Western District of Kentucky
Press releases recorded for this federal judicial district.
Logan County, Kentucky, Tax Return Preparers Guilty of Preparing False Tax ReturnsRead the Press Release
Falsified taxpayer education expenses resulting in education credits on prepared tax returns for a loss of more than $250,000
BOWLING GREEN, Ky. – Two former tax preparers pleaded guilty in United States District Court this week, before United States District Judge Greg N. Stivers, to conspiring to defraud the United States through preparing false tax returns and aiding in the preparation of the false returns at a tax preparation office in Logan County, Kentucky, announced United States Attorney John E. Kuhn, Jr.
Defendants Tara L. Mitchell and Mechelle Blankenship were initially charged in a 21-count grand jury indictment, that was unsealed March 21, 2016. According to the plea agreement, the defendants worked together at Triple J Tax, a tax return preparation office located in Russellville, Kentucky. Mitchell managed the office and in 2012, hired and trained defendant Blankenship to prepare tax returns.
The defendants admitted yesterday, in separate plea agreements, that between March 2012, and November 2014, they knowingly agreed to defraud the United States by preparing and electronically filing U.S. Individual Income Tax Returns, on behalf of themselves and clients of Triple J Tax, which contained statements that they knew were false and fraudulent as to material matters, thereby causing the Internal Revenue Service to pay tax refunds that were not due under provisions of the Internal Revenue laws. The loss was more than $250,000.
Specifically, the returns stated the taxpayers had incurred educational expenses, when they had not, and thus falsely claimed education-related credits, to which the taxpayers were not entitled.
Further, in the course of the conspiracy, Mitchell and Blankenship also included fraudulent education credits on their own tax returns. On or about January 10, 2013, Mitchell and Blankenship prepared Mitchell’s 2012 tax return, fraudulently claiming education expenses in the amount of $3,500, resulting in a $950 American opportunity credit. On or about April 11, 2013, Mitchell and Blankenship prepared Blankenship’s 2012 tax return, fraudulently claiming education expenses in the amount of $4,000, resulting in a $371 American opportunity credit and a $557 education credit.
If convicted at trial, Blankenship could be sentenced to up to 41 years in prison, fined $1,450,000 and required to serve a 3 year period of supervised release. Mitchell could be sentenced up to 29 years in prison, fined $1,050,000 and required to serve a 3 year period of supervised release.
Assistant United States Attorney Amanda E. Gregory is prosecuting the case. The Internal Revenue Service (IRS) Criminal Investigation office is conducting the investigation.
Business Owner Sentenced to 36 Months in Prison for Defrauding over 400 Victims of $809,205.43Read the Press Release
Owner of Patriot Computers ordered to pay full restitution to victims
LOUISVILLE, Ky. – Mark Allen Hartley, the owner of Patriot Computers, a Virginia corporation, was sentenced this week, in United States District Court, by Chief Judge Joseph H. McKinley Jr., to 36 months in prison, on multiple wire fraud charges related to the theft of $809,205.43 from 434 victims, announced United States Attorney John E. Kuhn, Jr.
“In stealing this money, Hartley victimized many men and women of our armed services,” stated U.S. Attorney Kuhn. “His crime not only exemplifies a shockingly selfish avarice, it is also an affront to the sacrifices made by our servicemembers and their military families. My office will do everything in its power to recover every penny of the unpaid restitution for these victims.”
According to the four count indictment and facts admitted in court by the defendant, from December 1, 2012, through April 14, 2014, Hartley, age 56, devised a scheme to defraud First Citizens Bank and its customers. At the time, Hartley operated a business called Spartan Group Inc., dba Patriot Computers. Patriot Computers sold computer equipment to its customers on installment sales contracts. Customers of Patriot Computers agreed to have specified amounts of money taken from their paychecks on a regular basis until their purchases were paid in full. These customers completed payment authorization forms for these payment arrangements, and then Patriot Computers submitted these forms to First Citizens Bank in Hardin County, Kentucky. First Citizens Bank, through its bill payment service, would then transfer the payments from each customer’s paycheck to Patriot Computers’ account at Wells Fargo Bank until the customer’s contract with Patriot Computers was paid in full.
As part of the scheme and artifice to defraud, Hartley created fraudulent payment authorization forms and transmitted those, by e-mail, to First Citizens Bank. This caused First Citizens Bank to transfer unauthorized payments from victims’ paychecks to an account at Wells Fargo Bank, controlled by Hartley. These unauthorized payments totaled approximately $809,205.43. The average loss Hartley caused to each of his 434 individual victims was $1,864. The court ordered full restitution for each individual victim in the amount of the loss they sustained, in addition to restitution to First Citizens Bank for the loss of $126,338.38 it sustained due to Hartley’s scheme.
In entering his plea of guilty, Hartley agreed that the United States could put Patriot Computers’ accounts receivable into receivership, with collections from those accounts being directed to pay restitution to victims.
Hartley’s sentence includes not only the three-year prison sentence but also requires the payment of $809,205.43 in restitution to his victims and a three-year term of supervised release after his prison term. The United States has already collected $150,000 in funds from Hartley that, pending a court order, will be disbursed among victims.
This case was prosecuted by Assistant United States Attorneys Jason Snyder and Jessica R.C. Malloy and was investigated by the Federal Bureau of Investigation (FBI).
Vibra Healthcare to Pay $32.7 Million to Resolve Claims for Medically Unnecessary ServicesRead the Press Release
Allegations included admitting patients to Southern Kentucky Rehabilitation Hospital, located in Bowling Green, who did not qualify for admission
WASHINGTON - Vibra Healthcare LLC (Vibra), a national hospital chain headquartered in Mechanicsburg, Pennsylvania, has agreed to $32.7 million, plus interest, to resolve claims that Vibra violated the False Claims Act by billing Medicare for medically unnecessary services, the Department of Justice announced today.
“Medicare beneficiaries are entitled to receive care that is determined by their clinical needs and not the financial interests of healthcare providers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “All providers of taxpayer-funded federal healthcare services, whether contractors or direct billers, will be held accountable when their actions cause false claims for medically unnecessary services to be submitted.”
“Pursuing and recovering fraudulent billing for unnecessary services is a priority of my office,” stated U.S. Attorney John E. Kuhn Jr. for the Western District of Kentucky. “This significant case against Vibra Healthcare is but one example of the vigorous work against healthcare fraud taking place in the Western District of Kentucky and across the nation.”
Vibra operates approximately 36 freestanding long term care hospitals (LTCHs) and inpatient rehabilitation facilities (IRFs) in 18 states, including Southern Kentucky Rehabilitation Hospital (SKY), located in Bowling Green, Kentucky. LTCHs provide inpatient hospital services for patients whose medically complex conditions require long hospital stays and programs of care. IRFs are intended for patients needing rehabilitative services that require hospital-level care.
The government alleged that between 2006 and 2013, Vibra admitted numerous patients to five of its LTCHs and to one of its IRFs (SKY) who did not demonstrate signs or symptoms that would qualify them for admission. Moreover, Vibra allegedly extended the stays of its LTCH patients without regard to medical necessity, qualification and/or quality of care. In some instances, Vibra allegedly ignored the recommendations of its own clinicians, who deemed these patients ready for discharge.
As part of the settlement, Vibra also agreed to enter into a chain-wide corporate integrity agreement with the Inspector General of the U.S. Department of Health and Human Services.
“Medical necessity is fundamental if health providers wish to claim taxpayer funds for medical care,” said Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG). “OIG is committed to protecting precious Medicare dollars and ensuring that beneficiaries receive quality, necessary long term care.”
Part of the allegations resolved by this settlement were originally filed under the qui tam or whistleblower provisions of the False Claims Act by Sylvia Daniel, a former health information coder at Vibra Hospital of Southeastern Michigan. Daniel filed her suit in the Southern District of Texas, where one of Vibra’s LTCHs was located. Under the False Claims Act, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery. Daniel will receive at least $4 million.
This settlement illustrates the government’s emphasis on combating healthcare fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $30.7 billion through False Claims Act cases, with more than $18.5 billion of that amount recovered in cases involving fraud against federal healthcare programs.
This matter was handled by the Civil Division’s Commercial Litigation Branch; the U.S. Attorneys’ Offices for the Southern District of Texas in Houston and for the Western District of Kentucky; and the HHS-OIG. The qui tam case is captioned United States ex rel. Daniel v. Vibra Healthcare, LLC, Civil Action No. 10-5099 (S.D. Tex.).
The claims resolved by the settlements are allegations only and there has been no determination of liability.
Hart County, Kentucky, Man Charged with Consumer Product TamperingRead the Press Release
Charged with putting glass shards in cups being sent to fast food restaurants
BOWLING GREEN, Ky. – A Hart County, Kentucky, man was charged, under seal, by grand jury indictment on September 14, 2016, with one count of consumer product tampering, announced United States Attorney, John E. Kuhn, Jr.
Waylon J. Horton, 41, of Munfordville, Kentucky, is charged with tampering with a consumer product that affected interstate commerce, while recklessly disregarding the risk that another person would be placed in danger of death or bodily injury, and under circumstances manifesting extreme indifference to such risk. Specifically, on or about July 11, 2016, through July 13, 2016, Horton allegedly placed shards of glass in cups that would be sent to fast food restaurants.
The indictment was unsealed on September 20, 2016, when Horton was arrested in Hart County and appeared before Untied States Magistrate Judge H. Brent Brennenstuhl in Bowling Green.
If convicted of the charge, Horton could be sentenced to no more than ten years in prison, fined $250,000 and serve three years of supervised release.
Horton was initially charged in Kentucky Circuit Court on July 27, 2016 with wanton endangerment and possession of a destructive device.
Horton, was released on a $25,000 unsecured bond, and is scheduled for arraignment before Judge Brennenstuhl on September 28, 2016 at 10:00am CT in Bowling Green.
This case is being prosecuted by Assistant United States Attorney Amanda Gregory and is being investigated by the Federal Bureau of Investigation (FBI), with assistance from the Hart County (Kentucky) Sheriff’s Department.
The charge of a person by Grand Jury Indictment, is an accusation only and that person is presumed innocent until and unless proven guilty.
United States Attorney Announces Heroin Intervention Program with DEA and Louisville Metro Police DepartmentRead the Press Release
Priority is to investigate and prosecute heroin dealers who face a mandatory 20 year minimum sentence for causing overdoses
LOUISVILLE, Ky. – United States Attorney John E. Kuhn, Jr., joined by Louisville Mayor Greg Fischer, Louisville Metro Police Chief Steve Conrad and Timothy J. Plancon, Special Agent in Charge, DEA Detroit Field Office, announced a new collaborative investigation and prosecution program to remove heroin dealers from the streets of Louisville.
“I have a message for heroin dealers,” stated United States Attorney John Kuhn. "You are killing people in this city from every walk of life. From this point forward, if you sell heroin that causes an overdose, we will bring federal charges against you that will get you a minimum of 20 years in prison with no parole. The trafficking in this deadly poison must end."
“Our city is grateful for the support from the DEA and the U.S. Attorney to help combat the heroin problem in Louisville. We are tackling this issue from many facets, and this new enforcement initiative adds another element to our strategy,” Mayor Greg Fischer said.
"LMPD has enjoyed a long-standing partnership with the DEA and we are thankful for continued efforts such as this which will greatly assist us in combatting one of the major contributors of our violent crime,” stated Chief Steve Conrad.
The DEA and LMPD, in coordination with the U.S. Attorney’s Office, recently formulated a strategy in response to the current heroin epidemic. These meetings resulted in the creation of the Heroin Investigation Team (HIT) which will investigate overdoses with the aim of developing federal cases charging heroin distribution causing death or serious injury. These charges will be punished by a mandatory 20-year sentence. The HIT consists of Special Agents of the DEA and LMPD Major Case Narcotics Unit Detectives.
The program is supported initially with federal funding for overtime for six law enforcement officers from LMPD who will work on HIT. Each of the six law enforcement officers will be deputized by DEA as a federal Task Force Officer (TFO).
Through the first six months of 2016, first responder personnel including Louisville Emergency Medical Service, the Louisville Metro Fire Department, and the Louisville Metro Police Department responded to 3,421 reported overdoses (compared to 2,072 reported overdoses from the same period in 2015). In addition, first responder personnel had administered the opioid antagonist naloxone (Narcan) 1,148 times (compared to 354 naloxone administrations during the same time period in 2015). During the first two quarters of 2016, there were 183 total overdose deaths in Jefferson County. (63 heroin, 99 Fentanyl and 32 both drugs present).
“Louisville is being ravaged by the heroin and opioid epidemic. The crisis is fueling both a public safety and a public health crisis. As we broaden our public education efforts to stem the tide of new addicts, we will also intensify our law enforcement efforts to attack the supply of heroin. My office will work in partnership with LMPD and the DEA to investigate overdose scenes, utilize all available technology and resources to make arrests, and then incarcerate those who profit from this deadly poison,” concluded U.S. Attorney Kuhn.
Today’s announcement comes during the President’s Prescription Opioid and Heroin Epidemic Awareness Week. According to Attorney General Loretta Lynch, the purpose of Heroin and Opioid Awareness Week, is aimed at drawing attention to the urgency of heroin and prescription opioid abuse while improving the public’s understanding of how destructive this epidemic is across America. For more information: https://www.justice.gov/opioidawareness/
DEA Announces “360 Degree Strategy” to Address Opiate Epidemic in LouisvilleRead the Press Release
-Program serves as a model for communities struggling to break cycle of drug trafficking, drug abuse and associated violence
LOUISVILLE, Ky. - The United States Drug Enforcement Administration (DEA) today announced Louisville’s selection as the fourth city in America to take part in a comprehensive law enforcement and prevention “360 Degree Strategy” to assist cities dealing with the heroin and prescription drug abuse epidemic. Timothy J. Plancon, Special Agent in Charge of the DEA’s Detroit Field Division, and John E. Kuhn, Jr., United States Attorney for the Western District of Kentucky, announced this strategy today. Joining DEA and the U.S. Attorney’s Office in the announcement were Louisville Mayor Greg Fischer, Louisville Chief of Police Steve Conrad, and Dr. Toni Ganzel, Dean of the UofL School of Medicine, and representatives from the law enforcement, medical, and substance abuse prevention and treatment communities.
DEA’s Plancon said, “We are striving to find innovative strategies to confront the epidemic of heroin and prescription drug addiction in our society. DEA is collaborating with professionals from law enforcement, drug prevention, drug treatment, and the medical community, to attack this problem from a holistic approach.
“The heroin epidemic, ravaging communities across America, brings with it violence, addiction and death,” stated U.S. Attorney Kuhn. “We must do more, and today we announce new initiatives to improve our community education efforts and to get heroin dealers off our streets.”
The DEA 360 Degree Strategy comprises a three-fold approach to fighting drug traffickers and the current opiate abuse epidemic:
- Enforcement – Actions that target drug trafficking organizations supplying opioids to the neighborhoods of Louisville. These efforts will include a strategy to specifically address those traffickers that supply opioids resulting in fatal and non-fatal overdoses.
- Diversion Control – By engaging drug manufacturers, wholesalers, practitioners and pharmacists to increase awareness of the heroin and prescription drug problem and push for responsible prescribing and use of these medications throughout the medical community.
- Community Outreach – By partnering with medical professionals, governmental and community service organizations to proactively educate the public of the dangers of prescription drug and heroin abuse, and to guide individuals to treatment services when needed.
In November 2015, the 360 program was launched in Pittsburgh, Pennsylvania, followed by St. Louis, Missouri, and Milwaukee, Wisconsin, earlier this year. Louisville represents the fourth city nationally to launch this initiative.
“The community outreach portion of this initiative is critical to long term success in reducing drug use and addiction,” Plancon said. “We have to continuing working to find ways to effectively communicate to our community members the risks and dangers of substance abuse to curb the rates of addiction, overdose and death.”
“UofL is instructing its students in treating patients with realistic goals in mind. We are incorporating guidelines from the CDC on opioid prescription into the curriculum and instructing students in principles that will help them as physicians to limit opioid prescribing, limit opioid overuse and lessen the risk of harm from opioid treatment. These steps will help physicians in dealing with both the epidemic of chronic pain and the epidemic of opioid addiction, abuse and death,” stated Dr. Toni Ganzel, Dean of the UofL School of Medicine.
By bringing together experts in substance abuse and prevention, the DEA 360 Strategy aims, in part, to address the opioid and heroin threat posed to the community by focusing on providing resources and programs designed to educate youth and those most influential to youth including; parents, caregivers, and educators to the harms of drug abuse.
Officials will work to form a “Community Alliance” that will comprise key leaders from law enforcement, prevention, treatment, the judicial system, education, business, government, civic organizations, faith communities, media, and social services, to form the foundation of a long-term group that will help carry the prevention and treatment messages throughout metropolitan Louisville.
In December, DEA, the United States Attorney’s Office for the Western District of Kentucky and its partners plan to host a summit to bring community leaders together to look for sustainable, impactful efforts to address drug abuse, addiction, trafficking and the violence that accompanies it.
Plancon stated, “DEA’s 360 Strategy recognizes that we need to utilize every resource possible to reach everyone in our community, and attack the prescription drug and heroin epidemic from all directions.”
Monroe County, Kentucky, Physician Guilty of Prescribing Pain Medications Outside the Course of Professional Medical PracticeRead the Press Release
BOWLING GREEN, Ky. – A Monroe County, Kentucky physician pleaded guilty today, in U.S. District Court, before Magistrate Judge H. Brent Brennenstuhl, with prescribing pain medications outside the course of professional medical practice, during a more than six year period, to five patients announced United States Attorney John E. Kuhn, Jr.
Clella Louise Hayes, whose medical practice is located in Tompkinsville, Kentucky, pleaded guilty to five counts of a grand jury indictment charging her with dispensing and distributing Schedule II controlled substances and Schedule III controlled substances outside the course of her professional medical practice. Hayes, age 41, of Glasgow, Kentucky, pleaded guilty to authorizing prescriptions for fentanyl, morphine, Oxycodone, Demerol, hydrocodone and Klonopin. According to the plea agreement, the illegal activities occurred between March 2008 through March 2014 and included five patients.
Specifically, between June 2009 and September 2011, Hayes intentionally dispensed Schedule II controlled substances to the same patient, outside the course of professional medical practice, by issuing and authorizing prescriptions for fentanyl, morphine, Oxycodone, and Demerol. During the same time period, Hayes failed to establish a legitimate diagnosis of A.R.’s (the patient) pain complaints, failed to establish an individualized treatment plan, failed to take into account significant risk factors for abuse, and failed to take into account multiple inconsistent urine drug screens which reflected drug abuse and diversion. On September 19, 2011, Dr. Hayes prescribed fentanyl to A.R. On September 23, 2011, at age 55, A.R. died as a result of a fentanyl overdose, with post-mortem toxicology reports reflecting fentanyl at five times the therapeutic range in A.R.’s blood.
In a similar instance, Between November 2011 and November 2012, A.H. was Dr. Hayes’s patient. During that time period, Dr. Hayes knowingly and intentionally dispensed Schedule II controlled substances to A.H. outside the course of professional medical practice, by issuing and authorizing prescriptions for Oxycontin and Demerol.
Dr. Hayes failed to establish a legitimate diagnosis of A.H.’s pain complaints, failed to establish an individualized treatment plan, failed to take into account significant risk factors for abuse, and failed to take into account multiple inconsistent urine drug screens which reflected drug abuse and diversion.
On November 27, 2012, A.H. died at age 48 as a result of a poly-pharmacy overdose, with post-mortem toxicology reports reflecting high blood concentrations of medications Dr. Hayes prescribed to A.H., including Oxycodone and Klonopin.
Further, Between June 2010 and January 2014, K.S. was Dr. Hayes’s patient. During that time period, Dr. Hayes knowingly and intentionally dispensed Schedule II and Schedule III controlled substances to K.S. outside the course of professional medical practice, by issuing and authorizing prescriptions for Oxycontin and hydrocodone.
Dr. Hayes failed to establish a legitimate diagnosis of K.S.’s pain complaints, failed to establish an individualized treatment plan, failed to take into account significant risk factors for abuse, and failed to take into account multiple inconsistent urine drug screens which reflected drug abuse and diversion.
On January 1, 2014, K.S. died at age 53 as a result of a poly-pharmacy overdose, with post-mortem toxicology results reflecting oxycodone, and hydrocodone at ten (10) times the therapeutic dose, both of which Dr. Hayes prescribed to K.S in December 2013.
Sentencing is scheduled before Senior Judge Thomas B. Russell, in Bowling Green on January 18, 2017.
This case is being prosecuted by Assistant United States Attorney David Weiser and is being investigated by the Kentucky State Police (KSP) Drug Enforcement/Special Investigations West, and the Federal Bureau of Investigation (FBI) with assistance from the Tompkinsville Police Department.
Illegal Immigrant Living in Louisville Indicted on Immigration and Fraud Related ChargesRead the Press Release
Previously charged in Jefferson County Circuit Court with murder and operating a motor vehicle under the influence
LOUISVILLE, Ky. – A Mexican national illegally present in the United States and residing in Louisville, Kentucky, was charged this week, by a federal grand jury, with possessing and using counterfeit documents for purposes of obtaining employment announced United Statets Attorney John E. Kuhn, Jr.
Juan Carlos Ortega-Santos, 26, was charged with four immigration fraud related counts: Counts 1-2: Use of a False Document for Purposes of Obtaining Employment, Count 3: Possession of a Counterfeit Alien Registration Card, and Count 4: Possession of a Counterfeit Social Security Card.
This case arose when Ortega-Santos was arrested on June 22, 2016 for driving a vehicle under the influence and killing two juveniles on Taylorsville Road. Ortega-Santos was later charged with murder, assault, wanton endangerment, operating a motor vehicle under the influence, driving without a license, and failure to maintain insurance. Soon after his arrest, it was learned that Ortega-Santos was a Mexican national illegally present in the United States.
Upon learning of Ortega-Santos’ illegal immigration status in the United States, the Immigration and Customs Enforcement (ICE) office began investigating Ortega-Santos and found that he had used counterfeit documents to obtain employment in Louisville, Kentucky. Ortega-Santos currently has an ICE detainer which will hold him if he were to be released from state or federal custody.
If convicted, Ortega-Santos faces maximum potential penalties of no more than 10 years in prison for counts 1-2; and no more than 5 years in prison for counts 3-4.
Assistant United States Attorney Daniel P. Kinnicutt is prosecuting the case. Immigration and Customs Enforcement (ICE) conducted the investigation.
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The indictment of a person by Federal Grand Jury is an accusation only and that person is presumed innocent until and unless proven. ortega-santos_juan_indictment_9-7-16.pdf
Oldham County Man Sentenced to 30 Years in Prison for Aiding and Abetting the Sex Trafficking of A ChildRead the Press Release
LOUISVILLE, Ky. – United States Attorney John E. Kuhn, Jr. today announced the 30-year sentence, of an Oldham County, Kentucky, man by Chief District Judge Joseph H. McKinley Jr., in United States District Court, for aiding and abetting the sex trafficking of a minor. There is no parole in the federal prison system.
“Howard Chambers subjected this young girl to repeated sexual abuse,” stated U.S. Attorney John Kuhn. “Acting with unfathomable selfishness, he chose to traumatize a child in favor of his own self-gratification. The goal of my office was to obtain the maximum sentence of incarceration that insured Chambers would never touch another child. I do want to thank the law enforcement officers and our prosecutor who worked tirelessly together in the investigation of these crimes. I want the public to know we are doing everything in our power to protect the most vulnerable members of our community.”
Howard Key Chambers, 65, and co-defendant Christopher Kosicki helped each other to carry out the sex trafficking of a child. Chambers, a former youth choir leader at an Oldham County church, admitted to travelling to Kosicki’s home in Louisville, to engage in sexual activity with a 10-year-old turned 11-year-old child, between six and eight times, from 2013 until August 2014. The two helped each other entice, harbor, provide, obtain, and maintain a person that had not attained the age of 14 years who was caused to engage in commercial sex acts. Commercial sex acts include any sex act, on account of which anything of value is given to or received by any person. On several occasions, Chambers gave Kosicki money after engaging in sexual activity with the child (age 10 and then 11). On at least one occasion, Chambers admitted to giving money directly to the child after engaging in sexual activity with her. Additionally, on one occasion, Kosicki photographed Chambers engaging in sexual activity with the child.
In 2013, Chambers met co-defendant Kosicki via Craigslist.com. The two communicated online and, eventually, Chambers travelled from Oldham County to Louisville to meet Kosicki at Kosicki’s residence. The criminal activity took place at Kosicki’s Louisville home.
Kosicki was sentenced to serve 50 years in prison, followed by a life term of Supervised Release, by Chief District Judge Joseph H. McKinley Jr., on February 1, 2016. Kosicki pleaded guilty to multiple child sexual exploitation charges, including sex trafficking of a child and the production of child pornography involving 10 children, on July 23, 2015, in U.S. District Court in Owensboro, Kentucky. Kosicki, 27, pleaded guilty in total to 15 charges, in a Superseding Indictment, including sex trafficking a child under age 14, and aiding and abetting another person to cross a state line with intent to engage in sexual acts with a person who had not attained the age of 12 years.
Law enforcement officials first became aware of Kosicki’s criminal conduct after arresting Raymond Shadburn in Seymour, Indiana, on September 24, 2014, on child exploitation charges. During a post-arrest interview, Shadburn provided information that led law enforcement to Kosicki’s residence in Louisville. Shadburn is being prosecuted in the Southern District of Indiana.
In addition to the 30-year sentence, Chambers will be required to serve a ten year period of supervised release and register as a sex offender.
Assistant United States Attorneys Jo E. Lawless and Spencer McKiness prosecuted the case. The Indianapolis Police Department, District of Columbia Metro Police, Louisville Metro Police, and the Federal Bureau of Investigation (FBI) conducted the investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Louisville Attorney Sentenced to 48 Months in Federal Prison for Money Laundering Scheme and Defrauding Estates of More Than $1.6 MillionRead the Press Release
Ordered to pay $1,602,327.14 to multiple victims including $268,459.06 to St. Mary’s Church and $245,993.67 to WHAS Crusade for Children
LOUISVILLE, Ky. – United States Attorney John E. Kuhn, Jr. announced today that David Cary Ford, 54, of Louisville, Kentucky, was sentenced to 48 months in federal prison following his conviction on criminal counts of wire fraud and money laundering, stemming from Ford’s actions while he was a practicing attorney and the executor of seven estates in Louisville.
“Attorneys are professionally and ethically bound to serve their clients’ best interests,” stated U.S. Attorney John Kuhn. “We simply cannot tolerate attorneys or any other fiduciaries using their positions of trust to steal from those they are obligated to protect. This prosecution serves the principle of justice and vindicates the breach of a trust that is an absolutely essential component of a multitude of professional relationships.”
Ford previously pled guilty to charges alleging that from November 6, 2008, through February 11, 2015, Ford, while serving as executor of the estates of Saundra A. Benzinger, Kenneth L. Keith, William T. Lawson, Mary Helen Pfeffer, Elinor E. Starr, Mary Augustine Starr, and Richard Steinmetz, defrauded those estates of approximately $1,666,671.18, and used those estates’ funds for personal expenses and enjoyment, including significant gambling activity.
Ford also pled guilty to laundering proceeds of his fraud by using funds belonging to one estate to conceal the depletion of funds from another estate. In pleading guilty, Ford admitted using his escrow account for this purpose with the intent to promote the carrying on of his fraud and to conceal or disguise the nature of the proceeds of his fraud.
As part of his sentence, Ford was ordered to pay over $1.6 million in restitution to 21 different victims who would have received that amount, according to bequests in the wills written by the individuals whose estates were defrauded, if not for Ford’s fraud. Those victims and the restitution they are owed include $245,993.67 that would have gone to the WHAS Crusade For Children and $5,598.59 for the Little Sisters of the Poor.
The restitution order also includes several Catholic religious organizations. Local victims included St. Mary’s Church ($268,459.06), St. Francis of Assisi Church ($44,743.18), Holy Family Catholic Church ($2,799.30), Our Mother of Sorrows Catholic Church ($2,799.30) and the Archdiocese of Louisville ($89,486.35).
Other victims included the Passionist Community ($245,993.67), the Passionist Nuns ($245,993.67), the National Shrine of St. Elizabeth Ann Seton ($134,229.53), the Franciscan Sisters of Allegany, Inc. ($134,229.53), the Catholic Foreign Mission Society of America, Inc. ($44,743.18), the Sisters of Charity of St. Joseph’s ($44,743.18), the Nazareth Literary and Benevolent Institution, Inc. ($44,743.18).
In addition, restitution was ordered for seven individuals, named only by their initials in court documents, who would have received bequests from the wills at issue if not for Ford's fraud.
The case was prosecuted by Assistant United States Attorney Jason Snyder, and it results from an investigation conducted by the Internal Revenue Service – Criminal Investigation Division and the Federal Bureau of Investigation.
Miami Resident Sentenced to 77 Months in Prison for Participating in A Conspiracy to Burglarize A Kentucky Cigarette WarehouseRead the Press Release
Ordered to pay $1,486,164.45 in restitution for theft of cigarettes from Leitchfield, Kentucky warehouse
Owensboro, KY – A Miami resident from Cuba, was sentenced this week in United States District Court by Chief Judge Joseph H. McKinley Jr., to 77 months in prison and ordered to pay restitution of $1,486,164.45 - for conspiracy and theft charges stemming from the defendant’s participation in a warehouse burglary in Leitchfield, Kentucky, announced United States Attorney John E. Kuhn, Jr.
Amuary Villa, 41, admitted to his role in stealing nearly $1.5 million in cigarettes from the Coremark Cigarette Warehouse in Leitchfield, Kentucky, in March 2011, and that he and others possessed the stolen cigarettes (which constitute an interstate and foreign shipment of property valued at over $1,000) with the intent to convert the property to their own use.
During the theft, Villa and his co-conspirators gained entry into the warehouse through the roof, disabled the alarm system, and loaded the stolen goods into a stolen tractor trailer. Specifically, between March 18, 2011, to March 20, 2011, defendant Camilo Rodriguez-Hernandez allegedly rented three hotel rooms in Elizabethtown, Kentucky, where the co-conspirators, who traveled to Kentucky from Miami, Florida, resided during the burglary and theft. Between March 19, 2011, and March 20, 2011, Amuary Villa, Ivan Romero (a/k/a El Negro), Amed Villa (charged separately), and other co-conspirators unloaded a stolen tractor trailer and loaded it with cigarettes. Defendant Romero admitted to providing transportation for the stolen cigarettes and driving them to the New Jersey/New York area. Defendant Villa admitted to “casing” the warehouse location, cutting a hole in the warehouse roof, then entering the warehouse and disabling the alarm system.
Amuary Villa will serve the 77 month prison term consecutive to a 140 month sentence from the Southern District of Florida and the District of Connecticut, for his role in the theft of approximately $90 million in pharmaceuticals from the Eli Lilly Company warehouse and storage facility in Enfield, Connecticut.
Romero, also a legal permanent resident from Cuba who last resided in Miami, will finish serving a six-year state sentence from Florida, before being transferred to federal custody to serve 57 months. Ahmed Villa, the defendant’s brother, pleaded guilty in the District of Connecticut to charges stemming from the $90 million in pharmaceuticals stolen from the Eli Lilly Company warehouse and storage facility in Enfield, Conn., and several other warehouse thefts including the Coremark Cigarette Warehouse in Leitchfield. Co-defendant Camillo Rodriguez Hernandez has a trial pending in the Western District of Kentucky. Restitution will be paid to Coremark and the insurance company for Coremark.
This case is being prosecuted by Assistant United States Attorney Joshua Judd and the investigation of the Kentucky theft is being led by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) with assistance from the U.S. Drug Enforcement Administration (DEA), Leitchfield and Elizabethtown Police Departments, and New Jersey and Kentucky State Police Departments.
Louisville Felon Convicted at Trial for His Role in A String of Armed Robberies in Metro LouisvilleRead the Press Release
Federal prosecution resulted from “Project Recoil”
LOUISVILLE, Ky. – United States Attorney John E. Kuhn, Jr. announced the conviction yesterday, of a violent felon for his role in a string of armed robberies in Metro Louisville. The federal charges stemmed from “Project Recoil,” the on-going partnership of multiple Jefferson County, Kentucky law enforcement agencies, developed by the U.S. Attorney’s Office for the Western District of Kentucky, to maximize penalties for the most violent offenders and to reduce violent crime in our community.
“This conviction will ensure that Jescell Whittle, a violent offender, who threatened businesses and customers with deadly force, will be off our streets and behind bars for a long time,” Stated U.S. Attorney John Kuhn. “Project Recoil, our law enforcement partnership, is working to identify and successfully prosecute the most dangerous offenders in our community and this conviction is an example of how well our partnership is working.”
Jescell Whittle was convicted of the obstruction of interstate commerce through robbery of two businesses, and using a firearm in connection with the two robberies following a six-day trial before Chief Judge Joseph H. McKinley, Jr. Sentencing is scheduled for December 6, 2016, in Louisville.
This successful prosecution has resulted in the sentencing of four co-defendants, to lengthy prison sentences, for their roles in the armed robberies of two Cricket Wirelesses and three convenience stores in Metro Louisville.
Co-defendants James Gore, Jr. was sentenced to serve 72 months in prison followed by a three year period of supervised release, Tony Trumbo, Jr. was sentenced to serve a combined 255 months in prison followed by a three year period of supervised release for their roles in the armed robberies of three businesses located in Jefferson County, Kentucky. Both were sentenced on July 9, 2015.
Gore previously pleaded guilty to aiding and abetting the obstruction of interstate commerce through robbery of two businesses. Trumbo previously pleaded guilty to aiding and abetting the obstruction of interstate commerce through robbery, attempted robbery of three businesses, and aiding and abetting the discharge of a firearm during a robbery.
According to the plea agreement, Gore admitted to robbing a Thorntons, with several other individuals, located at 4516 Poplar Level Road on October 30, 2012, and to robbing a Speedway, with several other individuals, located on 3030 Taylor Boulevard on October 31, 2012. Surveillance video taken from the Thorntons robbery shows Gore brandishing two firearms during the robbery.
In a separate plea agreement, defendant Trumbo admitted to attempting to rob the Cricket Wireless store, located at 3125 W. Broadway, along with other individuals, on October 23, 2012. Surveillance video taken from the store shows Trumbo along with an accomplice who was brandishing a firearm, attempting to rob the store. Trumbo also admitted to being one of several people to rob the Thorntons located at 4516 Poplar Level Road, on October 30, 2012. Trumbo further admitted to being one of several people to rob the Speedway located at 3030 Taylor Boulevard on October 31, 2012. During the course of that robbery, Whittle shot a Speedway customer in the back causing serious bodily injury.
Co-defendant Dahntel Newsome pleaded guilty to multiple charges on September 9, 2015, and was sentenced to 243 months in prison. Newsome admitted to being the getaway driver during the robbery by his co-defendants of the Crickett Wireless store on Cane Run Road. He further admitted to being the getaway driver during the robbery of the Cricket Wireless Store on West Broadway in Louisville, and admitted to using a handgun and threatening to shoot the clerk in the foot during the robbery of the JC Cigarette Outlet located on Crums Lane and driving the getaway vehicle.
This case is being prosecuted by Assistant United States Attorneys A. Spencer McKiness and Rob Bonar, and was investigated by the Louisville Metro Police Department.
Pharmacy Owner and Medical Doctor Charged in an Internet Scheme to Dispense Medications to Customers Without Valid PrescriptionsRead the Press Release
Customers received prescription drugs based solely on completion of online medical questionnaires
Sales exceeded $4 million
LOUISVILLE, Ky. – United States Attorney John E. Kuhn, Jr. this week charged several defendants and businesses, all tied to a multi-million-dollar internet scheme to dispense medications to customers without a valid prescription, with ten criminal charges. The indicted charges include an internet pharmacy conspiracy, conspiracy to distribute misbranded drugs, distributing misbranded drugs, mail fraud conspiracy, wire fraud conspiracy, health care fraud, engaging in the unlicensed wholesale distribution of prescription drugs, aggravated identity theft, conspiracy to commit money laundering, and obstruction of a criminal investigation.
Those charged were: Philip E Michael II of Alum Creek, West Virginia, and his business MEDS 2 GO, Inc. later known as MEDS 2 GO Express Pharmacy, Inc.; physician Euton Laing, of Piscataway, New Jersey, who is licensed to practice medicine in New Jersey, and was employed by RX Limited – a website selling prescription drugs over the internet; Mark Reinhard of Cross Lanes, West Virginia, who is charged with being an unlicensed wholesale distributor of prescription drugs; and Joetta Kuhn (of no familial relation to U.S. Attorney John Kuhn) of Louisville, Kentucky, who is charged with obstructing a criminal investigation.
According to the indictment, beginning in June of 2009 and continuing until at least April of 2012, defendant Philip Michael caused prescription drugs to be provided to customers of the website RX Limited. Specifically, through Aracoma Pharmacy and MEDS 2 GO Pharmacy, Michael filled and shipped various prescription drug orders to customers, for RX Limited and other internet websites, located across the United States and in the Western District of Kentucky, who did not have a valid prescription. These prescription drug orders were shipped to various states, which by law, required a valid prescription, prior to the drugs being dispensed. Customers would receive a prescription without ever seeing or speaking with a physician or medical practitioner, rendering the prescription invalid. Rather, customers would merely choose which prescription drug he or she wanted and complete an online medical questionnaire. The website operator would then send the completed online medical questionnaire by electronic means to an issuing doctor, including Eutan Laing, John Burlington, Edward Kaplan, and others known and unknown by the Grand Jury. (Physicians Burlington and Kaplan have pleaded guilty to charges in the Southern District of New York.) The drug would be prescribed without verifying the customers’ medical complaint, having an adequate patient history, performing a mental or physical exam, using appropriate diagnostic or laboratory testing, and providing a means to monitor the customer’s response to the medication. Then the invalid prescription would be filled by MEDS 2 Go or Aracoma, and shipped to customers across the United States.
During the course of the Internet Pharmacy Scheme, bank accounts controlled by Michael allegedly received approximately $4,000,000 from website operators, and others known and unknown to the Grand Jury. Physicians Laing, J.N.B., E.S.K., and others, were allegedly paid by website operators via wire transfers in excess of $800,000.
Further, MEDS 2 GO is charged with distributing misbranded drugs as the medications were not safe for use except under the supervision of a practitioner licensed by law to administer the drugs. Dispensing of Soma - a muscle relaxant, Ultram – a painkiller, and Fioricet – a treatment for tension headaches without a valid prescription caused the drugs to become misbranded.
Additionally, Michael is charged with defrauding a health care benefit program by submitting a fraudulent claim for payment to Humana Insurance Company for dispensing medication to P.R. which was never dispensed.
Also, Michael is charged with aggravated identity theft for using the name, date of birth and other identifying information for P.R. and the name and NPI number of A.S., a physician, to submit a fraudulent claim for payment.
In addition, proceeds from alleged criminal activities are subject to forfeiture to the United States. This includes, but is not limited to, an annuity and life insurance policy, vehicles associated with defendants Philip Michael and Meds 2 Go (2011 Jeep Grand Cherokee, 2011 Cadillac Escalade, 2008 Toyota Sequoia, and 2007 Chevy Corvette), a money judgement not less than 4 million dollars.
In the event of a conviction, the potential penalties range from 2 years to 20 years in prison for each specific count, a $250,000 fine for each count, and supervised release for a period of three years. The aggravated identity theft charge carries a minimum penalty of 2 years.
The case is being prosecuted by Assistant United States Attorney Lettricea Jefferson-Webb, and it results from an investigation conducted by the U. S. Food and Drug Administration, Office of Criminal Investigations, the Kentucky State Police and the West Virginia State Police.
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The charge of a person by Federal Indictment is an accusation only and that person is presumed innocent until and unless proven guilty
Former Manager of Louisville Medical Office Sentenced to 20 Months in Prison for Health Care Fraud and Identity TheftRead the Press Release
LOUISVILLE, Ky. – United States Attorney John E. Kuhn, Jr. today announced the sentencing of a former medical office manager to 20 months in prison, on Wednesday, August 19, 2016, by Senior District Judge Thomas B. Russell, for committing health care fraud and aggravated identity theft.Kelly Lenning, age 45, of Jefferson County, Kentucky, pleaded guilty to all charges in a six count federal indictment, on March 28, 2016. Lenning admitted to scheming to defraud a health care benefit program, in connection with the delivery of and payment for health care benefits, items, and services, and three counts of aggravated identity theft in relation to the health care fraud offenses.
Specifically, from May of 2013 through August of 2013, while manager of Injury Rehab Specialists of Lou., PLLC a medical practice that treated motor-vehicle-accident patients, Lenning unlawfully used former employees’ (nurse practitioners) DEA numbers to order controlled substance prescriptions, namely Hydrocodone, and directed two individuals to fill the Hydrocodone prescriptions.
The individuals provided the filled Hydrocodone prescriptions to Lenning, for her own personal use, while she knew the individuals used Humana insurance, to pay for the unlawful prescriptions.
Additionally, during the same time period, Lenning admits to using the identification of another person, namely the DEA numbers of two nurse practitioners, without lawful authority. Lenning admitted that she did not have the authority or permission of the nurse practitioners to use their DEA numbers to order narcotics.
This case is being prosecuted by Assistant United States Attorneys Joseph Ansari and Lettricea Jefferson-Webb and was investigated by the Federal Bureau of Investigation (FBI) and Louisville Metro Police Department.
Former Louisville Business Owner Charged with Failure to File Income Tax Returns and Tax EvasionRead the Press Release
LOUISVILLE, Ky. – United States Attorney John E. Kuhn, Jr. today announced the indictment this week, of former Louisville business owner Lawrence P. Tatem, for willful failure to file federal income tax returns during a four-year period and evasion of payment of taxes, penalties, and assessments totaling $533,498 from a two-year period.
According to the indictment, Tatem, 50, willfully attempted to evade and defeat the payment of a large part of the federal income tax, penalties, and interest due by him to the United States of America, for the calendar years 2002 through 2004, totaling approximately $533,498, by concealing his assets; by changing the names and locations of his rehabilitation businesses; by placing his businesses in the names of nominees J.S., D.R., and M.Z.; by closing bank accounts at Republic Bank after the Internal Revenue Service attempted to levy funds from the accounts, and opening new bank accounts at Chase Bank under different names; and by operating in cash without keeping proper records of cash transactions.
Further, Tatem is charged with willful failure to file federal income tax returns for calendar years 2010 to 2013. Specifically, during the calendar year 2010, Tatem received gross income of approximately $252,860 and failed to file a federal tax return by April 15, 2011. During calendar year 2011, Tatem received gross income of approximately $45,353 and failed to file a federal tax return by April 15, 2012. During calendar year 2012, Tatem received gross income of approximately $199,067 and failed to file a federal income tax return by April 15, 2013. During the calendar year 2013, Tatem received gross income of approximately $120,994 and failed to file a federal income tax return by April 15, 2014.
If convicted at trial, Tatem could be sentenced to no more than nine years in prison, fined up to $225,000, and serve up to three years of supervised release.
This case is being prosecuted by Assistant United States Attorney Amanda Gregory and is being investigated by the Internal Revenue Service Criminal Investigation Division. tatem_lawerence_charged_8-18-16.pdf
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The charge of a person by Federal Indictment is an accusation only and that person is presumed innocent until and unless proven guilty
Bowling Green, Kentucky, Substitute Teacher Sentenced to Ten Years in Prison for Possession and Distribution of Child PornographyRead the Press Release
Arrest part of an international undercover investigation by Toronto, Ontario police
BOWLING GREEN, Ky. – A substitute teacher, formerly employed by the Bowling Green (Kentucky) School system, was sentenced to ten years in prison and a lifetime of supervised release this week in United States District Court, by United States District Judge Greg N. Stivers, for possession and distribution of child pornography, announced United States Attorney John E. Kuhn, Jr.
Leon Lussier, of Bowling Green, Kentucky, was arrested by criminal complaint on September 1, 2015, and charged by grand jury indictment on September 16, 2016. He pleaded guilty to the charges in May of 2016.
In court today, Lussier admitted that on three occasions, from June 23, 2015, to July 21, 2015, he participated in video conferencing rooms (chat rooms) where he was a participant in streaming child pornography through his webcam which was shared with other users in the room.
According to the initial charges, the international investigation that led to Lussier’s arrest started in January 2015, when the Toronto, Ontario, Canada Police Service, Child Exploitation Section, received information regarding the investigation of a group of individuals involved in the sexual abuse of children, including the distribution of child pornography. On June 23, 2015, a Toronto Police Service Detective Constable logged into an undercover software account and observed a person with the username “I luv boys” was streaming child pornography videos by sharing his computer screen. The user streamed four videos containing child pornography. Further investigation led law enforcement to Lussier as the person with username “I luv boys.”
A search warrant of Lussier’s Bowling Green home resulted in the seizure of numerous computer media. A preview of an HP Pavilion by a Computer Forensics Agent revealed several videos containing child pornography. Several of the videos had been previously viewed in a chat room by an undercover officer. The videos were being live-streamed on a computer with an IP address assigned to Lussier.
In addition to the sentence, Lussier was ordered to pay $15,000 to victims and $50,000 in fines.
This case is being prosecuted by Assistant United States Attorney Jo E. Lawless. This case is being investigated by U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), Canadian authorities, Bowling Green Police Department and U.S. Marshals Service.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Allen County, Kentucky, Tobacco Farmers Guilty of Crop Insurance FraudRead the Press Release
Both defrauded crop insurance companies of more than $1 million each
BOWLING GREEN, Ky. – Two Allen County, Kentucky, farmers pleaded guilty in United States District Court today, before Magistrate Judge H. Brent Brennenstuhl, to a single charge each of crop insurance fraud announced United States Attorney John E. Kuhn, Jr.
According to the separate plea agreements, David Manion, 53, and Henry Manion, 48, aided and abetted by others, admitted to knowingly making false statements and reports on applications for insurance. Both defendants made false statements for the purpose of influencing the actions (insurance payments) of the Federal Crop Insurance Corporation (FCIC) and Producers Agriculture Insurance Company (ProAg), a company insured by the Federal Crop Insurance Corporation. Additionally, David Manion had crop insurance provided by Rural Community Insurance Services (RCIS), a company insured by the Federal Crop Insurance Corporation (FCIC).
The violations by Henry Manion occurred between August 10, 2009, and February 14, 2012, in Allen and Simpson Counties in Kentucky. The violations by David Manion occurred between August 25, 2009, and February 7, 2012, in Allen, Simpson and Warren Counties in the Western District of Kentucky. At all relevant times, their tobacco crops were covered by companies insured by the FCIC.
According to the plea agreement, David Manion had eight (8) separate tobacco crop insurance policies on eight (8) different crops. David Manion, aided and abetted by others, admitted to intentionally overstating crop damage for each crop on a crop insurance claim, resulting in a loss of $1,133,498.
According to a separate plea agreement, Henry Manion had five (5) separate tobacco crop insurance policies on five (5) different crops. Henry Manion, aided and abetted by others, admitted to intentionally overstating crop damage for each crop on a crop insurance claim form, resulting in a loss of $1,104,087.
According to the terms of the plea agreements, at sentencing the United States agrees to recommend a sentence for both defendants at the lowest end of the sentencing guideline range and each defendant will be required to make full restitution to the FCIC. If convicted at trial, Henry Manion and David Manion each faced a maximum prison term of 30 years and a maximum fine of $1,000,000.
Sentencing is scheduled before U.S. District Judge Gregory N. Stivers on December 5, 2016 at 10:00 a.m. in Bowling Green, Kentucky.
These cases are being prosecuted by Assistant United States Attorney David Weiser and are being investigated by the United States Department of Agriculture (USDA) Office of Inspector General (OIG). manion_david_plea_8-2-16.pdf manion_henry_plea_8-2-16.pdf
Cuban National Residing in Louisville on A Visa Found Guilty of Conspiring to Possess and Distribute Ten Kilograms of CocaineRead the Press Release
LOUISVILLE, Ky. – A Cuban National residing in Louisville, Kentucky on a Visa was convicted by a federal jury late yesterday, in United States District Court, on all charges including conspiring with others to possess with the intent to distribute cocaine, announced United States Attorney John E. Kuhn, Jr.
Following a three-day trial, a federal jury deliberated approximately three hours before finding Manuel Sile-Perez, 54, guilty of conspiring to possess with intent to distribute cocaine and aiding and abetting an attempt to possess with intent to distribute cocaine.
Sile-Perez was charged individually by federal Complaint on November 5, 2014, and charged by grand jury indictment with three co-defendants on December 2, 2014.
During the trial, the United States provided evidence of Sile-Perez’s role in the attempted purchase of cocaine for approximately $100,000 from an alleged California based supplier. The “supplier” was an FBI Inland Crackdown Allied Task Force Confidential Human Source (INCA CHS).
The CHS met with Sile-Perez and co-defendants Walter Elliot, Nathaniel Barbour and Roberto Remedios Faguagua (Remedios) at a storage business located on Preston Highway in Louisville, the agreed upon location where the supposed cocaine was stored. The meeting was captured on video tape.
Sile-Perez is scheduled to be sentenced by Chief District Judge Joseph H. McKinley JR., on October 27, 2016 in Louisville.He faces a sentence from five to forty years in prison for each count.
Assistant United States Attorney Larry Fentress prosecuted the case. The Federal Bureau of Investigation (FBI), with assistance from the California Department of Justice, conducted the investigation.
Louisville, Woman Sentenced to Eight Years in Prison for Conspiracy to Sex Traffic A Louisville, Kentucky, MinorRead the Press Release
LOUISVILLE, Ky. – A Louisville, Kentucky, woman was sentenced today in United States District Court by District Judge David J. Hale to eight years in prison, followed by tens years of supervised release, for conspiracy to sex traffic a minor, announced U. S. Attorney John E. Kuhn, Jr.
Crystal Bradshaw, a/k/a Crystal Thurman, 42, pleaded guilty to the charge on March 16, 2016. Her co-defendant, Ralph Goodwin, was sentenced earlier this month, by Judge Hale, to ten years in prison for sex trafficking of the 15-year-old female, including soliciting the minor to engage in commercial sex acts and transporting the minor with the intent that the minor engage in prostitution.
According to court records, Bradshaw admitted that in June of 2015, she made contact with Goodwin through seekingarrangements.com, a “sugar daddy” website. They met shortly thereafter and established a relationship wherein Bradshaw would have sexual relations with Goodwin in exchange for money and other things of value.
On August 7, 2015, Bradshaw approached a 15-year-old female in a Louisville park. Bradshaw took the minor female to a Marriott Hotel in Louisville, where the minor engaged in sexual contact with Goodwin. From August 7, 2015, to August 9, 2015, Goodwin stayed at the hotel in Louisville with Bradshaw and the minor victim.
On August 9, 2015, the three left the hotel and Bradshaw received $600-$700 from Goodwin, but the minor was not paid. Goodwin drove the minor to his home in Clarksville, Tennessee. Eventually, the minor contacted a friend on Goodwin’s computer. The friend contacted the minor’s mother, which resulted in the Montgomery County, TN Sheriff’s Office discovering the minor at Goodwin’s Clarksville home. In Louisville, and in Tennessee, Goodwin provided the victim with things of value.
This case was prosecuted by Assistant United States Attorney Amanda Gregory and was investigated by the Federal Bureau of Investigation (FBI).
Barren County, Kentucky, Man Sentenced to 42 Months in Prison for Defrauding Supplemental Security Income ProgramRead the Press Release
Defendant misrepresented his mental condition to qualify for benefits
Ordered to pay $106,716.07 in restitution to victim agencies
BOWLING GREEN, Ky. – A Cave City, Kentucky, man was sentenced yesterday in United States District Court, by District Judge Greg N. Stivers, to 42 months in prison, and ordered to pay restitution of $24,884.80 to the Social Security Administration and $81,831.27 to the Kentucky Department for Medicaid Services, the victim agencies, for defrauding the Supplemental Security Income program, announced United States Attorney John E. Kuhn, Jr.
“Safeguarding programs designed to help those in need is a priority of my office,” stated U.S. Attorney Kuhn. “Defendant Thompson committed a crime when he failed to report income and falsely misrepresented his mental condition in order to receive Supplemental Security Income benefits. He was neither qualified to receive benefits nor should he have received benefits.”
Between August 2009 and April 2013, Gary Hank Thompson, 34, made misrepresentations in order to receive Supplemental Security Income benefits from the Social Security Administration in the amount of $24,884.80, to which he was not entitled. Supplemental Security Income is a federal government program that provides benefits to individuals who are disabled and have limited income and resources.
In his initial application for Supplemental Security Income, Thompson also applied for Medicaid, and during the same period, obtained $81,831.27 in Medicaid benefits.
At various points, including during the initial field interview with Social Security Administration personnel in August 2009, and during the April 15, 2013, redetermination meeting with Social Security Administration personnel in Warren County, Kentucky, defendant Thompson falsely represented his mental condition by slowing his speech and stuttering, and generally saying and doing things to make it seem that he had issues with comprehension, when he did not. Defendant misrepresented his mental condition in this way to qualify for benefits and to continue qualifying for Supplemental Security Income benefits. Thompson’s misrepresentations of his mental condition were material to whether he would receive Supplemental Security Income benefits, as he initially qualified under “organic mental disorders.” When the Social Security Administration was provided with accurate information concerning the Defendant’s mental condition, it reevaluated whether he qualified for Supplemental Security Income and determined he did not.
Additionally, the Defendant made material omissions and misstatements regarding his income and resources, which affected his eligibility for Supplemental Security Income benefits.
This case was prosecuted by Assistant United States Attorney Amanda E. Gregory and was investigated by the Office of the Inspector General of the Social Security Administration.
Former Deputy at Bullitt County, Kentucky, Sheriff’s Office Convicted of Civil Rights ViolationsRead the Press Release
Jury Found Defendant Guilty of Abusing his Authority by Retaliating Against a Civilian
A former deputy with the Bullitt County, Kentucky, Sheriff’s Office was convicted today by a federal jury of two counts of willfully depriving a Bullitt County resident of his constitutional rights under color of law, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, and U.S. Attorney John E. Kuhn Jr. of the Western District of Kentucky.
The evidence presented at trial established that Matthew Corder, of Louisville, Kentucky, abused his authority as a sworn law enforcement officer by retaliating against a Bullitt County resident who insulted him. Corder unlawfully entered the man’s home, tased him in the back, arrested him without probable cause and charged him with crimes that he did not commit, causing the man sit in jail for weeks and lose his job. The charges against the victim, disorderly conduct and fleeing and evading, were eventually dismissed.
“This deputy abused his authority, neglected the law and harmed a resident he swore an oath to protect,” said Principal Deputy Assistant Attorney General Gupta. “No insult justifies depriving the victim of his constitutional rights, and anytime law enforcement officers act like Corder did here, they do a disservice to the vast majority of their colleagues who safeguard our communities with fidelity, professionalism and distinction. The Justice Department will work tirelessly to bring to justice any member of law enforcement who breaks the law by using excessive force.”
“Every day, thousands of law enforcement officials have thousands of respectful, appropriate, lawful interactions with individuals,” said U.S. Attorney Kuhn. “We all appreciate these dedicated guardians for keeping us safe in our homes and in our communities. But in those rare instances when a police officer violates his foremost duty to obey the law and adhere to the limits imposed by our Constitution, the Department of Justice will vigorously work to hold that officer accountable. Today our efforts culminated in a unanimous jury verdict finding that former Deputy Sheriff Corder victimized an individual by making an unconstitutional arrest and bringing unconstitutional charges. The Department of Justice and the U.S. Attorney’s Office will continue to protect all individuals and communities from unlawful police conduct wherever and whenever it occurs.”
The four-day trial included testimony from the victim, the victim’s sister and the other officer on scene, which corroborated the victim’s account. The instructors from the police academy who trained Corder also testified to the fact that he knew what the law permits and knew that his conduct violated the victim’s constitutional rights. Evidence included Corder’s false arrest report as well as body-camera footage of the arrest.
Corder faces a maximum sentence of 10 years in prison on the first charge and one year of imprisonment on the second charge. His sentencing is scheduled for Oct. 17, 2016, before U.S. District Judge David J. Hale of the Western District of Kentucky.
This case was investigated by the FBI’s Louisville Division, and was prosecuted by Assistant U.S. Attorney Amanda Gregory of the Western District of Kentucky and Trial Attorney Christopher Perras of the Civil Rights Division’s Criminal Section.
Former Deputy at Bullitt County, Kentucky, Sheriff’s Office Convicted of Civil Rights ViolationsRead the Press Release
Jury Found Defendant Guilty of Abusing his Authority by Retaliating Against a Civilian
WASHINGTON – A former deputy with the Bullitt County, Kentucky, Sheriff’s Office was convicted today by a federal jury of two counts of willfully depriving a Bullitt County resident of his constitutional rights under color of law, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, and U.S. Attorney John E. Kuhn Jr. of the Western District of Kentucky.
The evidence presented at trial established that Matthew Corder, of Louisville, Kentucky, abused his authority as a sworn law enforcement officer by retaliating against a Bullitt County resident who insulted him. Corder unlawfully entered the man’s home, tased him in the back, arrested him without probable cause and charged him with crimes that he did not commit, causing the man sit in jail for weeks and lose his job. The charges against the victim, disorderly conduct and fleeing and evading, were eventually dismissed.
“This deputy abused his authority, neglected the law and harmed a resident he swore an oath to protect,” said Principal Deputy Assistant Attorney General Gupta. “No insult justifies depriving the victim of his constitutional rights, and anytime law enforcement officers act like Corder did here, they do a disservice to the vast majority of their colleagues who safeguard our communities with fidelity, professionalism and distinction. The Justice Department will work tirelessly to bring to justice any member of law enforcement who breaks the law by using excessive force.”
“Every day, thousands of law enforcement officials have thousands of respectful, appropriate, lawful interactions with individuals,” said U.S. Attorney Kuhn. “We all appreciate these dedicated guardians for keeping us safe in our homes and in our communities. But in those rare instances when a police officer violates his foremost duty to obey the law and adhere to the limits imposed by our Constitution, the Department of Justice will vigorously work to hold that officer accountable. Today our efforts culminated in a unanimous jury verdict finding that former Deputy Sheriff Corder victimized an individual by making an unconstitutional arrest and bringing unconstitutional charges. The Department of Justice and the U.S. Attorney’s Office will continue to protect all individuals and communities from unlawful police conduct wherever and whenever it occurs.”
The four-day trial included testimony from the victim, the victim’s sister and the other officer on scene, which corroborated the victim’s account. The instructors from the police academy who trained Corder also testified to the fact that he knew what the law permits and knew that his conduct violated the victim’s constitutional rights. Evidence included Corder’s false arrest report as well as body-camera footage of the arrest.
Corder faces a maximum sentence of 10 years in prison on the first charge and one year of imprisonment on the second charge. His sentencing is scheduled for Oct. 17, 2016, before U.S. District Judge David J. Hale of the Western District of Kentucky.
This case was investigated by the FBI’s Louisville Division, and was prosecuted by Assistant U.S. Attorney Amanda Gregory of the Western District of Kentucky and Trial Attorney Christopher Perras of the Civil Rights Division’s Criminal Section.
Louisville Dentist Sentenced to 78 Months in Prison for Possession and Attempted Receipt of Child PornographyRead the Press Release
LOUISVILLE, Ky. – A Louisville, Kentucky, dentist was sentenced to 78 months in prison, followed by ten years of supervised release, today in United States District Court by Senior District Judge Charles R. Simpson III, for attempting to receive child pornography and possession of child pornography that had been transported by computer, announced United States Attorney John E. Kuhn, Jr.
Gregory Witte, age 55, was charged in a four count grand jury indictment on July 7, 2015, and pleaded guilty to two of the counts on March 29, 2016. The United States agreed to dismiss the remaining two counts today during sentencing.
According to the plea agreement, using a peer-2-peer program, Kentucky State Police downloaded child pornography on November 5, 2014 and December 11, 2014, from an IP address traced to Greg Witte’s residence in Louisville. On January 7, 2015, a state search warrant was executed on Witte’s residence. At that time, officers observed Witte’s computer actively downloading files from the internet with filenames indicative of child pornography. An onsite preview of Witte’s electronic devices revealed several files of child pornography. A forensic review of Witte’s electronic devices revealed that he possessed 91 image files and 21 video files of child pornography. The forensic review also revealed several search terms indicative of child pornography.
Witte faced a minimum sentence of five years in prison. As part of the plea agreement, Witte forfeited real and personal property used in the commission of the offenses including $40,000 in lieu of real property located on Happiness Way, in Louisville and computer equipment.
Assistant United States Attorney A. Spencer McKiness prosecuted this case. Kentucky State Police and Homeland Security Investigations conducted the investigation.
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This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Bowling Green Physician Charged with Unlawful Distribution and Dispensing of Controlled Substance Causing Serious Physical Injury And/Or Death, Health Care Fraud Resulting in Death, and Conspiracy to Dispense Controlled SubstancesRead the Press Release
50 Count Indictment includes deaths of patients
BOWLING GREEN, Ky. – United States Attorney John E. Kuhn, Jr. today announced the Superseding Indictment of former Warren County, Kentucky, physician Charles Fred Gott on multiple charges of unlawful distribution and dispensing of controlled substances resulting in injury and or death of patients, health care fraud resulting in a patient’s death, and conspiracy to distribute and dispense controlled substances during the course of his professional practice that were not for a legitimate medical purpose, and health care fraud.
Gott, age 63, a formerly licensed physician in the Commonwealth of Kentucky, was initially indicted by grand jury in Bowling Green on June 10, 2015.
Today’s 50 count, superseding indictment adds multiple charges while the alleged criminal activity remains between 2006 and September 19, 2013, in Warren County, Kentucky.
Gott is charged with a single count of conspiring with others to knowingly and intentionally distribute and dispense, not for a legitimate medical purpose in the usual course of professional practice, Schedule II, Schedule III and Schedule IV controlled substances. Included are 14 counts of unlawfully dispensing Methadone and Fentanyl – Schedule II controlled substances, Hydrocodone – a Schedule III controlled substance, and Clonazepam and Oxymorphone – Schedule IV controlled substances.
Further, Gott is charged with three counts of unlawful distribution and dispensing of controlled substances resulting in serious physical injury and/or the death of known patients. According to the charges, on December 8, 2011, Gott knowingly and intentionally distributed Fentanyl, not for a legitimate medical purpose and in the usual course of professional practice, to a patient whose serious physical injury and death on December 13, 2011 resulted from the use of the dispensed substance.
On February 28, 2012, Gott is charged with knowingly and intentionally distributing Hydrocodone, not for a legitimate medical purpose and in the usual course of professional practice, to a patient whose serious physical injury and death on March 2, 2012 resulted from the use of the dispensed substance.
On July 24, 2012, Gott is charged with knowingly and intentionally distributing Methadone, not for a legitimate medical purpose and in the usual course of professional practice, to a patient whose serious physical injury and death on July 28, 2012, resulted from the use of the dispensed substance.
Gott is further charged with a single count of the health care fraud resulting in the death of a patient. According to the superseding indictment, between July 13, 2011, and September 19, 2013, Gott knowingly dispensed and distributed medically unnecessary controlled substance prescriptions to a patient – knowing that the patient would fill her prescriptions at pharmacies, and those pharmacies in turn would submit claims to health care benefit programs for reimbursement and these prescriptions resulted in the patients’ death on February 7, 2013.
Further, during the same time period, Gott is charged with executing a scheme to falsely and fraudulently bill various health care benefit programs, including Medicare and Medicaid, by submitting claims for office visits at a higher code than the service actually provided to patients under his care. Also, Gott is charged with directing staff members to provide medically unnecessary spirometry tests and medically unnecessary electrocardiogram (EKG/ECG) tests to patients, and to falsely and fraudulently bill various health care benefit programs, including Medicare, Medicaid, and Anthem, among others, by submitting claims for medically unnecessary spirometry tests and EKG/ECG tests, for patients. A spirometry test assess lung function in the diagnosis of asthma, chronic obstructive pulmonary disease (COPD) and other conditions that affect breathing.
Gott is further subject to forfeiture to the United States government, any and all proceeds derived from unlawful activity as a result of the offenses alleged in the indictment and the forfeiture of Gott’s license to practice medicine.
If convicted at trial, Gott faces a mandatory minimum of 20 years and up to and including life in prison. Gott is scheduled for arraignment on July 27th, at 10:00 a.m. in Bowling Green.
This case is being prosecuted by Assistant United States Attorneys Mac Shannon, Lettricea Jefferson-Webb and Joseph Ansari. This case was investigated by the Warren County Drug Task Force, Drug Enforcement Administration (DEA) Drug Diversion Section, the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG), Kentucky State Police, Office of the Attorney General, Medicaid Fraud and Abuse Division and Federal Bureau of Investigation (FBI). The Warren County Drug Task Force, led by Director Tommy Loving, along with detectives from KSP’s West Drug Enforcement Branch, were instrumental in identifying and developing this case for federal prosecution.
Clarksville, Tennessee, Man Sentenced to Ten Years for Sex Trafficking of A Louisville, Kentucky MinorRead the Press Release
LOUISVILLE, Ky. – A Clarksville, Tennessee man was sentenced today in United States District Court by District Judge David J. Hale, to ten years in prison for sex trafficking a 15-year-old female, announced United States Attorney John E. Kuhn, Jr.
“Pursing those who sex traffic vulnerable children is a priority of my office and the Department of Justice,” stated U.S. Attorney Kuhn. “We have an unwavering commitment to ensuring that no child will become the victim of sexual trauma and exploitation.”
Ralph W. Goodwin, age 66, pleaded guilty to a three count superseding indictment on April 4, 2016. The charges included sex trafficking of a child older than 14 but younger than 18; soliciting a minor to engage in commercial sex acts; and transporting a minor with the intent that the minor engage in prostitution. Co-defendant Crystal Bradshaw, a/k/a Crystal Thurman, age 42, was charged with recruiting, harboring, transporting and soliciting a minor to engage in a commercial sex act. Bradshaw remains in federal custody and is scheduled for sentencing by District Judge Hale on July 21, 2016, in Louisville.
According to the affidavit attached to the criminal complaint, on August 7, 2015, a 15-year-old female was approached by Crystal Bradshaw, in a Louisville park. Bradshaw took the minor female to a Marriott Hotel in Louisville to engage in sexual contact with Ralph Goodwin, in exchange for a monetary payment. According to the affidavit, Bradshaw received $700 from Goodwin, but the minor was not paid. Further, after two days, Goodwin drove the minor to his home in Clarksville, Tennessee. Eventually, the minor contacted a friend on Goodwin’s computer. The friend contacted the minor’s mother, which resulted in the Montgomery County, TN Sheriff’s Office discovering the minor at Goodwin’s Clarksville home.
Goodwin was initially charged in a separate, sealed criminal complaint on August 23, 2015. The case was unsealed during the initial appearance and detention hearing before U.S. Magistrate Judge Dave Whalin on Monday, August 31, 2015.
This case was prosecuted by Assistant United States Attorney Amanda Gregory and was investigated by the Federal Bureau of Investigation (FBI).
Louisville Based MD2U, a Regional Provider of Home-Based Care, and Its Principal Owners Admit to Violating the Federal False Claims Act and Being Liable for MillionsRead the Press Release
Knowingly Presented False Claims and Altered Records to Get False Claims Paid Will Pay Millions to Settle Allegations
MD2U Holding Company, including its related companies and individually named owners, have agreed to pay millions to resolve a government lawsuit alleging that they violated the federal False Claims Act by knowingly submitting false medical claims to Medicare and other government health care programs, altering records to support false claims and providing services that were medically unnecessary, announced U.S. Attorney John E. Kuhn Jr. for the Western District of Kentucky
“Unfortunately, our healthcare system is under assault from a small minority of providers who engage in fraudulent billing, overbilling and providing unnecessary services,” said U.S. Attorney Kuhn. “In an effort to control these losses and force accountability, my office and the Department of Justice pursues and recovers false and fraudulent billings as one of its highest priorities. This significant case against MD2U is but one example of the vigorous work against healthcare fraud taking place in the Western District and across the nation.”
“This provider billed for medically unnecessary home visits and often grossly exaggerated the level of service provided,” said Special Agent in Charge Derrick L. Jackson for the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) in Atlanta. “The OIG is committed to protecting the integrity of federal health care programs by aggressively pursuing entities that increase their revenue through deceitful schemes and trickery.”
The government’s complaint alleged that between July 1, 2007, and Nov. 30, 2014, MD2U submitted false billings for patients who were neither homebound nor home-limited; improperly billed the government for medically unnecessary visits; billed government health care programs at the highest payment codes (upcoding) when a lower code would have been more appropriate; and cloned medical records (a cut, copy, paste electronic program) in order to justify patient visits. Specifically, the government’s complaint alleged that MD2U’s schemes included the following:
- MD2U required non-physician providers (NPPs) to document that patients were homebound or home-limited and indicate in the medical record that an outpatient visit would jeopardize the patient’s health, regardless as to whether this was true or not. A number of MD2U patients were neither homebound nor home-limited, as some patients worked outside the home, attended school outside the home, drove independently, routinely saw other providers in the office and in at least one case, went horseback riding.
- MD2U would require NPPs to perform medically unnecessary visits and improperly bill Government Health Care Programs for evaluation and management (E&M) visits in order to generate revenue. Management instructed NPPs to schedule patient visits more frequently than necessary in order to increase productivity.
- According to a review of Medicare claims submitted by MD2U between July 1, 2007, and Nov. 30, 2014, 98 percent were falsely billed to Medicare. NPPs’ patient visits would often last less than ten minutes with some lasting less than five minutes (and in at least one reviewed case – 34 seconds), but these encounters were billed as comprehensive medical visits and billed at the highest level E&M code possible. The American Medical Association’s guidelines for these codes indicate that practitioner’s using the codes billed by MD2U should be performing comprehensive medical exams and should typically spend 60 minutes face-to-face with the patient, family member or caregiver.
- Management trained NPPs to bill all visits using the highest level E&M code available.
- MD2U also utilized an electronic medical records (EMR) system that permitted the NPPs to easily electronically cut, copy and paste medical notes from prior visits. The ability to migrate notes from visits that occurred weeks, months, or even years prior to the current patient encounter created the illusion that MD2U’s NPPs were performing a significant amount of work during their patient encounters when, in fact, they were not. If the documentation was deficient to bill the highest level code, MD2U would direct NPPs to go back and change the medical record – after the encounter had occurred – to falsely show that more work was performed during the visit in order to support the highest level billing.
Through a stipulation and order to be entered by the court, the defendants have admitted that they violated the False Claims Act, 31 U.S.C. §§ 3729-3733, by (a) making or causing others to make false statements and (b) submitting or causing others to submit false claims to the United States. The defendants admit that these actions caused damages and that they are liable to the United States in the amount of $21,511,756 under the False Claims Act (which allows for damages in the amount of three times the government’s loss, plus penalties).
Further, in the consent judgment to be entered by the court, defendants J. Michael Benfield, Chief Executive Officer and President of MD2U; Greg Latta, Chief Information Officer; and Karen Latta, Chief Operations Officer, all owners, residing in Louisville, Kentucky, admit that, due in part to the actions of a former employee, they caused the submission of false claims to the United States in violation of the False Claims Act. They further admit that the submission of the claims for payment caused these damages as a result of misrepresentations, false representations and/or deceptive conduct; that it was done with reckless disregard of the falsity of the claims; and in doing so, caused the United States to be deceived.
Through the terms of the stipulation and order, the defendants can fulfill their obligations to pay the consent judgment by paying $3.3 million and a percentage of MD2U’s net income over the next five years. The defendants have also agreed to enter into a five year corporate integrity agreement with HHS-OIG.
The settlement announced today illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $27.1 billion through False Claims Act cases, with more than $17.1 billion of that amount recovered in cases involving fraud against federal health care programs. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, including the conduct described in the United States’ complaint, can be reported to the Department of Health and Human Services, at 1-800-HHS-TIPS (1-800-447-8477).
This matter was handled by Assistant U.S. Attorney Benjamin S. Schecter with the U.S. Attorney’s Office for the Western District of Kentucky, HHS-OIG; Defense Criminal Investigative Services; and the Railroad Retirement Board, Office of the Inspector General.
The case is captioned United States v. MD2U Holding Company et al., Case No. 3:16-cv-00440-GNS
Louisville Based MD2U, A Regional Provider of Home-Based Care, and Its Principal Owners Admit to Violating the Federal False Claims Act and Being Liable for MillionsRead the Press Release
Knowingly presented false claims and altered records to get false claims paid
Will pay millions to settle allegations
LOUISVILLE, KY – MD2U Holding Company, including its related companies and individually named owners (“Defendants”), have agreed to pay millions to resolve a government lawsuit alleging that they violated the federal False Claims Act by knowingly submitting false medical claims to Medicare and other government health care programs, altering records to support false claims, and providing services that were medically unnecessary U.S. Attorney John E. Kuhn, Jr. today announced.
"Unfortunately, our healthcare system is under assault from a small minority of providers who engage in fraudulent billing, overbilling, and providing unnecessary services," stated U.S. Attorney Kuhn. "In an effort to control these losses and force accountability, my office and the Department of Justice pursues and recovers false and fraudulent billings as one of its highest priorities. This significant case against MD2U is but one example of the vigorous work against healthcare fraud taking place in the Western District and across the nation."
"This provider billed for medically unnecessary home visits and often grossly exaggerated the level of service provided," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "The OIG is committed to protecting the integrity of federal health care programs by aggressively pursuing entities that increase their revenue through deceitful schemes and trickery.”
The government’s complaint alleged that between July 1, 2007, and November 30, 2014, MD2U submitted false billings for patients who were neither homebound nor home-limited; improperly billed the government for medically unnecessary visits; billed government health care programs at the highest payment codes (upcoding) when a lower code would have been more appropriate; and cloned medical records (a cut, copy, paste electronic program) in order to justify patient visits. Specifically, the government’s complaint alleged that MD2U’s schemes included the following:
-
MD2U required nonphysician providers (NPPs) to document that patients were homebound or home-limited and indicate in the medical record that an outpatient visit would jeopardize the patient’s health, regardless as to whether this was true or not. A number of MD2U patients were neither homebound nor home-limited, as some patients worked outside the home, attended school outside the home, drove independently, routinely saw other providers in the office, and in at least one case, went horseback riding.
-
MD2U would require NPPs to perform medically unnecessary visits and improperly bill Government Health Care Programs for evaluation and management (E&M) visits in order to generate revenue. Management instructed NPPs to schedule patient visits more frequently than necessary in order to increase productivity.
-
According to a review of Medicare claims submitted by MD2U between July 1, 2007, and November 30, 2014, 98 percent were falsely billed to Medicare. NPPs’ patient visits would often last less than ten minutes with some lasting less than 5 minutes (and in at least one reviewed case – 34 seconds), but these encounters were billed as comprehensive medical visits and billed at the highest level E&M code possible. The American Medical Association’s guidelines for these codes indicate that practitioner’s using the codes billed by MD2U should be performing comprehensive medical exams and should typically spend 60 minutes face-to-face with the patient, family member or caregiver.
-
Management trained NPPs to bill all visits using the highest level E&M code available.
-
MD2U also utilized an electronic medical records (EMR) system that permitted the NPPs to easily electronically cut, copy and paste medical notes from prior visits. The ability to migrate notes from visits that occurred weeks, months, or even years prior to the current patient encounter created the illusion that MD2U’s NPPs were performing a significant amount of work during their patient encounters when, in fact, they were not. If the documentation was deficient to bill the highest level code, MD2U would direct NPPs to go back and change the medical record – after the encounter had occurred – to falsely show that more work was performed during the visit in order to support the highest level billing.
Through a Stipulation and Order to be entered by the Court, the Defendants have admitted that they violated the False Claims Act, 31 U.S.C. §§ 3729-3733, by (a) making or causing others to make false statements and (b) submitting or causing others to submit false claims to the United States. The Defendants admit that these actions caused damages and that they are liable to the United States in the amount of $21,511,756 under the False Claims Act (which allows for damages in the amount of three times the government’s loss, plus penalties).
Further, in the Consent Judgment to be entered by the Court, defendants J. Michael Benfield, Chief Executive Officer and President of MD2U; Greg Latta, Chief Information Officer; and Karen Latta, Chief Operations Officer, all owners, residing in Louisville, admit that, due in part to the actions of a former employee, they caused the submission of false claims to the United States in violation of the False Claims Act. They further admit that the submission of the claims for payment caused these damages as a result of misrepresentations, false representations, and/or deceptive conduct; that it was done with reckless disregard of the falsity of the claims; and in doing so, caused the United States of America to be deceived.
Through the terms of the Stipulation and Order, the Defendants can fulfill their obligations to pay the Consent Judgment by paying $3.3 million and a percentage of MD2U’s net income over the next five years. The Defendants have also agreed to enter into a five year Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General.
The settlement announced today illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $27.1 billion through False Claims Act cases, with more than $17.1 billion of that amount recovered in cases involving fraud against federal health care programs. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, including the conduct described in the United States’ complaint, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
This matter was handled by Assistant United States Attorney Benjamin S. Schecter with the U.S. Attorney’s Office for the Western District of Kentucky, the Department of Health and Human Services, Office of Inspector General; Defense Criminal Investigative Services; and the Railroad Retirement Board, Office of the Inspector General.
The case is captioned United States v. MD2U Holding Company et al., Case No. 3:16-cv-00440-GNS.
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McCracken County, Kentucky, Physician Guilty of Fraudulent Possession of A Controlled Substance, Wire Fraud and Making False Statements Related to Health Care MattersRead the Press Release
PADUCAH, Ky. – A McCracken County, Kentucky, physician plead guilty today, in United States District Court, before Senior District Judge Thomas B. Russell, to fraudulent possession of a controlled substance, wire fraud and making false statements related to health care matters, announced United States Attorney John E. Kuhn, Jr.
Sean P. McDonald, 46, admitted to devising a scheme to obtain prescription pain medication, while a treating physician at two Paducah, Kentucky, hospitals by falsely misrepresenting that he was removing medications for hospitalized patients, falsely possessing the controlled substances, and then falsely causing a request for payment to be sent from the two Paducah hospitals to the insurance carriers of the patients.
Specifically, according to the twelve-count federal Information, McDonald defrauded Lourdes Hospital and Western Baptist Hospital, by means of wire communication. From February 2009, through November 2010, McDonald caused a request for payment to be sent from Western Baptist Hospital and/or Lourdes Hospital, both located in Paducah, Kentucky, to patient’s insurance carriers.
During the same time period, McDonald admitted to making false and fraudulent statements to insurance carriers indicating that he had provided medication to patients when he had not.
Further, McDonald, as a prescribing physician with a DEA (Drug Enforcement Administration) registration number to issue prescriptions, wrote prescriptions for Dilauded, a Schedule II controlled substance, in violation of his DEA registration, to patients, when in fact he never provided the controlled substances to the patient.
If convicted at trial, McDonald would have faced a combined maximum term of imprisonment of 113 years, a combined maximum fine of $3,000,000 and a three year term of supervised release. Sentencing before Senior Judge Russell is September 26, 2016, in Paducah.
This case is being prosecuted by Assistant United States Attorneys Lettricea Jefferson-Webb and Seth Hancock and is being investigated by the United States Department of Health and Human Services Office of Inspector General, the Medicaid Fraud and Abuse Control Unit of the Kentucky Office of the Attorney General, and Federal Bureau of Investigation.
Warren County, Kentucky, Sales Administrator for Heathco Corporation Charged with Mail Fraud, Identity Theft and Tax FraudRead the Press Release
Received nearly $309,000 in kickbacks from $2,696,400 in fraudulent advertisement sales
BOWLING GREEN, Ky. – A sales administrator for HeathCo LLC, appeared before United States Magistrate Judge H. Brent Brennenstuhl today, charged by federal indictment with mail fraud, identity theft and tax fraud after receiving $308,954.42 in kickbacks from $2,696,400 in fraudulent advertisement sales, announced United States Attorney John E. Kuhn, Jr.
Annette Thomas, 42, of Warren County, Kentucky, was charged in a 15 count indictment with ten counts of mail fraud, three counts of identity theft, and two counts of filing false tax returns with the Internal Revenue Service, while employed at HealthCo., located in Bowling Green.
Between October of 1999, and February of 2012, Thomas served as a Sales Analyst Supervisor with administrative responsibilities for budget and expense matters within the retail sales department. HealthCo markets HeathZenith lighting products that are sold at large retail stores.
According to the indictment, Thomas used forged signatures of her supervisor to authorize payments to Professional Sport Publications (PSP), and an associated entertainment company, Adventure Entertainment Promotions (AEP), for unwanted and unnecessary advertisements in sports publications around the United States. Thomas typically authorized payment to PSP in the amount of $15,000 per advertisement and in return for advertisements, PSP allocated approximately 20% of the value of the advertisement in merchandising credits. Merchandising credits consisted of gift cards, sports tickets, concert tickets, airline tickets, and hotel and resort reservations.
In executing the scheme, Thomas used the United States Mail and other common carriers to mail payments for the unauthorized advertisements and received merchandising credits for HealthCo, that were diverted by Thomas for her own personal benefit. Further, as part of the scheme, Thomas is charged with forging the signature of a supervisor for payment of advertisements for the World Series, the Sugar Bowl, and the Liberty Bowl.
Also, Thomas is charged with failing to report approximately $30,578 in other income on a U.S. Individual Tax Return, for calendar year 2010 and failing to report approximately $39,665 of other income on a U.S. Individual Tax Return for calendar year 2011.
If convicted of the charges, Thomas could be sentenced to no more than 20 years for each count of mail fraud, two years for each count of aggravated identity theft, and three years for each count of filing a false tax return. Thomas could be fined $250,000 for each charge.
This case is being prosecuted by Assistant United States Attorney Joshua Judd and is being investigated by the United States Postal Inspection Service and Internal Revenue Service (IRS) Criminal Investigation division.
The charge of a person by Grand Jury Indictment is an accusation only and that person is presumed innocent until and unless proven guilty.
Med 1st of Evansville, P.C., Charged with Conspiracy to Commit Health Care Fraud, Conspiracy to Violate the Controlled Substance Act and Money LaunderingRead the Press Release
LOUISVILLE, Ky. – MED 1st of Evansville, P.C., located in Evansville, Indiana, was charged by Grand Jury Indictment today with conspiracy to commit health care fraud, health care fraud, and conspiracy to violate the Controlled Substance Act announced United States Attorney John E. Kuhn, Jr.
According to the four count indictment, beginning in January 2009, and continuing until at least May 2014, MED 1ST Of Evansville, P.C., conspired with others to commit health care fraud by causing the submission of false claims to Medicaid, Medicare, Anthem, and other insurance carriers.
Specifically, MED 1ST Of Evansville, P.C., knowingly and willfully executed a scheme to defraud health care benefit programs including Medicare, Medicaid, and Anthem, by directing staff members to provide medically unnecessary treatments to patients and fraudulently billing the health care benefit programs for the services. Claims were allegedly submitted for medically unnecessary facet block injections; conscious sedation, which was never performed; back braces, which were not medically necessary; and performing unnecessary tests for patients.
Further beginning on or about November 2011, and continuing until at least December 2012, MED 1ST Of Evansville, P.C., knowingly and intentionally conspired to distribute and dispense controlled substances in violation of the Controlled Substances Act. According to the indictment, Conspirator A, who was then a medical practitioner and Drug Enforcement Administration registrant, signed blank prescription pads and permitted individuals, acting at the direction of Conspirator B, who were not Drug Enforcement Administration registrants, to conduct evaluations of patients and to use these pre-signed prescription pads to prescribe medication to the patients.
Further, MED 1ST Of Evansville, P.C., conspired to commit money laundering by using the proceeds from a specified unlawful activity (health care fraud and unlawful distribution and dispensing of controlled substances) to promote and conceal that activity, and to engage in monetary transactions greater than $10,000 with proceeds derived from that specified unlawful activity.
Further, MED 1ST Of Evansville, P.C., is subject to forfeiture of any and all property constituting or derived from any proceeds the defendants obtained, directly or indirectly, as a result of the these violations, and any and all property used or intended to be used in any manner or part to commit and to facilitate the commission of these violations.
This case is being prosecuted by Assistant United States Attorneys Lettricea Jefferson-Webb and Jessica Malloy. This case is being investigated by the United States Drug Enforcement Administration, U.S. Department of Health and Human Services Office of Inspector General, Internal Revenue Service, Indiana Attorney General’s Office and Kentucky Attorney General’s Office.
McCracken County, Kentucky, Physician Charged with Fraudulent Possession of A Controlled Substance, Wire Fraud and Making False Statements Related to Health Care MattersRead the Press Release
PADUCAH, Ky. – A McCracken County, Kentucky, physician was charged by federal Information today with the fraudulent possession of a controlled substance, wire fraud and making false statements related to health care matters, announced United States Attorney John E. Kuhn, Jr.
According to the twelve-count federal Information, Sean P. McDonald, 46, devised a scheme to obtain prescription pain medication, while a treating physician at two Paducah, Kentucky, hospitals by falsely misrepresenting that he was removing medications for hospitalized patients, falsely possessing the controlled substances, and then falsely causing a request for payment to be sent from the two Paducah hospitals to the insurance carriers of the patients.
Specifically, it’s alleged that McDonald defrauded Lourdes Hospital and Western Baptist Hospital, by means of wire communication. From February 2009, through November 2010, McDonald caused a request for payment to be sent from Western Baptist Hospital and/or Lourdes Hospital, both located in Paducah, Kentucky, to patient’s insurance carriers.
During the same time period, McDonald made false and fraudulent statements to insurance carriers indicating that he had provided medication to patients when he had not.
Further, McDonald, as a prescribing physician with a DEA (Drug Enforcement Administration) registration number to issue prescriptions, wrote prescriptions for Dilauded, a Schedule II controlled substance, in violation of his DEA registration, to patients, when in fact he never provided the controlled substances to the patient.
If convicted at trial, McDonald would face a combined maximum term of imprisonment of 113 years, a combined maximum fine of $3,000,000 and a three year term of supervised release.
This case is being prosecuted by Assistant United States Attorneys Lettricea Jefferson-Webb and Seth Hancock and is being investigated by the United States Department of Health and Human Services Office of Inspector General, Kentucky Attorney General’s Office and Federal Bureau of Investigation.
The indictment of a person by a Federal Information is an accusation only and that person is presumed innocent until and unless proven guilty.
Louisville Daycare Owner/Operator Sentenced to 46 Months in Prison for Fraudulently Seeking Child Care Payments from Kentucky AgencyRead the Press Release
Lottie Carisa Burgos, former owner of ABC Village Daycare, falsified daycare attendance figures
and qualifications of daycare workers
Ordered to pay $1,424,929 in restitution
LOUISVILLE, Ky. –United States Attorney John E. Kuhn, Jr. announced today the sentencing of a former Louisville daycare owner by United States District Judge Greg N. Stivers, to 46 months in prison for committing wire fraud and money laundering and was ordered to pay $1,424,929.00 in restitution to the victim agency
In March of 2016, Lottie Carisa Burgos, the former owner and operator of ABC Village Daycare, pleaded guilty in United States District Court, to 18 counts of an indictment returned by a federal grand jury on July 16, 2014.
“In committing this fraud, Ms. Burgos not only took taxpayer money intended to assist economically disadvantaged parents with childcare costs, but also placed infants and toddlers in harm’s way,” stated United States Attorney John Kuhn. “With this prosecution, we are protecting children and recovering stolen taxpayer money. I thank the Kentucky Cabinet for Health and Family Services and the Federal Bureau of Investigation for their work on this case.”
Burgos operated ABC Village Daycare at two locations, 1801 West Market Street, Louisville, Kentucky, and 2823 7th Street Road, Louisville, Kentucky. According to the plea agreement, Burgos or others acting at her direction falsified a wide range of information which was a condition of payment for child care services from Kentucky’s Department for Community Based Services. The Department for Community Based Services provides child care benefits to low-income working parents and guardians.
Burgos, or others acting at her direction, falsified the following information: the number of children who attended the daycare centers including the number of days children attended the daycare centers and the employment status of the parents.
In addition, Burgos, or others acting at her direction, falsified records of the ABC Village Daycare employees. Those records included high school diplomas (which are a requirement of child care staff with supervisory authority over minors), tuberculosis tests, and CPR certificates. A false tuberculosis test and CPR certificate are requirements of child care employees for the business to receive payment from Kentucky’s Department of Community Based Services.
Burgos pleaded guilty to 12 counts of wire fraud and 6 counts of money laundering. The total loss was $1,424,929.00.
This case was prosecuted by Assistant United States Attorney David Weiser and was investigated by the Office of Inspector General for the Kentucky Cabinet for Health and Family Services and the Federal Bureau of Investigation (FBI).
Jefferson County, Kentucky, Dentist Guilty of Illegal Distribution of Controlled SubstancesRead the Press Release
21,866 Hydrocodone pills prescribed during 9 month period
LOUISVILLE, Ky. – A Jefferson County, Kentucky, dentist pleaded guilty in United States District Court today, before Magistrate Judge Colin H. Lindsay, to a charge of illegal distribution of controlled substances announced United States Attorney John E. Kuhn, Jr.
In court today, Rodney B. Fultz, 63, admitted to allowing an employee who was not authorized to write prescriptions for controlled substances to use his DEA registration number to prescribe 21,866 hydrocodone pills during a ten month period.
Specifically, according to the plea agreement, during calendar year 2012, Fultz owned Market Street Dental in Louisville, Kentucky. Between January 2012 and November 2012, D.C.K., also a dentist, performed dental work on patients at Market Street. At the time, D.C.K.’s DEA (Drug Enforcement Administration) registration number was voluntarily suspended, which precluded him from writing prescriptions for controlled substances. Nonetheless, Fultz knowingly gave D.C.K. his DEA registration number so that D.C.K. could prescribe controlled substances for his patients. Fultz was rarely at Market Street, and did not supervise, review, or approve any of these prescriptions when they were written.
Between January 2012 and November 2012, D.C.K. prescribed 21,866 hydrocodone pills to his patients, using Rodney B. Fultz’s DEA registration number. Hydrocodone is a highly addictive controlled substance used for the treatment of pain. Although now a Schedule II controlled substance, hydrocodone was a Schedule III controlled substance in 2012.
At the time of sentencing, the United States will agree to a sentence of two years of probation , a fine of $45,000 and require Fultz to permanently surrender both his DEA registration number and his license to practice dentistry in the Commonwealth of Kentucky.
Sentencing will be scheduled before Senior District Judge Thomas B. Russell.
This case is being prosecuted by Assistant United States Attorney David Weiser and is being investigated by the United States Drug Enforcement Administration (DEA) and Louisville Metro Police Department.
United States Attorney John E. Kuhn, Jr. Delivers Remarks at Annual Pride FestivalRead the Press Release
Remarks as prepared for delivery
LOUISVILLE, KY
Thank you, Greg [Fischer], for that kind introduction and your dedication to equal rights, equal justice, fairness and inclusiveness.
I cannot begin to express how much it means to me to be with all of you here today. I do wish we stood here together in a spirit of undiminished, unalloyed, pure celebration. This past year was marked with important milestones, not the least of which was a milestone Supreme Court decision announced exactly one week after last year’s Pride Festival, a decision that finally secured freedom and equality in marriage for all of us. I wish – with all my heart – I wish that our hearts today were full of nothing but joy and pride.
Tragically that is not the case. Today we reel from the unconscionable terrorist attack on the innocents at the Pulse club in Orlando. Our hearts ache with the weight of the unfathomable losses of our brothers and sisters.
I am here today to tell you that my office – the United States Attorney’s Office – and the Department of Justice stand with you in support and commiseration. The Attorney General of the United States has asked U.S. Attorneys all over the country to speak to you. And because I cannot improve upon the remarks of Deputy Attorney General Sally Yates, I will share them with you. She said:
“Words cannot express the depth of our sorrow or the measure of our grief for all those whom we lost and all those whose lives have been changed forever. What happened in Orlando . . . was a horrifying act of evil and of terror. For the LGBT community, Pulse was more than a place to celebrate and see friends. It was a place that promised safety, inclusion and the freedom for people to be themselves – the same promise our country has made to all of us. This was an attack on that promise. It was an attack on our values, on our country and on our national community. It was an attack on who we are as a nation and as a people. And our country as a whole stands united in its response to this cowardly and despicable act.”
So let me say this. You have much to be proud of. Even in the shadow of this darkness and evil, the future is bright with promise for you. I pledge to you we will continue our fight together for universal equality, for acceptance, inclusion, freedom and security. We must continue on, together. Stronger. Brave. Unbowed. More determined than ever. And as we fight, let us always remain the force that you have been all along: a force of peace, courage, hope and love.
Franklin, Kentucky, Physician Guilty of Illegal Distribution of Controlled SubstancesRead the Press Release
Prescribed opiate pain medications outside the course of professional medical practice and without a legitimate medical purpose.
Two patients died while under his care.
BOWLING GREEN, Ky. – A Franklin, Kentucky, physician pleaded guilty today in U.S. District Court before Magistrate Judge H. Brent Brennenstuhl to charges of the illegal distribution of controlled substances by way of prescribing opiate pain medications outside of the course of professional medical practice and without a legitimate medial purpose, announced U.S. Attorney John E. Kuhn, Jr.
According to the plea agreement, Roy D. Reynolds, age 66, was a doctor practicing in Franklin, Kentucky, in Simpson County during the time of the illegal activity. Dr. Reynolds was the treating physician to patients known as J.H. and J.R. at the time of their deaths. According to autopsies, both patients died from pharmaceutical overdoses.
According to information in the plea agreement, J.H. had a history of illegal drug usage and psychiatric issues which were documented in his patient charts. Further, this patient had a KASPER report also suggesting opiate abuse and diversion. Although J.H. made various somatic complaints, Dr. Reynolds never objectively documented a legitimate source of pain. Also, an opiate centric treatment plan was contraindicated because of risk factors inherent with a history of drug abuse.
Nonetheless, Dr. Reynolds admitted to placing J.H. on a regimen of chronic opiate therapy, and did not monitor or enforce patient accountability, (did not perform urine screens or pill counts), and did not attempt to wean J.H. off opiates. Between February 2009 and April 2011, Dr. Reynolds repeatedly prescribed oxycodone, a Schedule II controlled substance, and Xanax, a Schedule IV controlled substance, to J.H. outside the course of professional medical practice and without a legitimate medical purpose.
On April 3, 2011, J.H. died at age 46 of a pharmaceutical overdose, and an autopsy revealed oxycodone at five (5) times the upper therapeutic concentration. Two days prior to his death, Dr. Reynolds prescribed J.H. 180 oxycodone pills and 90 Xanax pills.
J.R. was Dr. Reynolds’s patient between July 2010 and December 2011. J.R. presented vague complaints of knee, neck and shoulder pain, but MRI’s and physical examinations failed to identify any significant pathologies. A legitimate pain diagnosis was never established, and J.R.’s patient records reflect a history of alcohol abuse, doctor shopping, drug dependency, and non-compliance. Controlled substances were contraindicated, but Dr. Reynolds repeatedly prescribed hydrocodone, a Schedule III controlled substance at the time, and Xanax and clonazepam, Schedule IV controlled substances, outside the course of professional medical practice and without a legitimate medical purpose. On December 30, 2011, J.R. died at age 41 of a pharmaceutical overdose, and an autopsy revealed hydrocodone at thirty (30) times the upper therapeutic concentration.
If convicted at trial, Reynolds could have been sentenced to no more than 30 years in prison, followed by a three year period of supervised release and fined $1.5 million. Reynolds will be sentenced by U.S. District Judge Greg Stivers in Bowling Green.
This case is being prosecuted by Assistant United States Attorney David Weiser and is being investigated by the Federal Bureau of Investigation (FBI) and Kentucky State Police.
Veterans Treatment Court Established for Louisville Area Veterans Charged with Federal CrimesRead the Press Release
LOUISVILLE, Ky. – United States Attorney John E. Kuhn, Jr., in conjunction with U.S. District Court Judge David J. Hale, U.S. District Court Magistrate Judge Colin H. Lindsay, Chief U.S. Probation Officer Kathryn B. Jarvis, Chief of Staff Robley Rex VA Medical Center Dr. Mary Lee Rothchild, and Chief Federal Defender Scott Wendelsdorf, today announced the newly established Veterans Treatment Court (VTC) Program for the Western District of Kentucky.
“Our nation is indebted to our veterans for their service and sacrifice," stated U.S. Attorney Kuhn. "Many return from combat with serious mental health and substance abuse issues that often go untreated. We have learned that these challenges sometimes lead to criminal behavior,” stated U.S. Attorney John Kuhn. “We expect this program will curb recidivism in our veteran community and promote sober and crime-free lives that our veterans deserve.”
"Our agency is committed to helping connect those on our case loads with the opportunities, skills, and resources for change. To that end, the Veteran Treatment Court allows us to more intentionally target and tailor our efforts to better serve justice involved veterans. Developing this program also helped us identify new veteran specific community resources which will allow us to better serve all veterans, not just those who are eligible for the treatment court," stated Kathryn Jarvis, Chief U.S. Probation Officer.
“The Robley Rex VAMC and Veterans Justice program is proud and honored to be a partner with the Western District Federal court, the U.S Attorney’s Office and the U.S. Probation and Parole office in the implementation of the Western District Federal Veterans treatment court. The Veterans treatment court is a model for assisting our Veteran population who have found themselves legally involved due to their often times untreated co-occurring mental health and substance abuse treatment issues or their difficulties with adjusting to civilian life. This partnership will include matching the legally involved Veteran with a mentor as well as identifying and addressing their housing, employment and pro-social needs, in order to empower their continued service to our community post military as they work within this partnership to resolve their criminal offense,” stated Sonny Hatfield, U.S. Department of Veterans Affairs.
The VTC allows qualified veterans charged with certain non-violent federal crimes to enroll in an intensive court-managed treatment program as an alternative to prison. This program was made possible through a collaborative agreement between the U.S. District Court, the U.S. Attorney's Office, the U.S. Probation Office, and the U.S. Department of Veterans Affairs. The mission of the VTC is to promote community safety and reduce recidivism by helping justice-involved veterans obtain needed mental health and addiction treatment. Voluntary participants will be monitored and held accountable by the Court-managed program to insure participants attain treatment and rehabilitation.
Veterans who have not been convicted of or charged with violent or sexual offenses may enter the VTC Program in one of three ways: as defendants facing federal misdemeanor charges; as defendants facing federal felony charges; or as felons facing revocation of supervised release after having served any sentence of incarceration.
Veterans Treatment Court requires enrollees to engage in intensive multi-stage professional counseling and treatment for issues involving substance abuse, mental health, disability, finances, and other difficulties, including those related to their military service. They must also abide by strict conditions, follow rigorous treatment plans, and attend scheduled hearings before a judge.
Most participants will be required to participate in the program for 18 months. Upon successfully completion of the voluntary program, veterans can expect the U.S. Attorney’s Office to reduce the charges to a lesser offense, refer the Veteran-Participant to Pretrial Diversion, or dismiss the charges entirely. Most importantly, Veteran-Participants will receive treatment that may help them regain hope for a sober and crime-free life.
The VTC program is only possible due to the availability of rehabilitative programs offered by the VA. Because the VTC program's essential treatment and counseling services are furnished by the VA Medical Center, veterans must be eligible to receive VA benefits in order to participate.
According to a report by the Bureau of Justice Statistics, the number of military veterans in jails and prisons continues to drop since 1978, when 24 percent of prisoners were veterans. Currently veterans make up 8 percent of the inmate population in local jails, state facilities and federal prison. The increasing number of Veterans’ Courts is partly credited for the lower incarceration rate. However, a Department of Veterans Affairs study determined that from 1999 through 2010, between 18 and 22 veterans commit suicide each day in the United States.
A Memorandum of Understanding (MOU) was signed today by officials from each participating agency during a ceremony held in the Gene Snyder United States Courthouse. The MOU establishes the rights and responsibilities of each stakeholder involved in the VTC program and outlines the expectations for the program's veteran-participants.
Kalamazoo, Michigan, Man Charged with Multiple Counts of Sex Trafficking and Interstate Transportation for ProstitutionRead the Press Release
David Q. Givhan, 34, of Kalamazoo, Michigan, was charged by grand jury indictment, unsealed late yesterday, with multiple counts of sex trafficking and interstate transportation for prostitution, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division and U.S. Attorney John E. Kuhn Jr. of the Western District of Kentucky.
Givhan was arrested on May 18, 2015, and appeared before Magistrate Judge Colin H. Lindsay of the Western District of Kentucky on May 19, 2016. Givhan is charged with three counts of interstate transportation for prostitution and two counts of sex trafficking an adult by force, fraud or coercion.
According to the indictment, the alleged criminal acts occurred between October 2014 and May 2015, and involved three women over the age of 18. The three women were transported by Givhan from Michigan to Kentucky to engage in prostitution.
The indictment also alleges that Givhan recruited and transported two of the women, knowing and in reckless disregard of the fact that means of force, threats of force, fraud and coercion, would be used to cause them to engage in commercial sex acts.
An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty. If convicted, his maximum sentence for the interstate transportation for prostitution charges is 10 years in prison. For the sex trafficking charges, his maximum sentence is life in prison.
This case is being investigated by the FBI’s Louisville, Kentucky, Division and Louisville Metro Police Department. The case is being prosecuted by Assistant U.S. Attorney Amanda E. Gregory of the Western District of Kentucky and Trial Attorney William Nolan of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Givhan Indictment
Kalamazoo, Michigan, Man Charged with Multiple Counts of Sex Trafficking and Interstate Transportation for ProstitutionRead the Press Release
WASHINGTON – David Q. Givhan, 34, of Kalamazoo, Michigan, was charged by grand jury indictment, unsealed late yesterday, with multiple counts of sex trafficking and interstate transportation for prostitution, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division and U.S. Attorney John E. Kuhn Jr. of the Western District of Kentucky.
Givhan was arrested on May 18, 2015, and appeared before Magistrate Judge Colin H. Lindsay of the Western District of Kentucky on May 19, 2016. Givhan is charged with three counts of interstate transportation for prostitution and two counts of sex trafficking an adult by force, fraud or coercion.
According to the indictment, the alleged criminal acts occurred between October 2014 and May 2015, and involved three women over the age of 18. The three women were transported by Givhan from Michigan to Kentucky to engage in prostitution.
The indictment also alleges that Givhan recruited and transported two of the women, knowing and in reckless disregard of the fact that means of force, threats of force, fraud and coercion, would be used to cause them to engage in commercial sex acts.
An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty. If convicted, his maximum sentence for the interstate transportation for prostitution charges is 10 years in prison. For the sex trafficking charges, his maximum sentence is life in prison.
This case is being investigated by the FBI’s Louisville, Kentucky, Division and Louisville Metro Police Department. The case is being prosecuted by Assistant U.S. Attorney Amanda E. Gregory of the Western District of Kentucky and Trial Attorney William Nolan of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Bullitt County, Kentucky, Man Sentenced to 360 Months in Prison for Production of Child PornographyRead the Press Release
LOUISVILLE, Ky. – A Bullitt County, Kentucky, man was sentenced today to 360 months in prison, followed by a life-time of supervised release, by Senior United States District Judge Thomas B. Russell, for the production of child pornography, announced United States Attorney John E. Kuhn, Jr.
“Thirty years is a just sentence for Michael Mudd, who exploited two young children to manufacture child pornography," stated U.S. Attorney Kuhn. “This successful prosecution was part of Project Safe Childhood, a Department of Justice initiative launched ten years ago this month to combat the growing epidemic of child sexual exploitation and abuse. We will continue to work with our law enforcement partners to rescue child victims and pursue criminals like Mr. Mudd who prey on them."
Michael Mudd, 47, previously admitted in court that he had photographed and video recorded two male children. He created the images inside his residence as well as outside at a small lake near the trailer park where he lived. At least one of the children was identified and a staff member with Family and Children’s Place in Louisville, Kentucky, conducted a forensic interview with the 12-year-old boy. During the interview, the child described multiple occasions during which Mudd photographed and video recorded him engaging in sexually explicit conduct. According to the child, the recording/photographing took place on multiple occasions dating back to the fall of 2013 and continuing to May 2014. The computer forensic examination of the items seized from Mudd’s home revealed the existence of the videos / photographs described by the boy.
Mudd was arrested on August 25, 2014, on a criminal complaint. A federal grand jury indicted Mudd on September 18, 2014. Mudd pleaded guilty to two separate counts of producing child pornography on June 17, 2015.
According to the record of this case, law enforcement officials executed a federal search warrant on Mudd’s residence on August 7, 2014. Mudd was at home during execution of the warrant. Law enforcement officials seized a number of items, including computers, cellular telephones and other digital devices. The items were submitted for forensic examination.
While law enforcement officials were on the scene of the search, neighbors approached and expressed concern about Mudd’s conduct with young boys in the neighborhood. Within 24 hours of executing the warrant, an adult female made contact with law enforcement. She reported that her 12-year-old son told her that Mudd had recorded her son engaging in sexually explicit conduct.
Assistant United States Attorney Jo E. Lawless prosecuted the case. The United States Postal Inspection Service, with assistance from the Bullitt County Sheriff’s Office, conducted the investigation.
***
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Bowling Green, Kentucky, Substitute Teacher Guilty of Possession and Distribution of Child PornographyRead the Press Release
Arrest part of an international undercover investigation by Toronto, Ontario police
BOWLING GREEN, Ky. – A substitute teacher, formerly employed by the Bowling Green (Kentucky) School system, pleaded guilty today in United States District Court, before United States District Judge Greg N. Stivers to a single count of possession of child pornography and a single count of distribution of child pornography, announced United States Attorney John E. Kuhn, Jr.
Leon Lussier, age 49, of Bowling Green, Kentucky, was arrested by criminal complaint on September 1, 2015, and charged by grand jury indictment on September 16, 2016.
In court today, Lussier admitted that on three occasions, from June 23, 2015, to July 21, 2015, he participated in video conferencing rooms (chat rooms) where he was a participant in streaming child pornography through his webcam which was shared with other users in the room.
According to the initial charges, the international investigation that led to Lussier’s arrest started in January 2015, when the Toronto, Ontario, Canada Police Service, Child Exploitation Section, received information regarding the investigation of a group of individuals involved in the sexual abuse of children, including the distribution of child pornography. On June 23, 2015, a Toronto Police Service Detective Constable logged into an undercover software account and observed a person with the username “I luv boys” was streaming child pornography videos by sharing his computer screen. The user streamed four videos containing child pornography. Further investigation led law enforcement to Lussier as the person with username “I luv boys.”
A search warrant of Lussier’s Bowling Green home resulted in the seizure of numerous computer media. A preview of an HP Pavilion by a Computer Forensics Agent revealed several videos containing child pornography. Several of the videos had been previously viewed in a chat room by an undercover officer. The videos were being live-streamed on a computer with an IP address assigned to Lussier.
Lussier faces not less than 5 years and not more than 30 years in prison, a 500,000.00 fine, and supervised release of at least five years and could be any number of years, including life. Lussier is being held in the custody of the United States Marshals Service pending sentencing by Judge Stivers in Bowling Green.
This case is being prosecuted by Assistant United States Attorney Jo E. Lawless. This case is being investigated by U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), Canadian authorities, Bowling Green Police Department and U.S. Marshals Service.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Kentucky Anesthesiologist Sentenced to 100 Months for Unlawful Distribution of Controlled Substances, Health Care Fraud, Conspiracy and Money LaunderingRead the Press Release
Anesthesiologist Jaime Guerrero, 48, of Kentuckiana, Kentucky, was sentenced in federal court in Louisville, Kentucky, to 100 months in prison for his role in the unlawful distribution of controlled substances, including the prescription opioid hydrocodone without a legitimate medical purpose and related crimes, announced U.S. Attorney John E. Kuhn Jr for the Western District of Kentucky.
According to the terms of a prior plea agreement, Guerrero agreed to forfeit his license to practice medicine and real property owned by Guerrero Real Estate Investments LLC. Further, Guerrero agreed to pay $827,000 in victim restitution to nine health care benefit programs.
Guerrero, formerly a medical physician with offices in Louisville and Jeffersonville, Indiana, pleaded guilty to 31 counts of a 35 count Superseding Indictment on Jan. 7, including unlawful distribution or dispensing of controlled substances, health care fraud, conspiracy and money laundering.
“The prescribing practices of a very few physicians in Kentucky have caused immeasurable harm,” said U.S. Attorney Kuhn. “Reckless prescribing encourages abuse, creates addicts and builds the foundation for the scourge of heroin that so many pill addicts turn to. The personal and social costs are no less than tragic. My office will aggressively prosecute doctors like Dr. Guerrero who prescribe narcotics without a legitimate medical purpose. We will seek justice and accountability for the harm they do.”
“Doctors take an oath to ‘first, do no harm.’ Dr. Guerrero violated that oath and today’s sentence is a solemn reminder that the cost of health care fraud is not one just paid in money,” said Special Agent in Charge Howard Marshall for the FBI’s Louisville Division. “The FBI and our law enforcement partners are committed to vigorously investigating those who seek to enrich themselves and threaten the public’s safety through fraudulent health care schemes.”
“This doctor was operating as a drug dealer in a white coat,” said Special Agent in Charge Derrick L. Jackson for the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “This sentence should be a wake-up call to physicians across the state: if you’re overprescribing narcotics you are facing a lengthy prison sentence.”
“The dangerous overprescribing of opioid drugs by some providers has had tragic consequences for public health in southern Indiana and western Kentucky,” said Indiana Attorney General Greg Zoeller, who co-chairs the Indiana Prescription Drug Abuse Prevention Task Force. Its website is www.BitterPill.in.gov. “The Indiana Medicaid Fraud Control Unit of my office worked with our colleagues in the U.S. Attorney’s Office to investigate and unravel this illegal scheme, hold the defendant accountable and recoup taxpayers’ funds.”
“Addressing the diversion and abuse of controlled substance prescription medications is a top priority of the DEA,” said Special Agent in Charge Timothy J. Plancon for the U.S. Drug Enforcement Administration’s Detroit Field Division. “In this instance, Jaime Guerrero, formerly an anesthesiologist abused his position of trust and jeopardized the lives of many individuals by dispensing controlled substances to patients without a medical purpose. This sentence should serve as a notice to all medical professionals that if you prescribe medication for personal gain you will be investigated and prosecuted to the fullest extent of the law.”
According to the plea agreement, from Nov. 1, 2009, continuing through Jan. 1, 2013, Guerrero conspired with others to knowingly and intentionally distribute and dispense, Schedule II and III controlled substances to patients, without a legitimate medical purpose and beyond the bounds of professional medical practice. Beginning Nov. 1, 2009, and continuing through May 8, 2014, Guerrero admitted to distributing and dispensing Schedule II and III controlled substances to patients (listed in counts 2-26) without a legitimate medical purpose beyond the bounds of professional medical practice. Beginning on or about Jan. 6, 2010, and continuing through Sept. 16, 2011, Guerrero knowingly and intentionally distributed and dispensed, and caused to be distributed and dispensed Hydrocodone, a Schedule III controlled substance, to patient S.O., without a legitimate medical purpose and beyond the bounds of professional medical practice, which resulted in S.O.’s death on or about Sept. 24, 2011.
Guerrero further pleaded guilty to three counts of health care fraud for fraudulently billing various health care benefit programs and for submitting fraudulent claims for patient health care counseling. Specifically, on May 26, 2011, June 15, 2011, and June 22, 2011, Guerrero saw more than 100 patients on each of the dates, by himself, and spent approximately three minutes or less with each patient and fraudulently billed various health care benefit programs, for office visits at a higher code than the service provided. Between July 9, 2010, and July 22, 2010, Guerrero travelled outside of the United States and directed staff personnel to provide group counseling sessions for patients in his absence. The group sessions were then billed as individual counseling sessions and as if Guerrero personally provided the service. Additionally, between Jan. 1, 2008, and continuing through June 15, 2012, Guerrero falsely and fraudulently submitted over 100 claims to various health care benefit programs for office visits at a higher code than the service provided; for office visits that were not medically necessary or within the course of usual medical practice; submitting claims for services that were not sufficiently documented in the patient’s medical record; and making claims for office visits as though a physician saw the patient, when in fact, a nurse practitioner saw the patient. Guerrero agreed to pay $827,000 in victim restitution to nine health care benefit programs.
Finally, Guerrero pleaded guilty to a single money laundering charge for redeeming (paying the taxes) on a building located at 1201 West Wall Street in Jeffersonville with $89,556.25 in cash derived from unlawful activity - the unlawful dispensing and distribution of controlled substances and health care fraud.
This case was prosecuted by Assistant U.S. Attorneys Joseph Ansari and Lettricea Jefferson-Webb and was investigated by the Federal Bureau of Investigation, the U.S. Department of Health and Human Services-Office of Inspector General, the U.S. Drug Enforcement Administration, Indiana and Kentucky Medicaid Fraud Control Units and Louisville Metro Police Department.
Kentuckiana Anesthesiologist Sentenced to 100 Months for Unlawful Distribution of Controlled Substances, Health Care Fraud, Conspiracy, and Money LaunderingRead the Press Release
LOUISVILLE, Ky. – Kentuckiana anesthesiologist Jaime Guerrero was sentenced to 100 months in prison, by United States District Judge Greg N. Stevens today, and according to the terms of a prior plea agreement, agreed to forfeit his license to practice medicine and real property owned by Guerrero Real Estate Investments, LLC. Further, Guerrero agreed to pay $827,000 in victim restitution to nine health care benefit programs announced United States Attorney John E. Kuhn, Jr.
Guerrero, age 48, formerly a medical physician with offices in Louisville, Kentucky, and Jeffersonville, Indiana, pleaded guilty to 31 counts of a 35 count Superseding Indictment on January 7, 2016, including unlawful distribution or dispensing of controlled substances, health care fraud, conspiracy and money laundering.
“The prescribing practices of a very few physicians in Kentucky have caused immeasurable harm," stated U.S. Attorney John Kuhn. "Reckless prescribing encourages abuse, creates addicts, and builds the foundation for the scourge of heroin that so many pill addicts turn to. The personal and social costs are no less than tragic. My office will aggressively prosecute doctors like Dr. Guerrero who prescribe narcotics without a legitimate medical purpose. We will seek justice and accountability for the harm they do."
“Doctors take an oath to ‘first, do no harm.’ Dr. Guerrero violated that oath, and today’s sentence is a solemn reminder that the cost of health care fraud is not one just paid in money. The FBI and our law enforcement partners are committed to vigorously investigating those who seek to enrich themselves and threaten the public’s safety through fraudulent health care schemes,” stated FBI Special Agent in Charge Howard Marshall.
“This doctor was operating as a drug dealer in a white coat,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “This sentence should be a wake-up call to physicians across the state: if you’re overprescribing narcotics you are facing a lengthy prison sentence.”
“The dangerous overprescribing of opioid drugs by some providers has had tragic consequences for public health in southern Indiana and western Kentucky. The Indiana Medicaid Fraud Control Unit of my office worked with our colleagues in the U.S. Attorney’s Office to investigate and unravel this illegal scheme, hold the defendant accountable and recoup taxpayers’ funds,” said Indiana Attorney General Greg Zoeller, who co-chairs the Indiana Prescription Drug Abuse Prevention Task Force. Its website is www.BitterPill.in.gov.
“Addressing the diversion and abuse of controlled substance prescription medications is a top priority of the DEA. In this instance, Jaime Guerrero, formerly an anesthesiologist abused his position of trust and jeopardized the lives of many individuals by dispensing controlled substances to patients without a medical purpose. This sentence should serve as a notice to all medical professionals that if you prescribe medication for personal gain you will be investigated and prosecuted to the fullest extent of the law,” stated Special Agent in Charge of the U.S. Drug Enforcement Administration’s Detroit Field Division, Timothy J. Plancon
According to the plea agreement, from November 1, 2009, continuing through January 1, 2013, Guerrero conspired with others to knowingly and intentionally distribute and dispense, schedule II and III controlled substances to patients, without a legitimate medical purpose and beyond the bounds of professional medical practice. Beginning November 1, 2009, and continuing through May 8, 2014, Guerrero admitted to distributing and dispensing Schedule II and III controlled substances to patients (listed in counts 2-26) without a legitimate medical purpose beyond the bounds of professional medical practice. Beginning on or about January 6, 2010, and continuing through September 16, 2011, Guerrero knowingly and intentionally distributed and dispensed, and caused to be distributed and dispensed Hydrocodone, a Schedule III controlled substance, to patient S.O., without a legitimate medical purpose and beyond the bounds of professional medical practice, which resulted in S.O.’s death on or about September 24, 2011.
Guerrero further pleaded guilty to three counts of health care fraud for fraudulently billing various health care benefit programs and for submitting fraudulent claims for patient health care counseling. Specifically, on May 26, 2011, June 15, 2011, and June 22, 2011, Guerrero saw more than 100 patients on each of the dates, by himself, and spent approximately 3 minutes or less with each patient, and fraudulently billed various health care benefit programs, for office visits at a higher code than the service provided. Between July 9, 2010 and July 22, 2010, Guerrero travelled outside of the United States and directed staff personnel to provide group counseling sessions for patients in his absence. The group sessions were then billed as individual counseling sessions, and as if Guerrero personally provided the service. Additionally, between January 1, 2008, and continuing through June 15, 2012, Guerrero falsely and fraudulently submitted over 100 claims to various health care benefit programs for office visits at a higher code than the service provided; for office visits that were not medically necessary or within the course of usual medical practice; submitting claims for services that were not sufficiently documented in the patient’s medical record; and making claims for office visits as though a physician saw the patient, when in fact, a nurse practitioner saw the patient. Guerrero agreed to pay $827,000 in victim restitution to nine health care benefit programs
Finally, Guerrero pleaded guilty to a single money laundering charge for redeeming (paying the taxes) on a building located at 1201 West Wall Street in Jeffersonville, Indiana, with $89,556.25 in cash derived from unlawful activity - the unlawful dispensing and distribution of controlled substances and health care fraud.
This case was prosecuted by Assistant United States Attorneys Joseph Ansari and Lettricea Jefferson-Webb and was investigated by the Federal Bureau of Investigation (FBI), the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG), the U.S. Drug Enforcement Administration (DEA), Indiana and Kentucky Medicaid Fraud Control Units, and Louisville Metro Police Department (LMPD).
Defendants Sentenced in Money Laundering and Crystal Meth Drug Trafficking OperationRead the Press Release
Possessed 26 firearms and 3,700 rounds of ammunition
BOWLING GREEN, Ky. – The final defendants in a drug trafficking operation were sentenced this week in United States District Court, by United States District Judge Greg N. Stivers, to prison sentences for their roles in a money laundering and methamphetamine distribution network operating from Fresno, California, to Allen County, Kentucky, and included the illegal possession of 26 firearms and more than 3,700 rounds of ammunition, announced United States Attorney John E. Kuhn, Jr.
Bradley Burton Brown 37, of Allen County, and Ashley Dawn Kendall, 25, of Franklin, Kentucky, directed a conspiracy that distributed more than 80 grams of crystal methamphetamine and diverted the proceeds through pre-paid bank cards, with co-defendants Adam Scott Gallagher and Kevin Joseph Willey, between March 2014, and February 26, 2015.
Brown, who was in custody, was sentenced to 120 months in federal prison and a five year term of supervised release and Kendall was taken into custody following her sentencing of 48 months in prison and a three year term of supervised release. There is no parole in the federal system.
Co-defendant Willey was sentenced to 110 months in prison and a five year period of supervised release, and Gallagher, who was living in California, was sentenced to 36 months in prison and a five year term of supervised release. Both were sentenced on March 10, 2016, by Judge Stivers in Bowling Green.
According to the plea agreements, Brown and Kendall would direct Willey to ship packages of crystal methamphetamine from Fresno, CA to Gallagher, located here in the Western District of Kentucky. Once the methamphetamine was received by Gallagher, he would then deliver it to Brown and Kendall to distribute. Brown and Kendall would conceal payments to Willey for the methamphetamine by using prepaid Green Dot Bank cards. They would load the cards with the proceeds from the sale of methamphetamine here in the Western District of Kentucky and then provide Willey with the card's pin number allowing him to obtain the loaded cash in California. According to DEA chemical analysis, the 81.2 grams of methamphetamine recovered from Brown and Kendall on September 17, 2014, tested at over 95 percent purity resulting in a total of 77.7 grams of actual methamphetamine.
Further, on September 17, 2015, Brown, then an unlawful user of a controlled substance, possessed the following firearms: 1. Llama (Gabilondo & Cia), .40 caliber pistol, model XII; 2. High Standard, .22 caliber revolver, model Sentinel; 3. Jennings Firearms, .22 caliber pistol; 4. Keltec, CNC Industries, .380 caliber pistol, model P3A T; 5. Phoenix Anns Co., .25 caliber pistol, model Raven; 6. Marlin Firearms Co., .30-.30 caliber rifle, model336CS; 7. Savage, .243 caliber rifle, model Stevens 200; 8. Browning, 12 gauge shotgun, model Light 12; 9. Ruger, .22 caliber rifle, model 10/22; 10. Marlin Firearms Co., .22 caliber rifle, model Golden 39A; 11. Mossberg, 12 gauge shotgun, model 835 Ulti-Mag; 12. New England Firearms, 12 gauge shotgun, model Pardner; 13. Savage, 20 gauge shotgun, model Stevens 94; 14. Marlin Firearms Co., .22 caliber rifle, model XT-22; 15. Winchester, .30-.30 caliber rifle, model 94 (stolen); 16. Marlin Firearms Co., .22 caliber rifle, model 80; 17. Mossberg, 410 gauge shotgun, model500E; 18. Winchester, .22 caliber rifle, model 190; 19. Winchester, .22 caliber rifle, model190; 20. Winchester, .22 caliber rifle, model 190; 21. Keystone Sporting Arms, .22 caliber rifle, model Cricket; 22. Savage, .22 caliber rifle, model Stevens 87A; 23. Winchester, .22 caliber rifle, model67; 24. Marlin Firearms Co., .22 caliber rifle, model 75C; and 3,707 rounds of assorted ammunition.
Also, on September 17, 2014, Kendall, being an unlawful user of a controlled substance possessed a Romarm/Cugir, .762 rifle, model GP WASR 10/63 and a Marlin Firearms Co., .22 caliber rifle, model 99M1.
Assistant United States Attorney Mac Shannon prosecuted the case. The Federal Bureau of Investigation (FBI) and Barren River Drug Task Force conducted the investigation.
Business Owner Pleads Guilty to Wire Fraud for Stealing $809,205.43 from VictimsRead the Press Release
LOUISVILLE, Ky. – Mark Allen Hartley, the owner of Patriot Computers, a Virginia corporation, entered pleas of guilty today, in United States District Court, before Chief Judge Joseph H. McKinley Jr., to multiple wire fraud charges related to the theft of $809,205.43 from 434 victims, announced United States Attorney John E. Kuhn, Jr.
According to the four count indictment and facts admitted today during his guilty plea, from December 1, 2012, through April 14, 2014, Hartley, age 55, devised a scheme to defraud First Citizens Bank and its customers. At the time, Hartley operated a business called Spartan Group Inc., dba Patriot Computers. Patriot Computers sold computer equipment to its customers on installment sales contracts. Customers of Patriot Computers agreed to have specified amounts of money taken from their paychecks on a regular basis until their purchases were paid in full. These customers completed payment authorization forms for these payment arrangements, and then Patriot Computers submitted these forms to First Citizens Bank in Hardin County, Kentucky. First Citizens Bank, through its bill payment service, would then transfer the payments from each customer’s paycheck to Patriot Computers’ account at Wells Fargo Bank until the customer’s contract with Patriot Computers was paid in full.
As part of the scheme and artifice to defraud, Hartley created fraudulent payment authorization forms and transmitted those, by e-mail, to First Citizens Bank. This caused the bank to transfer unauthorized payments from victims’ paychecks to an account at Wells Fargo Bank, controlled by Hartley. These unauthorized payments totaled approximately $809,205.43.
In entering his pleas of guilty, Hartley agreed that the United States could put Patriot Computers’ accounts receivable into receivership, with collections from those accounts being directed to pay restitution to victims.
Hartley, a Florida resident, faces a sentence of up to 80 years in prison and fines of up to $1,000,000, along with up to 3 years of supervised release.
This case is being prosecuted by Assistant United States Attorneys Jason Snyder and Jessica R.C. Malloy and is being investigated by the Federal Bureau of Investigation (FBI).
Cave City, Kentucky, Physician Guilty of Illegally Dispensing Controlled Substances Outside of His Professional Medical Practice and Health Care FraudRead the Press Release
BOWLING GREEN, Ky. – A Barren County, Kentucky, physician pleaded guilty today in United States District Court to seven criminal counts of knowingly and intentionally distributing and dispensing controlled substances outside the course of professional medical practice and health care fraud, while he was a practicing physician in the Western District of Kentucky, announced United States Attorney John E. Kuhn, Jr.
Dr. Christopher Steward, of Cave City, was a dentist and a nurse practitioner with a practice located at 212 Broadway in Cave City and had a Drug Enforcement Agency registration number which authorized him to write prescriptions within the course of professional medical practice.
According to the plea agreement, on six separate occasions, between March 6, 2015, and June 6, 2015, Steward intentionally conspired with patients to acquire possession of Schedule II and Schedule IV controlled substances, through misrepresentation and fraud, outside the course of medical practice, in order to distribute and/or acquire possession of prescription pills, mostly for his own use.
Further, Steward admits that on June 6, 2015, he willfully executed a scheme to defraud Kentucky Medicaid, a health care benefit program, in connection with the delivery of payment for health care benefits, by writing a prescription for alprazolam, a Schedule IV controlled substance, for a patient without the patient’s knowledge or consent. That prescription was subsequently filled by someone other than the patient, again without the patient’s knowledge or consent, and Steward obtained those pills. That fraudulent prescription was paid for by Kentucky Medicaid, through Coventry Managed Care.
Steward was arrested on April 13, 2016, made an initial appearance before Magistrate Judge H. Brent Brennenstuhl, in Bowling Green, and released on a $25,000 unsecured bond.
At the time of sentencing, the United States will move for dismissal of Count 8 of the Indictment (identity theft) and agree that a sentencing range between 18 months of imprisonment and 30 months of imprisonment is the appropriate disposition of this case. Further, the defendant will agree to forfeit property located at 212 Broadway Street in Cave City, Kentucky, and a 2009 Ford F-150 white pickup truck.
The case is being prosecuted by Assistant United States Attorney David Weiser, and it results from an investigation conducted by the Federal Bureau of Investigation (FBI) and Kentucky State Police.
U.S. Attorney and DEA Announce Take-Back Initiative to Safely Remove Prescription Pills from Local HomesRead the Press Release
Nearly 50 locations this Saturday where Kentuckiana residents can safely and anonymously rid their homes of unwanted and expired medications
LOUISVILLE, Ky. – Kentuckiana residents have an opportunity this Saturday to safely and anonymously rid their homes of unused, unwanted, unneeded, or expired prescription medications, today announced U.S. Attorney John E. Kuhn, Jr. and U.S. Drug Enforcement Administration (DEA) Assistant Special Agent in Charge, Thomas J. Gorman. The National Prescription Take-Back Day, will take place this Saturday, April 30, 2016 at nearly 50 locations across Kentuckiana. During this one-day event, federal and local law enforcement will once again partner to increase awareness of prescription drug abuse and provide an opportunity to reduce the availability of prescription pain medications in local homes.
U.S. Attorney Kuhn and ASAC Gorman are encouraging families to clean out medicine cabinets and safely rid their homes of unwanted and expired prescription medications. Many Americans are not aware that medicines that languish in home cabinets are highly susceptible to diversion, misuse, abuse and theft. Studies show that two-thirds of all teenagers who abuse prescription narcotics first obtain the drugs from family and friends; often from their home medicine cabinet.
Further, many Americans are unsure of how to properly dispose of their unused medications and often flush them down the toilet or throw them away. This poses safety and environmental hazards.
USA Kuhn and ASAC Gorman also stated that the Take-Back is a great opportunity to begin a dialogue with children to educate them on the dangers of obtaining pharmaceuticals for illicit use.
Prior DEA Prescription Take-Backs have been extremely successful with Kentuckiana residents dramatically reducing the risk of pain pill and other medication abuses by ridding their homes of thousands of pounds of unused prescription medications. Kentucky remains among the nation’s most medicated states.
The Prescription Drug Take-Back is part of a nationwide effort sponsored by the DEA. Containers where unwanted and expired prescription medications may be safely disposed will be at locations across Kentucky, and Southern Indiana, on Saturday, from 10 a.m. to 2:00 p.m. A complete list of locations and the assisting law enforcement agency may be found in the attachment, or at www.dea.gov or by calling 800-882-9539.
More information on how to properly dispose of unused medicines can be found on the Food & Drug Administration website:
http://www.fda.gov/Drugs/ResourcesForYou/Consumers/BuyingUsingMedicineSafely/EnsuringSafeUseofMedicine/SafeDisposalofMedicines/ucm186187.htm
Lithuanian Man Guilty of Conspiring with Others to Steal Shipments from Warehouses and Distribution Facilities in Kentucky, Tennessee, and GeorgiaRead the Press Release
Stole more than $700,000 in Alcohol from Barton Brands’ Warehouse in Bardstown, Kentucky and Jack Daniels Distillery in Lynchburg, Tennessee
LOUISVILLE, Ky. –United States Attorney John E. Kuhn, Jr. announced today the guilty plea of a Lithuanian man to a single charge of conspiracy for his role in the theft of interstate shipments from warehouses and distribution facilities in Kentucky, Tennessee, and Georgia.
Vismantas Danyla, 35, admitted in court to conspiring with others between October of 2014, and April of 2015, to submit fraudulent documents purporting to be a legitimate shipping company to transportation brokers. In turn, the brokers hired Danyla and others to ship goods including alcohol from Barton Brands’ Warehouse in Bardstown, Kentucky, alcohol from Jack Daniels Distillery in Lynchburg, Tennessee, and copper wire from Southwest Wire in Carrollton, Georgia. The shipments were never delivered to the purchasers, but, rather, were stolen and driven to a warehouse located in Chicago, Illinois, for illegal distribution.
As part of the conspiracy, Danyla and others submitted fraudulent Commonwealth of Kentucky liquor licenses and fictitious shipping documents to personnel at Barton Brand’s Warehouse in Bardstown. On or about October 23, 2014, Danyla, and other coconspirators, stole and transported alcohol from Barton Brands’ Warehouse and transported it to Chicago, for illegal distribution. The shipment was not delivered to its intended buyer Central Liquor Company in Oklahoma City, Oklahoma. It was valued at approximately $130,000.
On or about October 24, 2014, Danyla, and other coconspirators, submitted fictitious shipping and identification documents to personnel at South Wire in Carrollton, Georgia. Danyla other coconspirators stole and transported the copper wire to Chicago for illegal distribution. The shipment of wire was never delivered to the purchaser Rail Products, located in Columbus, Ohio. It was valued at approximately $139,911.72.
On April 7, 2015, Danyla and other coconspirators submitted, fictitious shipping documents to personnel at Brown-Foreman/Jack Daniels Distillery in Lynchburg, Tennessee. Danyla admits to stealing and transporting two loads of alcohol from Jack Daniels Distillery to a warehouse in Chicago. The shipments never reached its intended destination of North Las Vegas, Nevada and Sparks, Nevada. The values of the shipments were approximately $201,032.55 (North Las Vegas) and $207,705.52 (Sparks).
Further, on April 9, 2015, Danyla admits to conspiring with others to submit fictitious shipping documents to personnel at Brown -Foreman/Jack Daniels Distillery in Lynchburg, Tennessee. Danyla and other coconspirators stole and transported alcohol from Jack Daniels Distillery in Lynchburg to Chicago. The shipment never reached its intended destination of Phoenix, Arizona. The value of this shipment was approximately $188,314.88.
Danyla faces a maximum term of five years in prison, a combined maximum fine of $250,000, an order of restitution, and a three year term of supervised release. Danyla is scheduled for sentencing before Senior District Judge Thomas B. Russell, on August 17, 2016, in Louisville.
This case is being prosecuted by Assistant United States Attorney Joshua Judd, and is being investigated by the FBI, Illinois State Police, Kentucky State Police, Georgia Bureau of Investigation, and Tennessee Bureau of Investigation.
Louisville Woman Charged with Defrauding the Social Security AdministrationRead the Press Release
Failed to disclose the death of her husband for eleven years
LOUISVILLE, Ky. – A Louisville woman was recently charged with several counts involving the fraudulent receipt of Old-Age, Survivors and Disability Insurance (OASDI) benefits by the Social Security Administration (SSA), for an eleven year period, announced United States Attorney John E. Kuhn, Jr.
According to the three-count Superseding Indictment, returned April 20, 2016, Janice M. Arnow failed to disclose the death of her husband and continued to receive and spend OASDI payments made by the SSA between October 2003 and October 2014.
Further, during the same period, Arnow is charged with theft of government property. Arnow allegedly embezzled, stole, and purloined money of the Social Security Administration (SSA), a department and agency of the United States, namely, Old-Age, Survivors and Disability Insurance program (OASDI) payments made to her deceased husband, to which she knew she was not entitled, having a value in excess of $1,000.
Also, on or about July 17, 2012, Arnow is charged with making a false Social Security Application. It’s alleged that Arnow willfully and knowingly made a materially false, fictitious, and fraudulent statement, by submitting an application for OASDI payments to the SSA. In doing so, Arnow is charged with falsely omitting the identity of her late husband, the receipt of income from her late husband’s OASDI payments, the date of his death, and falsely indicating that she had no other marriages than to M.H.
In the event of a conviction, the maximum potential penalties are 20 years in prison, $750,000 fines, and supervised release for a period of three years. Arnow is scheduled for arraignment on the superseding indictment, before Magistrate Judge Dave Whalin, on April 28, 2016, in Louisville.
The case is being prosecuted by Assistant United States Attorney Joshua Judd, and results from an investigation conducted by the Social Security Administration –Office of the Inspector General.
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The indictment of a person by Federal Grand Jury is an accusation only and that person is presumed innocent until and unless proven.
Jefferson County, Kentucky, Dentist Charged with Illegal Distribution of Controlled SubstancesRead the Press Release
LOUISVILLE, Ky. – A Jefferson County, Kentucky, dentist was charged by federal Information today with the illegal distribution of controlled substances announced United States Attorney John E. Kuhn, Jr.
According to the one-count federal Information, Rodney B. Fultz, 63, aided and abetted by a person known to the Grand Jury, caused Schedule III controlled substances to be dispensed and distributed, outside the course of professional medical practice, by allowing D.C.K. to use his DEA (Drug Enforcement Administration) registration number to issue prescriptions for hydrocodone.
The alleged violations by Fultz occurred between January 20, 2012, and November 5, 2012, in Jefferson County.
If convicted at trial, Fultz would face no more than 10 years in prison, a fine of $500,000 and up to a three year period of supervised release.
This case is being prosecuted by Assistant United States Attorney David Weiser and is being investigated by the United States Drug Enforcement Administration (DEA).
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The indictment of a person by a Federal Information is an accusation only and that person is presumed innocent until and unless proven guilty.
Allen County, Kentucky, Farmers Charged with Crop Insurance FraudRead the Press Release
BOWLING GREEN, Ky. – Two Allen County, Kentucky, farmers were charged by federal Informations today with crop insurance fraud announced United States Attorney John E. Kuhn, Jr.
According to the separate federal Informations, David Manion, 53, and Henry Manion, 48, aided and abetted by others, knowingly made false statements and reports on applications for insurance. Both defendants allegedly made false statements for the purpose of influencing the actions (insurance payments) of the Federal Crop Insurance Corporation and Producers Agriculture Insurance Company, a company insured by the Federal Crop Insurance Corporation.
The alleged violations by Henry Manion occurred between August 10, 2009, and February 14, 2012, in the Western District of Kentucky, Allen County, Kentucky, and elsewhere. The alleged violations by David Manion occurred between August 25, 2009, and February 7, 2012, in the Western District of Kentucky, Allen County, Kentucky, and elsewhere.
If convicted at trial, the defendants each face no more than 30 years in prison, a fine of $1,000,000 and a five year period of supervised release.
These cases are being prosecuted by Assistant United States Attorney David Weiser and are being investigated by the United States Department of Agriculture (USDA) Office of Inspector General (OIG).
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The indictment of a person by a Federal Information is an accusation only and that person is presumed innocent until and unless proven guilty.