Eastern District of Kentucky
Press releases recorded for this federal judicial district.
Former Agriculture Commissioner Admits to Misappropriating Department FundsRead the Press Release
FRANKFORT, KY - Former Kentucky Department of Agriculture Commissioner, Richard Dwight Farmer, Jr., admitted in federal court today that he misappropriated public resources during his tenure in office.
Farmer pleaded guilty to two counts of theft from a program receiving federal funds. Farmer entered into an agreement with the U.S. Attorney’s office which, if approved by the Court, will require him to serve a prison sentence of 21 to 27 months. Additionally, Farmer agreed to pay $120,500 in restitution to the Commonwealth of Kentucky. Judge Gregory Van Tatenhove released Farmer on his own recognizance until his sentencing hearing on January 14, 2014.
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 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 that he actually appropriated to 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.
“Mr. Farmer admitted today that he engaged in a course of criminal conduct which constitutes an egregious abuse of the public trust,” said United States Attorney Kerry B. Harvey. “The people of Kentucky deserved better from Mr. Farmer. I hope that his acknowledgement of guilt will, in some small way, begin to repair the inevitable damage done when an elected official uses his public office to enrich himself through a criminal scheme. I appreciate the excellent work of the prosecutors and law enforcement officers who did the work necessary to bring this matter to a successful conclusion.”
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.
A federal grand jury indicted Farmer in April of this 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 plea today.
The investigation was conducted by the Kentucky Attorney General’s Office and the FBI. The case is being 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.
London Woman Sentenced 30 Years for Child Pornography OffensesRead the Press Release
LONDON, KY - Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Stewart Walker, London Police Chief; and Perrye Turner, Special Agent in Charge, FBI, jointly announced today that a London, KY., woman, who photographed two children engaged in sexually explicit conduct, was sentenced to 30 years in federal prison.
On Tuesday, U.S. District Judge Amul Thapar sentenced 37 year-old Corrine Sherman for producing child pornography, possessing child pornography, and conspiracy. Sherman’s husband and co-defendant, Rickey Sherman, died of a heart attack, while in custody, in July.
In February of this year, a jury convicted both at trial. Evidence presented established that, in 2008 and continuing throughout much of 2011, the Shermans conspired to produce child pornography. During this time period, the couple produced at least 40 images of two, prepubescent children engaged in sexually explicit conduct.
The investigation started when state authorities received a tip that Rickey Sherman had violated conditions of his probation from a previous offense. During that investigation, Corrine Sherman attempted to hide a camera from law enforcement. The camera was eventually recovered and contained the child pornography images.
Rickey Sherman had owned Truck Town Repair in Laurel County. He and his wife were indicted in September 2011.
Under federal law, Corrine Sherman will have to serve at least 85 percent of her prison sentence.
The investigation was conducted by Sargent Joe Smith, with the London Police Department, and the FBI. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney Jason Parman.
London Woman Sentenced 30 Years for Child Pornography OffensesRead the Press Release
LONDON, KY -
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Stewart Walker, London Police Chief; and Perrye Turner, Special Agent in Charge, FBI, jointly announced today that a London, Ky., woman, who photographed two children engaged in sexually explicit conduct, was sentenced to 30 years in federal prison.
On Tuesday, U.S. District Judge Amul Thapar sentenced 37 year-old Corrine Sherman for producing child pornography, possessing child pornography, and conspiracy. Sherman’s husband and co-defendant, Rickey Sherman, died of a heart attack, while in custody, in July.
In February of this year, a jury convicted both at trial. Evidence presented established that, in 2008 and continuing throughout much of 2011, the Shermans conspired to produce child pornography. During this time period, the couple produced at least 40 images of two, prepubescent children engaged in sexually explicit conduct.
The investigation started when state authorities received a tip that Rickey Sherman had violated conditions of his probation from a previous offense. During that investigation, Corrine Sherman attempted to hide a camera from law enforcement. The camera was eventually recovered and contained the child pornography images.
Rickey Sherman had owned Truck Town Repair in Laurel County. He and his wife were indicted in September 2011.
Under federal law, Corrine Sherman will have to serve at least 85 percent of her prison sentence.
The investigation was conducted by Sargent Joe Smith, with the London Police Department, and the FBI. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney Jason Parman.
Former Assistant Director at Nicholasville Day Care Pleads Guilty to FraudRead the Press Release
LEXINGTON, KY - A former employee at a child day care center in Nicholasville, KY., admitted defrauding the company out of thousands of dollars.
On Tuesday, Pamela Sandlin, 55, pleaded guilty to a fraud charge in front of U.S. District Judge Karen Caldwell.
Sandlin 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), a company that annually receives more than $10,000 in federal program funding.
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.
Judge Caldwell has scheduled an evidentiary hearing on December 11 to determine how much money Sandlin took from KCLC. Sandlin will be sentenced during this hearing as well.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge, FBI, jointly announced the plea today.
The investigation was conducted by the FBI. Assistant U.S. Attorney Ken Taylor represents the U.S. Attorney’s office in this case.
Sandlin faces a maximum of 10 years in prison. However, the Court must consider the U.S. Sentencing Guidelines and the federal statues before imposing a sentence.
Former United States Attorney Retires After 46 Year CareerRead the Press Release
LEXINGTON, KY - A former U.S. Attorney, who successfully prosecuted cases involving coal mine officials, insurance executives, doctors, sheriffs, and mayors in eastern Kentucky, Texas and Idaho over a 46 year career, retired from the U.S. Attorney’s office in the Eastern District of Kentucky (USAO-EDKY).
Patrick Molloy, 74, began as an Assistant U.S. Attorney for the USAO-EDKY in 1967 and served as U.S. Attorney from 1977 to 1981. During that time, the office prosecuted several sheriffs for extortion and mail fraud. Molloy was the Commonwealth’s Attorney in Fayette County from 1972 to1977 and he briefly served as interim U.S. Attorney in Idaho in 1993. Molloy was an Assistant U.S. Attorney in Houston, Texas for approximately five years and also was engaged in the private practice of law for a few years.
Molloy educated authorities in several eastern European countries on ways to improve their judicial system. On these international trips, he and others encouraged authorities to develop money laundering laws and create methods for law enforcement to legally seize assets obtained by criminals through unlawful means.
“When I started out we basically had three types of cases in eastern Kentucky – moonshine, property theft, and social security fraud,” said Molloy. “The types of cases we prosecute today are much more complicated. The most rewarding part of the job was getting to learn about a variety of professions through the cases I had. I will miss the people I worked with.”
“Pat’s career stands as a shining example of everything public service should be,” said U.S. Attorney Kerry B. Harvey. “He has made enormous contributions to his community and his nation. Simply put, our communities are better places because of the skill, dedication and unwavering commitment to the cause of justice that he has brought to every case he has touched over a stellar career. Although he leaves us for a well-earned retirement, his example remains for those who continue the work.”
Some of Molloy’s prominent cases include:
• U.S. vs. Manalapan - Mine Safety Violations
In 2013, a Harlan County coal company and several officials pleaded guilty to violating mandatory mine safety standards. The Court imposed a $150,000 fine on Manalapan Mining Company, Inc., which represents the largest criminal fine for a coal company in the EDKY dating back at least two decades.
• U.S. vs. Parker – Civil Rights
In 1983, Molloy prosecuted a water boarding case that occurred on U.S. soil. The defendants, a rural Texas Sheriff and three others, were convicted of torturing suspects in a fashion similar to water boarding. Some of these suspects were arrested on false pretenses.
• U.S. vs. Madon – Vote Buying
Former Pineville, Ky., Mayor Bob Madon and his son, Brent Madon, pleaded guilty in 2009 to a conspiracy to buy votes in a mayoral election.
• U.S. vs. Kelco – Fraud
In March 2003, a viatical company in Lexington, its CEO, president and vice president were convicted of a conspiracy to sell fraudulent life insurance policies. The company executives paid terminally ill people to lie about their health on life insurance applications in order to obtain a policy. The defendants then sold the policies to unsuspecting third parties.
• U.S. vs. Singleton – Pill Mill
Earlier this year, Molloy served as a co-counsel in a case in which a pain clinic owner was convicted of operating pill mills in Georgetown and Dry Ridge. The doctors at these clinics unlawfully distributed pills to thousands of Kentucky patients.
• U.S. vs. Hollingsworth – Civil Rights
In 2010, a deputy jailer in Carter County, Ky., was convicted of sexually abusing female inmates in violation of their civil rights.
Florence Man Sentenced to 18 Months for Illegally Copying Xbox 360 Video GameRead the Press Release
COVINGTON, KY -
A Florence, KY., man, previously convicted of copyright infringement, was sentenced today to 18 months in federal prison.
U.S. District Judge David L. Bunning sentenced 32 year-old Anthony Cappadona for willfully infringing a copyright, by distributing a copyrighted work being prepared for commercial distribution.
Cappandona previously admitted that, in May 2010, he made an Xbox 360 video game entitled “Red Dead Redemption,” available for download on a website, prior to the game’s official release date. Court records state that Cappadona illegally downloaded a copy of the game, then uploaded it to a website, and created links for others to download the game for free.
“Red Dead Redemption” is a copyrighted Xbox video game developed and manufactured by the company Take-Two Interactive; therefore, Cappadona violated copyright laws by improperly distributing the game.
According to court documents, Cappadona also advertised on the website that he modified Xbox consoles, so that they could play illegally copied games.
Under federal law, Cappadona must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for three years following his prison term.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge, FBI, and (Louisville Field Division) jointly announced the sentence.
The investigation was conducted by FBI. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Laura Voorhees.
Drug Dealer Pleads Guilty to Distributing Heroin That Resulted in DeathRead the Press Release
LONDON, KY - Following the first day of trial, a Pulaski County man pled guilty to conspiring to distribute heroin and to distributing heroin that resulted in the death of another.
Anthony Lacortiglia, age 29, admitted that he provided heroin to John Latham on May 4, 2012, and that Latham died as a result of using the heroin. Lacortiglia also admitted to conspiring with others to distribute heroin within Pulaski County. The terms of the agreement require Lacortiglia to be imprisoned for 240 months, provided no changes occur with respect to the law surrounding overdose deaths.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky; Perrye Turner, Special Agent in Charge, FBI; Rodney Brewer, Kentucky State Police Commissioner; Robbie Clark, Acting Director of the Lake Cumberland Area Drug Task Force; and Todd Wood, Pulaski County Sheriff, jointly announced the conviction.
U.S. Attorney Kerry B. Harvey said, “This case highlights the importance of cooperation between federal, state and local law enforcement in fighting the growing epidemic of heroin overdose deaths. A troubling increase in heroin abuse has been detected in the Eastern District of Kentucky. We are committed to using every available tool to combat this problem. Drug dealers should be on notice that we intend to hold them responsible for the consequences of their criminal conduct.”
The investigation was conducted by Detective Jason Browning of the Kentucky State Police, Detective Darrell Kegley of the Pulaski County Sheriff’s Office, Sergeant Jon Williams of the Pulaski County Sheriff’s Office, Agent Mike Walters of the Lake Cumberland Area Drug Task Force, and various agents of the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Jason Parman.
Kentucky Resident Charged with Tax Evasion and Other Tax Fraud ChargesRead the Press Release
WASHINGTON, DC - Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, and Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, jointly announced today that James S. Faller II, of Russell Springs, Ky., was indicted by a federal grand jury in Bowling Green, Ky. Faller, a consultant and private investigator, is charged in an eleven count indictment with obstructing the internal revenue laws, evading his individual income taxes, making and subscribing to a false form that he filed with the Internal Revenue Service (IRS) and failing to file his individual income tax returns.
The indictment, returned on Wednesday, alleges that Faller obstructed the IRS’s ability to collect payment of a substantial penalty he owed to the government and the IRS’s ability to identify his income from 2006 through 2009. According to the indictment, Faller evaded the payment of a $216,000 penalty related to unpaid employment taxes of Call Center Communications Inc., of which Faller was the president. In addition, Faller was charged with evading his individual income taxes from 2006 through 2009. He allegedly failed to report more than $960,000 of income during this four-year period and committed various affirmative acts of evasion.
Faller faces a maximum punishment of three years in prison for the charge of obstructing the internal revenue laws; five years for each count of evading his individual income taxes; three years for making and subscribing to a false form that he filed with the IRS; and one year for each count of failing to file his individual income tax returns. He faces a maximum fine of $100,000 on each count of failing to file his income tax returns and $250,000 for each of the other counts. An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The case resulted from an investigation by special agents of the IRS - Criminal Investigation. Tax Division Trial Attorney Thomas Voracek and Assistant U.S. Attorney Lee Gentry are prosecuting the case.
Kentucky Resident Charged with Tax Evasion and Other Tax Fraud ChargesRead the Press Release
WASHINGTON, DC - Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, and Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, jointly announced today that James S. Faller II, of Russell Springs, KY., was indicted by a federal grand jury in Bowling Green, KY. Faller, a consultant and private investigator, is charged in an eleven count indictment with obstructing the internal revenue laws, evading his individual income taxes, making and subscribing to a false form that he filed with the Internal Revenue Service (IRS) and failing to file his individual income tax returns.
The indictment, returned on Wednesday, alleges that Faller obstructed the IRS’s ability to collect payment of a substantial penalty he owed to the government and the IRS’s ability to identify his income from 2006 through 2009. According to the indictment, Faller evaded the payment of a $216,000 penalty related to unpaid employment taxes of Call Center Communications Inc., of which Faller was the president. In addition, Faller was charged with evading his individual income taxes from 2006 through 2009. He allegedly failed to report more than $960,000 of income during this four-year period and committed various affirmative acts of evasion.
Faller faces a maximum punishment of three years in prison for the charge of obstructing the internal revenue laws; five years for each count of evading his individual income taxes; three years for making and subscribing to a false form that he filed with the IRS; and one year for each count of failing to file his individual income tax returns. He faces a maximum fine of $100,000 on each count of failing to file his income tax returns and $250,000 for each of the other counts. An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The case resulted from an investigation by special agents of the IRS - Criminal Investigation. Tax Division Trial Attorney Thomas Voracek and Assistant U.S. Attorney Lee Gentry are prosecuting the case.
Georgetown Home Builder Convicted of Bank Fraud, Embezzlement, Aggravated Identity Theft and False Loan ApplicationRead the Press Release
LEXINGTON, KY - A home builder from Georgetown, KY., was convicted by a federal jury of fraudulently obtaining more than a million dollars in loans from a Frankfort bank.
The jury convicted 59 year-old Lee C. Tevis of one count of bank fraud, three counts of false loan application, three counts of aiding and abetting bank embezzlement and three counts of aggravated identity theft. Tevis was acquitted on a conspiracy count. The jury rendered the verdict Monday evening, after more than 15 hours of deliberation, following five days of trial.
Evidence at trial proved that, starting in 2006, Tevis began construction on a house and fraudulently obtained loans from American Founders Bank (AFB), by setting up bogus corporations in the names of other people to bypass loan limits.
The evidence furthered revealed 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 $1.4 million in loans from the bank, according to the evidence at trial. The Bank eventually foreclosed on the home that Tevis received the loans for and suffered a significant financial loss in the process.
Jim Tate, the AFB president who approved the loans for Tevis, previously pleaded guilty to bank fraud and will be sentenced on September 10.
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 the conviction.
The investigation was conducted by the FBI and the FDIC-OIG. Assistant U.S. Attorneys Andrew Sparks and Jim Arehart represent the U.S. Attorney’s Office in this case.
Tevis will appear for sentencing on December 3. He faces a maximum of 30 years in prison. However, the Court must consider the U.S. Sentencing Guidelines and the applicable federal statutes before imposing a sentence.
Former Ashland Police Officer Sentenced to 75 Months for Attempting to Illegally Obtain Prescription Drugs and for Firearm OffenseRead the Press Release
ASHLAND, KY - Melvin Charles Schoch, Jr., 30, was sentenced today to 75 months in federal prison for attempting to possess with intent to distribute Oxycodone and using a firearm during a drug offense.
Schoch previously admitted that, in May or June of 2009, while working as an Ashland Police Officer, he and two other individuals invaded a residence in Boyd County. They conducted the home invasion, under the guise of executing a search warrant, in order to obtain Oxycodone pills and/or money for their own personal benefit.
Prior to entering the residence, Schoch provided the others with police tactical equipment to help with the home invasion. Schoch entered the home armed with his duty weapon, a .40 caliber Glock pistol, and placed the two male occupants of the residence in handcuffs. However, Schoch didn’t locate any pills at the residence.
According to the plea agreement, before to the home invasion, Schoch and the others observed activity around the residence and believed there were large quantities of Oxycodone and cash at the residence.
Schoch’s co-defendant, Ellis Pittman, previously pleaded guilty to similar charges and is scheduled for sentencing in September.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Robert L. Corso, Special Agent in Charge, DEA; Rodney Brewer, Kentucky State Police Commissioner and Jack Conway. Kentucky Attorney General jointly made the announcement today.
The investigation was conducted by the DEA, Kentucky State Police, Kentucky Attorney General’s Office and the Morehead Police Department. Assistant U.S. Attorney Ron L. Walker represented the U.S. Attorney’s Office in this case.
Under federal law, Schoch must serve at least 85 percent of his prison sentence.
Hazard Woman Pleads Guilty to Illegally Structuring Bank DepositsRead the Press Release
LONDON, KY - Lois Elaine Smith, 53, of Hazard, KY., pleaded guilty today to charges of currency structuring.
In her guilty plea, Smith admitted she intentionally structured cash deposits, in increments of just under $10,000, into an account at the Peoples Bank and Trust in Perry County. Smith acknowledged that she structured the deposits in this manner to prevent the bank from filing a currency transaction report with the federal government.
Under federal law, financial institutions, such as banks, are required to report to the federal government any currency deposit, withdrawal, or exchange that is over $10,000. It is a violation of federal law to intentionally structure cash transactions to avoid these reporting requirements.
Smith was indicted by a grand jury in February of 2013.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Christopher A. Henry, Special Agent in Charge, Nashville Field Division, Internal Revenue Service, jointly made the announcement.
The investigation was conducted by the IRS, Northern Kentucky Financial Crimes Task Force. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorneys Jordi De Llano and Robert K. McBride.
Smith is currently scheduled to appear before U.S. District Judge Gregory Van Tatenhove for sentencing, in London, on November 21, 2013, at 1:30 p.m. Smith faces a maximum prison sentence of five years. However, any sentence following conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes governing the imposition of sentences.
Twenty-Eight People Indicted for Methamphetamine Conspiracy in Whitley CountyRead the Press Release
CITY, KY - A federal indictment, unsealed today, charges 28 individuals from Whitley County, KY., with a conspiracy to manufacture large quantities of methamphetamine.
Investigators with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Kentucky State Police (KSP), U.S. Marshal’s Office (USMS) and the Williamsburg Police Department arrested eight defendants this morning in Whitley County. All of the other defendants are already in custody.
On Thursday, July 25, a superseding indictment, which is a charging document that alters or changes information from a previous indictment, was returned sealed by a federal grand jury in London. The superseding indictment added 16 new defendants in a conspiracy to distribute at least 500 grams of a methamphetamine mixture over the course of approximately three and a half years. The original indictment, filed in May, charged 12 defendants in the conspiracy. The superseding indictment also charges some of the defendants with additional drug and firearm offenses.
Specifically, 35 year-old James Forest Manning is charged with manufacturing methamphetamine, carrying and using a firearm during and in relation to a drug trafficking offense and being an unlawful user of methamphetamine in possession of firearms. Jamie Mark Gibson 41, and Danny Lee Fyffe, 49, are charged with being unlawful users of methamphetamine in possession of a firearm.
The superseding indictment also alleges that Daniel John Moeser, 44, possessed firearms and explosives after having previously been convicted of a felony offense. Lisa Canada Ball, 49, is charged with being an unlawful user of methamphetamine in possession of firearms and explosives. Both defendants were charged with these offenses in the original indictment.
The other defendants indicted in the case are Bobby Darrell Canada, II, 26; David Allen Davis, 29; Robert Joe Gibson, 23; Michelle Manning, 33; Wayne Marcus, 32; Billy Ray Richardson, 35; Anthony Rose, 32; Jerry White, 36; Beverly Wilson, 28; James Bennett, 39; Wendell Ralph Canada, 31; Ryan David Carlson, 36; George Thomas Hubbard, 49; Mark A. Morrow, 46; Harrison B. Sulfridge, 33; Joanna Cansler, 55; Teanna Marie Cansler, 33; Robert Church, 27; William Helbig, Jr., 36; Suzann Judy Phillips, 49; Anna Davis, 24; Jason Wade Taylor, 31 and Aaron David Ellison, 35;
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Stuart L. Lowery, Special Agent in Charge, Bureau of Tobacco, Firearms and Explosives (ATF), Wayne Bird, Police Chief, Williamsburg Police Department and Loren Carl, U.S. Marshal for the Eastern District of Kentucky, jointly announced the superseding indictment today.
The investigation preceding the indictment was a result of a joint collaboration between the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); Post 11 of the Kentucky State Police, the Williamsburg Police Department; the U.S. Marshal’s Office; Kentucky Division of Probation and Parole; the Whitley County Sheriff’s Department and the Commonwealth Attorney’s Office for the 34th Judicial Circuit.
Arraignments for some defendants are set for August 2, 2013, while the defendants arrested today will make their initial appearances in court tomorrow. The conspiracy charge carries a maximum of 20 years in prison. Manning faces a minimum of five years in prison and a maximum of life for carrying and using a firearm during a drug trafficking crime. Additionally, he faces a maximum of 20 years for the manufacturing methamphetamine charge. The defendants charged with firearm/weapons offenses face a maximum of 10 years imprisonment.
Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial, at which the government must prove their guilt beyond a reasonable doubt.
Jackson Woman Sentenced to 39 Months for Identity Theft and FraudRead the Press Release
LEXINGTON, KY - A Jackson, KY., woman, who previously admitted to stealing someone else’s identity to buy a car, was sentenced to 39 months in federal prison.
On Thursday, U.S. District Judge Karen Caldwell sentenced 45-year old Lisa Ann Salyers for wire fraud and aggravated identity theft. Judge Caldwell also ordered that Salyers pay $5,450.50 in restitution to Paul Miller Ford.
Salyers previously admitted she obtained the date of birth and social security number of another person through the internet. She then assumed the identity of this victim and used it to purchase a car from a Lexington car dealership. Salyers also tried to use the victim’s identity to buy furniture from a Lexington retailer.
Salyers pleaded guilty to these charges in March of 2013.
Under federal law, Salyers must serve at least 85 percent of her prison sentence, and will be under the supervision of the U.S. Probation Office for three years following the completion of her prison term.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Paul R. Johnson, Special Agent in Charge, U.S. Secret Service, jointly announced the sentence.
The investigation was conducted by the U.S. Secret Service. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney Andrew T. Boone.
A Northern Kentucky IRS Employee and A Florida Man Accused of Stealing Identities, Committing Mail Fraud and Filing A False Tax ClaimRead the Press Release
COVINGTON, KY - A financial technician, employed in a Boone County, Kentucky office of the Internal Revenue Service (IRS), has been charged with multiple crimes relating to her unauthorized access of an IRS computer, to obtain personal information about tax payers.
On July 18, 2013, a federal grand jury returned a sealed indictment against Joy Fox, 32, of Independence, KY. The indictment, which was unsealed today, charges Fox with eight counts of intentionally exceeding her authorized access to an IRS computer, for the purpose of improperly obtaining personal identifying information of tax payers. She is also charged with three counts of mail fraud and three counts of aggravated identity theft in relation to the mail fraud.
According to the indictment, another individual, Patrick Sharpe, 23, of Tallahassee, FL., was charged as a co-defendant in the case. Sharpe and Fox allegedly used the personal identifying information of tax payers to obtain online prepaid debit cards, in tax payers’ names, and then attempted to fund the cards using the tax payers’ social security benefits. Once the cards were approved, the defendants caused the cards to be mailed to addresses in Kentucky. Fox and Sharpe are also charged with conspiracy to file a false claim for a tax refund.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, James D. Robnett, Special Agent in Charge, IRS Criminal Investigations Division, Tampa, FL., and Special Agent in Charge Dwaine Brinson, Treasury Inspector General Tax Administration, Chicago Field Division, jointly announced the indictment.
The investigation preceding the indictment was conducted by agents of the IRS, Criminal Investigation Division, Tallahassee, FL., the Leon County Sheriff’s Office, Tallahassee, FL., and agents of the U.S. Treasury Inspector General Tax Administration, Covington, KY. The indictment was presented to the grand jury by Assistant U.S. Attorney Laura Voorhees.
Fox appeared in court today, while Sharpe is scheduled to appear on August 14, 2013. The Court has scheduled trial for September 23, 2013. The mail fraud charges carry a maximum of 20 years imprisonment; the exceeding authorized access charges carry a maximum of 5 years imprisonment; the aggravated identity theft charges carry two years imprisonment, which must run consecutively to any other sentence imposed; and the filing a false claim for refund charge carries a maximum of 10 years imprisonment. The defendants could also be fined a maximum of $250,000. However, any sentence imposed would come after the court considers the U.S. Sentencing Guidelines and the federal statutes.
Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial, at which the government must prove their guilt beyond a reasonable doubt.
Richmond Tax Preparer Sentenced for Preparing False Income Tax ReturnsRead the Press Release
LEXINGTON, KY - Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Christopher A. Henry, Special Agent in Charge, IRS Criminal Investigation Division, Nashville Field Office, jointly announced today that a Richmond, KY., man, who prepared false income tax returns, was sentenced to 36 months in federal prison.
U.S. District Judge Karen Caldwell sentenced 58 year-old James Raymond Kennedy for aiding and assisting in the preparation of false income tax returns. Kennedy had previously admitted he promoted tax deductions, to his clients, that were not authorized by law. Kennedy submitted false tax returns using these deductions, which resulted in the U.S> Government losing approximately $345,000. Kennedy’s clients were unaware that the deductions Kennedy used were not authorized under the tax code.
Kennedy pleaded guilty to the charges in August of last year. He operated J.R. Kennedy and Associates from 2006 through April 2009.
Judge Caldwell ordered Kennedy to report on September 30, 2013, to the Bureau of Prisons, to begin serving his sentence.
This investigation was conducted by IRS, Criminal Investigation Division. Assistant U.S. Attorney Robert K. McBride represented the U.S. Attorney’s Office in the case.
Lexington Man Sentenced to 168 Months for Distributing Child PornographyRead the Press Release
LEXINGTON, KY - A Lexington man, who made child pornography videos available for download over the internet, has been sentenced to 168 months in federal prison.
On Thursday, U.S. District Judge Karen Caldwell sentenced 29 year-old Brett Michael Compton for distribution of child pornography and ordered him to serve 25 years of supervised release following the completion of his prison sentence. Compton is also required to register as a sex offender for the remainder of his life.
According to court documents, in October 2011, an undercover law enforcement agent located two online videos depicting children engaged in sexually explicit conduct. Agents later discovered that Compton had posted these videos from his computer. The videos contained images of prepubescent children.
In December of 2011, during the execution of a search warrant, authorities found approximately 60,000 child pornography images on Compton’s home computer.
Under federal law, Compton must serve at least 85 percent of his prison sentence.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation, and Jack Conway, Kentucky Attorney General, jointly announced the sentence.
The investigation was conducted by the Cyber Crimes Unit with the Kentucky Attorney General’s Office, and the FBI. The U.S. Attorney’s Office was represented in the case by its Fort Mitchell Branch Office.
Harlan County Mining Company Sentenced for Violation of Health and Safety StandardsRead the Press Release
LONDON, KY - A federal judge imposed a fine and ordered a period of probation for a Harlan County underground mining company, which violated mandatory safety and health standards established by the Mine Safety Health Administration (MSHA).
According to a sentencing document filed with the court on Monday, Manalapan Mining Company, Inc., received three years of probation and a $150,000 fine for allowing miners to work in hazardous conditions.
The sentence represents the largest criminal fine in the last 20 years imposed on a mining company in the Eastern District of Kentucky (district includes 67 counties). Mine officials previously pleaded guilty and were sentenced for their roles in the case.
As part of the probationary period, a probation officer is permitted to visit the mine to observe business practices. In addition, the conditions prohibit the company from attempting to hide assets. Specifically, the company can’t sell or transfer assets, without first notifying the probation officer, until the fine is paid off. Manalapan will pay $5,000 per month over a three year period to satisfy the fine. If the company fails to make payments, probation officers can conduct unannounced examinations of the company’s finances and records.
According to court records, from June 11, 2011 until June 29, 2011 the defendants allowed miners at the Harlan County P1-mine to work under roof conditions and operate electrical equipment that did not meet MSHA’s mandatory safety standards. Specifically, miners used mobile bridge carriers without a canopy, which is needed to protect miners from roof falls. Court records state that the canopies were available but never installed.
Under MSHA regulations, certain mine officials are required to perform daily inspections of the working sections of the mine and examine the equipment before allowing miners to work. After inspecting the mine, these officials are required to make written records of any hazardous conditions and address safety issues prior to the miners working in those sections of the mine.
Two of the defendants admitted they intentionally failed to document the hazardous working conditions in the mine and falsely signed and certified records stating that there were no hazardous conditions.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Joseph A. Main, Assistant Secretary of Labor, Mine Safety and Health Administration, jointly announced the sentence today.
The investigation was conducted by MSHA. The case was prosecuted by Assistant U.S. Attorney Patrick H. Molloy and Jason Grover with the Department of Labor.
Harlan County Mine Officials Sentenced for Violating Safety StandardsRead the Press Release
LONDON, KY - Former officials from an underground coal mine operation in Harlan County, KY., were sentenced today for violating mine safety standards.
U.S. District Judge Gregory Van Tatenhove sentenced mine foreman, Bryant Massingale, 53, of Cawood, KY., mine superintendent, Joseph Miniard, 54, of Smith, KY., and operations manager, Jefferson Davis, 47, of Harlan, KY., for violations of the Mine Safety and Health Administration’s (MSHA) mine safety standards.
Miniard received a $3,000 fine and three years of probation for a misdemeanor and felony offense of failing to report and record a hazardous condition. Judge Van Tatenhove ordered Miniard to serve his initial six months in home incarceration to be followed by a six month period of home detention. Massingale was fined $3,000 and sentenced to three years of probation, with six months to be served in home confinement, for failing to report and record a hazardous condition. Davis was fined $5,000 and sentenced to three years of probation for a misdemeanor offense of failing to provide protective canopies over persons operating mining equipment.
Judge Van Tatenhove scheduled a hearing to determine what fine, if any, to impose for Manalapan Mining Company.
According to court records, from June 11, 2011 until June 29, 2011 the defendants allowed miners at the Harlan County P1-mine to work under roof conditions and operate electrical equipment that did not meet MSHA’s mandatory safety standards. Specifically, miners used mobile bridge carriers without a canopy, which is needed to protect miners from roof collapses. Court records state that the canopies were available but never installed.
Under MSHA regulations, certain mine officials are required to perform daily inspections of the working sections of the mine and examine the equipment before allowing miners to work. After inspecting the mine, these officials are required to make written records of any hazardous conditions and address safety issues prior to the miners working in those sections of the mine.
Massingale and Miniard admitted they intentionally failed to document the hazardous working conditions in the mine and falsely signed and certified records stating that there were no hazardous conditions.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Joseph A. Main, Assistant Secretary of Labor, Mine Safety and Health Administration, jointly announced the sentences today.
The investigation was conducted by MSHA. The case was prosecuted by Assistant U.S. Attorney Patrick H. Molloy and Jason Grover with the Department of Labor.
Pulaski County, KY. Sheriff's Deputy Indicted for Federal Civil Rights ViolationsRead the Press Release
WASHINGTON, DC - U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky, and Assistant Attorney General Thomas E. Perez of the Civil Rights Division, announced today that Stephen Molen, a Sheriff’s Deputy with the Pulaski County Sheriff’s Office in Pulaski County, KY., was indicted by a federal grand jury on two counts of violating the civil rights of victims by using excessive force in October 2009 and October 2011.
Count one of the indictment alleges that on Oct. 2, 2009, Molen assaulted a victim identified in the indictment as “D.W.,” resulting in bodily injury. Count two of the indictment alleges that on Oct.7, 2011, Molen assaulted a victim identified in the indictment as “G.C.,” also resulting in bodily injury.
If Molen is convicted of these charges, he will face a statutory maximum punishment of 10 years in prison for each count.
The investigation was conducted by the Louisville Division of the FBI. The case will be prosecuted by Assistant U.S. Attorneys Pat Molloy and Ron Walker of the Eastern District of Kentucky and Civil Rights Division Trial Attorney Ali Ahmad.
The charges set forth in an indictment are merely accusations and the defendant is presumed innocent until proven guilty.
Kentucky Pain Clinics, Pharmacy and Owner Convicted by Jury on All CountsRead the Press Release
LEXINGTON, KY - The owner of pill mills in Georgetown, KY., and Dry Ridge, KY., which illegally dispensed prescription drugs to thousands of patients, was found guilty on all 21 counts of drug trafficking, money laundering, opening and maintaining a drug involved premise and conspiracy charges.
On Thursday, the jury returned guilty verdicts against 45 year-old Ernest William Singleton and his corporate fronts— Double D Holdings, LLC and S and R Medical Enterprises, LLC. These entities, controlled by Singleton, in turn owned Central Kentucky Bariatric and Pain Management; Central Kentucky Family Pharmacy of Georgetown and the Grant County Wellness Center in Dry Ridge, KY. The two clinics were convicted of the same charges as Singleton. Double D Holdings was convicted on drug trafficking and money laundering offenses. The pharmacy was convicted of money laundering charges. The jury returned the verdict after approximately three hours of deliberation, following three weeks of trial.
According to evidence presented at trial, starting in October of 2010 and continuing until February 2013, doctors at the clinics prescribed Diazepam and Ultram outside the scope of professional practice, not for a legitimate medical purpose, and under Singleton’s direction. Singleton then used his businesses to launder the proceeds gained from the drug trafficking.
Additionally, the jury found that Singleton used the drug proceeds to purchase a house in Willisburg, KY., a boat, farmland, and farm equipment, among other items. Singleton will have to forfeit bank accounts consisting of $427,834.34, more than 20 firearms, over 40 pieces of farm equipment, vehicles, and livestock that either facilitated the crimes or were purchased with proceeds obtained from his criminal offenses.
The evidence at trial 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.
Testimony also revealed that when some doctors complained to Singleton, about the volume of patients, he instructed them not to reduce their patient load and told them “if we don’t give them (patients) what they want, they won’t come back.” Doctors testified that they could not provide adequate medical care under Singleton’s guidelines. Two of the doctors employed by Singleton, Lea Marlow and Gregory White, pleaded guilty earlier this month to conspiring to distribute controlled substances outside the scope of professional practice and without a legitimate medical purpose.
Other evidence established that the pain clinics operated on a cash-only basis and did not accept insurance. New 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.
“Mr. Singleton is a drug dealer who used his business as a front for his criminal scheme,” said Kerry Harvey, U.S. Attorney for the Eastern District of Kentucky. “We will continue to pursue those who operate pill mills that bring so much pain to our communities. This successful prosecution exemplifies the sort of interagency collaboration that is necessary to effectively combat the scourge of illegal drug trafficking in our Commonwealth. We congratulate our law enforcement partners in this case and appreciate the great work of our trial team.”
“This verdict sends a clear message that drug and money laundering violations are serious crimes against the American public. IRS Criminal Investigation, along with our law enforcement partners, plays a very important role in the successful investigation and prosecution of these types of financial crimes,” said Christopher A. Henry, Special Agent in Charge, IRS Criminal Investigation, Nashville Field Office.
“The defendant’s greed came at a substantial cost to many families in the Commonwealth,” said Attorney General Jack Conway. “This case is a perfect example of why entrepreneurs should not be in control of pain management clinics, I appreciate the hard work of my Drug Investigative Branch and prosecutors who worked in coordination with our state and federal law enforcement partners to bring the defendant to justice and obtain this guilty verdict."
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Robert L. Corso, 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. Attorneys Ron Walker and Patrick Molloy with the U.S. Attorney’s Office, and Special Assistant U.S. Attorney Shawna Kincer, who is the Executive Director of Special Prosecutions with the Kentucky Attorney General’s Office, prosecuted the case.
Singleton faces up to 20 years in prison for both the money laundering and drug trafficking conspiracies. The businesses face a maximum of fine of $250,000. However, any sentences following conviction would be imposed after the Court reviews the U.S. Sentencing Guidelines and the federal statutes.
Four Eastern Kentuckians Sentenced for Roles in Kidnapping and Assaulting A Letcher County ManRead the Press Release
LONDON, KY - Four Harlan County, KY., relatives were sentenced today by U.S. District Judge Gregory Van Tatenhove for their roles in kidnapping and assaulting Kevin Pennington, a gay man. David Jason Jenkins (“Jason”), 39, received 30 years in prison, Anthony Ray Jenkins, 22, 17 years in prison, Mable Ashley Jenkins (“Ashley”), 20, 100 months in prison and Alexis LeeAnn Jenkins, 20, 8 years in prison.
In October 2012, a federal jury in London, KY., convicted Jason Jenkins and Anthony Jenkins of kidnapping and conspiracy charges related to the April 4, 2011 assault of Pennington. The jury acquitted the men of violating the sexual orientation provision of the Matthew Shepard James Byrd, Jr. Hate Crimes Prevention Act. Testimony at trial established that the two men, who are cousins, carried out the crime with help from their relatives - Ashley Jenkins and Alexis Jenkins, who both pleaded guilty prior to trial to aiding and abetting kidnapping and aiding and abetting the hate crime assault against Pennington. Both women testified against the defendants. The women’s guilty pleas to federal hate crime charges constituted the first federal convictions in the nation under the sexual orientation provision of the Matthew Shepard James Byrd, Jr. Hate Crimes Prevention Act.
The evidence at trial established that the four relatives planned in advance of the assault to kidnap Pennington, take him to a remote location and beat him to death. After luring Pennington by false pretenses into a truck driven by Anthony Jenkins, the group drove Pennington up a deserted mountain road into Kingdom Come State Park, where they dragged Pennington into the road and beat him.
The evidence also established that Pennington escaped while the two men were searching in the back of the truck for a tire iron to use to kill Pennington. Pennington ran off the road and threw himself over a ledge, where he hid behind a rock until the group finally gave up searching for him and drove away. Pennington staggered part-way down the mountain, where he found a ranger shack, broke a window and called 911.
Ashley and Alexis Jenkins both testified that they and the men had agreed in advance to lure Pennington into the truck, drive him to a deserted area and beat him because of his sexual orientation. The women also testified that during the beating, they all used anti-gay slurs and yelled “Kill the faggot!” and that the group intended to kill Pennington.
“Justice imposes a heavy price on those who engage in the sort of gratuitous violence that led to this prosecution,” said Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky. “The defendants’ crimes were brutal and cruel. They fully deserve the sentences delivered by the Court. The message is clear-our society will not tolerate such horrific conduct. The team of dedicated professionals who investigated and successfully prosecuted this case are to be congratulated for their fine work. We also thank our state and local partners who played an important role in achieving a just result in this matter.”
“We are pleased that this matter has been successfully resolved and that justice has been done,” said Perrye K. Turner, Special Agent in Charge of the FBI in Kentucky. “We feel the length of the sentences sufficiently reflects the seriousness of these violent acts”
This case was investigated by Special Agents Anthony Sankey and Mike Brown with the FBI and was prosecuted by Assistant U.S. Attorney Hydee Hawkins from the U.S. Attorney’s Office for the Eastern District of Kentucky, and Trial Attorney Angie Cha from the Civil Rights Division.
Lexington Man Convicted of Distributing Cocaine in Central KentuckyRead the Press Release
LEXINGTON, KY - Ramiro Ozuna Guerrero, 45, of Lexington, KY., was convicted Friday afternoon by a federal jury of conspiring to distribute 5 kilograms or more of cocaine.
The jury returned the verdict after a 2-day trial. The evidence established that Ozuna-Guerrero acted as a courier for a central Kentucky cocaine trafficking organization. The evidence also established that on July 24, 2012, Ozuna-Guerrero departed Lexington for Mexico, where he obtained over 5 kilograms of cocaine. Ozuna-Guerrero returned to Lexington on July 29, 2012, and provided the cocaine to Valentin Garcia-Ruiz.
On July 29, 2012, law enforcement arrested several participants in the conspiracy, including Ozuna-Guerrero, Garcia-Ruiz and Mario Sanchez Sr. Law enforcement also executed several search warrants which resulted in the recovery of over 1.5 kilograms of cocaine, 3 firearms, and $210,000, the monetary equivalent of 7-8 kilograms of cocaine.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration (DEA), and Rodney Brewer, Commissioner, Kentucky State Police (KSP), jointly made the announcement today.
The investigation was conducted by the DEA, KSP, and the Lexington Division of Police. The United States was represented in the trial by Assistant United States Attorney Robert M. Duncan, Jr.
Ozuna-Guerrero is currently scheduled to appear for sentencing before Senior District Judge Joseph M. Hood, in Lexington, on September 16, 2013, at 10:30 a.m. Ozuna-Guerrero faces a minimum prison sentence of 10 years and maximum prison sentence of Life. However, his sentence will be imposed by the court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.
Winchester Man Faces Charges for Distributing Heroin Resulting in DeathRead the Press Release
LEXINGTON, KY - A Winchester, KY., man, accused of distributing heroin to an individual who died of an overdose, made his first appearance in federal court today.
Harold Wayne Salyers, 53, was indicted on June 6 for distribution of heroin resulting in death, conspiracy to distribute heroin, possession with intent to distribute heroin and distribution of heroin.
Magistrate Judge Robert Wier advised Salyers of the charges and scheduled an arraignment for Tuesday, June 18. Salyers remains in custody.
According to the indictment, on August 7, 2012, Salyers distributed heroin to an individual in Clark County who used the heroin, overdosed and died. The indictment also alleges 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 preceding the indictment 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.
If convicted of the distribution resulting in death charge, Salyers faces a minimum prison sentence of 20 years and a 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.
The indictment of a person by a grand jury is an accusation only and that person is presumed innocent unless proven guilty.
Chicago Man Sentenced to 125 Months for Two Bank Robberies in Florence, KYRead the Press Release
COVINGTON, KY - A Chicago man, who has several prior criminal convictions, was sentenced to 125 months in federal prison for committing two bank robberies in Boone County.
U.S. District Judge David Bunning sentenced 49 year-old Bernard Beaver Russell on Thursday and placed him on supervised release for 3 years after he completes his prison term. Judge Bunning ordered the sentence to run consecutively to a previous state court sentence of 7 ½ years for driving a stolen car and engaging in a high-speed chase after committing the bank robberies.
Russell admitted to robbing a Huntington Bank branch and a Central Bank branch in Boone County on February 9, 2012.
Russell entered his guilty plea on February 28, 2013. Under federal law, he must serve at least 85 percent of his prison sentence.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation, jointly announced the sentence.
The investigation was conducted by the Federal Bureau of Investigation and the Boone County Sheriff’s Department. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney Tony Bracke.
London Doctor Sentenced for Evading TaxesRead the Press Release
LONDON, KY - A London, KY., physician was sentenced today to 18 months in prison to be followed by six months of home incarceration for evading federal income taxes.
U.S. District Court Judge Gregory F. Van Tatenhove sentenced Werner Grentz, 64, for tax evasion and ordered him to pay the IRS approximately $900,000 for taxes that Grentz owes for the years 1999 to 2010.
According to the plea agreement, in one of those years, Grentz made $356,073 in taxable income in 2009 while working as an independent physician contractor for a hospital in Jellico, Tenn., and a medical office in London, KY. Grentz previously admitted that he hid his income by having his earnings deposited into bank accounts of companies that he controlled.
Grentz pleaded guilty to the charge in January 2013.
Under federal law, Grentz must serve 85 percent of his prison sentence. Following his release, he will be under the supervision of the U.S. Probation Office for three years.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Kathryn M. Keneally, Assistant Attorney General for the Tax Division, and Christopher A. Henry, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, jointly made the announcement.
The investigation preceding the indictment was conducted by the Internal Revenue Service, Criminal Investigation Division. The United States was represented in the case by Assistant U.S. Attorney John Patrick Grant and Kenneth C. Vert, Trial Attorney, U.S. Department of Justice Tax Division.
Paintsville Doctor Sentenced to 75 Months for Pill ConspiracyRead the Press Release
LEXINGTON, KY - A former Paintsville, KY., doctor, who previously admitted that he unlawfully dispensed approximately 50,000 prescription pills to individuals in Eastern Kentucky, was sentenced today to 75 months in prison, to be followed by three years supervised release.
U.S. District Judge Amul Thapar sentenced 66-year-old Richard Albert for conspiring to distribute and dispense controlled substances. Albert also agreed to forfeit more $630,000, which represents proceeds from his conspiracy. Albert was also ordered to pay $100,000 in community restitution.
Albert admitted that, from January 2009 until February 2011, he wrote numerous fraudulent prescriptions to individuals without a legitimate medical purpose. He typically wrote prescriptions for 100 (10 milligram) Percocet pills in exchange for $200 cash. Court records indicate that Albert frequently wrote approximately 40 to 50 fraudulent prescriptions in a given day.
According to the plea agreement, Albert wrote prescriptions to people who visited his clinic, his private residence, and a closed chiropractor’s office in Johnson County. During these visits, Albert performed little to no examination before writing the prescriptions. Patients who returned to the clinic after their initial visits received prescriptions without visiting with Albert at all.
In many cases, Albert signed his name to blank prescriptions and had an office assistant fill out the actual prescription. He also back dated information into his medical files to cover up the scheme.
During the course of the conspiracy, Albert worked at Care More Pain Management; and after resigning from Care More, he opened his own pain clinic. Albert was employed by Care More Pain Management owners Tammy Cantrell, of Oil Springs, KY., and Shelby Lackey, of Williamsport, KY. They pleaded guilty in April to conspiracy to distribute and unlawfully dispense Oxycodone and maintaining a drug involved premise.
The investigation started in 2009 when investigators with the Kentucky Attorney General’s Office observed large congregations of people routinely lined up outside Care More’s pain clinic.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Jack Conway, Kentucky Attorney General and Robert L. Corso, Special Agent in Charge, DEA, jointly announced the plea.
The investigation was conducted by the DEA, the Kentucky Attorney General’s Office and the Paintsville Police Department. Assistant U.S. Attorney Roger West represented the U.S. Attorney’s Office in this case.
London Physician Pleads Guilty to Health Care Fraud Charges in First Case of Its Kind in KentuckyRead the Press Release
FRANKFORT, KY - A London, KY., cardiologist pleaded guilty to charges that he falsely recorded the severity of patients’ illnesses in order to receive payment for numerous heart procedures.
Sandesh Rajaram Patil, 51, a former cardiologist at St. Joseph’s Hospital in London, admitted Tuesday in Frankfort to making false statements regarding the placement of heart stents. Stents are metal tubes surgically inserted into a patient’s arteries in order to improve blood flow.
Patil reached an agreement with the U.S. Attorney’s Office to serve a prison term between 30 and 37 months, pending a judge’s approval. Patil is scheduled for sentencing on August 27, 2013. St Joseph’s hospital has repaid the government $256,800 for cardiac stent procedures that Patil falsely submitted for reimbursement in 2009 and 2010.
Patil is the third cardiologist in the nation, and the first in Kentucky, to be federally prosecuted for health care fraud related to the placement of heart stents.
“Dr. Patil violated the public’s trust in physicians,” said Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky. “Both patients and the entities that pay for medical services trust that our physicians will accurately and honestly assess a patient’s medical condition. We will aggressively pursue any physician or provider that breaches this trust and places their own financial well-being ahead of the well-being of the patients.”
Under federal law, Medicare and Medicaid reimburse physicians for procedures that are deemed medically necessary. For a cardiac stent procedure to qualify as a medical necessity, it is generally accepted that a patient must have at least 70 percent blockage of an artery and symptoms of blockage. Patil admitted that he placed stents in arteries that had substantially less than 70 percent blockage. Patil nonetheless recorded blockage of 70 percent or more in patient documents to guarantee payment from Medicare and Medicaid.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation, and Jack Conway, Kentucky Attorney General, jointly announced the plea.
The investigation was conducted by the Federal Bureau of Investigation, the Kentucky Attorney General’s Medicaid Fraud Abuse and Control Unit, and the Department of Health and Human Services.
Defendant is the Third Cardiologist Nationwide to be Criminally Prosecuted for Health Care Fraud Related to the Placement of Heart Stents
Career Offender from Cincinnati Sentenced to 262 Months for Possession of A Firearm in Furtherance of Drug TraffickingRead the Press Release
COVINGTON, KY - A Cincinnati man, who has several prior criminal convictions, was sentenced to 262 months in federal prison for possessing a firearm in furtherance of his drug trafficking activity in northern Kentucky.
On Wednesday, U.S. District Judge Amul Thapar sentenced 35 year-old Mitchell Blankumsee and also ordered that he be placed on supervised release for five years after he completes his prison term. Blankumsee received an enhanced sentence because he qualifies as a career offender, which means he had two or more drug trafficking or violent crime convictions at the time of his most recent offense.
In this case, Blankumsee admitted to distributing and selling heroin in Newport, KY., on July 24, 2012. He also possessed crack cocaine and a loaded firearm at the time of his arrest on August 29, 2012. Blankumsee acknowledged that he intended to sell the crack cocaine and that he possessed the firearm to assist him in trafficking drugs.
Blankumsee was previously convicted of selling crack cocaine, in Kenton County, in 1998; of possession of cocaine, in Hamilton County, Ohio, in 1999; and of trafficking in crack cocaine, in Campbell County, in 2005. He was released from prison for his 2005 offense shortly before committing this most recent offense.
Blankumsee entered his guilty plea on February 1, 2013. Under federal law, Blankumsee must serve at least 85 percent of his prison sentence.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Stuart L. Lowrey, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms & Explosives (Louisville Field Division), jointly announced the sentence.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms, & Explosives, the Newport Police Department, and the Highland Heights Police Department. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney Tony Bracke.
Cincinnati Man Sentenced to 162 Months for Conspiracy to Distribute Heroin in Northern KY and OhioRead the Press Release
COVINGTON, KY - A Cincinnati man who previously admitted to participating in a conspiracy to distribute heroin was sentenced to 162 months in federal prison.
U.S. District Judge David Bunning sentenced 43 year-old Lee Moore on Tuesday and also ordered him to serve 8 years of supervised release after he completes his prison term.
Moore admitted that over the course of approximately 15 months he distributed over 100 grams of heroin throughout northern Kentucky and southern Ohio. He also acknowledged transporting large amounts of a substance used to cut heroin for distribution. Moore was previously convicted of felony drug trafficking offenses in Ohio and Georgia.
Moore pleaded guilty on January 25, 2012. A co-defendant, Raymond Hill, Jr., was sentenced to 276 months in prison on May 16, 2013.
Under federal law, the defendants must serve at least 85 percent of their prison sentence.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration, Detroit Field Division, jointly announced the sentence.
The investigation was conducted by the DEA and the Cincinnati Police Department. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney Tony Bracke.
Texas Man Sentenced to 6 Years for Conspiring to Distribute Methamphetamine in Northern KY.Read the Press Release
COVINGTON, KY - A Texas man was sentenced to 72 months in federal prison for his role in a conspiracy to distribute methamphetamine in northern Kentucky.
U.S. District Judge David Bunning sentenced 52-year-old Michael Brian Brown on Thursday and placed him on supervised release for five years after he completes his prison term.
Brown admitted to distributing over 50 grams of pure methamphetamine from November of 2011 through April of 2012. He shipped between 1/8 ounce and an ounce of methamphetamine to Kenton County on approximately 12 occasions. Brown’s co-defendant, Michael Harney, received these shipments and distributed the methamphetamine in different areas in Northern Kentucky. In April of this year, Harney was sentenced to 53 months in prison.
Under federal law, Brown must serve 85 percent of his prison sentence.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration (DEA), jointly announced the sentence.
The investigation was conducted by the DEA. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney Tony Bracke.
Somerset Optometrist and Eye Care Group Sued for Medicare and Medicaid FraudRead the Press Release
CITY, KY - The U.S. Attorney’s Office filed a lawsuit today against a Somerset optometrist and his practice group, alleging that Dr. Philip Robinson and Associates in Eye Care P.S.C., defrauded the Medicare and Medicaid programs.
The lawsuit alleges that the defendants sought and received payment from Medicare and Medicaid for unnecessary eye examinations and for services Robinson didn’t provide.
According to the complaint, Robinson frequently visited area nursing homes and often claimed to treat more than 100 nursing home patients in a single day. The complaint alleges that on certain dates, these services would have required more than 20 hours’ worth of direct patient care per day, and that Robinson was not working inside these nursing homes more than 8 hours per day.
The complaint also claims that the defendants sought payment for routine monthly eye examinations that were unreasonable and unnecessary given the patients’ conditions. Many nursing home patients received an eye examination from Robinson every four to five weeks for five years or more. At times, Robinson billed Medicare for certain eye examinations more than any other optometrist in the United States.
The complaint accuses the defendants of violating the False Claims Act. If found liable, the defendants would face financial penalties between $5,500 and $11,000 per false claim, and would have to repay Medicare and Medicaid three times the amount of the U.S. Government’s loss for the fraud.
“Under the guise of caring for nursing home residents, these defendants exploited the Medicare and Medicaid programs,” said Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky. “Individuals paying for eye care with money from their own pocket would not be expected to pay a doctor to simply monitor their vision with a monthly exam, especially if the exams were as brief and superficial as what Robinson provided. Health care programs funded with taxpayer dollars are no different.”
The investigation preceding the complaint was conducted by agents with the Department of Health and Human Services, Office of Inspector General and the Kentucky Attorney General’s Medicaid Fraud and Abuse Control Unit. Assistant U. S. Attorney Paul McCaffrey will represent the U.S. Attorney’s Office in this case.
Office Manager of Northern Kentucky Company Sentenced to 51 Months for Mail Fraud and Aggravated Identity TheftRead the Press Release
COVINGTON, KY - Pamela Brown, 43, of Independence, Ky., was sentenced today to 51 months in federal prison by U.S. District Judge David L. Bunning for mail fraud and aggravated identity theft. Judge Bunning also ordered Brown to pay $261,182.45 in restitution.
Brown previously admitted that over a seven year period she embezzled more than $261,000 from her employer, Northern Kentucky Title, Inc. Brown, who worked as the company’s office manager and bookkeeper, also acknowledged that she wrote checks issued from the business’ accounts to pay her personal expenses. She executed this by unlawfully accessing a signature stamp in the business owner’s name.
Brown pleaded guilty to the charges in January of 2013.
Under federal law, Brown must serve 85 percent of her prison sentence, and, upon release, will be under the supervision of the U.S. Probation Office for three years.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge of the Federal Bureau of Investigation, Louisville Division, jointly made the announcement today.
The investigation was conducted by the FBI and local law enforcement. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Christopher L. Nasson.
Northern Kentucky Tax Examiner Accused of Destroying Tax FormsRead the Press Release
COVINGTON, KY - An employee at the IRS Service Center in Kenton County, KY., is accused of destroying hundreds of tax forms.
A federal grand jury returned an indictment Thursday charging Brady James, 30, of Burlington, KY., with one count of destruction of records with intent to impede proper administration of a matter within an agency of the United States.
According to the indictment, in April of this year, James destroyed at least 800 1041 federal income tax return forms that had been submitted to the IRS. These forms are used for individuals earning income from estates and trusts. James worked as a tax examining technician.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Special Agent in Charge Dwaine Brinson, Treasury Inspector General Tax Administration, Chicago Field Division, jointly announced the indictment.
The investigation preceding the indictment was conducted by agents with the Treasury Inspector General for Tax Administration. The indictment was presented to the grand jury by Assistant U.S. Attorney Laura Voorhees.
A date for James to appear in federal court has not yet been set. If convicted he faces a minimum of probation and a maximum of 20 years in prison. However, any sentence following a conviction would come after the court considers the U.S. Sentencing Guidelines and the federal statutes.
The indictment of a person by a grand jury is an accusation only, and that person is presumed innocent unless proven guilty.
Northern Kentucky Bank Employee Accused of Embezzling More Than $130,000Read the Press Release
COVINGTON, KY - A federal grand jury returned an indictment Thursday charging 34-year-old Rebecca Hatfield with bank embezzlement, 46 counts of false entries in bank records, and making a false statement.
According to the indictment, from December 2007 through August 2011, Hatfield embezzled approximately $135,700 from the Bank of Kentucky in Florence, KY.
The indictment further alleges that Hatfield intentionally made false entries into the accounting records and falsely told an FBI agent that she had not embezzled the money and suspected that another bank employee may have done so.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation (FBI), jointly made the announcement today.
The investigation preceding the indictment was conducted by the FBI. The indictment was presented to the grand jury by Assistant United States Attorney Christopher L. Nasson.
Hatfield’s appearance before the United States District Court has not yet been set. If convicted, Hatfield faces a minimum of probation and a maximum prison sentence of thirty years. However, any sentence following conviction would be imposed by the court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.
The indictment of a person by a grand jury is an accusation only, and that person is presumed innocent unless proven guilty.
U.S. Attorney's Office Announces Significant Management ChangesRead the Press Release
LEXINGTON, KY - The U.S. Attorney for the Eastern District of Kentucky, Kerry B. Harvey, announced a number of leadership changes today including a new top assistant.
Harvey announced that Carlton Shier IV will serve as the First Assistant U.S. Attorney, Robin Gwinn will lead the office’s civil division and Bob McBride will manage the Fort Mitchell, KY., branch office.
As First Assistant, Shier will serve as Harvey’s top advisor and support him in managing the operations of the Lexington headquarters and branch offices located in Fort Mitchell and London, KY., which, altogether, includes a staff of nearly 100 employees and contractors. He will work closely with leaders of the office’s administration, appellate, asset forfeiture, criminal and civil divisions, and will participate in all aspects of managing the operation.
Shier, a Lexington native, had served as chief of the office’s civil division since September of 2010. During his tenure, the division marked several accomplishments, including negotiating a settlement with an Erlanger nursing home in a landmark case. It marked the first time in Kentucky that the False Claims statute was used in a case in which a nursing facility was sued alleging a systemic failure of care for its residents.
Prior to joining the U.S. Attorney’s Office, Shier worked as the Deputy General Counsel for the Kentucky Cabinet of Health and Family Services. He also has worked at the Kentucky Attorney General’s Office and with the Fayette County Attorney’s Office. Shier graduated from Henry Clay High School and Centre College. He received his Master’s Degree in Justice Administration in 1994 and his law degree from the University of Louisville in 1997.
Gwinn, of Lexington, will lead a civil division consisting of approximately 20 attorneys and legal assistants. The civil division represents the United States in a wide array of litigation filed in the Eastern District of Kentucky, including affirmative efforts to recover taxpayer dollars lost to fraud and the defense of suits seeking damages against federal agencies and officers.
In 2010, U.S. Attorney General Eric Holder presented Gwinn with the “Exceptional Service Award” for her efforts in a case that resulted in the largest pharmaceutical settlement in the Department of Justice’s history at the time. The case involved pharmaceutical giant Pfizer, which agreed in September of 2009 to pay the Government $2.3 billion for illegally marketing drugs to doctors in Kentucky’s Eastern District and several other states.
Gwinn has been with the U.S. Attorney’s Office since 2002, primarily working civil cases. She has prior experience in state and county government. Gwinn received her law degree from the University of Kentucky in 1985.
McBride will oversee the operations of the Fort Mitchell branch office, which has a total of 14 attorneys and legal assistants. McBride has been with the U.S. Attorney’s Office since 2002 and was the office’s criminal division chief from the fall of 2007 through 2009. Prior to coming to the U.S. Attorney’s Office, he served in the Navy as a Lieutenant Commander. McBride received his law degree from the University of Dayton in 1992.
The U.S. Attorney’s Office in the Eastern District of Kentucky prosecutes criminal cases and represents the United States in civil litigation filed in the federal courts of the Eastern District of Kentucky which encompasses 67 counties stretching from southeastern Kentucky to the Ohio border.
Lexington Man Sentenced to 30 Years for Drug, Firearm, and Money Laundering OffensesRead the Press Release
LEXINGTON, KY - A Lexington man, who used proceeds from trafficking cocaine to purchase houses and vehicles, was sentenced to 30 years in prison for multiple federal offenses.
Chief U.S. District Judge Karen C. Caldwell sentenced 35-year-old Marquis Deron Heard on Thursday for distribution of cocaine, possession of a weapon by a convicted felon, and 29 counts of money laundering.
Heard was found guilty by a jury of the charges earlier this year. The evidence at trial established that, between 2008 and 2011, Heard was involved in trafficking large quantities of cocaine, from a Mexican source, into Lexington for distribution. The testimony at trial revealed that Heard had distributed at least 45 kilograms of cocaine.
Evidence at trial showed that Heard reinvested the proceeds of the drug transactions into the purchase of multiple vehicles and residences in both Lexington and Louisville. Heard was also found in possession of firearms at the time of his arrest. The jury convicted Heard in January of 2013 after four days of trial.
Under federal law, Heard must serve at least 85 percent of his prison sentence, and, upon release, will be under the supervision of the U.S. Probation Office for 10 years.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration and Christopher A. Henry, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, jointly made the announcement today.
The investigation was conducted by the Lexington Police Department, the DEA, and the IRS. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorney J. Hamilton Thompson.
Brooksville Woman Admits Defrauding State and Federal Assistance ProgramsRead the Press Release
COVINGTON, KY - A Brooksville, KY., woman admitted in federal court she concealed information from federal authorities, for several years, in order to fraudulently obtain state and federal benefits.
Patty Jo Ruf, 42, pleaded guilty Thursday to one count of Supplemental Security Income (SSI) fraud.
Ruf admitted she intentionally concealed her true living arrangement from agents with the Social Security Administration (SSA) in order to collect SSI and Medicaid benefits, on behalf of her children, in amounts greater than she was entitled to receive.
According to the plea agreement, Ruf repeatedly told agents she had separated from her husband and was not sharing living expenses. In reality, Ruf lived with her husband and received financial support from him. Had SSA agents been aware of the true living arrangement, the eligibility of Ruf’s children would have been greatly reduced. The fraud spanned from November 1999 until December 2010.
SSI is an income assistance program designed to provide financial assistance to elderly and disabled individuals who meet the program’s eligibility requirements. Kentuckians who are eligible for SSI also qualify for benefits under the Medicaid 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 guilty plea.
The investigation was conducted by the SSA, Office of Inspector General. Assistant U.S. Attorney Chris Nasson represents the U.S. Attorney’s Office in this case.
Sentencing for the defendant is scheduled for September 19, 2013. Supplemental Security Income fraud carries a maximum of five years in prison. However, the court must consider the U.S. Sentencing Guidelines and the federal statutes before imposing a sentence.
Covington Man Sentenced to over 59 Years for Kidnapping, Armed Bank Robbery, and Firearm OffensesRead the Press Release
COVINGTON, KY - A Kenton County man convicted last December of kidnapping, armed bank robbery and firearm offenses was sentenced to 711 months in federal prison.
U.S. District Judge Danny C. Reeves sentenced 40-year-old Joseph Weir on Monday for kidnapping, brandishing a firearm in furtherance of kidnapping, armed bank robbery, and possessing a firearm in furtherance of bank robbery. Judge Reeves also ordered Weir to pay $1,492.75 in restitution. Under federal law, Weir must serve 85 percent of his prison sentence.
Weir was indicted in March of 2012 and convicted in two separate trials in December of 2012.
Evidence at the first trial showed that on May 31, 2011, Weir kidnapped a 75 year- old patron of the Crestview Town Center by threatening her with a knife and a .357 caliber handgun. After forcing his way into the victim’s car, he took her purse and attempted to access her bank accounts.
Weir eventually transported the victim to a remote area near Cleves, Ohio. He then used his knife to cut the victim’s sweater into pieces and used them to gag and tie her to a tree near the bank of the East Miami River. Weir abandoned the victim there and took her car back to Kentucky, leaving it near his Covington residence. The victim freed herself from the tree and eventually found assistance at a nearby road. She suffered minor injuries.
In the other trial, evidence revealed that Weir robbed the Huntington Bank at Sixth and Madison in Covington of $900.00 on December 5, 2011. He entered the bank, concealing a .380 caliber handgun in his coat and passed a note to the teller threatening to shoot. After fleeing the bank with the money, Weir hid the jacket, shoes, and eyeglasses he wore during the robbery. Officers recovered the items near the bank and linked them to Weir using surveillance video and witness statements.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation, jointly announced the sentence.
The investigation was conducted by the FBI, the Covington Police Department, the Hamilton County Sheriff’s Office, the Boone County Sheriff’s Office, and the Lakeside Park / Crestview Hills Police Department. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorneys Tony Bracke and Elaine Leonhard.
Kentucky Pain Clinic Owners Await Sentencing for Unlawfully Dispensing More Than 50,000 Prescription PillsRead the Press Release
PIKEVILLE, KY - 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 today that two eastern Kentucky pain clinic owners will be sentenced in September after admitting in federal court they conspired with doctors to illegally dispense more than 50,000 prescription pills.
Tammy Cantrell, 40, of Oil Springs, KY., and Shelby Lackey, 50, of Williamsport, KY., pleaded guilty Wednesday before U.S. Magistrate Judge Edward B. Atkins to conspiracy to distribute and unlawfully dispense Oxycodone and maintaining a drug involved premise. Both defendants agreed to forfeit a total of approximately $500,000 which represents proceeds from the conspiracy. Judge Atkins remanded Cantrell into custody while Lackey was released on her own recognizance.
The defendants are the first pain clinic owners in the Eastern District of Kentucky (district includes 67 counties) to have federal convictions for operating a pill mill and conspiring to illegally distribute Oxycodone.
According to the plea agreement, the defendants owned and operated Care More Pain Management, LLC located in Paintsville, KY. From 2008 until approximately February 2012, the defendants conspired with two doctors to dispense Oxycodone to eastern Kentuckians without a legitimate medical purpose.
Court records state that the doctors performed little or no physical examination before writing prescriptions that were usually for 90 Percocet 10 mg pills. Patients paid $200 for the initial visit and $185 for subsequent visits; all fees were paid in cash. One of the doctors previously admitted he saw between 40 and 50 patients in one day. In many instances, the doctors wrote prescriptions without seeing patients or signed blank prescriptions for office assistants to complete, according to the plea agreement.
Cantrell and Lackey paid the doctors as much as $8,500 a week. The clinic didn’t accept insurance and doctors made no referrals for physical rehabilitation. Neither Cantrell nor Lackey are medically certified and have no nursing experience.
The investigation started when detectives with the Kentucky Attorney General’s Office received complaints from local law enforcement that Care More was seeing a high volume of patients. Court records state that patient lines at Care More stretched into the parking lot.
One of the doctors, Richard Albert, pleaded guilty in July 2012 to conspiring to distribute and dispense controlled substances without a legitimate medical purpose. He also agreed to forfeit $500,000 which represented his proceeds from the crime. Albert will be sentenced in June. The other doctor, Rano Bofill, was indicted in August of last year for conspiracy to distribute controlled substances and operating a drug involved premise. He previously pleaded not guilty and his trial is in May.
The investigation was conducted by the Kentucky Attorney General’s Office, the DEA and the Paintsville Police Department. Assistant U.S. Attorney Roger West represents the U.S. Attorney’s Office in this case.
Man Admits Traveling from England to Kentucky to Sexually Exploit MinorRead the Press Release
PIKEVILLE, KY - A resident of London, England traveled to Kentucky intending to engage in sex acts with a minor who lived in eastern Kentucky according to a plea agreement filed in federal court.
Solomon Blue Waters, 42, of London, England pleaded guilty Wednesday before U.S. Magistrate Judge Edward B. Atkins to using the internet to engage in sexual activity with a minor. The U.S. Attorney’s Office and the defendant agreed to a proposed sentencing range of 135 to 168 months pending the judge’s approval. Waters is scheduled to be sentenced on September 5 in Pikeville.
According to the plea agreement, Waters admitted he developed an online relationship with the minor in 2011 and persuaded her to send him sexually explicit images of herself. Waters also encouraged the victim to communicate with him in sexual conversations. Waters planned to visit the minor in eastern Kentucky and he specifically described the sexual acts he would perform on the minor when meeting her.
On August 27, 2012, Waters flew from London, England to Lexington’s Blue Grass Airport and was immediately arrested by agents with Homeland Security Investigations and the Kentucky State Police.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Gary J. Hartwig, Special Agent in Charge, Homeland Security Investigations (HSI) in Chicago, and Rodney Brewer, Kentucky State Police Commissioner, jointly announced the plea.
The investigation was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and KSP. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney David Marye.
Former Agriculture Commissioner Indicted for Misappropriating Department FundsRead the Press Release
LEXINGTON, KY - A federal indictment was unsealed today charging former Kentucky Agriculture Commissioner Richard Dwight Farmer Jr., with misusing and misappropriating money and property belonging to the Kentucky Department of Agriculture (KDA) during his tenure.
The indictment, filed Friday, April 19, charges Farmer, 43, with four counts of misappropriating property and funds of the KDA, a state agency that receives more than $10,000 annually in federal funds. Each of the four counts covers alleged misconduct occurring in separate calendar years beginning with 2008 and ending with 2011.
Farmer is also charged with one count of soliciting property of value in exchange for intending to be influenced in KDA matters.
According to the indictment, Farmer abused his authority throughout his tenure, using KDA funds to obtain rifles, clothes, hotel rooms, computer equipment and home appliances, all for himself, friends and family.
One example of Farmer’s alleged misuse of funds occurred in 2008, at the Southern Association of State Departments of Agricultural Conference held in Kentucky. The indictment alleges Farmer bought a surplus of gifts for participants and conference workers, such as rifles, watches, case knives, and personalized cigar boxes, and then kept the excess gifts for his personal use.
The indictment also alleges that Farmer misused his position to secure jobs for his friends. According to the indictment, Farmer directed the KDA to create several paid “Special Assistant” positions. He hired friends for these positions, and he ensured that they operated with little oversight and performed minimal official work. Some of these “Special Assistants” received state government salaries in exchange for performing home improvement projects and other personal services for Farmer.
Additionally, on multiple occasions, Farmer allegedly bought hotel rooms at the Kentucky State Fair for extended family using KDA’s money.
Another count in the indictment alleges that Farmer solicited and accepted property from an eastern Kentucky motor vehicle dealership, intending to be influenced in the decision in which he attempted to award KDA grant money to the dealership.
The U.S. Government is seeking the forfeiture of $450,000, which represents the approximate total amount of KDA money that Farmer allegedly misused.
The KDA is a state government agency that is funded, in part, with money provided by the federal government. The indictment alleges that the KDA receives millions of dollars annually in federal money.
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.
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 Kentucky Attorney General’s Office and the FBI. The indictment was presented to the grand jury 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.
A date for Farmer to appear in court has not yet been scheduled. Each count carries a maximum penalty of 10 years in prison and up to a $250,000 fine. However, any sentence following a conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which government must prove guilt beyond a reasonable doubt.
Campton, Kentucky Residents Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
LEXINGTON, KY - Dena Lynn Brooks, 40, Marcus Jessie Adkins, 39, and Courtney Junior Noble, 60, each of Campton, KY., were recently sentenced, by United States Senior District Judge Joseph M. Hood, for conspiring to distribute 50 grams or more of a mixture or substance containing methamphetamine. Noble was also sentenced for possessing a firearm in connection with a drug trafficking offense. Brooks and Noble were each sentenced to 10 years imprisonment. Adkins, because of prior felony drug convictions, was sentenced to almost 22 years imprisonment.
In May 2013, Brooks, Adkins, and Noble each pleaded guilty to the offense. The facts established that, on January 28, 2013, Brooks obtained approximately three ounces of methamphetamine for Adkins and Noble. The methamphetamine was intended for distribution in Wolfe County. After obtaining the methamphetamine, Brooks provided it to Adkins and Noble at a motel room in Lexington. A short while later, a vehicle driven by Adkins, in which Noble was a passenger, was stopped by law enforcement. Noble had the methamphetamine in his pocket and a loaded semiautomatic pistol in his waistband.
Under federal law, Brooks, Adkins, and Noble must each serve 85 percent of their prison sentence, and, upon release, will be under the supervision of the United States Probation Office, for at least 3 years for Noble and at least 8 years for Brooks and Adkins.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration, and Rodney Brewer, Commissioner, Kentucky State Police, jointly made the announcement.
The investigation was conducted by the DEA and KSP. The United States was represented in the case by Assistant United States Attorney Robert M. Duncan, Jr.
Prestonsburg Doctor Pays U.S. Government $50,000 to Settle Civil AllegationsRead the Press Release
CITY, KY - Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration (DEA) jointly announced today that a physician from Prestonsburg, Ky., paid the U.S. Government $50,000 to settle civil claims that she failed to account for nearly 5,000 prescription pills at her office.
According to the settlement agreement, the U.S. Government contends that, from June 2009 until May 2012, Dr. Laura Hazeltine failed to maintain accurate inventory records of controlled substances. More specifically, the Government contends that an audit conducted by the DEA revealed Hazeltine, who practices family medicine, couldn’t account for 4,967 pills and at least 10 purchasing records for controlled substances.
In addition to the monetary settlement amount, Dr. Hazeltine surrendered her DEA registration.
Doctors are only allowed to write prescriptions for controlled substances if they are registered with the DEA. DEA registrants are required by federal law to maintain complete and accurate inventory and dispensing records of all controlled substances.
The investigation was conducted by the DEA. Assistant U.S. Attorney Valorie D. Smith represented the U.S. Attorney’s Office in this case.
Lexington Man Sentenced to 41 Months for Attempting to Evade Paying Taxes and Wire FraudRead the Press Release
LEXINGTON, KY - A Lexington business man who admitted he used hundreds of thousands of dollars of his clients’ money to purchase sports collector cards, was sentenced today to 41 months in prison.
U.S. District Judge Karl S. Forester sentenced 46- year-old David Byron for wire fraud and attempting to evade paying income taxes. Judge Forester also ordered Byron to pay $688,530.89 in restitution to the victims of his crime.
Byron previously admitted that from 2006 through April 2010 he devised a scheme to defraud at least seven clients of his bookkeeping business. According to the plea agreement, Byron told them he would facilitate payment of their taxes owed to the Internal Revenue Service (IRS) and other state and federal government agencies. In reality, Byron wired money from their bank accounts to his bank account and then used the money to supplement his lifestyle and purchased $350,000 worth of baseball and sports collector cards.
Under federal law, Byron must serve 85 percent of his prison sentence, and, upon release, will be under the supervision of the United States Probation Office for three years.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Christopher A. Henry, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, and Paul R. Johnson, Special Agent in Charge, United States Secret Service, jointly made the announcement today after the sentencing.
The investigation was conducted by the Internal Revenue Service and the United States Secret Service. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Kevin Dicken.
Lexington Man Sentenced to 103 Months for Receiving Child PornographyRead the Press Release
LEXINGTON, KY - A Lexington man, who admitted downloading child pornography images over the internet, was sentenced to 103 months in federal prison.
U.S. District Judge Karen Caldwell sentenced 33-year-old Jason Daniel Meade Thursday for receiving child pornography. In addition to the 103-month term, Judge Caldwell also ordered Meade to be under the supervision of the U.S. Probation Office, for the rest of his life.
According to court documents, Meade downloaded hundreds of images of minors engaged in sexually explicit conduct. Meade’s sentence was enhanced because many of these images contained minors under the age of 12 and some were sadistic and violent in nature.
In September 2011, undercover law enforcement agents identified a computer in Lexington that was offering child pornography for downloading. Authorities traced the location of the computer to a locked room that Meade kept at his mother’s residence. During the execution of a search warrant at the residence, law enforcement found the images of child pornography on two computers and a CD.
Under federal law, Meade must serve at least 85 percent of his prison sentence and must register as a sex offender when he is released.
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.
Six Kentuckians Admit Defrauding Financial Assistance ProgramsRead the Press Release
COVINGTON, KY - Several eastern Kentuckians defrauded state and federal benefit programs out of hundreds of thousands of dollars, according to plea agreements filed in federal court.
Two men and four women from Carter, Boyd, Lawrence, Morgan and Morgan Counties pleaded guilty Monday, in separate cases, to charges related to Supplemental Security Income (SSI) fraud. One of the women also pleaded guilty to the additional charge of aggravated identity theft.
In their plea agreements, the defendants admitted they fraudulently obtained benefits from the Social Security Administration (SSA), and in some instances from the Medicaid Program, by concealing and intentionally failing to disclose their true living arrangements and financial resources.
Court documents indicate that, as far back as 1998 in one case, some of the defendants lied to SSA agents, telling the agents that they had divorced or separated from their spouses when in fact they were living together and sharing living expenses. In one case, a woman even forged the signature of her husband to further the scheme.
Collectively, the defendants defrauded the SSA and the Medicaid Program out of nearly $450,000.
Had the defendants’ provided the SSA with their true living arrangements and financial resources, the defendants would have either been ineligible for SSI and Medicaid benefits or their eligibility would have been greatly reduced.
SSI is an income assistance program designed to provide financial assistance to elderly and disabled individuals who meet the program’s eligibility requirements. Kentuckians who are eligible for SSI also qualify for benefits under the Medicaid Program.
The defendants in the case are Diana Lynn Rice, 66, of Webbville, KY., Ila Jean Rose, 57, of Olive Hill, KY., Granvell Windfred Ramey, 73, of Catlettsburg, KY., Junia Kay Ratliff, 66, of West Liberty, KY., Randall Dale Ratliff, 74, of West Liberty, KY., and Linda Lou Tackett, 73, of Grayson, KY.
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 guilty pleas.
The investigation was conducted by the SSA, Office of Inspector General. Assistant U.S. Attorney Chris Nasson represents the U.S. Attorney’s Office in this case.
Sentencing dates have not been announced. Supplemental Security Income Fraud carries a maximum of five years in prison upon conviction. Aggravated identity theft carries a mandatory two years in prison upon conviction.London Cattle Company Accused of Selling Animals That Tested Positive for DrugsRead the Press Release
LONDON, KY - A London cattle company was indicted for falsifying records related to an investigation into selling animals containing medical drugs in their system.
Williams Cattle Company and its treasurer, 47-year-old Pamela Collette, were indicted Monday for falsification of records related to a federal investigation and creating false documents.
According to the indictment, the Food and Drug Administration investigated Williams Cattle for violating a court ordered injunction, which instructs the company not to purchase or sell cattle for slaughter that may contain drug medication residue.
Collette allegedly falsified weekly reports that were supposed to be sent to buyers verifying that the animals sold were drug free, in an attempt to influence the outcome of the investigation. She is also alleged to have created false documents that appeared to be prepared by a company that sold animals to Williams Cattle, when in fact the company had not generated the documents.
As part of the injunction, which was filed in 2006, if Williams Cattle Company sells animals with medical drugs in their system, it is required to notify the buyers. Additionally, the injunction obligates Williams Cattle to identify the potential cause for the medical drugs in the animals and to refrain from purchasing animals from sellers who supply cattle that contains medical drugs.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Special Agent in Charge Antoinette V. Henry, of the U.S. Food and Drug Administration, Office of Criminal Investigations jointly announced the indictment.
The investigation preceding the indictment was conducted by the Food and Drug Administration, Office of Criminal Investigations. The indictment was presented to the grand jury by Assistant U.S. Attorney William Sam Dotson.
Collette is set to appear in federal court for an arraignment on April 24. If convicted she faces a maximum of five years in prison on each charge and a $250,000 fine. The company is also subject to the $250,000 fine for each count.
The indictment of a person by a grand jury is an accusation only, and that person is presumed innocent unless proven guilty.
Danville Business Owner Indicted for Wire Fraud and Identity TheftRead the Press Release
LEXINGTON, KY - The owner of a children’s fun and gaming center in Danville, KY., is accused of committing wire fraud and identity theft.
A federal grand jury in Lexington returned an indictment charging 49-year-old Paul Christopher Turner with seven counts of wire fraud and one count of aggravated identity theft.
According to the indictment, in July 2010, Turner, the owner and operator of Go Go Gorillas gaming center, attempted to obtain a loan to purchase equipment for his company. In seeking the loan, it is alleged that Turner falsely represented to the lending entity that one of his investors was willing to personally guarantee the loan. Turner allegedly offered the investor’s property as collateral for the loan without her knowledge.
The indictment further alleges that Turner forged the investor’s signature on loan and mortgage documents. Turner is also alleged to have forged the signature of a notary public on the documents.
The United States Attorney for the Eastern District of Kentucky, United States Postal Inspection Service, Kentucky State Police and the Commonwealth of Kentucky Department of Financial Institutions, Division of Securities, jointly made the announcement.
The investigation preceding the indictment was conducted by the United States Postal Inspection Service, the Kentucky State Police and the Department of Financial Institutions. The indictment was presented to the grand jury by Assistant U.S. Attorney Kenneth R. Taylor.
Turner is set to appear in court for arraignment on April 16 Wire fraud carries a maximum penalty of 20 years in prison and the Aggravated Identity Theft carries a mandatory sentence of two years in prison.
The indictment of a person by a grand jury is an accusation only, and that person is presumed innocent unless proven guilty.
Two Ashland Men in Stolen Motorcycle Ring ConvictedRead the Press Release
LONDON, KY - A federal jury in London, KY., found two Ashland, Ky., men guilty for their roles in a motorcycle theft ring.
Richard Meade, 65, and Mark Justice, 53, were convicted of a conspiracy to engage in money laundering by illegally transferring the ownership of stolen motorcycles and one count each of possession of motorcycles with altered vehicle identification (VIN) numbers. Justice was also convicted of one count of illegally transferring ownership titles of stolen motorcycles while Meade was convicted on one count and acquitted on another count of the same charge. A third defendant, George Ferguson, 64, on trial for the conspiracy charge, was acquitted.
The jury reached the verdict Tuesday night after approximately 3 hours of deliberation following more than three weeks of trial.
According to trial testimony, the two defendants sold approximately 30 motorcycles out of car lots in Ashland. They sold the motorcycles for between $13,000 and $15,000 apiece.
Justice and Meade participated in a conspiracy in which co-defendant Robert Jason Chapman of Cincinnati coordinated trips with others to motorcycle rallies in South Carolina, South Dakota and Florida. At these events, Chapman and others stole motorcycles and brought them to Kentucky to sell.
Chapman previously admitted that he and a co-defendant removed parts of the stolen motorcycles and replaced them with aftermarket parts bearing different vehicle identification numbers (VIN). He registered the stolen motorcycles with the new VIN numbers in Kentucky. Meade and Justice took some of the newly registered motorcycles and sold them.
Six other defendants previously pleaded guilty to their roles in the case.
The FBI and Kentucky State Police identified nearly 200 victims in this case, which include the original motorcycle owners and insurance companies.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, FBI, and Rodney Brewer, Kentucky State Police Commissioner jointly announced the plea.
The investigation preceding the indictment was conducted by the FBI, Kentucky State Police, the Boyd County Sheriff’s Office, Ohio Bureau of Investigations, Ohio Attorney General’s Office, and Ohio State Patrol. The U.S. Attorney’s Office was represented in the case by Assistant United States Attorneys Kenneth R. Taylor and Erin J. Roth.
The defendants are scheduled for sentencing on July 24, 2013. They face up to 20 years in prison on the illegal transfer of ownership titles charge and the conspiracy charge. Possessing motorcycles with altered VIN numbers carries a maximum 10 year penalty.