Eastern District of Kentucky
Press releases recorded for this federal judicial district.
Former Employee of Eastern Kentucky Agriculture Program Pleads Guilty to Mail FraudRead the Press Release
LEXINGTON, KY - A former employee of an agriculture program in eastern Kentucky admitted in federal court she defrauded the program out of more than $200,000.
Debra Marshall, 49, of Clayhole, KY., pleaded guilty Monday to mail fraud.
Marshall worked as the District Administrative Secretary for the Breathitt County Conservation District (BCCD), a program that administers federal, state, and local grants and provides other assistance to county farmers. In this position she had day-to-day control over the operations and the finances of the organization.
According to her plea agreement, from 2005 until March 2010, Marshall took money from the District in a variety of ways, including issuing herself extra paychecks, embezzling grant money that was intended to go to local farmers, and using the District’s credit card for personal purchases. When the District’s operating account dwindled because of her scheme, Marshall cashed the BCCD’s certificates of deposit without authorization and placed that money into the District’s operating account.
Marshall admitted she covered up the scheme by falsifying accounting records and submitting financial reports that falsely inflated the District’s financial condition.
BCCD uses local, state, and federal funding to promote soil conservation, efficient utilization of natural resources and progressive farming practices.
Marshall was indicted in July 2012.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Perrye K. Turner, Special Agent in Charge, Federal Bureau of Investigation, and Rodney Brewer, Commissioner of the Kentucky State Police jointly made the announcement today.
The investigation was conducted by the Federal Bureau of Investigation and the Kentucky State Police. The U.S. Attorney’s Office is represented by Assistant U.S. Attorneys Kenneth R. Taylor and Andrew T. Boone.
Marshall will appear for sentencing on June 10, 2013. Mail fraud carries a maximum of 20 years in prison. However, the Court will impose sentence after consideration of the U.S. Sentencing Guidelines and the applicable federal statutes.
Lexington Man Sentenced to 96 Months for Bank RobberyRead the Press Release
COVINGTON, KY - A federal judge sentenced a Lexington, KY., man to 96 months in prison for robbing a bank in Maysville, Ky., in May of last year.
U.S. District Judge Danny C. Reeves sentenced 36-year-old Patrick Andrew Donald Tuesday for bank robbery.
Donald previously admitted that he and an accomplice robbed the Security Trust Bank in Maysville, Ky., on May 16, 2012. According to testimony at Donald’s sentencing hearing, the two men entered the bank dressed in winter clothing and demanded money from three tellers. Donald’s accomplice insinuated that he had a gun and used his hand to conceal a metal object in his coat pocket. The accomplice then repeatedly pounded the counter in front of the tellers with this object as he demanded money.
Because the metal object was considered a dangerous weapon and used to commit the robbery, Donald received an enhanced sentence.
Donald pleaded guilty to the robbery in September 2012.
Under federal law, Donald must serve at least 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for three years following his release.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Perrye K. Turner, Special Agent in Charge of the FBI’s Louisville Field Office, Ronald Rice, Chief of Police, Maysville Police Department and Ronnie Bastin, Chief of Police, Lexington Fayette Urban County Government jointly, jointly announced the sentence.
The investigation was conducted by the FBI, the Maysville Police Department, and the Lexington Police Department. The U.S. Attorney’s Office was represented by Assistant U.S. Attorneys Kenneth R. Taylor and Andrew T. Boone.
Erlanger Nursing Home and United States Government Settle Civil AllegationsRead the Press Release
COVINGTON, KY - Under a settlement agreement with the U.S. Government, Villaspring Health Care Center, Inc., and Carespring Health Care Management, LLC are further enhancing the care that they provide to residents of Villaspring’s nursing home in Erlanger, KY., announced United States Attorney Kerry Harvey.
The agreement: (1) embodies and effectuates quality of care enhancements at Villaspring, and (2) ensures that the U.S. Attorney’s Office remains apprised of those enhancements over the next three years. The settlement agreement is the first of its kind in Kentucky and resolves False Claims Act allegations brought against Villaspring and Carespring in a lawsuit filed in July 2011 for conduct alleged to have occurred between 2004 and 2008.
Under the agreement, Villaspring and Carespring will pay the U.S. Government $350,000. Villaspring and Carespring will also retain an independent compliance consultant, subject to the approval of the U.S. Attorney’s Office (USAO). The USAO will review Villaspring’s existing compliance program and its quality of care, and collaborate with Villaspring and Carespring on enhancements to the program and its patient care. Villaspring and Carespring will be responsible for the costs of these enhancements and the costs of the consultant.
Pursuant to the agreement, the consultant will provide quarterly reports to the U.S. Attorney’s Office, Villaspring, and Carespring.
“We are pleased to reach an agreement,” said United States Attorney for the Eastern District of Kentucky Kerry B. Harvey. “The focus of the agreement is ensuring that quality of care standards are met and the consultant provisions of the settlement will provide real benefits to Villaspring residents. The Judge’s ruling in this matter establishes that the failure of care theory will be an important tool available for use in appropriate cases.”
The case was handled by Assistant United States Attorneys Andrew Sparks and Paul McCaffrey, and Department of Health and Human Services Office of Inspector General attorney Jill Wright. The matter was referred to the U.S. Attorney’s Office by the Kentucky Attorney General’s Medicaid Fraud Abuse and Control Unit.
Three Indicted for Structuring CurrencyRead the Press Release
COVINGTON, KY - A Hazard, KY., woman is accused of illegally structuring deposits totaling millions of dollars to avoid federal reporting requirements.
Lois Elaine Smith, 52, was indicted Thursday by a Covington grand jury for the charge of currency structuring.
The indictment alleges that Smith structured $4,044,180 by making deposits under $10,000 into a People’s Bank and Trust Company in Hazard. Smith allegedly deposited this money from February 14, 2008 until June 5, 2010.
A Thornton, Ky., man is accused of illegally withdrawing millions in structured increments to avoid federal reporting requirements.
Randall Baker, 57, was indicted Thursday by a Covington grand jury for the charge of currency structuring.
The indictment alleges that Baker structured $4,756,456 by withdrawing the money in under $10,000 increments from Community Trust Bank in Letcher County. Baker allegedly withdrew this money from February 14, 2008 until January 26, 2012.
An Erlanger, Ky., man is accused of illegally structuring deposits totaling more than $200,000 to avoid federal reporting requirements. Richard G. Adams, 66, was indicted on Thursday for currency structuring.
The indictment alleges that Adams structured $209,000 by making numerous deposits in amounts under $10,000 into a Fifth Third Bank account in Erlanger. Adams allegedly deposited this money from April 25, 2011 to October 13, 2011.
Under federal law, financial institutions such as banks are required to report to the federal government any currency deposit, withdrawal, or exchange over $10,000. It is a violation of federal law to intentionally structure transactions in a way that avoids reporting requirements.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Christopher A. Henry, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, jointly made the announcement today.
The investigation preceding the indictment was conducted by the Internal Revenue Service (IRS). The indictment was presented to the grand jury by Assistant United States Attorney Robert K. McBride.
Smith’s, Baker's and Adams's appearances before the United States District Court has not yet been set by the Court in Covington. If convicted, Smith, Baker and Adams face a maximum penalty of 5 years in prison and a fine of $250,000. 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.
Nine People Indicted for Defrauding Medicaid and Social Security Benefit ProgramsRead the Press Release
COVINGTON, KY - Nine people were charged with fraudulently collecting money and benefits from federal and state assistance programs, for more than a decade in some cases.
A federal grand jury in Covington returned seven indictments Thursday evening charging a man and seven women from Carter, Boyd, Lawrence, Morgan and Bracken County with Supplemental Security Income (SSI) fraud and health care fraud. An additional man was charged only with making false statements related to alleged fraud and one of the women was also charged with aggravated identity theft.
According to the indictments, the defendants fraudulently obtained benefits from the Social Security Administration (SSA) and Medicaid by concealing and intentionally failing to disclose their true living arrangements and financial resources.
The indictments allege that over the course of years, many of the defendants told SSA agents that they had divorced or separated from their spouses, when in fact they were living together and sharing living expenses. Had SSA known the defendants’ true living arrangements and financial resources, the defendants would have been ineligible for SSI and Medicaid benefits, or their eligibility would have been reduced greatly.
SSI is a cash assistance program designed to provide financial assistance to disabled and elderly people who have little or no income or resources. Based on an agreement between Kentucky and the SSA, Kentuckians who are eligible for SSI also qualify for Medicaid coverage.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky and Guy P. Fallen, Special Agent in Charge, Social Security Administration jointly announced the indictments.
The investigation was conducted by the SSA. Assistant U.S. Attorney Chris Nasson represents the U.S. Attorney’s Office in this case.
A date for the defendants to appear in court has not yet been set. If convicted, the defendants face up to five years in prison for the SSI charge and 10 years on the health care fraud charge. However, any sentence following a conviction would be imposed after the Court reviews the U.S. Sentencing Guidelines and the federal statutes.
Woodford County Man Sentenced to 14 Years for Distributing PornographyRead the Press Release
LEXINGTON, KY - A Woodford County man who posted child pornography videos on the internet for others to download was sentenced to 14 years in prison.
U.S. Senior District Judge Joseph M. Hood sentenced 31-year-old Juan Francisco Reyes-Ramos Monday for distributing child pornography. Judge Hood enhanced the defendant’s sentence because the defendant possessed images of child pornography that were sadistic and/or violent.
According to court documents, in May of 2012 a detective with the Kentucky State Police located child pornography videos available for download on the internet. . The videos contained images of prepubescent children engaged in sexually explicit conduct. The detective found that the videos were posted from an internet protocol (IP) address belonging to the defendant’s computer.
When investigators searched the defendant’s home, they found more than 3,000 child pornography images on his computer. Many of the images showed adults engaged in sexually explicit conduct with children.
Under federal law, Reyes-Ramos will have to serve at least 85 percent of his prison sentence. He pleaded guilty last November.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, special Agent in Charge, FBI; John R. Korkin, Special Agent in Charge, Department of Homeland Security Investigations-U.S. Immigration and Customs Enforcement and Rodney C. Brewer, Kentucky State Police Commissioner (KSP) jointly announced the sentence.
The investigation was conducted by the Kentucky State Police, FBI, and Department of Homeland Security Investigations-U.S. Immigration and Customs Enforcement.
Man Indicted for Robbing A Lexington BankRead the Press Release
LEXINGTON, KY - A Lexington man was indicted for allegedly robbing a bank in Fayette County in November of last year.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, FBI and Ronnie J. Bastin, Chief of Police for the Lexington-Fayette Urban County Government jointly made the announcement today.
A federal grand jury in Lexington returned the indictment February 7, charging 38-year-old William Abshear with one count of bank robbery.
According to the indictment, Abshear used intimidation to take $1,500 from the Chase Bank on Winchester Road on November 26 of last year.
Court documents allege that Abshear passed a note to the teller demanding that she put money on the counter. After getting the money, Abshear allegedly fled the bank on foot. Lexington Police used surveillance photographs to identify Abshear as a suspect. He was arrested in Phoenix, Ariz., on December 20.
>The investigation was conducted by the Lexington-Fayette Urban County Government and the FBI. Assistant U.S. Attorney Elisabeth Brown is prosecuting the case for the U.S. Attorney’s Office.
A date for Abshear to appear in federal court in Lexington has not yet been set. If convicted, Abshear faces a maximum penalty of 20 years in prison. However, any sentence following a conviction would be imposed after the Court considers the U.S. Sentencing Guidelines and the federal statutes governing the imposition of sentences.
London Couple Convicted on All Counts of Child Pornography OffensesRead the Press Release
LONDON, KY - A federal jury found a London, KY., couple guilty of photographing two children engaging in sexually explicit conduct.
The jury convicted 58-year-old Ricky L. Sherman and his wife, 33-year-old Corrine Sherman late Wednesday afternoon of two counts of producing child pornography, conspiracy to produce child pornography, and one count of possessing child pornography. The jury returned the verdict after approximately four hours of deliberation following three days of trial.
Evidence presented at trial showed that, in 2008, the Shermans produced approximately 40 images of two prepubescent children engaged in sexually explicit conduct.
At the time Ricky Sherman was arrested for the federal offenses he was on probation for a previous state offense. The investigation started when state authorities received a tip that Ricky Sherman violated terms of his probation by having access to a computer. The evidence revealed that Ricky Sherman contacted his wife as the investigation was underway, and she subsequently attempted to conceal a camera from law enforcement. The camera was recovered and found to contain the produced child pornography images.
Ricky Sherman owned Truck Town Repair in Laurel County. He and his wife were indicted in September 2011.
Kerry B. Harvey, U.S Attorney for Eastern District Kentucky, Perrye Turner, Special Agent in Charge, FBI and Stewart Walker, Chief of the London Police Department jointly announced the convictions.
The investigation was conducted by the FBI and the London Police Department. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Jason Parman.
The Shermans will appear for sentencing on June 4, 2013. They face a minimum of 15 years in prison and a maximum of life. The couple will have to serve a minimum of 85 percent of the prison sentences imposed. The court will impose a sentence after reviewing the U.S. Sentencing Guidelines and the federal statutes.
Convicted Felon from Richmond Sentenced to 250 Months for Helping Lead A Large Cocaine Trafficking RingRead the Press Release
LEXINGTON, KY - A Richmond man with a lengthy criminal history was sentenced today to 250 months in prison for dealing cocaine and using his retail store to conceal his drug trafficking activity.
U.S. District Court Judge Joseph M. Hood sentenced 30-year-old Jakolbe Chenault, aka, “Kolbe Cheese,” for conspiracies to distribute cocaine and launder drug money. Judge Hood enhanced Chenault’s sentence because Chenault qualified as a career offender. A career offender is someone with two or more prior violent crime or drug trafficking offenses.
According to court documents, from May 2009 until October 2011, Chenault helped lead a large cocaine trafficking ring and distributed at least 3.5 kilograms of cocaine in Madison County. More than 10 others were part of the conspiracy.
Chenault co-owned the clothing store known as Ja Ru’s New Fashions with co-defendant Ruben Catching. Chenault acknowledged that he and Catching used drug proceeds to buy merchandise for the store.
Court documents state that Chenault also used drug profits to purchase several vehicles and a house on Oakland Avenue in Richmond. The U.S. Government seized five vehicles and the home.
Chenault has prior felony convictions which include trafficking in a controlled substance, second degree unlawful transaction with a minor and wanton endangerment first degree.
Under federal law, Chenault must serve at least 85 percent of his prison sentence.
Others involved in the drug trafficking conspiracy previously received the following prison sentences: Ruben Catching - 100 months; Christina Thieleman – 120 months; Demetrius Catching – 60 months; Jermaine Carter – 60 months; Da’Lance Roberts – 120 months; James Phelps – 30 months; Bryan Campbell – 180 months; Shaquille Williams – 27 months; Franklin Floyd – 12 months and 1 day; Montel Jenkins – 138 months; Christoper Crutcher – 18 months; Laverne Cructcher – 60 months; Damar Horton – 128 months; and Edward Lamont Ellington – 87 months.
Kerry B. Harvey, U.S Attorney for the Eastern District Kentucky, Stuart L. Lowery, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Robert L. Corso, Special Agent in Charge of DEA; Christopher A. Henry, Special Agent in Charge of IRS’ Criminal Investigation Division; Rodney C. Brewer, Kentucky State Police Commissioner and Larry R. Brock, Richmond Police Chief jointly announced the sentence.
The investigation was conducted by ATF, the Richmond Police Department, IRS-CID, KSP, and DEA. The U.S. Attorney’s Office was represented by Robert M. Duncan Jr. and Roger W. West.
Detroit Man Sentenced to 57 Months for Using Counterfeit Credit Cards at Northern Kentucky Retail StoresRead the Press Release
COVINGTON, KY - A Michigan man was sentenced today to 57 months in federal prison for using other people’s credit card information to make purchases at retail stores in Campbell, Kenton and Boone Counties.
U.S. District Judge David L. Bunning sentenced 34-year-old Tyhkan S. Brunson for the use of unauthorized credit cards and aggravated identity theft. Judge Bunning also ordered Brunson and his co-defendants to jointly pay $5,478.76 in restitution.
Court documents state that in May of 2012, Brunson and three co-defendants possessed counterfeit credit cards bearing legitimate card numbers. In one day’s time they drove from Michigan to Kentucky and used the fraudulent cards to purchase thousands of dollars in gift cards and other merchandise from Home Depot, Meijer and Wal-Mart.
According to Brunson’s plea agreement, 32 people had their identities stolen and three banks lost money.
When Cold Spring Police in Campbell County conducted a vehicle stop of the defendants, officers located 26 counterfeit credit cards. They also found a co-defendant trying to destroy merchandise receipts by chewing them.
Brunson’s co-defendants previously received the following prison sentences: John Cotton, 44 months; Adam Sanford, 24 months, and Brittany Bell, 42 months.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Mark A. Porter, Special Agent in Charge, U.S. Secret Service jointly announced the pleas.
The investigation preceding the indictment was conducted by the U.S. Secret Service. The indictment was presented to the grand jury by Assistant U.S. Attorney Laura K. Voorhees.
London Doctor Admits Evading Hundreds of Thousands of Dollars in TaxesRead the Press Release
LONDON, KY - A London, KY., physician, who worked in eastern Kentucky and Tennessee, admitted he evaded hundreds of thousands of dollars in federal income taxes.
Werner Grentz, 64, pleaded guilty today to tax evasion in front of U.S. District Judge Gregory F. Van Tatenhove. As part of his plea, Grentz agreed to pay the IRS approximately $900,000.
Grentz admitted he made $356,073 in taxable income in 2009 working as an independent physician contractor for a hospital in Jellico, Tenn., and a medical office in London, Ky. In order to hide his income, Grentz had his earnings deposited into bank accounts of companies that he controlled, and he did not file a tax return or pay federal income taxes.
Grentz admitted that he failed to pay $900,068 in taxes since 1999. He was indicted in April of last year.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Christopher A. Henry, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, jointly made the announcement today.
The investigation preceding the indictment was conducted by the Internal Revenue Service, Criminal Investigation Division. The United States is represented in the case by Assistant United States Attorney John Patrick Grant.
Grentz is scheduled to appear for sentencing on May 16 at 2:30 p.m., in Federal court in London. He faces a maximum prison sentence of five years. However, the court must consider the United States Sentencing Guidelines and the federal statute before imposing a sentence.
Owner of Kentucky Pain Clinics Arrested and Indicted for Prescription Drug and Money Laundering ConspiraciesRead the Press Release
LEXINGTON, KY - A federal indictment, unsealed today, accuses a pain clinic owner and his two businesses of illegally distributing prescription drugs in central and northern Kentucky.
Ernest William Singleton, 44, was arrested in his hometown of Springfield, KY., this morning on federal charges.
Singleton and his businesses, Double D Holdings, LLC, and S & R Medical Enterprises, LLC, which previously did business under the names Central Kentucky Bariatric and Pain Management (Georgetown, Ky.) and Grant County Wellness Clinic, (Dry Ridge, Ky.) are charged with conspiracy to distribute oxycodone and conspiracy to launder funds from October 2010 until January 2013.
In addition, the U.S. Government seeks forfeiture of farm land, vehicles, businesses, and other property that were purchased with illegal profits or used to facilitate the alleged crimes.
A federal grand jury in Lexington returned the sealed indictment on January 10.
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 announced the arrest and the charges.
The investigation was conducted by the DEA, the IRS’ Criminal Investigation Division, the Kentucky Attorney General’s Office and Kentucky State Police. Assistant U.S. Attorney Ron Walker represents the U.S. Attorney’s Office in this case.
“Illegal pill mills have fueled the prescription drug epidemic in Kentucky that now kills more people than traffic accidents,” General Conway said. “I appreciate the hard work of my Drug Branch Investigators, working in coordination with our state and federal law enforcement partners, in bringing this case forward.”
A date for Singleton to appear in Federal Court has not yet been set. If convicted he faces a maximum of 20 years in prison on each count. 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.