Eastern District of Kentucky
Press releases recorded for this federal judicial district.
Lexington Man Found Guilty of Receiving and Possessing Thousands of Child Pornography ImagesRead the Press Release
Defendant possessed 4,000 videos of child pornography
LEXINGTON, KY - A federal jury has found a Lexington man guilty of receiving and possessing thousands of child pornography images.
On Wednesday night, following three days of trial and four hours of deliberation, the jury convicted Erik A. Hentzen, 26, of the charges.
The evidence at 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 began when authorities discovered that numerous child pornography videos 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 J. Hartwig, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), jointly announced the conviction.
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.
Hentzen is scheduled to be sentenced on September 15, 2014. Each of the charges he was convicted of carries a maximum term of 20 years in prison. However, the Court must consider the U.S. Sentencing Guidelines and the federal statutes before imposing the sentence.
Somerset Oncology Practice and Office Manager Plead Guilty to Food, Drug and Cosmetic Act Offenses Related to Misbranded Cancer Treatment DrugRead the Press Release
LEXINGTON, KY - Hematology and Oncology Center PLLC (HOC) in Somerset, Ky., pled guilty in federal court on Tuesday to charges of knowingly receiving a misbranded cancer treatment drug.
HOC’s former office manager, Natarajan Murugesan, also pled guilty; he admitted to aiding and abetting in the introduction of an unapproved oncology drug into interstate commerce. HOC and Murugesan’s offenses qualify as misdemeanors under the Food, Drug, and Cosmetic Act. The criminal charges stem from a 2014 civil settlement in which HOC, Murugesan, and Dr. N Mullai agreed to pay $2 million, plus interest, to resolve allegations that they violated the False Claims Act by submitting false claims to the Medicare program for misbranded and unapproved chemotherapy drugs that were administered through HOC’s Somerset clinic.
“The Food, Drug and Cosmetic Act establishes a ‘closed’ system of drug manufacturing and distribution to protect the safety of drugs used in the United States,” said U.S. Attorney Kerry Harvey. “Efforts to bypass this system with non-FDA approved foreign source drugs put patients at risk of receiving counterfeit, contaminated, or ineffective medications. The government will continue to prosecute such efforts – particularly when motivated by profit – to minimize the chances of patients receiving unsafe medications, and to ensure that the Medicare program does not pay for unapproved drugs.”
The defendants admitted that, between January 2010 and July 2011, HOC purchased substantial amounts of chemotherapy drugs and other cancer treatment drugs from a foreign distributor in Canada, which was operating under the name Quality Specialty Products (“QSP”). These drugs were sourced from foreign locations including: Turkey, India, the European Union, the United Kingdom, or other unidentified international locations. Often, the drugs arrived at HOC with labeling and dosage instructions in foreign languages. Some of the QSP drugs were distributed with labeling that wasn’t approved by the United States Food and Drug Administration (FDA), and therefore were misbranded. Also, many of these QSP drugs were not the version of the international oncology drug approved by the FDA for distribution within the United States.
Murugesan was responsible for ordering the drugs from QSP. He and HOC purchased the foreign QSP drugs for prices substantially below what drugs from FDA-approved manufacturers and distributors cost. Mullai administered the QSP drugs to her patients, and HOC submitted claims for reimbursement to Medicare, which typically does not cover misbranded or unapproved drugs by the FDA.
The parallel civil and criminal investigation was conducted by the FDA, Office of Criminal Investigation (FDA-OCI), and the plea agreements and settlement resulted from joint efforts of FDA-OCI, the Department of Health and Human Services, Office of Inspector General (HHS-OIG), and the U.S. Attorney’s Office.
HOC and Murugesan are scheduled to be sentenced on October 3, 2014. HOC faces up to five years of probation and a maximum fine of $200,000. Murugesan faces up to one year in prison and a maximum fine of $100,000. However, any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and other federal statutes.
Federal Inmate in Ashland Sentenced to 60 Months for Conspiring with Prison Guard to Smuggle Prohibited Items into PrisonRead the Press Release
ASHLAND, KY -An inmate at the Federal Correctional Institute (FCI) in Ashland, Ky., has been sentenced to 60 months in prison for conspiring with a correctional officer and others to smuggle prohibited items into the prison.
On Monday, June 9, U.S. District Judge David L. Bunning sentenced 33-year-old Gary Musick, of Newport, Tenn., for conspiracy to introduce contraband into a correctional facility and possession of contraband. The sentence will run consecutivly to the 235 month sentence that Musick is currently serving for other criminal convictions.
Musick was convicted of the contraband charges, by a jury, in March 2014. According to testimony at trial, Musick’s co-defendant and former girlfriend, Cindy Gates, and other female associates of Musick, routinely visited the FCI and delivered prohibited items, such as tobacco, marijuana, and nude photographs, to correctional officer James Lewis. Lewis subsequently provided the items to Musick, in exchange for payment from Gates and others.
The evidence at trial established that Musick also sold the prohibited items to other inmates. In some instances, he directed inmates to have money sent to an address outside of the institution as payment. The conspiracy lasted from December 2010 until February 2012.
Lewis and Gates have previously been convicted and sentenced for their roles. Lewis was sentenced to 15 months in prison and Gates received probation.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and John F. Oleskowicz, Special Agent in Charge, Department of Justice Office of the Inspector General, Chicago Field Office, jointly announced the sentence.
The investigation was conducted by the Department of Justice Office of the Inspector General. Assistant U.S. Attorneys Edwin J. Walbourn, III and Wade T. Napier prosecuted this case on behalf of the federal government.
Part Owners of Subway Restaurants in Lexington Admit Harboring and Under Compensating Unauthorized Aliens, and Tax EvasionRead the Press Release
LEXINGTON Two former part owners of four Subway restaurants in Lexington admitted they employed unauthorized aliens and intentionally failed to pay them lawful wages.
Amrutlal Patel, 46, pleaded guilty to harboring unauthorized aliens, and his wife Dakshaben Patel, 46, pleaded guilty to evading employment taxes. Both defendants also pleaded guilty to failure to pay employees overtime hours.
According to court documents, from April 2012 until November 2013, Amrutlal Patel used his residence to harbor four unauthorized aliens, who were employed at the Subway restaurants. These employees worked as many as 80 hours a week, but the Patels paid them below minimum wage and didn’t compensate them for overtime hours. Federal law requires employers to pay employees a minimum wage of $7.25 an hour and one and one-half times that rate for hours worked that exceed 40 in a week.
Dakshaben Patel acknowledged that she omitted unauthorized aliens from the payroll in order to evade taxes. According to the plea agreement, the couple must pay between $9,000 and $9,900 in payroll taxes, a $65,000 money judgment which is in lieu of a real estate forfeiture to the government, and $40,000 in restitution to the improperly compensated employees.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky and Gary T. Hartwig, Special Agent in Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), Ronnie Bastin, Chief, Lexington Division of Police and Christopher A. Henry, Special Agent in Charge, IRS, Criminal Investigation Division, jointly announced the plea.
Assistant U.S. Attorneys Hydee Hawkins and David Marye, and Civil Rights Attorney, Benjamin Hawk, prosecuted this case on behalf of the federal government.
The Patels will be sentenced on September 4, 2014. Amrutlal Patel faces a maximum of ten years in prison and a Dakshaben Patel faces a maximum of five years. However, any sentence imposed by the Court would come after consideration of the U.S. Sentencing Guidelines and the federal statutes governing the imposition of sentences.Final Member of Massive Prescription Drug Conspiracy Sentenced to 151 Months in PrisonRead the Press Release
Defendant is last of 38 defendants to be sentenced
COVINGTON – The final member of a large prescription drug ring that illegally distributed approximately 80,000 prescription pills in Northern Kentucky and Southern Ohio, was sentenced to 151 months in federal prison.
U.S. District Judge Amul Thapar sentenced 34 year-old Nick Sandlin, of Cincinnati, on Thursday and placed him on lifetime supervised release. Sandlin must serve at least 85 percent of his prison sentence. Sandlin is the last of 38 defendants involved in this conspiracy to be sentenced.
According to court records, from December of 2011 through February of 2013, Sandlin admitted to conspiring with others to distribute oxycodone. Specifically, Sandlin organized trips to pain clinics in Florida, where several of his co-defendants obtained prescriptions for large quantities of oxycodone. The group then typically traveled to various locations in Florida, Pennsylvania, Missouri, and Kansas to fill the prescriptions. Sandlin and others paid medical and travel expenses in exchange for the bulk of the oxycodone pills prescribed to each patient. Sandlin made approximately 13 trips to Florida to obtain oxycodone and admitted to distributing over 5,000 tablets. Sandlin acknowledged that he took part in a smaller conspiracy to distribute marijuana during this time as well.
This was the final sentencing in a prosecution that resulted from an Organized Crime Drug Enforcement Task Force (OCDETF) investigation, termed Operation Family Vacation.
All 38 members of the conspiracy have been convicted and sentenced. The ringleaders of the group, Damon and John Helton, received sentences of 360 and 270 months in prison, respectively, for engaging in a continuing criminal enterprise. Sentences for other members of the conspiracy ranged from 168 months to 30 months. Several members of the conspiracy were also convicted of money laundering. The average sentence was over 96 months. This investigation resulted in the forfeiture of five motor vehicles, 25 firearms, 12 pieces of real estate, and approximately $110,000.00 in currency.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, James V. Allen, Acting Special Agent in Charge, Detroit Field Division, Drug Enforcement Administration, and Kathy A. Enstrom, Special Agent in Charge, Cincinnati Field Office, Internal Revenue Service - Criminal Investigation, jointly announced the sentence.
The investigation was conducted by the Drug Enforcement Administration, the Internal Revenue Service, the Northern Kentucky Drug Strike Force, the Covington Police Department, and the Norwood Police Department. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorneys Tony Bracke and Wade Napier.
Final Member of Massive Prescription Drug Conspiracy Sentenced to 151 Months in PrisonRead the Press Release
Defendant is last of 38 defendants to be sentenced
COVINGTON, KY -The final member of a large prescription drug ring that illegally distributed approximately 80,000 prescription pills in Northern Kentucky and Southern Ohio, was sentenced to 151 months in federal prison.
U.S. District Judge Amul Thapar sentenced 34 year-old Nick Sandlin, of Cincinnati, on Thursday and placed him on lifetime supervised release. Sandlin must serve at least 85 percent of his prison sentence. Sandlin is the last of 38 defendants involved in this conspiracy to be sentenced.
According to court records, from December of 2011 through February of 2013, Sandlin admitted to conspiring with others to distribute oxycodone. Specifically, Sandlin organized trips to pain clinics in Florida, where several of his co-defendants obtained prescriptions for large quantities of oxycodone. The group then typically traveled to various locations in Florida, Pennsylvania, Missouri, and Kansas to fill the prescriptions. Sandlin and others paid medical and travel expenses in exchange for the bulk of the oxycodone pills prescribed to each patient. Sandlin made approximately 13 trips to Florida to obtain oxycodone and admitted to distributing over 5,000 tablets. Sandlin acknowledged that he took part in a smaller conspiracy to distribute marijuana during this time as well.
This was the final sentencing in a prosecution that resulted from an Organized Crime Drug Enforcement Task Force (OCDETF) investigation, termed Operation Family Vacation.
All 38 members of the conspiracy have been convicted and sentenced. The ringleaders of the group, Damon and John Helton, received sentences of 360 and 270 months in prison, respectively, for engaging in a continuing criminal enterprise. Sentences for other members of the conspiracy ranged from 168 months to 30 months. Several members of the conspiracy were also convicted of money laundering. The average sentence was over 96 months. This investigation resulted in the forfeiture of five motor vehicles, 25 firearms, 12 pieces of real estate, and approximately $110,000.00 in currency.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, James V. Allen, Acting Special Agent in Charge, Detroit Field Division, Drug Enforcement Administration, and Kathy A. Enstrom, Special Agent in Charge, Cincinnati Field Office, Internal Revenue Service - Criminal Investigation, jointly announced the sentence.
The investigation was conducted by the Drug Enforcement Administration, the Internal Revenue Service, the Northern Kentucky Drug Strike Force, the Covington Police Department, and the Norwood Police Department. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorneys Tony Bracke and Wade Napier.
United States Attorney’s Office Achieving Landmark Results in Fight Against Health Care FraudRead the Press Release
Settlements Valued At More Than $75 Million Completed In the First Half of 2014
LEXINGTON The U.S. Attorney’s Office’s concerted efforts to combat Medicare and Medicaid fraud and recover wrongfully obtained taxpayer dollars, are bearing fruit as evidenced by recent civil settlements totaling more than $75 million. The settlements – highlighted by today’s $40.9 million dollar deal with King’s Daughters Medical Center in Ashland, Kentucky – result from a reorganization of investigative and prosecutorial resources within the U.S. Attorney’s Office to focus on health care fraud.
“Health care fraud has been a Department of Justice priority for several years, and our office has made it a priority as well,” said U.S. Attorney Kerry B. Harvey. “There is a tremendous amount of taxpayer money in federal health care programs like Medicare and Medicaid being spent in the Eastern District of Kentucky. Where there are signs that health care providers have obtained taxpayer dollars through fraud or other forms of abuse, it is our responsibility to investigate those allegations and recover those funds to the fullest extent allowed by the evidence and the law.”
The Eastern District of Kentucky covers 67 counties in the eastern half of the state, and US. Attorney Harvey leads the U.S Attorney’s Office, which has responsibility for enforcing federal laws in that part of the state.
In late 2010, U.S. Attorney Harvey reorganized the U.S. Attorney’s Office to create a fraud unit that focuses in part on fighting civil fraud, particularly health care fraud. The attorneys and other personnel assigned to the group – including a paralegal, auditor, and investigator – work closely with law enforcement agencies such as FBI and Health and Human Services (HHS) and with state level counterparts at the Kentucky Office of the Attorney General to investigate health care fraud allegations. Where appropriate, criminal and civil health care fraud investigations are conducted simultaneously.
“These cases are large and complex from both a legal and factual standpoint,” said Andrew Sparks, Chief of the Fraud Unit. “They have taken time to investigate, but those efforts are paying off.”
U.S. Attorney Harvey observed that several of the cases resolved this year involved allegations of medically unnecessary procedures and other unsafe medical practices, which can pose serious health risks.
“These cases are not just about dollars and cents; they are also about patient safety and quality medical care,” said U.S. Attorney Harvey. “Where appropriate, this office can and will use federal laws and resources to hold accountable those health care providers that put their bottom line above their patients’ interests.”
Each of the 2014 settlements resolves allegations that health care providers violated the False Claims Act by submitting false or fraudulent claims to Medicare or Medicaid. That federal statute allows the government to recover up to three times the amount of monetary loss caused by the fraudulent conduct. Several of the settlements included a separate Corporate Integrity Agreement between the defendant and HHS, which allows for greater government oversight of the health care provider’s quality of service, billing, and compliance practices.
Harvey emphasized the ongoing nature of the Department’s health care fraud efforts and the importance of public awareness of potential fraud.
“We are not resting on our laurels with these settlements, and have added additional resources to our health care fraud group over the last few months,” said Harvey. “However, we can only investigate what we know about, and I would encourage those members of the public who are aware of potential fraud to report it through appropriate channels, whether at their workplace, through the HHS fraud hotline, or at our office.”
Below is a list of some of the significant civil health care fraud settlements in 2014.
U.S. vs. Saint Joseph London Hospital: The hospital agreed to pay the federal government $16.5 million to settle allegations that it billed Medicare and Medicaid for highly invasive and medically unnecessary cardiac procedures.
U.S. vs. Mullali: A Somerset, Ky., oncology center agreed to pay the government $2 million to settle allegations that the oncology practice had purchased cheap, foreign chemotherapy drugs that were not approved by the FDA. The drugs were used on patients, and then the oncology center billed the services to Medicare as if the drugs were the FDA-approved versions.
U.S. vs. PremierTox: A chain of opiate addiction recovery centers, and a clinical laboratory along with two physician owners agreed to pay the government $15.75 million to settle allegations that they fraudulently billed federal health care programs for urine tests that were unnecessary and excessive.
U.S. vs. King’s Daughters: The Ashland Hospital agreed to pay $40.9 million, plus interest, to settle allegations that it had billed Medicare and Medicaid for invasive and medically unnecessary heart procedures as well as allegations of significant Stark Law violations.Ashland Hospital to Pay Nearly $41 Million to U.S. Government as Part of Landmark SettlementRead the Press Release
This Represents the Largest Federal Health Care Fraud Settlement involving a Hospital in the History of the Eastern District of Kentucky
ASHLAND King’s Daughters Medical Center (KDMC) in Ashland, Ky., has agreed to pay the U.S. Government $40.9 million to resolve civil allegations that it made millions of dollars by falsely billing federal health care programs for heart procedures that were performed on patients who didn’t medically need them.
“The conduct alleged in this matter is unacceptable, victimizing both taxpayers and patients,” said U.S. Attorney for the Eastern District of Kentucky Kerry B. Harvey. “Treatment decisions motivated by financial gain undermine public confidence in our health care system and threaten vital federal programs upon which so many of our citizens rely. We will not relent in our efforts to protect the public from the sort of systematic misconduct alleged in this case.”
The government alleged that, between 2006 and 2011, KDMC maximized reimbursements from Medicare and Kentucky Medicaid by billing for numerous unnecessary coronary stents and diagnostic catheterizations performed by KDMC physicians. The government also alleged that the physicians falsified medical records in order to justify these unnecessary procedures, which allegedly generated millions of dollars in fraudulent reimbursements for KDMC. This alleged conduct violated the False Claims Act because under federal law, federal health care programs like Medicare only reimburse providers for procedures that are deemed medically necessary.
To the knowledge of the U.S. Attorney’s Office, this case marks the largest settlement involving a hospital in the history of the Eastern District of Kentucky (District consists of 67 counties). The settlement amount roughly doubles the amount of money KDMC received as a result of the alleged fraudulent billing for the unnecessary services.
“Hospitals that place their financial interests above the well-being of their patients will be held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Department of Justice will not tolerate those who abuse federal health care programs and put the beneficiaries of these programs at risk by providing medically unnecessary care.”
The settlement also resolves allegations that KDMC violated the Stark Law by engaging in improper financial relationships with certain physicians. The government contended that KDMC paid some cardiologists salaries that were unreasonably high and in excess of fair market value. The government further contended that the cardiologists receiving these unreasonably high salaries referred their patients to KDMC for various health services. The Stark Law is designed to limit the influence of money on physicians’ medical decisions by prohibiting financial relationships between hospitals and referring physicians, unless these relationships meet certain designated exceptions.
In connection with this settlement, KDMC 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 the hospital 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 five years.
“Medically unnecessary procedures can cause very serious health issues, wastes millions in tax payer dollars each year and undercuts the public’s trust in the medical professionalism the Medicare Trust Fund,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General in the region covering Kentucky. “The OIG will continue to protect beneficiaries and hold health care providers accountable for improper claims.”
“This type of alleged conduct deceives individuals when they are seeking medical treatment and are vulnerable,” said Perrye K. Turner, Special Agent in Charge, FBI, Louisville Field Division. “The level of funds involved in this matter is staggering. This money has been stolen from the patients and the taxpayers.”The Commonwealth of Kentucky will receive $1,018,380, which represents the state’s share of the recovered Medicaid funds. The Medicaid program is funded jointly by the federal and state governments.
“We take very seriously our obligation to ensure the safety of patients in Kentucky and to hold accountable those who put profits ahead of patient care,” said Jack Conway, Kentucky Attorney General. “I appreciate the hard work of my Medicaid Fraud Unit and all of the agencies involved in this case, and I am pleased that we are able to recover this money on behalf of Kentucky taxpayers and a vital state program.”
The investigation was conducted by the FBI; the HHS-OIG; the Kentucky Office of Attorney General-Medicaid Fraud and Abuse Control Unit; the Commercial Litigation Branch of the Department of Justice’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Kentucky. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Settlement Agreement
Former Corrections Officer Sentenced for Conspiring with Inmate to Smuggle Illegal Items into PrisonRead the Press Release
ASHLAND, KY - A former corrections officer at the Federal Corrections Institute (FCI) in Ashland, Ky., has been sentenced to federal prison for conspiring with an inmate and others to smuggle prohibited items into the prison.
U.S. District Judge David L. Bunning sentenced 46-year-old James Lewis on Monday to 15 months in federal prison. Under federal law, Lewis will have to serve at least 85 percent of his prison sentence.
According to court records, from December 2010 until February 2012, Lewis conspired with inmate Gary Musick, of Newport, Tenn., and Musick’s girlfriend, Cindy Gates, to introduce tobacco, marijuana, and nude photographs into the prison. Gates frequently visited the prison and gave the items to Lewis. Lewis subsequently provided the items to Musick, in exchange for payment from Gates and others.
Evidence at Musick’s trial, in March, established that he sold some of the prohibited items to other inmates. Musick was convicted of conspiracy to introduce contraband into a correctional facility and possession of contraband. Gates pleaded guilty to a misdemeanor conspiracy charge, prior to trial, and she was also sentenced on Monday; she received probation.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and John F. Oleskowicz, Special Agent in Charge, Department of Justice, Office of the Inspector General, Chicago Field Office, jointly announced the sentence.
The investigation was conducted by the Department of Justice, Office of the Inspector General. Assistant U.S. Attorneys Edwin J. Walbourn, III and Wade T. Napier prosecuted this case on behalf of the federal government.
Former Mayor of Martin Convicted of Violating Civil Rights and Buying VotesRead the Press Release
PIKEVILLE – The former Mayor of Martin, Ky., has been convicted of intentionally violating voters’ civil rights, during her reelection campaign in 2012.
On Thursday evening, a federal jury in Pikeville, Ky., convicted former Martin Mayor, Ruth Thomasine Robinson, 69, of conspiracy to violate civil rights and one count of vote buying. The jury also convicted her husband, James “Red” Robinson, 64, of the conspiracy count and one vote buying count. Her stepson, James Steven Robinson, 32, was found guilty of the conspiracy count and two of three vote buying counts and another co-defendant, Johnny T. Moore, 32,was acquitted of all charges. The jury returned the verdicts after approximately two hours of deliberation, following three days of trial.
According to evidence introduced at trial, Thomasine Robinson and her co-conspirators intimated poor and disabled citizens in order to gain their votes during the 2012 general election in Martin. 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 members of the conspiracy also targeted residents of private housing owned and leased by Thomasine Robinson.
The trial testimony established that the members of the conspiracy filled out absentee ballots, marking the conspirators’ choice of candidates, and then had the voters sign the pre-marked ballots. Voters who cooperated with this arrangement and voted for Thomasine Robinson received promises of better living arrangements and other consideration. Voters who did not comply faced consequences such as eviction and the loss of priority for public housing.
In addition, the evidence at trial established that the defendants offered to pay several voters to vote for Thomasine Robinson.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Perrye K. Turner, Special Agent in Charge, FBI; and Jack Conway, Kentucky Attorney General, jointly announced the conviction.
The investigation was conducted by the FBI and the Kentucky Attorney General’s Office. Assistant U.S. Attorneys Kenneth R. Taylor and Andrew T. Boone represent the federal government in this case.
Sentencing is scheduled for September 9. The defendants face a maximum of 10 years in prison for the conspiracy offense and a maximum of five years in prison on the vote buying offenses. However, the Court must consider the U.S. Sentencing Guidelines and the federal statutes before imposing a sentence.
Newport Chiropractor Convicted of Health Care Fraud ConspiracyRead the Press Release
COVINGTON, KY - – The owner of a chiropractic clinic in Newport, Ky., has been convicted of a fraud scheme involving tens of thousands of dollars.
A federal jury in Covington convicted 48-year-old Andrea Almond, of Cincinnati, Ohio, of conspiracy to commit health care fraud, late Friday afternoon. The jury returned the verdict after four days of trial, following six hours of deliberation.
According to evidence established at trial, from September 2008 through April 2010, Almond conspired with a co-defendant to bill the Kentucky Medicaid Program for chiropractic services rendered at the Newport Chiropractic Center.
The evidence, however, also established that Almond never actually practiced at the Newport Chiropractic Center; the billed services were instead provided by other doctors, who had never been approved or enrolled in Kentucky Medicaid Program.
Almond billed the Kentucky Medicaid Program using her National Provider Identification number, knowing that the Kentucky Medicaid Program would not have paid for any claims for treatment rendered by unapproved providers.
The government proved that Almond and her co-conspirator fraudulently submitted approximately 1,943 claims to the Kentucky Medicaid Program, which totaled $483,797, and they received $95,098 in payments.
Her co-conspirator, Elaine Legg, has already pled guilty in the case. In a separate case, Dr. Nanci Allen, a former part owner in the Erlanger Chiropractic Clinic, has pled guilty to a similar scheme to defraud the Kentucky Medicaid Program. These individuals are also awaiting sentencing.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation; Dugan Wong, Postal Inspector in Charge, United States Postal Inspection Service, Pittsburg Field Division; and Jack Conway, Kentucky Attorney General, jointly made the announcement today.
The investigation was conducted by the Federal Bureau of Investigation; the United States Postal Inspection Service, Cincinnati Field Office; the Kentucky Attorney General’s Office, Medicaid Fraud Abuse and Control Unit; and the Kentucky Department for Medicaid Services. The federal government was represented by Assistant United States Attorney Laura K. Voorhees.
Almond will appear for sentencing on September 4, 2014. She faces a maximum of 10 years in prison. However, any sentence following a conviction will be imposed after the Court considers the U.S. Sentencing Guidelines and the applicable federal statutes.
Former Northern Kentucky School Superintendent Sentenced for Embezzling MoneyRead the Press Release
COVINGTON, KY - The former superintendent for the Dayton Independent School District has been sentenced to two years in federal prison for embezzling school funds during his tenure.
U.S. District Judge David L. Bunning sentenced William Rye, 66, of Wilder, Ky., for embezzlement. Under federal law, Rye will have to 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. Following the sentencing, Rye was released on his own recognizance and ordered to report on June 2 to a prison facility designated by the Bureau of Prisons. Rye has already paid full restitution in the amount of $193,149.22.
Rye pled guilty in December 2013 and admitted that, between 2004 and 2012, he embezzled approximately $193,149.22 from the Dayton Independent School District, while serving as school superintendent. The Dayton School District annually receives in excess of $10,000 in federal funds.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation, jointly made the announcement today.
The investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Laura K. Voorhees represents the federal government in this case.
Pikeville Doctor Admits to Conspiracy to Misbranding Prescription DrugsRead the Press Release
PIKEVILLE, KY - A Pikeville doctor admitted in federal court that he allowed a pharmacy access to his prescription drug samples that were supposed to go to his patients.
Thad Manning, 48, pleaded guilty on Wednesday to conspiracy to misbranding drugs. Manning agreed to forfeit $250,000 which represents the proceeds he received as a result of the conspiracy. Manning will also enter into drug rehabilitation for an addiction to hydrocodone.
Manning admitted that over the course of several years he received numerous prescription drug samples from various pharmaceutical companies. In the written agreement between Manning and the pharmaceutical companies, Manning pledged to provide the samples to patients. Instead, Manning allowed Marrowbone Clinic Pharmacy (later known as Marrowbone Hometown Pharmacy) to take the prescription samples and co-mingle them with other prescription drugs already in stock bottles. These co-mingled drugs were ultimately dispensed to the pharmacy’s customers.
Because the pharmacy removed the sample medications from their original packaging and mixed them with medications from stock bottles, the drug’s identifying information and expiration information on the stock bottle became inaccurate and thus misbranded. This made it impossible for the consumer to know whether or not their particular medication had been recalled by the Food and Drug Administration or the pharmaceutical companies.
Manning was the last of several individuals to be charged in 2012 as a result of an investigation conducted by the Food and Drug Administration’s Office of Criminal Investigations, the FBI, the Kentucky Board of Pharmacy, the Kentucky Office of the Inspector General and the Kentucky State Police. The individuals that were indicted have been convicted of the charges including a Houston, Texas doctor who wrote unlawful prescriptions for patients from Pike County; six defendants who were distributing narcotics obtained from Marrowbone Clinic Pharmacy; a pharmacy employee who billed insurance carriers for prescriptions that were never filled; the Marrowbone Hometown Pharmacy Corporation for the selling of prescription drug samples; and the pharmacy manager who was convicted of narcotics trafficking and conspiracy to sell prescription drug samples. Pikeville Pharmacist Ronald Huffman was named the 2012 indictment but committed suicide around the time the charges were announced.
The U.S. Attorney’s Office was represented in this case by Assistant U.S. Attorney Lee Gentry.
Manning will be sentenced in July 2014. He faces a maximum of one year in prison and a $100,000 fine. However, the Court must consider the U.S. Sentencing Guidelines and the applicable federal statutes before imposing a sentence.
Bookkeeper for Northern Kentucky Bank Admits Stealing over $100,000Read the Press Release
COVINGTON, KY -A longtime bookkeeper for a Northern Kentucky Bank admitted in federal court that she embezzled more than $100,000 from her employer, over a three year period.
Linda Penick, 58, of Dry Ridge, KY., pleaded guilty on Tuesday to bank embezzlement, before U.S. District Court Judge David L Bunning.
Penick admitted that, from 2010 until 2013, she defrauded the Grant County Deposit Bank, by transferring bank funds to her personal account and issuing cashier checks and money orders to herself. Many of these checks and money orders were made payable to her husband. Penick admitted that she used the money to pay bills and taxes.
According to the plea agreement, Penick embezzled $118,775.00, over a three year period. Penick worked at the bank for 23 years.
Penick waived her right to be indicted by a grand jury and pled guilty to the embezzlement charge by way of an information.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Perrye K. Turner, Special Agent in Charge, FBI, jointly made the announcement.
The investigation was conducted by the FBI. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Laura K. Voorhees.
Penick is scheduled to be sentenced on July 22, 2014. The bank embezzlement offense carries a maximum penalty of 30 years in prison and a maximum fine of $1 million. However, any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
Former Assistant Director of Nicholasville Day Care Sentenced and Ordered to Pay More Than $200,000 in RestitutionRead the Press Release
LEXINGTON, KY - A former employee of a child day care center in Nicholasville, KY., was sentenced today to 30 months in federal prison and ordered to pay $201,060 in restitution for defrauding her employer.
U.S. District Judge Karen Caldwell sentenced Pamela Sandlin, 55, for fraud. Under federal law, Sandlin will have to serve at least 85 percent of her prison sentence.
Sandlin previously admitted that, over the course of several years, she fraudulently took thousands of dollars while working as the Assistant Director at the Kids Connection Learning Center (KCLC). KLLC receives more than $10,000 annually in federal program funds.
According to her plea agreement, Sandlin was responsible for collecting money from parents, making bank deposits, and documenting financial transactions for KCLC. Court documents also established that Sandlin altered company records to conceal the fraud.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge, FBI, jointly made the announcement.
The investigation was conducted by the FBI. Assistant U.S. Attorney Ken Taylor prosecuted this case on behalf of the federal government.
Boone County Man Admits Producing Child Pornography VideosRead the Press Release
COVINGTON, KY - A Boone County man has admitted in federal court that he created multiple videos of minors engaged in sexually explicit conduct. Michael Schweitzer, 46, pleaded guilty on Tuesday, in front of U.S. District Judge David L. Bunning, to producing and possessing child pornography. Schweitzer was taken into custody of the U.S. Marshal.
Schweitzer has entered into an agreement with the U.S. Attorney’s Office that, pending the Court’s approval, would result in a sentence of 35 years in prison. Under federal law, Schweitzer will have to serve at least 85 percent of the prison sentence imposed. His sentencing is scheduled for July 1.
According to court documents, in November 2012, Schweitzer provided a drug to a minor and then recorded himself sexually exploiting the minor, while the minor was under the influence.
During the investigation, authorities seized Schweitzer’s cell phone and discovered more videos that he had produced, which also involved minors engaged in sexually explicit conduct.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Michael Helmig, Boone County Sheriff, jointly made the announcement today.
The investigation was conducted by the Boone County Sheriff’s Office. The Ft. Mitchell Branch of the U.S. Attorney’s Office prosecuted this case on behalf of the federal government.
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., has admitted to his role in a conspiracy that was responsible for illegally distributing more than 25,000 prescription pills in Eastern Kentucky.
Om Monday, Rano Bofill, 72, pleaded guilty in federal court in Lexington, before U.S. District Judge Amul Thapar, to conspiracy to unlawfully dispense Oxycodone.
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
Lackey and Cantrell pled guilty last year to their roles in the conspiracy. At the time of their guilty pleas, 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, pled guilty in July 2012 to a conspiracy charge and was sentenced to 75 months in prison. Albert, Cantrell and Lackey have collectively agreed to forfeit approximately $1.3 million, which represents proceeds from 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, Robert L. Corso, Special Agent in Charge, DEA, and Jack Conway, Kentucky Attorney General, jointly announced the 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.
Bofill will appear for sentencing on July 14, 2014. . He faces a maximum of 20 years in prison. However, the Court will consider the U.S. Sentencing Guidelines and the federal statues before imposing a sentence.
Former Owner of Pain Clinics in Georgetown and Dry Ridge Sentenced to 20 YearsRead the Press Release
Defendant sentenced to maximum penalty allowed under the statute
LEXINGTON, KY - The former owner of pain clinics in Georgetown, KY., and Dry Ridge, KY., that illegally dispensed prescription drugs to thousands of patients, was sentenced today to 20 years in prison.
U.S. District Judge Karen Caldwell sentenced Ernest William Singleton for drug trafficking, money laundering, opening and maintaining a drug involved premise and conspiracy offenses. Singleton will have to serve at least 85 percent of his prison sentence.
Singleton and his corporations, Double D Holdings, LLC and S and R Medical Enterprises, LLC, which owned Central Kentucky Bariatric and Pain Management, Central Kentucky Family Pharmacy of Georgetown, and the Grant County Wellness Center in Dry Ridge, were convicted by a federal jury in June 2013.
According to evidence presented at trial, from October 2010 until February 2013 and under Singleton’s direction, doctors at the clinics prescribed large quantities of Oxycodone and Diazepam outside the scope of professional practice and without a legitimate medical purpose.
Specifically, the evidence established that Singleton oversaw the daily operations of the clinics, influenced doctors to overprescribe drugs to patients, and pressured them to see as many patients as possible. Witnesses testified that, at Singleton’s direction, one of the doctors saw more than 90 patients in a day and another doctor visited with some patients for as little as three minutes before prescribing medication. Witnesses also testified that when some doctors complained to Singleton about the volume of patients, he instructed them not to reduce their patient load.
Other evidence established that the pain clinics operated on a cash only basis and did not accept insurance. Patients paid approximately $250 on the first visit and $300 on subsequent visits. Investigators estimate that approximately 5,000 patients visited the clinics during the course of the conspiracy.
Some of the doctors who testified at trial confirmed that they could not provide adequate medical care under Singleton’s guidelines. Two of the doctors employed by Singleton, Lea Marlow and Gregory White, pled guilty to criminal charges last year and are currently serving prison terms.
The jury also found that Singleton engaged in money laundering, by using the drug proceeds to purchase real estate, a boat, and farm equipment, among other items. He also used the proceeds to build a home. Singleton has forfeited items numerous that either facilitated the crimes or were purchased with proceeds from his criminal offenses, including bank accounts consisting of more than $427,000, more than 20 firearms, more than 40 pieces of farm equipment, vehicles, and livestock.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; James W. Allen, Acting Special Agent in Charge, Drug Enforcement Administration; Christopher A. Henry, Special Agent in Charge of IRS, Criminal Investigation Division; Jack Conway, Kentucky Attorney General; and Rodney Brewer, Commissioner of Kentucky State Police, jointly made the announcement.
The investigation was conducted by the DEA, IRS Criminal Investigation Division, the Kentucky Attorney General’s Office and Kentucky State Police. Assistant U.S. Attorney Ron Walker, former Assistant U.S. Attorney Patrick H. Molloy, and Special Assistant U.S. Attorney Shawna Kincer, the Executive Director of Special Prosecutions with the Kentucky Attorney General’s Office, prosecuted the case.
Nicholasville Woman Found Guilty of Social Security Fraud, Bankruptcy Fraud, and Other ChargesRead the Press Release
Defendant defrauded federal agency and filed for bankruptcy despite owning millions of dollars in assets
LEXINGTON, KY. - A federal jury has found a Nicholasville woman guilty of defrauding the Social Security Administration (SSA), for approximately a decade, and fraudulently filing for bankruptcy, among other charges.
On Thursday evening, a jury convicted 51-year-old Sheryl Bruner of one count each of theft of government money, failure to disclose assets, and bankruptcy fraud. She was also convicted of ten counts of money laundering and two counts of making false statements. The jury returned the verdicts after approximately two and a half hours of deliberation, following four days of trial.
The evidence at trial established that, from 2003 until 2013, Bruner fraudulently claimed that she was disabled and had no funds or source of income, in order to qualify for financial assistance from the Supplemental Security Income (SSI) program. SSI is an income assistance program designed to provide financial assistance to elderly and disabled individuals who meet the program’s eligibility requirements. Bruner failed to disclose, and concealed from the SSA, that she owned multiple companies, which collectively earned millions of dollars during the time she was receiving financial assistance. Bruner worked primarily as a Medicaid service provider.
The evidence also established that, on May 16, 2013, Bruner filed for bankruptcy, despite the fact that she had more than a million dollars in assets. Bruner had tried to hide the amount of cash she had on hand, the bank and trust accounts she maintained or controlled, and vehicles and real estate she owned.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky andThomas Caul was recently selected as the Special Agent-in-Charge of the Social Security Administration, Office of the Inspector General, Office of Investigations for the Atlanta Field Division.
The investigation was conducted by the Social Security Administration, Office of the Inspector General, Office of Investigations. Assistant U.S. Attorney Ken Taylor prosecuted the case on behalf of the federal government.
Bruner is scheduled to appear for sentencing in June 2014. The money laundering offenses carry a maximum of 20 years in prison, the theft of government property offense carries a maximum of 10 years, and the other offenses each carry a maximum penalty of five years. However, any sentence would be imposed by the Court, after consideration of the United States Sentencing Guidelines and the federal statutes governing the imposition of sentences.
Federal Inmate in Ashland Convicted of Conspiring with Prison Guard to Smuggle Prohibited Items into PrisonRead the Press Release
ASHLAND –An inmate at the Federal Corrections Institute (FCI) in Ashland, KY., has been convicted by a federal jury of conspiring with a prison guard and others to smuggle prohibited items into the prison.
Today, a federal jury convicted 33-year-old Gary Musick, of Newport, Tenn., of conspiracy to introduce contraband into a correctional facility and possession of contraband. The jury reached its verdicts after approximately three and half hours of deliberation, following four and a half days of trial.
According to testimony, Musick’s co-defendant and former girlfriend, Cindy Gates, and other female associates of Musick, routinely visited the FCI and delivered prohibited items, such as tobacco, marijuana, and nude photographs, to corrections officer James Lewis. Lewis subsequently provided the items to Musick, in exchange for payment from Gates and others.
The evidence at trial established that Musick also sold the prohibited items to other inmates, in exchange for stamps. In some instances, he directed inmates to have money sent to an address outside of the institution as payment. The conspiracy lasted from December 2010 until February 2012.
Lewis and Gates previously pleaded guilty to a conspiracy charge.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and John F. Oleskowicz, Special Agent in Charge, Department of Justice, Office of the Inspector General, Chicago Field Office, jointly announced the conviction.
The investigation was conducted by the Department of Justice, Office of the Inspector General. Assistant U.S. Attorneys Edwin J. Walbourn, III and Wade T. Napier prosecuted this case on behalf of the federal government.
Musick is scheduled to appear for sentencing in June 2014. Both offenses carry a maximum of five years in prison. However, before the Court imposes a sentence it will carefully review the U.S. Sentencing Guidelines and the federal statutes governing the imposition of sentences.
Johnson County Man Sentenced to 84 Months for Armed Drug TraffickingRead the Press Release
PIKEVILLE, KY - A Johnson County man, who previously admitted to trafficking prescription drugs, was sentenced on Tuesday to 84 months in prison.
U.S. District Judge Amul Thapar sentenced 43 year-old John Kline for armed drug trafficking. Under federal law, Kline will have to serve at least 85 percent of his prison sentence.
Kline admitted during his guilty plea, in December 2013, that he had sold Oxycodone pills to several undercover officers with the Kentucky State Police. Kline was also in possession of a loaded semiautomatic pistol at the time of one of the drug transactions. According to the plea agreement, authorities searched Kline’s residence and found hundreds of Oxycodone pills and 17 firearms.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Stuart Lowrey, Special Agent in Charge, ATF; Rodney Brewer, Kentucky State Police Commissioner; and Dwayne Price, Johnson County Sheriff, jointly announced the sentence.
The investigation was conducted by ATF, the Kentucky State Police and the Johnson County Sheriff’s Office. Assistant U.S. Attorney Hydee Hawkins prosecuted this case for the U.S. Attorney’s Office on behalf of the federal government.
Former Winchester Brake Pad Engineer Pleads Guilty to Theft of Trade Secrets ChargeRead the Press Release
LEXINGTON, KY - Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, FBI, and Mythili Raman, Acting Assistant Attorney General for the U.S. Department of Justice’s Criminal Division jointly announced today that a Winchester, KY., man admitted in federal court that he conspired to share confidential information about his employer’s brake pads with another company.
David Lewis, 65, pleaded guilty on Monday to conspiracy to commit theft of trade secrets, before Senior U.S. District Judge Joseph M. Hood.
Lewis admitted that, between 2006 and 2007, he emailed trade secrets concerning the specifications of brake pads, which information is the property of Lewis’s former employer, Brake Parts International, Inc. According to the plea agreement, Lewis was paid thousands of dollars by a Canadian company for this information.
On March 3, Lewis waived his right to be indicted and pleaded guilty to the charge brought by U.S. Attorney Harvey.
The investigation was conducted by the FBI and the U.S. Attorney’s Office was represented by Assistant U.S. Attorney Hydee Hawkins and Evan Williams, Senior Council of the Department of Justice’s Computer Crime & Intellectual Property Section.
David Lewis is scheduled to be sentenced on July 7, 2014. He faces up 10 years in prison 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 applicable federal statutes.
Former Drug Task Force Director Admits Stealing Federal DollarsRead the Press Release
COVINGTON, KY - The former executive director of a federally funded northern Kentucky drug task force has admitted he stole money that belonged to the task force.
Timothy George Fegan, 52, pleaded guilty to one count of theft of government money. Fegan, who worked for the Buffalo Trace/Gateway Narcotics Task Force at the time, wrongfully took thousands of dollars from the organization, over an extended period. Fegan acknowledged that he took cash proceeds that Task Force agents had seized during drug investigations and took money that the Task Force kept on hand to perform undercover drug buys.
Between November 2011 and November 2012, the Task Force received approximately $150,000 in federal funding. Fegan admitted that he stole thousands of dollars in Task Force funds during this period. At sentencing, the Court will determine the total amount of money that Fegan stole from the Task Force, during the period from December 31, 2009 to November 2012.
The Buffalo Trace/Gateway Narcotics Task Force was organized by several county and city governments and was responsible for the investigation of drug crimes in various northern and eastern Kentucky counties. The Task Force was funded by federal and state grants and contributions from the county and city governments that formed the Task Force. The Task Force’s operations are based in Maysville, KY., and Fegan worked for the Task Force during this period, including serving as Interim Executive Director from December 31, 2009 through March 2010 and Executive Director from April 2010 until November 2012. The Task Force ceased its operations in early 2013.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge, FBI, jointly announced the guilty plea.
The investigation was conducted by the FBI and the Kentucky State Police. Assistant U.S. Attorney Andrew T. Boone is prosecuting this case for the U.S. Attorney’s Office on behalf of the federal government.
Sentencing is scheduled for June 19, 2014. The theft of government money offense carries a maximum of 10 years in prison and a maximum fine of $250,000. The sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the applicable federal statutes.
Former Mayor of Martin and Her Daughter Convicted on Fraud ChargesRead the Press Release
PIKEVILLE, KY -A former mayor of Martin, KY., and her daughter, have been convicted on all counts by a federal jury of charges related to a scheme to defraud the Social Security Administration (SSA) and to misapply federal funds.
On Tuesday night, the jury convicted former Martin Mayor Ruth Thomasine Robinson, 69, and her daughter, Rita Christine Whicker, 42, who formerly directed the Martin Community Center. The verdict was handed down after approximately two hours of deliberation following two days of trial. Specifically, the jury convicted the defendants on a total of eight counts of conspiracy, federal program fraud, theft of social security disability benefits and aggravated identity theft. Ginger Michelle Halbert, 42, a volunteer city employee who worked closely with Robinson, pled guilty last week to a charge of theft of government money. Charges against Ethel Clouse, the city bookkeeper, were dismissed at trial.
Evidence at trial established that from 2006 until January 2013, Halbert, who purportedly worked on a volunteer basis, 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 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.
Evidence further established that Halbert, who was receiving social security disability benefits, intentionally failed to notify SSA of her earned income from the city of Martin. Under federal law, anyone who receives disability benefits is limited in the amount of money he or she can receive from another source and all income must be reported to the SSA so it can properly determine eligibility for benefits.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, 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 Attorney General’s Office. Assistant U.S. Attorney Ken Taylor is prosecuting this case for the U.S. Attorney’s Office on behalf of the federal government.
Sentencing for Robinson and Whicker is scheduled for July 9, 2014. Halbert is scheduled for sentencing on June 6, 2014. The conspiracy offense carries a maximum of 5 years in prison; misappropriating money from a federal program carries a maximum penalty of 10 years in prison and aggravated identity theft has a mandatory minimum penalty of two years in prison.
Frankfort Man Sentenced to 87 Months for Receiving Child PornographyRead the Press Release
FRANKFORT, KY - A Franklin County man, who previously admitted to downloading numerous images of child pornography, was sentenced to 87 months in federal prison.
On Monday, U.S. District Judge Gregory Van Tatenhove sentenced 43-year-old Dennis Hodge for receipt of child pornography. Under federal law, Hodge must serve at least 85 percent of his prison sentence and will be on supervised release for 20 years following the completion of his prison term.
Hodge admitted, during his guilty plea in October 2013, that he downloaded more than 100 images of child pornography using a computer at his Frankfort home. According to the plea agreement, the images depicted children, under 12 years of age, engaged in sexually explicit conduct and many were considered sadistic and violent in nature.
In October 2011, Kentucky State Police seized Hodge’s computer during the execution of a search warrant. Agents later performed a forensic examination of the computer and discovered the child pornography images.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye K. Turner, Special Agent in Charge, FBI, and Rodney Brewer, Kentucky State Police Commissioner, jointly announced the sentence today.
The investigation was conducted by the FBI and the Kentucky State Police. This case was prosecuted by the U.S. Attorney’s Office in Fort Mitchell, KY.
Former Information Technology Worker at Georgetown Toyota Plant Convicted by Jury for Damaging Computer SystemRead the Press Release
LEXINGTON, KY - A former information technology worker at the Toyota Motor Manufacturing, Kentucky, Inc., plant in Georgetown, KY., has been convicted of intentionally damaging the company’s computer systems.
Earlier this week, a federal jury in Lexington convicted 36-year-old Ibrahimshah Shahulhameed of intentionally damaging a protected computer through the transmission of malicious information, codes, and commands. The jury returned the verdict on Tuesday after approximately four hours of deliberation, following six days of trial.
Testimony at trial proved that Shahulhameed was fired from his contractor position at Toyota on August 23, 2012. During the hours following his termination, Shahulhameed used a Toyota issued laptop and his Toyota credentials to access the company’s computer network on several occasions from his home. Shahulhameed then made numerous unauthorized changes to the programming of different Toyota computer systems. Shahulhameed also attempted to delete and alter evidence that he had changed the settings of these computer systems. Shahulhameed’s actions caused multiple Toyota computer systems to malfunction. In the months that followed, Toyota spent substantial resources diagnosing and repairing the problems that Shahulhameed caused within a seven hour span.
The defendant was employed at Toyota as a contractor from early 2011 until August 23, 2012.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky and Perrye K. Turner, Special Agent in Charge, Federal Bureau of Investigation jointly announced the conviction.
The investigation was conducted by the FBI. Assistant U.S. Attorney Andrew T. Boone prosecuted this case for the U.S. Attorney’s Office on behalf of the federal government.
Shahulhameed will appear for sentencing on May 8, 2014. He faces a maximum of 10 years in prison. However, the Court must consider the U.S. Sentencing Guidelines and the federal statute before imposing a sentence.
Pikeville Man Sentenced to 30 Years for Producing Child PornographyRead the Press Release
PIKEVILLE, KY - A federal judge has sentenced a Pikeville man to 30 years in federal prison for producing videos of himself engaged in sexually explicit conduct with a small child.
On Tuesday, U.S. District Judge Amul Thapar sentenced 63-year-old David Campbell for producing child pornography. The 30-year sentence is the maximum punishment allowed under the statute. Under federal law, Campbell will have to serve at least 85 percent of his sentence.
According to court documents, from March 2012 until March 26, 2013, Campbell produced sexually explicit videos of himself with the victim and then distributed them to others over the internet.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky and Perrye K. Turner, Special Agent in Charge, FBI, jointly announced the sentence.
The investigation was conducted by the FBI. Assistant U.S. Attorney Jason Parman prosecuted this case for the U.S. Attorney’s Office on behalf of the federal government.
Kentucky Addiction Treatment Center, Clinical Laboratory and Two Physician Owners to Pay $15.75 Million to Resolve Allegations of Fraudulent Urine Drug TestingRead the Press Release
LEXINGTON, KY - A chain of opiate addiction recovery centers, headquartered in Harrodsburg, KY., and a Russell Springs, KY., clinical laboratory, along with two physician owners, agreed to pay the U.S. Government millions of dollars to resolve civil allegations that they fraudulently billed federal health care programs for medically unnecessary and excessive urine tests.
PremierTox 2.0, LLC (“PremierTox”), Addixxion Recovery of Kentucky, LLC d/b/a SelfRefind (“SelfRefind”), Dr. Bryan Wood and Dr. Robin Peavler have agreed to pay a total of $15,750,000, plus interest, to resolve allegations that they violated the False Claims Act by submitting claims to Medicare and Kentucky’s Medicaid program for urine tests that were medically unnecessary and more expensive than the actual tests that were performed. Under federal law, health care programs only reimburse health care providers for services that are deemed medically necessary.
“Federal health care programs are essential to many of our citizens,” said U.S. Attorney Kerry B. Harvey. “We will not tolerate efforts by misguided providers to unfairly enrich themselves at the expense of these programs and the taxpaying public. This settlement underscores the continuing commitment of our office to use every available tool to protect these vital programs from false claims.”
According to the settlement agreement, Dr. Wood and Dr. Peavler owned and operated SelfRefind, a chain of addiction treatment clinics located in 12 Kentucky cities including, Danville, Frankfort, Hazard, Middlesboro, Pikeville, Barbourville, Morehead and Carrollton. As part of its treatment program, SelfRefind required all of its patients to submit to regular urine drug screening, as often as every two weeks, to ensure that the patients were not abusing controlled substances and were taking addiction treatment medications as prescribed.
The government alleged that after Wood and Peavler became owners of PremierTox they began automatically referring all drug screens completed at SelfRefind to PremierTox clinic for additional comprehensive urine drug screening tests that were frequently unnecessary and often more expensive than suitable alternative tests. The government also alleged that PremierTox submitted false claims that misidentified the class of drug that was tested for and received a higher financial reimbursement than necessary.
Before Dr. Wood and Dr. Peavler became part owners of PremierTox, SelfRefind did not automatically refer urine samples for additional confirmation testing to outside laboratories.
According to the settlement agreement, in December 2010 when Drs. Wood and Peavler referred urine samples to PremierTox, the lab did not have the equipment necessary to test the large volume of urine samples sent to it by SelfRefind. Therefore, PremierTox froze the samples in a storage unit for many months before performing the additional tests, which by that time were medically unnecessary for the treatment of the patients. Nevertheless, PremierTox submitted claims, seeking reimbursement for the tests.
In connection with the settlement, PremierTox has agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”). The agreement obligates PremierTox to undertake substantial internal compliance reforms and commit to a third-party review of its claims to federal health care programs for the next five years. The agreement also resolves allegations that the defendants violated the Stark Law, which forbids a laboratory from billing Medicare and Medicaid for certain services referred by physicians that have a financial relationship with the laboratory.
“Billing Medicare and Medicaid for laboratory tests that are not necessary contributes to the soaring costs of health care,” said Assistant Attorney General for the Civil Division Stuart F. Delery. “Providers will be aggressively investigated and held accountable for falsely billing federal health care programs.”
The Commonwealth of Kentucky is also a party to the agreement and will receive approximately $2.74 million, which represents the state’s share of the government’s recovery of Medicaid funds. The Medicaid program is funded jointly by the federal and state governments.
“Substance abuse is devastating our Commonwealth and addiction is ripping families apart,” Kentucky Attorney General Jack Conway said. “Treatment centers and their owners should be focused on patient care rather than profits. Companies that take advantage of Kentucky’s Medicaid program will not be tolerated and I am pleased that we were able to recover this money for such a vital state program and for Kentucky taxpayers.”
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $17.3 billion through False Claims Act cases, with more than $12.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation was conducted by the Kentucky Office of Attorney General, Medicaid Fraud and Abuse Control Unit (“MFCU”), Kentucky State Police, and the U.S. Attorney’s Office. The settlement agreement and Corporate Integrity Agreements resulted from joint efforts of HHS-OIG, MFCU, the U.S. Attorney’s Office, and the Civil Frauds Section of the Department of Justice in Washington, D.C.
Whitley County Woman Admits Involvement in Scheme to Steal Prescription Drugs from Pharmacy and Distribute ThemRead the Press Release
LONDON, KY - The final member of a scheme to steal prescription pills, from a Whitley County, KY., pharmacy, and provide the pills to area drug dealers has pled guilty to federal charges.
Lora Cupp, 35, of Rockholds, KY., pled guilty on Thursday to conspiracy to distribute a controlled substance.
Cupp admitted that from October 2011 to February 22, 2012, she conspired with her son, Jordan Chute, 21, and his wife at the time, Breanna Rhoades, 24, to steal approximately 6,000 oxycodone pills from Whitley Family Pharmacy.
According to court documents, Rhoades worked as a pharmacy technician and stole between 100 and 200 oxycodone pills a week. Chute assisted Rhoades in transferring the stolen pills to Cupp, who ultimately provided the pills to drug dealers in Whitley County.
Rhoades and Chute previously pled guilty to the conspiracy charge.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration jointly announced the plea today.
The investigation was conducted by the DEA, Kentucky Board of Pharmacy, London Police Department and the Williamsburg Police Department. Assistant U.S. Attorney Stephen C. Smith prosecuted this case for the U.S. Attorney’s Office on behalf of the federal government.
Cupp will appear in U.S. District Court for sentencing, on June 5, 2014. Chute is scheduled to be sentenced on February 20, 2014 and Rhoades is scheduled to be sentenced on May 15, 2014. The conspiracy charge carries a maximum penalty of 20 years.
Saint Joseph London Hospital to Pay $16.5 Million to Settle False Claims Act Allegations of Unnecessary Heart ProceduresRead the Press Release
This Represents the Second Largest Federal Health Care Fraud Settlement in the Eastern District of Kentucky
LONDON, KY - Saint Joseph Health System, Inc., d/b/a Saint Joseph London Hospital (“Saint Joseph”) has agreed to pay the U.S. Government $16.5 million to resolve civil allegations that it submitted false or fraudulent claims to the Medicare and Kentucky Medicaid programs for a variety of medically unnecessary heart procedures.
“We all rely on health care providers to make treatment decisions based on clinical, not financial, considerations,” said U.S. Attorney Kerry B. Harvey. “The conduct alleged in this case violates that fundamental trust and squanders scarce public resources set aside for legitimate health care needs. We will use every available tool to protect our federal health care programs and the patients who they serve.”
According to the settlement agreement, the U.S. Government contends that from January 1, 2008 until August 31, 2011, several doctors working at the hospital performed numerous invasive cardiac procedures on Medicare and Medicaid patients who did not need them. The hospital then billed the federal programs for these unnecessary procedures, which include coronary stents, pacemakers, coronary artery bypass graft surgeries (“CABGS”), and diagnostic catheterizations. The claims seeking reimbursement allegedly violated the False Claims Act because under federal law, Medicare and Medicaid programs only reimburse health care providers for operations that are deemed medically necessary. Hospitals generally receive between $10,000 and $15,000 for medical procedures such as heart stents.
These doctors were affiliated with Cumberland Clinic, a physician group that entered an exclusive arrangement with Saint Joseph in 2008 to provide cardiology services to the hospital’s patients.
The settlement also resolves allegations that Saint Joseph violated the federal Stark Law and Anti-Kickback Statute by entering into sham management agreements with doctors at the Cumberland Clinic. These agreements served as an inducement for the doctors to refer patients to Saint Joseph. Therefore, the government contends that Medicare and Medicaid are not responsible to pay claims that resulted from this improper financial relationship between the doctors and the hospital.
In connection with this settlement, Saint Joseph 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 the hospital to undertake substantial internal compliance reforms and commit to a third-party review of its claims to federal health care programs for the next five years.
"Cases such as this threaten both the health of patients and the financial integrity of the Medicare and Medicaid programs," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "This settlement is another example of the OIG’s commitment to protecting our beneficiaries and to recovering any money that has been improperly paid as a result of medically unnecessary procedures."
Today’s agreement represents the second largest health care fraud settlement in the Eastern District of Kentucky (district includes 67 counties).
The settlement stems in large part from a whistleblower complaint that was filed by three Lexington cardiologists pursuant to the qui tam provisions of the False Claims Act. That law allows the whistleblowers, also known as relators, to share in settlement proceeds that result from their bringing claims of fraud to the government’s attention. In this case, Doctors Michael Jones, Paula Hollingsworth, and Michael Rukavina will receive $2,458,810 of the $16.5 million settlement. Prior to the relators filing their complaint, Saint Joseph voluntarily disclosed to the government that one of its cardiologists, Dr. Sandesh Patil, had performed medically unnecessary coronary stents. Dr. Patil previously pleaded guilty to a federal health care fraud offense and was sentenced to 30 months imprisonment.
“Hospitals that place their financial interests above the well-being of their patients will be held accountable,” said Stuart Delery, Assistant Attorney General for the Civil Division of the United States Department of Justice. “The Department of Justice will not tolerate those who abuse the public health care programs to which we all contribute and on which we all depend.”
“The criminal investigation and civil settlements are excellent examples of the importance of whistleblower complaints,” said Perry K. Turner, Special Agent in Charge of the FBI in Kentucky. “This result would not be possible without the commitment of private citizens exposing this type of egregious fraud.”
The Commonwealth of Kentucky is also a party to the agreement and will receive approximately $365,851, which represents the state’s share of the government’s recovery of Medicaid funds. The Medicaid program is funded jointly by the federal and state governments.
"I applaud the hard work of my Medicaid Fraud Unit and all of the agencies involved in this case," said Kentucky Attorney General Jack Conway. "I am pleased that we have reached this settlement and are recovering thousands of dollars for a vital state program and for taxpayers."
While the settlement resolves claims against Saint Joseph London, the U.S. Government will intervene in the case initiated by the whistleblowers and continue litigating allegations of False Claims Act violations arising out of unnecessary cardiac procedures against most of the other defendants named in the qui tam. It will also continue a related criminal investigation.
The investigation was conducted by the FBI, HHS-OIG, Kentucky Office of Attorney General, Medicaid Fraud and Abuse Control Unit (“MFCU”), the Civil Frauds Section of the Department of Justice in Washington, D.C., and the U.S. Attorney’s Office.
settlement_agreement.pdf
Winchester Man Sentenced to 20 Years for Distributing Heroin Resulting in DeathRead the Press Release
LEXINGTON, KY -A Winchester, KY., man, previously convicted of distributing heroin to an individual who died of an overdose, was sentenced today to 20 years in federal prison.
Senior U.S. District Judge Joseph M. Hood sentenced Harold Wayne Salyers, 53, for distribution of heroin resulting in death, conspiracy to distribute heroin, possession with intent to distribute heroin and distribution of heroin. Under federal law, Salyers will have to serve at least 85 percent of his prison sentence. A federal jury convicted Salyers in October 2013 following two days of trial.
According to the evidence at trial, in August of 2012, Salyers distributed a large quantity of heroin to an individual in Clark County. This individual used the heroin, overdosed, and died. The evidence further established that three other individuals witnessed the victim ingest the heroin and, the day after the victim died, Salyers admitted to one of the witnesses, in a recorded conversation, that he had distributed the heroin to the victim.
An expert from the Medical Examiner’s Office and a toxicologist testified that the death was caused by the toxic effects of heroin in the victim’s body. The evidence established that Salyers had conspired with others to distribute heroin, in Clark County, from approximately August 2012 until June 2013.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration; and Kevin Palmer, Chief, Winchester Police Department, jointly made the announcement today.
The investigation was conducted by the DEA and the Winchester Police Department. Assistant U.S. Attorney Todd Bradbury prosecuted the case for the U.S. Attorneys’ Office on behalf of the federal government.
Northern Kentucky IRS Financial Technician Sentenced to 28 Months for Stealing Identities and Committing Mail FraudRead the Press Release
COVINGTON, KY -A financial technician, employed in an office of the Internal Revenue Service (IRS) located in Boone County, KY., was sentenced to 28 months in federal prison for unlawfully accessing an IRS computer to obtain personal information about taxpayers.
U.S. District Judge Amul Thapar sentenced 33-year-old Joy Fox of Independence, KY., on Thursday for aiding and abetting mail fraud and one count of aiding and abetting aggravated identity theft. Under federal law, Fox will have to serve at least 85 percent of her prison sentence.
Fox pleaded guilty in September 2013 and acknowledged that as part of her official duties she had access to the Integrated Data Retrieval System (IDRS). IDRS is a computer system that maintains taxpayer information including names, social security numbers and dates of birth of taxpayers. Fox’s authorized access to the computer system was limited to official business use only.
Fox admitted she used IDRS without authorization to steal the identities of taxpayers. She provided the information to her co-defendant, Patrick Sharpe, 23, who lived in Tallahassee, FL. Sharpe specifically requested that Fox obtain the personal information of individuals 65 or older who were eligible for Social Security benefits. The defendants had planned for Sharpe to apply online for debit cards using the stolen identities and fund the cards with those individuals’ Social Security benefits.
Sharpe has admitted that he used false addresses in the application process so the cards would be delivered to locations where they could be picked up and used without the knowledge of the individuals whose identities had been stolen. Investigators discovered the scheme before the defendants could use the victims’ debit cards.
Sharpe pleaded guilty in October 2013 to aiding and abetting mail fraud and aiding and abetting aggravated identity theft. Sharpe will be sentenced on February 20, 2014.
Kerry B. Harvey, United U.S. Attorney for the Eastern District of Kentucky; James D. Robnett, Special Agent in Charge, IRS-Criminal Investigations Division, Tampa, FL., and Michael Wallenhorst, Special Agent in Charge, Treasury Inspector General Tax Administration, Chicago Field Division, jointly announced the sentence.
The investigation was conducted by agents of the IRS-Criminal Investigation Division, Tallahassee, Fla.; the Leon County Sheriff’s Office, Tallahassee, and agents of Treasury Inspector General Tax Administration, Covington, KY. Assistant U.S. Attorney Laura Voorhees prosecuted this case for the U.S. Attorney’s Office on behalf of the federal government.
Nicholasville Woman Appears in Court on Charges of Defrauding the Social Security AdministrationRead the Press Release
LEXINGTON, KY - A Nicholasville woman was arraigned in federal court on Monday, for allegations that she defrauded the Social Security Administration (SSA) for approximately a decade.
A federal indictment returned Thursday, January 9, charges Sheryl Bruner, 51, with theft of government money, concealment and failure to disclose assets, bankruptcy fraud, and making false and fictitious statements. Bruner has pleaded not guilty to the charges and a trial date has been scheduled for March 10, 2014.
According to the indictment, from 2003 until 2013, Bruner fraudulently claimed that she was disabled and had no money or source of income in order to receive financial assistance from a program known as Supplemental Security Income (SSI). Bruner allegedly concealed and failed to disclose to the SSA that she worked two jobs during this time period —both as a Medicaid service provider—in which she earned a substantial income.
The indictment further alleges that on May 16, 2013, Bruner filed for bankruptcy, in Lexington, and intentionally omitted the amount of cash she had on hand, all the bank and trust accounts she maintained or controlled, all of the vehicles she owned, and a piece of real estate she owned.
SSI is an income assistance program designed to provide financial assistance to elderly and disabled individuals who meet the program’s eligibility requirements. If the SSA had known Bruner’s true health and financial situation, SSA would have discontinued her eligibility in the program.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky and Guy P. Fallen, Special Agent in Charge, Social Security Administration, Office of Inspector General, jointly announced the indictment.
The investigation was conducted by the Social Security Administration, Office of the Inspector General, Office of Investigations. Assistant U.S. Attorney Ken Taylor presented the case to the grand jury.
The theft of government property charge carries a maximum of 10 years in prison upon a conviction. The rest of the charges each carry a maximum penalty of five years in prison.
Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which government must prove guilt beyond a reasonable doubt.
Former Agriculture Commissioner Sentenced to 27 Months for Misappropriating Department FundsRead the Press Release
FRANKFORT, KY - Former Commissioner of the Kentucky Department of Agriculture, Richard Dwight Farmer, Jr., was sentenced today to 27 months in federal prison and one year supervised release for misappropriating public resources during his tenure in office.
U.S. District Judge Gregory Van Tatenhove sentenced Farmer for theft from a program receiving federal funds. In addition to the prison term, Farmer will also be required to pay $120,500 in restitution to the Commonwealth of Kentucky and a special assessment of $200.00. Judge Van Tatenhove released Farmer on his own recognizance and ordered Farmer to report to prison to begin serving his sentence on March 18, 2014, at 1:00 p.m. At a later date, the Bureau of Prisons will determine to which prison Farmer will report. Farmer will have to serve at least 85 percent of his prison sentence.
“We appreciate the Court’s thoughtful decision regarding Mr. Farmer’s sentence,” said U.S. Attorney Kerry B. Harvey. “This sad episode now concludes, but we hope that it sends a lasting message that neither political power nor celebrity places anyone above the law. The public has been well-served by the dedicated law enforcement officers and prosecutors who prepared and prosecuted this case – their commitment to the task is noteworthy and appreciated.”
During his guilty plea in September 2013, Farmer admitted that he misappropriated a total of $120,500, by hiring friends who didn’t perform work to justify their salaries and purchasing a number of items for his personal use with Kentucky Department of Agriculture (KDA) funds.
Specifically, Farmer admitted that, in 2008, he used approximately $19,500 in KDA money to buy excessive gifts for a KDA sponsored conference. Farmer purchased rifles, rifle cases, knives, and gift cards, purportedly for use at the conference; but he actually took the items for his own use. Farmer further acknowledged that, in both 2008 and 2011, he misappropriated thousands of dollars in labor cost by putting friends on the public payroll, knowing they would perform little or no actual work for the KDA.
Farmer was elected to two terms as Commissioner of Agriculture and was responsible for the supervision and administration of the KDA from January 2004 until January 2012.
Farmer was indicted by a federal grand jury in April of last year.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, FBI, and Jack Conway, Kentucky Attorney General, jointly announced the sentence today.
The investigation was conducted by the Kentucky Attorney General’s Office and the FBI. The case was prosecuted by Assistant U.S. Attorneys Kenneth R. Taylor and Andrew T. Boone, and trial attorney Sean Mulryne with the Public Integrity Section of the United States Department of Justice.
Michigan Man Convicted of Conspiracy to Distribute Heroin in KentuckyRead the Press Release
LEXINGTION, KY - A Michigan man, who led a drug conspiracy that brought heroin into eastern Kentucky for distribution, was convicted by a federal jury.
On Tuesday, a federal jury in Lexington convicted 32 year-old Douglas Martin of one count of conspiracy to distribute controlled substances, following an hour and a half of deliberation and two days of trial. Martin was also convicted of witness tampering.
According to the evidence at trial, Martin conspired with others to obtain heroin in Detroit, Mich., and bring it back for distribution in Madison, Fayette and Bourbon Counties in Kentucky. The evidence established that, from June 2012 until March 2013, Martin conspired to distribute 2.7 ounces of heroin, which has a street value of approximately $15,000. It also established that Martin and others conspired to distribute cocaine and that Martin would live in an apartment in Richmond when he came to Kentucky.
The investigation started when officers with the Paris Police Department conducted a routine traffic stop of a vehicle, with Martin and his co-defendants, Andre Hawkins, Ameida Udousoro and Jessica Cavezza inside. The officers subsequently located several thousand dollars, in cash, on the defendants.
Udousoro and Cavezza previously pleaded guilty to their roles in the conspiracy and Hawkins remains a fugitive.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, FBI, Rodney Brewer, Kentucky State Police Commissioner, and Kevin Sutton, Chief of the Paris Police Department, jointly announced the verdict.
The investigation was conducted by Kentucky State Police, FBI and the Paris Police Department. Assistant U.S. Attorney Todd Bradbury represents the U.S. Attorney’s Office in this case.
Martin will be sentenced on March 19, 2014. He faces a maximum of 30 years in prison, for the drug conspiracy, and 20 years for the witness tampering offense. However, any sentence following conviction would come after the Court considers the U.S. Sentencing Guidelines and the federal statutes governing the imposition of sentences.
Manchester Pharmacy Owner Sentenced to 10 Years for Conspiring to Illegally Fill Out of State Prescriptions for CustomersRead the Press Release
Pharmacy owner to forfeit a million dollars, home, and multiple vehicles
LONDON, KY - A Manchester pharmacy owner and his wife will forfeit their home, more than a million dollars and six cars that were proceeds or purchased with proceeds from a drug conspiracy in which the pharmacy owner filled prescriptions for customers without a legitimate medical purpose.
Charles Terry Tenhet, 63, of London, KY., pleaded guilty today to a conspiracy to distribute a controlled substance. U.S. District Judge Amul Thapar sentenced Tenhet to 10 years in prison following the plea. Charles Tenhet’s wife, Melissa Tenhet, 50, was sentenced to 12 months and day in prison for her role in the conspiracy. She pleaded guilty on Monday.
“Mr. Tenhet, with the assistance of Mrs. Tenhet, used his professional license to engage in a massive drug trafficking conspiracy,” said U.S. Attorney Kerry B. Harvey. “In so doing, he inflicted a great deal of pain on his community-one already hard hit by the scourge of prescription drug abuse. The punishment is well-deserved. Those in the healing arts deserve special attention from law enforcement authorities when they choose to betray their professional duties in favor of the ill-gotten gains made from drug trafficking.”
Charles Tenhet admitted he filled out of state prescriptions for large quantities of oxycodone in exchange for cash for eastern Kentuckians who had traveled in groups to pain clinics in Georgia and Tennessee and returned to visit Charles Tenhet’s pharmacies– Community Drug and Medi-Center Drug. Some customers drove as far as 600 miles to visit the clinics.
According to the plea agreement, Tenhet knew the visitors were potential drug traffickers and addicts. The plea agreement describes the Tenhets’ customers as being visibly high, lacking physical pain symptoms and appearing destitute and unemployed.
Melissa Tenhet worked as the office manager for Community Drug and admitted she directed co-workers to fill the prescriptions even when the workers questioned the legality of the prescriptions.
The Tenhets agreed to forfeit approximately a million dollars in cash, six vehicles, numerous luxury watches and a plot of land, all of which the Tenhets obtained or used as part of the conspiracy. The total value of all the assets forfeited was approximately three million dollars.
Under federal law, both defendants will each have to serve at least 85 percent of their respective prison sentence.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Robert L. Corso, Special Agent in Charge of DEA, jointly announced the guilty pleas.
The investigation was conducted by the DEA. Assistant U.S. Attorney Jason Parman represented the U.S. Attorney’s Office in this case.
Georgetown Home Builder Sentenced to 69 Months for Bank Fraud, Embezzlement, Aggravated Identity Theft and A False Loan ApplicationRead the Press Release
Defendant used the identity of a five year old to fraudulently obtain loans
FRANKFORT, KY -Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation, and John E. Lucas, Special Agent in Charge, Federal Deposit Insurance Corporation, Office of Inspector General, jointly announced today that a home builder from Georgetown, KY., was sentenced to 69 months in federal prison for fraudulently obtaining more than a million dollars in loans from a Frankfort bank.
On Tuesday, U.S. District Judge Gregory Van Tatenhove sentenced 59 year-old Lee C. Tevis for bank fraud, a false loan application, aiding and abetting bank embezzlement and aggravated identity theft.
In August of 2013, after a five day trial, a federal jury convicted Tevis of the offenses and acquitted him of an additional conspiracy charge.
Evidence at trial established that, beginning in 2006, Tevis fraudulently obtained loans from American Founders Bank (AFB), by setting up bogus corporations in the names of other people to bypass loan limits, while constructing a house.
The evidence further establshed that Tevis used some of the loan money, which the bank intended to be used to fund a home in Frankfort, to pay off his personal loans and debt on other construction projects.
According to trial testimony, when Tevis reached loan limits established by the Bank, he set up a bogus corporation in the name of his company’s foreman, an illegal alien, in order to obtain more loans. After fraudulently qualifying for the loans, Tevis used the social security number of the foreman’s five year-old son to pass the bank’s credit check.
Tevis fraudulently received $1,095,000 in loans from the bank, according to the evidence at trial. The Bank eventually foreclosed on the home for which Tevis received the loans and suffered a significant financial loss.
Additionally, Jim Tate, the AFB president who approved the loans for Tevis, pleaded guilty to bank fraud and received a sentence of 36 months in prison.
Under federal law, Tevis must serve at least 85 percent of his prison sentence.
The investigation was conducted by the FBI and the FDIC-OIG. Assistant U.S. Attorneys Andrew Sparks and Jim Arehart represented the U.S. Attorney’s Office in this case.
Morgan County Judge-Executive and Owners of Salyersville-Based Bridge Contractor Indicted for Kickback Scheme, Fraud, and Money LaunderingRead the Press Release
LEXINGTON, KY - Timothy Alexander Conley, the Morgan County Judge Executive, has been charged with soliciting and accepting kickbacks from a Salyersville, KY., based bridge contractor, in exchange for contract awards, according to a federal indictment unsealed today.
The indictment, filed under seal on Thursday, December 5, charges Conley and Kenneth Lee Gambill and Ruth L. Gambill, the co-owners of PBTHNOJJ Construction, with several offenses arising from the kickback scheme. Conley and Kenneth Gambill are both charged with four counts of mail fraud and one count of theft from a program receiving federal funds. All three defendants are also charged with conspiring to launder money.
Specifically, the indictment alleges that, from early 2009 until August 2013, as part of a mail fraud scheme, Conley rigged competitive bidding processes to select PBTHNOJJ Construction for Morgan County construction contracts. After obtaining PBTHNOJJ Construction’s payments for these contracts, Kenneth Gambill then delivered to Conley cash kickbacks from the contract proceeds.
In addition, Conley and Kenneth Gambill are charged with defrauding a federally-funded program. The indictment alleges that Conley misappropriated money from Morgan County, which received federal funding for emergency services, debris cleanup, and rebuilding efforts following a tornado that swept through West Liberty, KY., on March 2, 2012. As part of the debris cleanup effort, Morgan County contracted with PBTHNOJJ Construction and other entities. Conley allegedly abused his position to ensure that PBTHNOJJ Construction received excessive payments for this work.
Finally, Conley, Kenneth Gambill, and Ruth Gambill are charged with conspiring to launder the proceeds of these crimes, in order to promote ongoing illegal activities and conceal the nature and source of the funds, among other things.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, FBI, and Jack Conway, Kentucky Attorney General jointly announced the indictment today.
The investigation preceding the indictment was conducted by the FBI and the Kentucky Attorney General’s Office. The indictment was presented to the grand jury by Assistant U.S. Attorney Andrew T. Boone.
Conley is scheduled to appear in federal court on Tuesday, December 10 in Lexington at 3:00 pm. Kenneth Gambill will appear in court on December 30, 2013 at 1:00. in Lexington. A date for Ruth Gambill to appear in court has not yet been scheduled. The mail fraud and money laundering counts each carry a maximum penalty of 20 years in prison. The federal program fraud count carries a maximum penalty of 10 years in prison. The maximum fine for each count is $250,000. However, any sentence following a conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
An indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Northern KY. Fireworks Dealer Awaits Sentence for Explosives CrimeRead the Press Release
COVINGTON, KY - Sam Droganes, 48, of Ft. Mitchell, KY., awaits sentencing for being a felon in possession of explosives, a violation of federal law.
Droganes, who will be sentenced in March 2014, pleaded guilty on November 27, 2013 and admitted selling 1.3G (display) fireworks to a confidential informant who was working with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The sale occurred on May 28, 2013, at Droganes’s store, which is located in Covington, KY., Droganes is a convicted felon, having previously been convicted in federal court in 2010 of an offense involving the same type of explosives. Under federal law, convicted felons are prohibited from possessing firearms and explosives.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Stuart L. Lowrey, Special Agent in Charge, ATF, jointly made the announcement.
The investigation was conducted by ATF. Assistant U.S. Attorney Elaine K. Leonhard represents the U.S. Attorney’s Office in this case.
Droganes is currently scheduled to appear for sentencing, before U.S. District Judge Amul R. Thapar, in Covington, on March 20, 2014 at 2:00 p.m. Droganes faces a maximum prison sentence of 10 years. However, any sentence will be imposed by the Court after consideration of the United States Sentencing Guidelines and the applicable federal statutes governing the imposition of sentences.
Former Northern Kentucky School Superintendent Admits Embezzling MoneyRead the Press Release
COVINGTON, KY - The former superintendent for the Dayton Independent School District has admitted in federal court to embezzling school funds during his tenure.
William Rye, 65, of Wilder, KY., pleaded guilty today to one count of embezzlement. Rye waived his right to be indicted by a federal grand jury and pleaded guilty to the embezzlement charge brought by U.S. Attorney Kerry B. Harvey.
In the course of his guilty plea, Rye admitted that, between 2004 and 2012, he embezzled approximately $193,149.22 from the Dayton Independent School District, while serving as school superintendent.
This case is eligible for federal prosecution because the Dayton School District annually receives in excess of $10,000 in federal funds.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation, jointly made the announcement today.
The investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Laura K. Voorhees represents the US. Attorney’s Office in this case.
Rye is currently scheduled to appear for sentencing in Covington on April 22 at 11:00 am. Rye faces a maximum prison sentence of 10 years. However, any sentence would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes governing the imposition of sentences.
Covington Man Awaits Sentence for Defrauding Internet CompaniesRead the Press Release
COVINGTON, KY - Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky and Perrye Turner, Special Agent in Charge, FBI, jointly announced today that a Covington man will be sentenced in March of next year for defrauding two internet companies out of thousands of dollars.
Melvin Dietz, Jr., 39, will be sentenced on March 14, 2014 for wire fraud and aggravated identity theft. Dietz faces a mandatory two year sentence on the aggravated identity theft count and maximum of 20 years on the wire fraud offense.
Dietz pleaded guilty on November 19 and admitted that on or about January 2011 through December 2011, he devised a scheme to defraud two online internet companies, WeBuyUsedCisco.com and Teksavers.com, both of which purchase used Cisco computers and equipment.
Dietz executed his scheme by using PayPal, which is a global e-commerce business allowing payments and money transfers to be made through the Internet. During this time, Dietz set up approximately fourteen PayPal accounts using alias identities. Shortly before or after he created an account, he contacted one of these companies and fraudulently offered to sell them certain Cisco items by misrepresenting that he possessed them.
Through email, he used an alias identity and negotiated a price with a representative of the company for the Cisco equipment. At Dietz’s direction, the company transferred payment to one of the PayPal accounts that Dietz had set up using the same or a different alias identity. Thereafter, Dietz cut off communication and never sent the equipment.
Dietz acknowledged he used or attempted to use the money in his PayPal accounts to purchase items on line from various online retail businesses or remove the money from his alias PayPal accounts in other ways. The money transferred by WeBuyUsedCisco.com to Dietz’s PayPal accounts as a result of his fraud totaled approximately $21,846.25. The amount of money transferred by Teksavers.com to Dietz’s PayPal accounts as a result of his fraud totaled approximately $50,240.
In committing this crime, Dietz knowingly used, without lawful authority, a means of identification of another person, during and in relation to the wire fraud count, in that he used that individual’s social security number to obtain a prepaid Visa card. Dietz used the card to authenticate the account with PayPal for the purpose of furthering his scheme to defraud Teksavers.com.
eBay Incorporated initiated the investigation with law enforcement and fully cooperated with the FBI and the Covington, KY., Police department who prepared the case for prosecution.
Owner of Northern Kentucky Chiropractic Clinic Indicted for Health Care Fraud ConspiracyRead the Press Release
COVINGTON, KY - The owner of a chiropractic clinic in northern Kentucky was indicted today on charges that she conspired to defraud a federal health care benefit program.
A federal grand jury in Covington returned the indictment charging 47-year-old Dr. Andrea Almond, of Cincinnati, with one count of conspiracy to commit health care fraud.
The indictment alleges that from September 2008 until April 2010, Almond, a chiropractor and owner of Newport Chiropractic in Campbell County, allegedly submitted health care claims to Medicaid for chiropractic services which she did not perform or witness. Furthermore, the indictment alleges that Almond was aware that the chiropractors who did perform the services were not enrolled as providers with Kentucky Medicaid, and therefore were not eligible for reimbursement.
According to the indictment, over the course of the conspiracy Almond submitted or caused to be submitted approximately 1,943 claims for payment in the approximate amount of $483,797, and received approximately $95,098 in actual reimbursement from Kentucky Medicaid.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation, Robin Dangleish, Postal Inspector in Charge, United States Postal Inspection Service, and Jack Conway, Kentucky Attorney General, jointly made the announcement today after a federal grand jury in Covington returned the indictment.
The investigation preceding the indictment was conducted by the Federal Bureau of Investigation, the United States Postal Inspection Service, and the investigators with the Medicaid Fraud and Abuse Control Unit with the Kentucky Office of the Attorney General. The indictment was presented to the grand jury by Assistant United States Attorney Laura K. Voorhees.
Almond’s appearance before the United States District Court has not yet been set by the Court in Covington. If convicted, Almond faces a maximum prison sentence of 10 years. However, any sentence following a conviction would be imposed by the Court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.
Paintsville Doctor Agrees to Pay U.S. Government $200,000 to Settle Civil AllegationsRead the Press Release
Doctor has surrendered medical license
LEXINGTON, KY - A former Paintsville, KY., physician has agreed to pay the U.S. Government $200,000 to settle civil allegations that he improperly billed federal health care programs and failed to maintain documentation required to support reimbursement payments.
Under federal law, the Medicare and Medicaid programs reimburse physicians for procedures that are deemed medically necessary. The U.S. Attorney’s Office, on behalf of the Government, contends that, from January 2008 through December 2011, Dr. Don V. Bryson failed to keep documentation that supported the medical necessity of procedures for which he had billed Medicare and Medicaid for reimbursement.
The Government further contends that Bryson had submitted claims seeking reimbursement for services to patients that he failed to properly authorize or oversee.
Under the terms of the settlement agreement, Bryson will return $152,000 to repay the Kentucky Department for Medicaid Services and $48,000 to repay the Medicare program.
Previously, in June 2012, Bryson also agreed with the Kentucky Board of Medical Licensure to surrender his medical license.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky announced the settlement agreement today.
The investigation was conducted by the U.S. Attorney’s Office and the Kentucky Department for Medicaid Services. Assistant U.S. Attorney Valorie D. Smith represented the Government in this case.
Former Clay County Officials Admit to Racketeering ConspiracyRead the Press Release
LEXINGTON, KY - Former public officials from Manchester, KY., admitted in federal court that they conspired to organize a long running criminal enterprise to achieve personal gain and control over the politics in Clay County.
Former longtime Clay County Circuit Judge, Russell Cletus Maricle; schools superintendent, Douglas C. Adams; county clerk, Freddy W. Thompson; democratic election commissioner, Charles W. Jones; and election officer William E. Stivers pleaded guilty to a racketeering conspiracy before U.S. District Judge Karen Caldwell on Wednesday.
The defendants admitted that starting in 2002 they conspired to gain control of the Clay County board of elections and corruptly used the board’s authority to control the outcome of elections in the county. In order to carry out this scheme, the defendants acknowledged that they pooled their money together to bribe voters and that they also appointed corrupt election officers who ensured that the bribed voters delivered for the slate of candidates that the members of the conspiracy wanted to win.
Three other co-defendants, Stanly Bowling, and Debra and Bart Morris previously pleaded guilty to the same charge.
Sentencing for the defendants is scheduled for February. Maricle faces a maximum of 87 months imprisonment; Adams, a maximum of 75 months imprisonment; Thompson, a maximum of 66 months imprisonment; Jones, a maximum of 69 months imprisonment; and Stivers, a maximum of 72 months imprisonment. However, any sentence following a conviction would come after the Court considers the U.S. Sentencing guidelines and the federal statutes.
Winchester Man Convicted of Distributing Heroin Resulting in DeathRead the Press Release
Defendant will receive a minimum of 20 years in prison
LEXINGTON, KY - A federal jury convicted a Winchester, KY., man today of distributing heroin that resulted in an overdose death.
The jury convicted 53 year-old Harold Wayne Salyers on Wednesday evening for distribution of heroin resulting in death, conspiracy to distribute heroin, possession with intent to distribute heroin and distribution of heroin. The jury returned the verdict after approximately three hours of deliberation following two days of trial.
According to testimony, in August of 2012, Salyers distributed heroin to an individual in Clark County who used the heroin, overdosed and died. Evidence at trial established that three individuals witnessed the victim ingest the heroin and that the day after the victim died, Salyers admitted to one of the witnesses, in a recorded conversation, that he distributed the heroin to the victim.
Experts from the Medical Examiner’s Office and the toxicologist testified that the victim’s death was caused by the toxic effects of heroin in the victim’s body.
Evidence further established that Salyers conspired with others to distribute heroin in Clark County from approximately August 2012 until June 2013.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration; and Kevin Palmer, Chief, Winchester Police Department, jointly made the announcement today.
The investigation was conducted by the DEA and the Winchester Police Department. The U.S. attorney’s office is represented by Assistant U.S. Attorney Todd Bradbury.
Salyers’ sentence is scheduled for January. The distribution of heroin resulting in death offense carries a minimum of 20 years in prison and maximum of life. He faces a maximum of 20 years on the other heroin charges. However, any sentence following a conviction would be imposed after the Court considers the U.S. Sentencing Guidelines and the federal statutes.
Lexington Attorney Pleads Guilty to Mail Fraud, Wire Fraud, Distribution of Controlled Substances, Obstruction of Justice and Tax FraudRead the Press Release
LEXINGTON, KY -
A Lexington attorney admitted his involvement in a drug ring and several fraud schemes, where he illegally diverted in excess of a million dollars.
On Wednesday, Seth Johnston, 34, pleaded guilty to two counts of mail fraud and one count each of wire fraud, conspiracy to obstruct of justice, conspiracy to distribute a controlled substance analogue (synthetic marijuana) and tax fraud.
Johnston admitted he was responsible for collecting money for plaintiffs in a civil lawsuit, as part of a settlement regarding the diet drug Fen-Phen. However, Johnston diverted $14,963.15 of the collected money for his own personal use. Angela Ford, the Lexington attorney representing the plaintiffs in the lawsuit, had 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.
Court records state that Ford had 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 documentation 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 hid assets and diverted money for his own personal use.
In addition, Johnston 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 acknowledged that in 2013, he instructed witnesses, who had been subpoenaed to testify at the grand jury regarding the fraud case, 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.
The U.S. attorney’s office for the Eastern District of Kentucky; Robert L. Corso, Special Agent in Charge, DEA; Perrye Turner, Special Agent in Charge, FBI; and Christopher Henry, Special Agent in Charge, IRS, jointly announced the plea today.
The investigation was conducted by the DEA, FBI and IRS. Assistant U.S. Attorneys Erin Roth, Robert Duncan Jr. and Elisabeth Sigler prosecuted the case on behalf of the U.S. attorney’s office.
Johnston is scheduled to be sentenced on March 3, 2014. The tax fraud charge carries a maximum of five years in prison. The remaining offenses each carry a maximum penalty of 20 years imprisonment. However, any sentence imposed by the Court would come after consideration of the U.S. Sentencing Guidelines and the federal statutes.
Four Former City Officials in Martin, Ky Indicted on Fraud ChargesRead the Press Release
Indictment Charges the Former Mayor and Her Daughter
LONDON, KY - A former mayor of Martin, KY., her daughter, and two other city employees have been indicted for engaging in a scheme to defraud the Social Security Administration (SSA) and to misapply federal funds.
The federal indictment filed on Wednesday names former Martin Mayor Ruth Thomasine Robinson, 69; her daughter, Rita Christine Whicker, 42, who formerly directed the Martin Community Center; Ginger Michelle Halbert, 42, a volunteer city employee who worked closely with Robinson; and Ethel Lee Clouse, 68, the bookkeeper for the city.
All four defendants have been charged with conspiracy to defraud the SSA, an agency of the United States; theft of social security disability benefits; and aggravated identity theft. Halbert, Whicker, and Robinson were also charged with misappropriating money from a federal program. The final count of the indictment charges Halbert with knowingly failing to report her employment and earnings to the Social Security Administration.
According to the indictment, from 2006 until January 2013, Halbert, who purportedly worked on a volunteer basis, was secretly being paid with federal funds that were primarily intended for the Martin Community Center and the Martin Housing Authority. To conceal the scheme, the defendants allegedly arranged for the checks to be made payable to Halbert’s son.
The indictment further alleges that Halbert, who was receiving social security disability benefits, intentionally failed to notify SSA of her earned income from the city of Martin. Under federal law, anyone who receives disability benefits is limited in the amount of money he or she can receive from another source and all income must be reported to the SSA so it can properly determine eligibility for benefits.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Perrye Turner, 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 preceding the indictment was conducted by the Federal Bureau of Investigation, Social Security Administration, and the Attorney General’s Office. The indictment was presented to the grand jury by Assistant United States Attorney Kenneth R. Taylor.
The defendants’ appearance before the United States District Court has not yet been set by the Court in Pikeville. The charges of conspiracy and social security fraud carry a maximum of 5 years in prison; the charge of misappropriating money from a federal program carries a maximum penalty of 10 years in prison; and the aggravated identity theft charge has a mandatory minimum penalty of two years in prison upon a conviction.
The indictment of a person by a grand jury is an accusation only, and that person is presumed innocent unless proven guilty.
Three Time Convicted Felon from Nicholasville Sentenced to 15 Years for Unlawful Possession of A FirearmRead the Press Release
LEXINGTON, KY - Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Stuart L. Lowrey, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives; Barry Waldrop, Nicholasville Police Chief and Kevin Corman, Jessamine County Sheriff, jointly announced today that a man with several prior felony convictions was sentenced for a firearm offense.
On Wednesday, U.S. District Judge Danny C. Reeves sentenced 35 year-old Troy Lee Mellott to 15 years in prison for possessing a firearm after having been previously convicted of a felony offense. Under federal law, convicted felons are prohibited from possessing firearms.
Judge Reeves enhanced Mellott’s sentence because Mellott’s criminal history classified him as an “armed career criminal.” Defendants become armed career criminals when they are convicted of unlawfully possessing a firearm after having convictions for three or more violent felonies or serious drug offenses. Because Mellott is an armed career criminal, he was subject by law to the minimum statutory sentence of 15 years to up to life imprisonment.
Mellott admitted that on December 10, 2012, he unlawfully possessed a .380 caliber semiautomatic pistol that he pawned at a pawn shop in Nicholasville, KY.
Mellott pleaded guilty to the charges in June of 2013.
Under federal law, Mellott must 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 prison term.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Hydee R. Hawkins and Special Assistant U.S. Attorney John Hayne.
Williamsburg Couple Sentenced for Committing Series of Bank RobberiesRead the Press Release
LONDON, KY - A Williamsburg, KY., couple was sentenced today for robbing numerous banks in eastern Kentucky and Tennessee.
U.S. District Judge Gregory Van Tatenhove sentenced 32 year-old Jason Fox, aka “The Bad Hair Bandit,” to 20 years, for seven separate counts of bank robbery and armed bank robbery. His wife, Tasha Fox, 28, was sentenced to 10 years, for aiding and abetting in several of those robberies. Both defendants will also be on supervised release for five years, after their prison terms are completed. Judge Van Tatenhove also ordered Jason Fox to pay $80,028.30 in restitution; Tasha Fox is jointly and severally responsible for $57,956.88 of that restitution amount.
In a guilty plea earlier this year, Jason Fox admitted that, in 2011, he robbed a total of seven banks located in Barbourville, KY., Corbin, KY., Pine Knot, KY., Williamsburg, KY., Jellico, Tenn., and LaFollette, Tenn. In five of those robberies, he possessed a semi-automatic handgun; Fox sometimes brandished or pointed the gun at bank tellers as he demanded money.
The banks Fox robbed include: Commercial Bank, in Barbourville, on June 17, 2011; Bank of McCreary County, in Pine Knot, on July 5, 2011; Forcht Bank, in Barbourville, on August 19, 2011; Hometown Bank, in Corbin, on October 25, 2011; the Wal-Mart branch of the L&N Federal Credit Union, in Williamsburg, on December 1, 2011; First Volunteer Bank, in Jellico, Tenn., on June 9, 2011; and the Y-12 Federal Credit Union, in LaFollette, Tenn., on October 28, 2011.
In four of these bank robberies, Tasha Fox drove the “getaway” car for her husband. She also pleaded guilty earlier this year.
Under federal law, both defendants will have to serve at least 85 percent of their respective prison sentence.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, William C. Killian, U.S. Attorney for the Eastern District of Tennessee, and Perrye Turner, Special Agent in Charge, FBI, jointly announced the sentence today.
The investigation was conducted by the FBI. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney Sam Dotson.
Covington Man Indicted and Arraigned for Drug Distribution Causing DeathRead the Press Release
COVINGTON, KY - A Covington, KY., man has been arraigned on federal charges alleging that he sold a quantity of heroin to another individual who died as a result of using the drug.
On September 12, 2013, a federal grand jury in Covington returned a sealed indictment charging 28 year-old Timothy Tingle with distribution of heroin resulting in death. The indictment was unsealed Monday afternoon, following Tingle’s arrest. Tingle subsequently pleaded not guilty to the charges during his initial appearance in federal court. A trial date is set for November 25, 2013.
The indictment alleges that Tingle sold heroin, on or about April 20, 2013 in Kenton County, and that the person who purchased it died from an overdose as a result of using the heroin.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration, jointly announced the indictment and arraignment.
The investigation preceding the indictment was conducted by the Drug Enforcement Administration and the Taylor Mill Police Department. The indictment was presented to the grand jury by Assistant U.S. Attorney Anthony Bracke.
Tingle’s next court appearance is scheduled for September 19, 2013 at 1:30 p.m. If convicted, Tingle faces a minimum of 20 years and up to life in prison, a maximum fine of $1,000,000, and at least 3 years of supervised release. However, any sentence following a conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
An indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which government must prove guilt beyond a reasonable doubt.