of the Estate.
Johnston further admitted that, as part of a drug conspiracy, he provided approximately $100,000 to others, to purchase synthetic marijuana to be distributed in Lexington.
Johnston also acknowledged that in 2013, he instructed witnesses, under subpoena to provide records to the grand jury regarding the fraud offenses, to destroy documents so that certain evidence would not be available. Johnston further admitted that, in 2011, he under reported his taxable income to the IRS. Specifically, Johnston reported an income of $26,372 when, in fact, his income was $208,950.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky; Howard S. Marshall, Special Agent in Charge, FBI; Christopher Henry, Special Agent in Charge, IRS; James V. Allen, Acting Special Agent in Charge, DEA, and Ronnie Bastin, Chief of the Lexington Division of Police, jointly announced the sentence.
The investigation was conducted by the FBI, IRS, DEA and Lexington Police. Assistant U.S. Attorneys Erin M. Roth and Robert Duncan Jr., prosecuted the case on behalf of the federal government.
Lexington Man Sentenced to 20 Years for Receiving and Possessing Thousands of Child Pornography ImagesRead the Press Release
LEXINGTON, KY -A Lexington man, previously convicted of receiving and possessing thousands of child pornography videos, has been sentenced to 20 years in prison.
On Monday, U.S. District Judge Joseph M. Hood formally sentenced Erik A. Hentzen, 26, and also ordered him to serve a lifetime of supervised release, following the completion of his sentence. Under federal law, Hentzen will have to serve at least 85 percent of his prison sentence.
The evidence at Hentzen’s trial established that, from May 2012 to March 2013, Hentzen downloaded thousands of videos, which depicted prepubescent children engaged in sexually explicit conduct.
On March 23, 2013, investigators with the Kentucky Attorney General’s Office executed a search warrant and seized multiple computers belonging to Hentzen; the computers contained more than 4,000 videos depicting child pornography.
The investigation started when authorities discovered that Hentzen had stolen the internet signal of a neighbor in his apartment complex. Authorities later located numerous child pornography videos that had been made available for download over the internet. Investigators then traced the location of the computer to Hentzen’s apartment in downtown Lexington.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Jack Conway, Kentucky Attorney General; and Gary T. Hartwig, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), jointly announced the sentence.
The investigation was conducted by the Office of the Attorney General’s Cyber Crimes Unit and HSI. The Fort Mitchell Branch of the U.S. Attorney’s Office prosecuted the case on behalf of the federal government.
Former Pikeville Pharmacy Manager Sentenced to 72 Months for Conspiring to Distribute Prescription DrugsRead the Press Release
Defendant is the last of 11 conspiracy members to be sentenced
PIKEVILLE, KY - A federal Judge has sentenced a former Pikeville pharmacy manager to 72 months in prison for her role in a conspiracy to illegally dispense thousands of prescription pills.
On Tuesday, U.S. District Judge Amul Thapar sentenced 60-year-old Beverly Lockhart, who worked at multiple Pikeville Pharmacies, for conspiracy to distribute Oxycodone. Under federal law, Lockhart must serve at least 85 percent of her prison sentence.
According to evidence presented at her trial earlier this year, Lockhart conspired with several co-defendants, from June 2006 to July 2011, to illegally dispense prescription drugs to Eastern Kentuckians. Lockhart’s co-defendants include two doctors, the corporation which owns the pharmacy where Lockhart worked, another pharmacy employee and six street-level dealers who obtained their pills from the pharmacies where Lockhart was employed. Dr. Linda Roos, who practiced medicine in Houston, Texas was sentenced to 72 months in December 2013 for her role and has permanently surrendered her license to practice medicine. All 11 defendants have been sentenced.
The investigation was conducted by the U.S. Food and Drug Administration, Office of Criminal Investigations; the Federal Bureau of Investigation; the Kentucky Board of Pharmacy; the Kentucky Office of Inspector General; Kentucky State Police and the Pikeville Police Department.
Assistant U.S. Attorney Lee Gentry prosecuted this case on behalf of the federal government.
Covington Man Sentenced to 20 Years for Distribution of Heroin Resulting in DeathRead the Press Release
COVINGTON, KY - A Covington, Ky., man, who has previously admitted in federal court that he sold heroin that resulted in the death of one of his customers, was sentenced today to 20 years in prison.
U.S. District Judge David L. Bunning sentenced 29 year-old Timothy Tingle-Brown for distributing heroin that resulted in death. Under federal law, Tingle-Brown must serve at least 85 percent of his prison sentence and will be on supervised release for three years following the completion of his prison term.
Tingle-Brown admitted to selling heroin to a man at an apartment in Taylor Mill, Ky., on April 20, 2013. The man subsequently died from an overdose from the heroin that Tingle-Brown had sold to him.
In June of this year, Tingle-Brown pleaded guilty to the charge shortly after the start of his trial. He was indicted in September 2013.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and James V. Allen, Acting Special Agent in Charge, Detroit Field Division, Drug Enforcement Administration, jointly announced the sentence.
The investigation was conducted by the Cincinnati Resident Office of the Drug Enforcement Administration, the Taylor Mill Police Department, and the office of the Kenton County Commonwealth Attorney. Assistant U.S. Attorney Tony Bracke represented the federal government in this matter.
Former Paintsville Doctor Admits Role in Pill Mill That Illegally Dispensed 25,000 Prescription PillsRead the Press Release
LEXINGTON, KY -A former doctor in Paintsville, Ky., was sentenced to 48 months in prison on Thursday, for his role in a conspiracy that was responsible for illegally distributing more than 25,000 prescription pills in Eastern Kentucky.
U.S. District Judge Amul Thapar sentenced Rano Bofill, 72, for conspiracy to unlawfully dispense Oxycodone. Judge Thapar also ordered that Bofill pay $15,000 in community restitution to the Commonwealth of Kentucky. Under federal law, Bofill will have to serve at least 85 percent of his prison sentence.
According to court documents, from January 2009 until December 2012, Bofill conspired with Tammy Cantrell and Shelby Lackey, owners of Care More Pain Management, LLC, located in Johnson County, to distribute thousands of Oxycodone pills to patients without a legitimate medical purpose.
Bofill acknowledged that he wrote prescriptions for numerous patients after performing little to no examination and, in some instances, he even signed off on prescriptions without actually ever seeing the patients. Patients who visited the clinic paid $200 for the initial visit and $185 for subsequent visits; all fees were paid in cash. Bofill admitted he saw approximately 25 patients per day and was paid between $5,000 and $6,000 per week.
For their part in the conspiracy, Lackey and Cantrell received sentences of 97 and 108 months respectively. At the time of their guilty pleas, in April 2013, Cantrell and Lackey were the first pain clinic owners in the Eastern District of Kentucky to have federal convictions for illegally distributing prescription drugs. Another doctor at the clinic, Richard Albert, pleaded guilty to a conspiracy charge in July 2012; he was sentenced to 75 months in prison. Albert, Cantrell, and Lackey have collectively agreed to forfeit approximately $, 128,206 as proceeds of the conspiracy.
The investigation into this case started when detectives with the Kentucky Attorney General’s Office received complaints, from local law enforcement, that Care More was seeing a remarkably high volume of patients. Court records state that patient lines at Care More stretched into the parking lot.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; James V. Allen, Acting Special Agent in Charge, DEA; and Jack Conway, Kentucky Attorney General, jointly announced today’s plea.
The investigation was conducted by the Kentucky Attorney General’s Office, the DEA, and the Paintsville Police Department. Assistant U.S. Attorney Roger West prosecuted this case on behalf of the federal government.
Eastern Kentucky Pharmacies and Treatment Programs to Pay Federal Government over One Million Dollars to Settle Allegations of Improper Record Keeping of Prescription DrugsRead the Press Release
The Pharmacies and Treatment Programs will no longer have authority to dispense prescription drugs
PIKEVILLE, KY -Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and James V. Allen, Acting Special Agent in Charge, Drug Enforcement Administration (DEA), jointly announced today that the federal government has reached settlements, worth more than a million dollars, with multiple Eastern Kentucky treatment programs and two pharmacies, to settle allegations that they failed to maintain accurate records of their controlled substances.
“The regulatory scheme governing the handling of controlled substances is designed to insure that these powerful drugs are used only for appropriate medical purposes,” said U.S. Attorney Harvey. “These vital safeguards are compromised and our communities are put at greater risk when medical professionals entrusted to prescribe or dispense these drugs do not meet their obligations under the Controlled Substances Act. The substantial penalties paid in these cases are consistent with the importance of strict compliance with the Controlled Substances Act by all DEA registrants.”
The Perry County Treatment Center, LLC; Pike County Treatment Center, LLC; and Paintsville Professional Associates, LLC, and one of its doctors, agreed to pay a total of $525,000 to settle claims that they violated the Controlled Substance Act. This is believed to be the largest penalty ever obtained by the U.S. Attorney’s Office in the Eastern District of Kentucky, in a civil case involving methadone treatment programs. Additionally, MedZone Pharmacy and Neighborhood Pharmacy, both in Prestonsburg, Ky., each agreed to pay $250,000 for similar violations. The facilities involved in the settlements surrendered their DEA registration number and will no longer have the authority to possess or dispense controlled substances.
The government contended that a DEA audit of the treatment programs and pharmacies revealed shortages and overages of prescription drugs and incomplete and inaccurate records. DEA agents found the facilities had improperly documented the type of drug, the dosage strength, the name of drugs, or the amount of the drugs they were dispensing. The investigations were initiated by the DEA’s London, Ky., office, after it had monitored drug sales data reported by distributors and wholesalers.
Under federal law, the DEA supplies medical professionals with a registration number that authorize them to possess, prescribe and dispense certain controlled substances, such as Methadone, Oxycodone, Hydrocodone, Lortab and others. The DEA also has the authority to perform audits and inspections to ensure that clinics, pharmacies and treatment programs properly document drug transactions, including the amount of controlled substances dispensed, discarded, and received.
Assistant U.S. Attorney Andrew Sparks litigated this case on behalf of the federal government.
Lakeside Park Man Sentenced to 78 Months for Possession of A Firearm in Furtherance of Drug TraffickingRead the Press Release
COVINGTON, KY - A Lakeside Park man has been sentenced to 78 months in federal prison, for selling crack cocaine and possessing a firearm in furtherance of drug trafficking.
U.S. District Judge Amul Thapar sentenced 56 year-old Michael Robinson to 78 months in prison and placed him on supervised release for 10 years after he completes his prison term.
Robinson admitted to distributing crack cocaine in Kenton and Campbell Counties in 2012 and 2013. He also possessed crack cocaine and a loaded firearm at the time of his arrest, on November 12, 2013. Robinson acknowledged that he intended to sell the crack cocaine and that he possessed the firearm to assist him in his drug trafficking.
Robinson was previously convicted of selling cocaine in Kenton County in 2004 and had received a prison term of five years for that offense.
.Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Stuart L. Lowrey, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms & Explosives (Louisville Field Division), jointly announced the sentence.
Robinson entered his guilty plea on April 9, 2014. Under federal law, Robinson must serve at least 85 percent of his prison sentence.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms, & Explosives, the Covington Police Department, and the Campbell County Drug Task Force. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney Tony Bracke.
Kentucky Pain Clinic Owners Sentenced for Unlawfully Dispensing More Than 50,000 Prescription PillsRead the Press Release
LEXINGTON, KY - Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; James V. Allen, Acting Special Agent in Charge, DEA; and Jack Conway, Kentucky Attorney General, jointly announced today that two Eastern Kentucky pain clinic owners, who had previously admitted to conspiring with doctors to illegally dispense more than 50,000 prescription pills, were sentenced to federal prison.
U.S. District Judge Amul Thapar sentenced Tammy Cantrell, 41, of Oil Springs, Ky., to 108 months and Shelby Lackey, 52, of Williamsport, Ky., to 97 months, for conspiracy to distribute and unlawfully dispense Oxycodone and maintaining a drug involved premise. In total, Cantrell, Lackey and one of their co-defendants have forfeited $1,128,206, as proceeds of the conspiracy.
At the time of their guilty plea, in April 2013, Cantrell and Lackey were the first pain clinic owners in the Eastern District of Kentucky (district includes 67 counties) to have federal convictions for such charges.
According to the plea agreements, the defendants owned and operated Care More Pain Management, LLC, located in Paintsville, Ky. From 2008 until approximately February 2012, the defendants conspired with two doctors to dispense Oxycodone to Eastern Kentuckians without a legitimate medical purpose.
Specifically, Court records state that the doctors performed little or no physical examination before writing prescriptions that were usually for 90 Percocet pills. Patients paid $200 for the initial visit and $185 for subsequent visits; all fees were paid in cash. One of the doctors has admitted that he saw between 40 and 50 patients in one day. In many instances, the doctors wrote prescriptions without seeing patients or signed blank prescriptions for office assistants to give to patients.
Cantrell and Lackey paid the doctors as much as $8,500 a week. The clinic did not accept insurance and the doctors made no referrals for physical rehabilitation. Neither Cantrell nor Lackey are medically certified and neither has any nursing experience.
In June 2013, Dr. Richard Albert was sentenced to 75 months in federal prison for his role in the conspiracy. Another doctor, Rano Bofill, pleaded guilty to a conspiracy charge earlier this year and is awaiting sentencing.
The investigation was conducted by the DEA and the Kentucky Attorney General’s Office. Assistant U.S. Attorney Roger West prosecuted this case on behalf of the federal government.
New York Man Sentenced to 120 Months for Wire FraudRead the Press Release
FRANKFORT, KY - A Scarsdale, New York man, who was convicted of wire fraud relating to a Ponzi scheme, was sentenced to 120 months in prison yesterday. U.S. District Court Judge Gregory F. VanTatenhove sentenced Eilat Lev, 65, on his conviction.
Lev previously admitted that he defrauded investors, of approximately $33,000,000, during a scheme he executed from 2005 through 2008. According to the plea agreement, Lev admitted that he owned a business called International Tractor Company, Inc. (ITC), located in Ardsley, New York. He was in the business of buying and selling heavy construction equipment, domestically and internationally. Lev relied, in part, on other individuals to finance the purchase of the equipment, with the agreement that he would arrange for the sale of the equipment and would return the amount invested, pay interest on the amount invested, and share the profit made on any sale with the individuals who provided the financing.
In 2002, an investor accepted an ongoing business proposition from Lev, where the investor would finance the purchase of specific items of equipment on the global market. Lev had identified the equipment for sale and had typically secured a willing buyer. For each transaction, the investor would receive paper work from Lev identifying the equipment, the amount required to purchase it, and confirmation of the sale price, which had been negotiated and agreed upon by the ultimate purchaser. Upon receiving this documentation, the investor would arrange for the transfer of money from his bank account to an account utilized by ITC, in New York. Under the terms of the agreement, Lev would complete the transaction and would return the investment, the agreed interest and, the share of the profit to the investor, within an agreed upon time frame.
In 2005, the investor opened a line of credit with First Southern National Bank located in Pulaski County, Kentucky. He used this line of credit to continue to finance transactions with Lev and his company. In order to draw from the line of credit, Lev was required to submit the same itemized documentation to the bank, which would then transfer funds, by wire, from the investor’s line of credit to Lev’s account at Gotham Bank of New York.
Lev admitted that he perpetrated a scheme to defraud this investor, and others, by soliciting millions of dollars under false pretenses, failing to invest the investors’ funds as promised, and misappropriating investors’ funds without the knowledge or authorization of the investors. In furtherance of the scheme, rather than purchasing and selling specific items of equipment and returning the investment, interest, and profit to them, Lev ran a scheme by which he falsified purchase and sales documents and diverted new investor funds to pay prior investors their principal, interest and/or profits on prior transactions, thereby creating the impression among investors that the business was successful, which enticed them to invest more money. By the end of 2008, Lev was without funds to pay his investors their principal, interest, and/or profit, causing these individuals to lose approximately $33,700,000.
Lev plead guilty in October of 2013.
Under federal law, Eilat Lev must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for five years.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Howard S. Marshall, Special Agent in Charge, Louisville Field Office of the Federal Bureau of Investigation jointly announced the sentence.
The investigation was conducted by the Federal Bureau of Investigation. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Laura K. Voorhees.
Pulaski County Man Sentenced to 20 Years for Distributing Heroin Resulting in DeathRead the Press Release
LONDON, KY - A Pulaski County man, who has previously admitted to distributing heroin that resulted in the death of another individual, was sentenced to 20 years in prison.
U.S. District Judge Amul Thapar sentenced 30 year-old Anthony Lacortiglia for distribution of heroin resulting in death and conspiracy to distribute heroin. Following the completion of his prison term, Lacortiglia will be under the supervision of the U.S. Probation Office for 20 years. Under federal law, Lacortiglia must serve at least 85 percent of his prison sentence.
In August 2013, following the first day of trial, Lacortiglia pled guilty to the offenses. Lacortiglia admitted that on May 4, 2012, he distributed heroin to John Latham at Latham’s Pulaski County residence. A short time later, Latham died as result of injecting the heroin provided to him by Lacortiglia. Lacortiglia also admitted to conspiring with others to distribute heroin within Pulaski County.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky; Bryan B. Underwood, Acting Special Agent in Charge, FBI; Rodney Brewer, Kentucky State Police Commissioner; Robbie Clark, Director of the Lake Cumberland Area Drug Task Force and Todd Wood, Pulaski County Sheriff, jointly announced the sentence.
The investigation was conducted by Kentucky State Police, the Pulaski County Sheriff’s Office, and the Lake Cumberland Area Drug Task Force, and various agents of the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Jason Parman.
Boone County Man Sentenced to 35 Years for Producing Child Pornography VideosRead the Press Release
COVINGTON, KY - A Boone County man, who previously admitted that he created multiple videos of minors engaged in sexually explicit conduct, was sentenced today to 35 years in prison.
U.S. District Judge David L. Bunning sentenced Michael Schweitzer, 47, for producing and possessing child pornography. Under federal law, Schweitzer will have to serve at least 85 percent of his prison sentence.
According to court documents, in November 2012, Schweitzer provided a drug to a minor and then recorded himself sexually assaulting the minor, while the minor was under the influence.
During the investigation, authorities seized Schweitzer’s cell phone and discovered more videos that Schweitzer had recorded, which also involved minors engaged in sexually explicit conduct.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Gary J. Hartwig, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI),and Michael Helmig, Boone County Sheriff, jointly made the announcement.
The investigation was conducted by the Boone County Sheriff’s Office and HSI. The Ft. Mitchell Branch of the U.S. Attorney’s Office prosecuted this case on behalf of the federal government.
Romanian National Pleads Guilty to International Internet Fraud SchemeRead the Press Release
LEXINGTON, KY - An Eastern European man has admitted his involvement in an international internet fraud ring that defrauded hundreds of purchasers of motor vehicles across the U.S.
Petrica Octavian Stoian, 27, who was extradited from Hungary to the U.S. in June 2013, pleaded guilty in federal court on Monday to one count of conspiring to commit wire fraud.
As part of the scheme, the conspirators used websites, such as eBay.com and Autotrader.com to offer non-existent vehicles for sale. Members of the conspiracy negotiated with victims via telephone and e-mail and instructed them to electronically transfer the purchase funds using Western Union, MoneyGram, or bank wire transfers. The funds were first received by conspiracy members in the U.S. and then resent to co-conspirators abroad.
During his plea in federal court, Stoian admitted his involvement in the conspiracy. Specifically, Stoian acknowledged that he used numerous fraudulent identities to open bank accounts in Europe, which were used to receive funds from the U.S.
Eight other members of the conspiracy have already pleaded guilty and seven are currently awaiting sentencing. Stoian is scheduled to be sentenced on September 22, 2014 before U.S. District Judge Joseph M. Hood. He faces up to 20 years in prison and a $250,000 fine. However, the Court must consider the U.S. Sentencing Guidelines and applicable federal statutes before imposing a sentence.
This investigation was conducted by special agents with the U.S. Secret Service, Lexington Resident Office, in coordination with international law enforcement agencies.
Assistant U.S. Attorneys Erin Roth and Jordi de Llano prosecuted this case on behalf of the federal government.
Danville Business Owner Sentenced to 10 Years for Wire Fraud and Identity TheftRead the Press Release
FRANKFORT, KY - The owner of a children’s fun and gaming center in Danville, Ky., has been sentenced to 10 years in prison for defrauding investors in his business.
U.S. District Judge Gregory Van Tatenhove sentenced 50-year-old Paul Christopher Turner on Monday, for aggravated identity theft and wire fraud. Under federal law, Turner will have to serve at least 85 percent of his prison sentence.
According to court documents, Turner used the personal identifying information of some investors without their permission and forged signatures of a notary public, in order to obtain loans and open lines of credit for his business.
Turner previously pled guilty to an indictment that alleged from approximately 2004 through 2013 he raised millions of dollars from investors to promote his company. Turner improperly lured some of that money from investors through misrepresentations and falsehoods about how the investors’ money would be used. Turner then applied some of the funds toward his own living expenses.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky; Dugan Wong, Inspector in Charge, United States Postal Inspection Service, Pittsburgh Division; and Rodney Brewer, Commissioner, Kentucky State Police jointly made the announcement today.
The investigation was conducted by the United States Postal Inspection Service and the Kentucky State Police. The case was prosecuted by Assistant U.S. Attorney Kenneth R. Taylor.
Covington Man Pleads Guilty to Distribution of Heroin Resulting in DeathRead the Press Release
COVINGTON, KY -A Covington, Ky., man admitted in federal court today that he sold heroin that resulted in the death of one of his customers.
Timothy Tingle-Brown, 29, pled guilty today before U.S. District Judge David L. Bunning to distributing heroin that resulted in death.
“This case exemplifies the commitment of our office and our law enforcement partners to the fight against heroin trafficking,” said Kerry B. Harvey, U.S. Attorney in the Eastern District of Kentucky. “Tingle-Brown faces at least twenty years in prison because he chose to sell heroin, a decision with deadly consequences in this case. Others who are tempted to engage in this destructive behavior should take heed of the price to be paid.”
Tingle-Brown admitted to selling heroin to a man at an apartment in Taylor Mill, Ky., on April 20, 2013. The man subsequently died from an overdose from the heroin that Tingle-Brown had sold to him.
A federal grand jury in Covington returned an indictment on September 12, 2013 charging Tingle-Brown with distribution of heroin resulting in death. The trial started on June 20, 2014 and a jury was selected, but Tingle-Brown entered a guilty plea this morning before the trial was scheduled to continue.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and James V. Allen, Acting Special Agent in Charge, Detroit Field Division, Drug Enforcement Administration, jointly announced the guilty plea.
The investigation was conducted by the Cincinnati Resident Office of the Drug Enforcement Administration, the Taylor Mill Police Department, and the office of the Kenton County Commonwealth Attorney. Assistant U.S. Attorney Tony Bracke represents the federal government in this matter.
Tingle-Brown is scheduled to be sentenced on September 30, 2014. He faces a minimum of 20 years in prison and a maximum of life. He also faces a maximum fine of $1,000,000.00 and at least three years of supervised release. However, any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.