District of Massachusetts
Press releases recorded for this federal judicial district.
Boston Man Pleads Guilty to Illegally Possessing a Loaded HandgunRead the Press Release
BOSTON – A Boston man pleaded guilty yesterday in federal court in Boston to being a felon in possession of a firearm and ammunition.
Kerry Charlotin, 30, pleaded guilty to being a felon in possession of a firearm and ammunition before U.S. District Court Judge William G. Young who scheduled sentencing for May 21, 2020. Charlotin was charged in August 2019.
On May 1, 2019, officers were in the area of Blue Hill Avenue in Mattapan due to resident complaints of drug dealing and public drinking. It is alleged that when Charlotin, who was seen by the officers wearing a black backpack, observed the police presence, he ran. The officers pursued him, and when they caught up to him, a black backpack was in the air and landed on the roof of a building. Charlotin, no longer wearing a black backpack, continued running from the officers; he was eventually found hiding in a fenced in area in a backyard. When officers recovered the black backpack, they found, among other things, a loaded Glock 26, 9mm caliber Lugar semi-automatic pistol containing nine rounds of ammunition, one of those rounds was in the chamber.
Based on prior felony convictions, Charlotin is prohibited from possessing a firearm and ammunition under federal law.
The charging statute provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Kelly Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Boston Police Commissioner William G. Gross made the announcement. Assistant U.S. Attorney Lindsey E. Weinstein of Lelling’s Major Crimes Unit is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. PSN is part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Whitman Man Pleads Guilty to Child Pornography OffensesRead the Press Release
BOSTON – A Whitman man pleaded guilty yesterday in federal court in Boston to child pornography offenses.
Matthew Kulikowski, 38, pleaded guilty to one count of receipt of child pornography and one count of possession of child pornography. U.S. District Court Judge Richard G. Stearns scheduled sentencing for May 29, 2020. Kulikowski was arrested and charged in September 2018, and has been in custody since that time.
Law enforcement learned that an internet user at Kulikowski’s Whitman home distributed child pornography using the Kik messenger application. A search of the home resulted in the seizure of a tablet located in Kulikowski’s bedroom that contained at least 300 images and videos depicting child pornography, including the sexual assault of girls who appeared to be between four-and-eight-years-old.
At the time of his arrest, Kulikowski was on pretrial release from Plymouth County Superior Court, where he had a case pending for multiple child exploitation offenses, including possession of child pornography, disseminating obscene material to a minor, indecent assault and battery on a child under 14 and enticement of a child under 16. He has since been convicted of those offenses.
The charge of receipt of child pornography provides for a mandatory minimum sentence of five years and up to 20 years in prison. The charge of possession of child pornography provides for a sentence of up to 20 years in prison. Both charges provide for a minimum of five years and up to a lifetime of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Jason Molina, Acting Special Agent in Charge of Homeland Security Investigations in Boston made the announcement. Assistance was provided by the Massachusetts State Police, Whitman Police Department and the Plymouth County District Attorney’s Office. Assistant U.S. Attorney Anne Paruti, Lelling’s Project Safe Childhood Coordinator and a member of the Major Crimes Unit, is prosecuting the case.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Dominican National Charged with Selling Fentanyl that Led to Victim’s Fatal OverdoseRead the Press Release
BOSTON – A Dominican national was indicted yesterday in federal court in Boston with distributing fentanyl resulting in death.
Bernardito Carvajal, 27, a Dominican national most recently residing in Haverhill, was indicted on one count of distribution of fentanyl and cocaine resulting in death and one count of distribution of fentanyl. On July 31, 2019, Carvajal was arrested and charged by criminal complaint with one count of possession with intent to distribute fentanyl. He has been in custody since that time.
On or about June 12, 2018, Carvajal sold fentanyl and cocaine in Lawrence to a 26-year-old victim, who died of an overdose after using the drugs. Carvajal continued to sell fentanyl after the fatal overdose, including another sale on July 31, 2019.
“The opioid epidemic has inflicted an unprecedented toll of addiction, suffering, and death on our communities,” said United States Attorney Andrew E. Lelling. “And no one knows this better than the dealers victimizing those struggling with addiction. We will aggressively prosecute every single case where we can link a drug dealer to an overdose death.”
“The state of Massachusetts is faced with a fentanyl crisis unlike ever before,” said DEA Special Agent in Charge Brian D. Boyle. “Those responsible for distributing this lethal drug and for contributing to loss of life for those battling this addiction need to be held responsible for their actions. In response to the ongoing opioid epidemic, DEA and its local, state and federal partners are committed to bringing to justice those that distribute this poison.”
The charge of distributing fentanyl resulting in death provides for a mandatory minimum sentence of 20 years and up to life in prison, a minimum of five years of supervised release and a fine of up to $10 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
The case arose from “Devil’s Highway,” a 10-week coordinated enforcement operation in the Merrimack Valley. The enforcement operation was a coordinated effort by federal, state and local partners to focus on drug distribution activity in the City of Lawrence and between Lawrence and New Hampshire.
U.S. Attorney Lelling, DEA SAC Boyle and Andover Police Chief Patrick Keefe made the announcement. Assistant U.S. Attorneys Elysa Wan and Stephen Hassink of Lelling’s Criminal Division are prosecuting the case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
U.S. Attorney’s Office Settles Claims Against Brookline Landlord for Violating Rights of Active Duty Military OfficerRead the Press Release
BOSTON – A Brookline landlord has entered into a settlement with the U.S. Attorney’s Office to resolve allegations that she refused to fully refund a servicemember who had to terminate his lease because he was relocated by the U.S. Army.
Deborah Levenson resolved allegations that she violated the Servicemembers Civil Relief Act (SCRA) by refusing to refund overpaid rent and delaying returning the security deposit to a servicemember who received orders from the U.S. Army to relocate to another state. Under the terms of the settlement, which must be approved by the U.S. District Court in Massachusetts, Levenson must pay her former tenant $3,000 in damages, pay a civil penalty of $500 to the United States, and is prohibited from violating the SCRA in the future.
The purpose of the SCRA is to provide servicemembers with protections against certain civil proceedings that could adversely affect their legal rights while they are in military service. When servicemembers receive military orders requiring them to relocate, including orders to deploy overseas, the SCRA permits them to terminate residential leases and requires their landlords to return overpayments in rent and security deposits.
“Men and women in uniform risk their lives for our country, and Congress enacted the Servicemembers Civil Relief Act to protect their rights when they are called away to serve our nation,” said United States Attorney Andrew E. Lelling. “We will aggressively enforce the SCRA. Our military members deserve no less.”
Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at https://legalassistance.law.af.mil/.
Assistant U.S. Attorney Torey B. Cummings of Lelling’s Civil Rights Unit handled the matter.
The Civil Rights Unit of the U.S. Attorney’s Office was established in 2015 with the mission of enhancing federal civil rights enforcement. For more information on the Office’s civil rights efforts, please visit www.justice.gov/usao-ma/civil-rights.
Two Men Charged with Conspiracy to Distribute over Four Kilograms of Fentanyl PillsRead the Press Release
BOSTON – Two men were charged today in federal court in Boston in connection with selling approximately 40,000 fentanyl pills.
Jose Esmerlin Diaz, 36, of Salem, and Manuel E. Tejeda, 39, of Peabody, were charged with conspiracy to distribute and possession with intent to distribute 400 grams or more of fentanyl. Both are scheduled to appear in federal court in Boston on Friday, Jan. 31, 2020.
According to charging documents, Diaz delivered an estimated 13,800 fentanyl pills (weighing approximately 1.6 kilograms) disguised as Percocet 30s to a cooperating source on Jan. 17, 2020, at a price of $6 per pill. Shortly thereafter, Tejeda and another man arrived in the vicinity of the drug transaction to deliver additional pills, and were found in possession of an estimated 27,000 fentanyl pills (weighing approximately 3.1 kilograms). A subsequent search of a storage unit used by Tejeda in Salem resulted in the discovery of approximately two kilograms of suspected fentanyl and/or heroin, $150,000 in cash and an industrial/commercial grade pill press that could be used to press powder-form opiates into pills. Keys located on Tejeda at the time of his arrest opened locks to the storage unit.
The charge of conspiracy to distribute and to possess with intent to distribute 400 grams or more of fentanyl provides for a minimum of 10 years and up to life in prison, at least five years and up to life of supervised release and a fine of up to $10 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; Peabody Police Chief Thomas M. Griffin; and Andover Police Chief Patrick Keefe made the announcement. Assistant U.S. Attorney Craig Estes of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Operators of Millbury Plumbing Business Convicted of Running Large Scale Commercial Marijuana Cultivation and Distribution OperationRead the Press Release
BOSTON – The operators of a family-owned plumbing business in Millbury were convicted by a federal jury yesterday of drug and money laundering charges arising from their operation of a large-scale marijuana grow operation.
Thomas Laverty, 39, of Clinton and Charles Laverty, 63, of Millbury, were each convicted following a five-day trial of conspiring to cultivate more than 100 marijuana plants; conspiracy to launder money; and cultivating marijuana and possessing marijuana with intent to distribute. The defendants are scheduled to be sentenced on May 19, 2020.
Earlier this month, Andrea Laverty, 63, of Millbury, pleaded guilty to conspiring to cultivate marijuana and conspiring to launder money. She is scheduled to be sentenced on April 9, 2020.
Charles, Thomas and Andrea Laverty used their business, Chuck Laverty & Son Inc., as a front for a large-scale, commercial marijuana cultivation and distribution operation. The defendants utilized Laverty & Son vehicles, bank accounts and locations to facilitate marijuana manufacturing, storage and distribution. Every week, numerous Laverty & Son workers harvested 20 marijuana plants from the commercial warehouse. Workers then brought the harvested crop to the residence of Charles and Andrea Laverty to be dried, with a goal of producing 8 – 10 pounds of dried marijuana per week. The dried marijuana was sold by Charles Laverty in large quantities for approximately $2,400 per pound.
On Oct. 17, 2017, law enforcement officers executed two search warrants: one at Laverty and Son’s business warehouse in Clinton, which was attached to Thomas Laverty’s residence, where agents found a commercial-style marijuana grow operation; and another at the residence of Charles and Andrea Laverty in Millbury, where agents found a large quantity of marijuana being dried and processed, as well as another marijuana grow operation.
On the drug conspiracy charge, Thomas Laverty faces a sentence of up to life in prison, between eight years and life of supervised release and a fine of $8 million, and Charles and Andrea Laverty face up to 40 years in prison, between four years and life of supervised release and a fine of $5 million. On the money laundering charge, each defendant faces a sentence of up to 20 years in prison, three years of supervised release and a fine of $500,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Thomas Laverty also faces a charge of theft of government funds in connection with allegations that he received Supplemental Nutrition Assistance Program (“SNAP”) benefits while concealing the money he earned from the family’s drug business. On this charge, Thomas faces a sentence of up to five years in prison, three years of supervised release and a fine of $250,000.
United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorneys Bill Abely and Phil Cheng of Lelling’s Criminal Division are prosecuting the case.
Natick Man Sentenced for Child Pornography OffensesRead the Press Release
BOSTON – A Natick man was sentenced yesterday in federal court in Boston for possessing child pornography.
Joshua Bemis, 28, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to six years in prison and five years of supervised release. In October 2019, Bemis pleaded guilty to one count of possession of child pornography and one count of receipt of child pornography. Bemis was arrested and charged in November 2018.
Federal authorities received information from law enforcement in the United Kingdom regarding an individual – whose IP address was traced to Bemis’ Natick residence – who had posted child pornography on a photo sharing website. Law enforcement subsequently executed a search warrant and seized a laptop computer and separate hard drive, both of which contained numerous videos of children, including some that depict the rape of children as young as seven-years-old.
United States Attorney Andrew E. Lelling; Jason Molina, Acting Special Agent in Charge of Homeland Security Investigations in Boston; and Natick Police Chief James G. Hicks made the announcement today. Assistant U.S. Attorney David G. Tobin prosecuted the case.
The case was brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Brazilian National Pleads Guilty to Producing False Identification DocumentsRead the Press Release
BOSTON – A Brazilian national pleaded guilty today in federal court in Boston with producing a false identification document, aiding and abetting and Social Security card fraud.
Cristiano Ribeiro De Moura, 32, who previously resided in Framingham, pleaded guilty to one count of producing an identification document, authentication feature, or false identification document; aiding and abetting; and one count of Social Security card fraud. Ribeiro De Moura was indicted in October 2019. U.S. District Court Judge Allison D. Burroughs scheduled sentencing for April 28, 2020.
Ribeiro De Moura sold four counterfeit Lawful Permanent Resident cards and four counterfeit Social Security cards in July and August 2019. Ribeiro De Moura charged $350 for a set of fake documents, which included one Lawful Permanent Resident card and one Social Security card. The buyers provided their name and date of birth, and Ribeiro De Moura provided the Social Security number.
The charge of producing a false identification document provides for a sentence of up to 15 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of Social Security card fraud provides for a sentence of up to five years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Boston Field Office; and Jason Molina, Acting Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today. Special Assistant U.S. Attorney Karen Burzycki of Lelling’s Major Crimes Unit is prosecuting the case.
Whitman Man Pleads Guilty to Sexually Exploiting ChildrenRead the Press Release
BOSTON – A Whitman man pleaded guilty today in federal court in Boston in connection with sexually exploiting children via a social media app.
Matthew Murphy, 22, pleaded guilty to five counts of sexual exploitation of children. Sentencing is set for May 19, 2020. Murphy was arrested and charged by criminal complaint in March 2019 and has been in custody since.
According to the charging documents, the investigation began when law enforcement learned that Murphy, posing as a teenage girl, used a Snapchat account to extort nude photographs from a Massachusetts middle school boy. Agents obtained portions of the Snapchat account Murphy had created in the fake identity and uncovered evidence of similar extortion of dozens of other minors in the area. The indictment charges Murphy with using five separate Snapchat accounts to sexually exploit children.
The charges of sexual exploitation of children each provide for a minimum mandatory sentence of 15 years and up to 30 years in prison, a minimum of five years and up to a lifetime of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Jason Molina, Acting Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The Whitman Police Department provided valuable assistance with the investigation. Assistant U.S. Attorney Anne Paruti, Lelling’s Project Safe Childhood Coordinator and a member of the Major Crimes Unit, is prosecuting the case.
The case was brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
VA Employee Charged with Embezzling $70,000 Using Mobile Payment ApplicationRead the Press Release
BOSTON – A Department of Veteran Affairs (VA) employee was charged in federal court in Boston with embezzling nearly $70,000 in VA funds.
Michael Donaher, 41, of Lakeville, was charged with one count of embezzlement and theft of public money, property or records. Donaher was arrested today and released on conditions following an initial appearance in federal court in Boston.
According to the complaint, Donaher works as an Inventory Management Specialist for the Veterans Affairs Medical Facility in Brockton and is responsible for purchasing various equipment necessary for use in the facility. It is alleged that Donaher conducted fraudulent transactions using his government-issued purchase cards and routed the proceeds to his personal bank account. Donaher attempted to conceal these fraudulent purchases by making it appear as if the purchases were made through a large company – FW Webb – that the VA frequently used for legitimate business, when, in fact, they were actually made through a company Donaher created through Square, Inc., a mobile payment company. These purchases were not for actual items ever received by the VA. Furthermore, Donaher attempted to hide this fact by annotating the items as having been received within the VA’s accountability system. According to the complaint, Donaher fraudulently routed approximately $70,000 of VA funds to his personal account since the scheme began in 2016.
The charging statute provides a sentence of up to 10 years in prison, three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Jeffrey Stachowiak, Acting Special Agent in Charge of the Department of Veteran Affairs, Office of the Inspector General, Northeast Field Office made the announcement today. Assistant U.S. Attorney Eugenia M. Carris of Lelling’s Public Corruption & Special Prosecutions Unit is prosecuting the case.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Harvard University Professor and Two Chinese Nationals Charged in Three Separate China Related CasesRead the Press Release
BOSTON – The U.S. Attorney’s Office announced today that the Chair of Harvard University’s Chemistry and Chemical Biology Department and two Chinese nationals have been charged in connection with aiding the People’s Republic of China.
Dr. Charles Lieber, 60, Chair of the Department of Chemistry and Chemical Biology at Harvard University, was arrested this morning and charged by criminal complaint with one count of making a materially false, fictitious and fraudulent statement. Lieber will appear this afternoon before Magistrate Judge Marianne B. Bowler in federal court in Boston.
Yanqing Ye, 29, a Chinese national, was charged in an indictment today with one count each of visa fraud, making false statements, acting as an agent of a foreign government and conspiracy. Ye is currently in China.
Zaosong Zheng, 30, a Chinese national, was arrested on Dec. 10, 2019, at Boston’s Logan International Airport and charged by criminal complaint with attempting to smuggle 21 vials of biological research to China. On Jan. 21, 2020, Zheng was indicted on one count of smuggling goods from the United States and one count of making false, fictitious or fraudulent statements. He has been detained since Dec. 30, 2019.
Dr. Charles Lieber
According to court documents, since 2008, Dr. Lieber who has served as the Principal Investigator of the Lieber Research Group at Harvard University, which specialized in the area of nanoscience, has received more than $15,000,000 in grant funding from the National Institutes of Health (NIH) and Department of Defense (DOD). These grants require the disclosure of significant foreign financial conflicts of interest, including financial support from foreign governments or foreign entities. Unbeknownst to Harvard University, beginning in 2011, Lieber became a “Strategic Scientist” at Wuhan University of Technology (WUT) in China and was a contractual participant in China’s Thousand Talents Plan from in or about 2012 to 2017. China’s Thousand Talents Plan is one of the most prominent Chinese Talent recruitment plans that are designed to attract, recruit, and cultivate high-level scientific talent in furtherance of China’s scientific development, economic prosperity and national security. These talent programs seek to lure Chinese overseas talent and foreign experts to bring their knowledge and experience to China and reward individuals for stealing proprietary information. Under the terms of Lieber’s three-year Thousand Talents contract, WUT paid Lieber $50,000 USD per month, living expenses of up to 1,000,000 Chinese Yuan (approximately $158,000 USD at the time) and awarded him more than $1.5 million to establish a research lab at WUT. In return, Lieber was obligated to work for WUT “not less than nine months a year” by “declaring international cooperation projects, cultivating young teachers and Ph.D. students, organizing international conference[s], applying for patents and publishing articles in the name of” WUT.
The complaint alleges that in 2018 and 2019, Lieber lied about his involvement in the Thousand Talents Plan and affiliation with WUT. On or about, April 24, 2018, during an interview with investigators, Lieber stated that he was never asked to participate in the Thousand Talents Program, but he “wasn’t sure” how China categorized him. In November 2018, NIH inquired of Harvard whether Lieber had failed to disclose his then-suspected relationship with WUT and China’s Thousand Talents Plan. Lieber caused Harvard to falsely tell NIH that Lieber “had no formal association with WUT” after 2012, that “WUT continued to falsely exaggerate” his involvement with WUT in subsequent years, and that Lieber “is not and has never been a participant in” China’s Thousand Talents Plan.
Yanqing Ye
According to the indictment, Ye is a Lieutenant of the People’s Liberation Army (PLA), the armed forces of the People’s Republic of China and member of the Chinese Communist Party (CCP). On her J-1 visa application, Ye falsely identified herself as a “student” and lied about her ongoing military service at the National University of Defense Technology (NUDT), a top military academy directed by the CCP. It is further alleged that while studying at Boston University’s (BU) Department of Physics, Chemistry and Biomedical Engineering from October 2017 to April 2019, Ye continued to work as a PLA Lieutenant completing numerous assignments from PLA officers such as conducting research, assessing U.S. military websites and sending U.S. documents and information to China.
According to court documents, on April 20, 2019, federal officers interviewed Ye at Boston’s Logan International Airport. During the interview, it is alleged that Ye falsely claimed that she had minimal contact with two NUDT professors who were high-ranking PLA officers. However, a search of Ye’s electronic devices demonstrated that at the direction of one NUDT professor, who was a PLA Colonel, Ye had accessed U.S. military websites, researched U.S. military projects and compiled information for the PLA on two U.S. scientists with expertise in robotics and computer science. Furthermore, a review of a WeChat conversation revealed that Ye and the other PLA official from NUDT were collaborating on a research paper about a risk assessment model designed to decipher data for military applications. During the interview, Ye admitted that she held the rank of Lieutenant in the PLA and admitted she was a member of the CCP.
Zaosong Zheng
In August 2018, Zheng entered the United States on a J-1 visa and conducted cancer-cell research at Beth Israel Deaconess Medical Center in Boston from Sept. 4, 2018, to Dec. 9, 2019. It is alleged that on Dec. 9, 2019, Zheng stole 21 vials of biological research and attempted to smuggle them out of the United States aboard a flight destined for China. Federal officers at Logan Airport discovered the vials hidden in a sock inside one of Zheng’s bags, and not properly packaged. It is alleged that initially, Zheng lied to officers about the contents of his luggage, but later admitted he had stolen the vials from a lab at Beth Israel. Zheng stated that he intended to bring the vials to China to use them to conduct research in his own laboratory and publish the results under his own name.
The charge of making false, fictitious and fraudulent statements provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. The charge of visa fraud provides for a sentence of up to 10years in prison, three years of supervised release and a fine of $250,000. The charge of acting as an agent of a foreign government provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. The charge of conspiracy provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. The charge of smuggling goods from the United States provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; John C. Demers, Assistant Attorney General for National Security; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Michael Denning, Director of Field Operations, U.S. Customs and Border Protection, Boston Field Office; Leigh-Alistair Barzey, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office; Philip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General; and William Higgins, Special Agent in Charge of the U.S. Department of Commerce, Office of Export Enforcement, Boston Field Office made the announcement today. Assistant U.S. Attorneys B. Stephanie Siegmann, Jason Casey and Benjamin Tolkoff of Lelling’s National Security Unit are prosecuting these cases with the assistance of Trial Attorneys William Mackie and Davie Aaron of the National Security Division’s Counterintelligence and Export Control Section.
These case are part of the Department of Justice’s China Initiative, which reflects the strategic priority of countering Chinese national security threats and reinforces the President’s overall national security strategy. In addition to identifying and prosecuting those engaged in trade secret theft, hacking and economic espionage, the initiative will increase efforts to protect our critical infrastructure against external threats including foreign direct investment, supply chain threats and the foreign agents seeking to influence the American public and policymakers without proper registration.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Harvard University Professor and Two Chinese Nationals Charged in Three Separate China Related CasesRead the Press Release
The Department of Justice announced today that the Chair of Harvard University’s Chemistry and Chemical Biology Department and two Chinese nationals have been charged in connection with aiding the People’s Republic of China.
Dr. Charles Lieber, 60, Chair of the Department of Chemistry and Chemical Biology at Harvard University, was arrested this morning and charged by criminal complaint with one count of making a materially false, fictitious and fraudulent statement. Lieber will appear this afternoon before Magistrate Judge Marianne B. Bowler in federal court in Boston, Massachusetts.
Yanqing Ye, 29, a Chinese national, was charged in an indictment today with one count each of visa fraud, making false statements, acting as an agent of a foreign government and conspiracy. Ye is currently in China.
Zaosong Zheng, 30, a Chinese national, was arrested on Dec. 10, 2019, at Boston’s Logan International Airport and charged by criminal complaint with attempting to smuggle 21 vials of biological research to China. On Jan. 21, 2020, Zheng was indicted on one count of smuggling goods from the United States and one count of making false, fictitious or fraudulent statements. He has been detained since Dec. 30, 2019.
Dr. Charles Lieber
According to court documents, since 2008, Dr. Lieber who has served as the Principal Investigator of the Lieber Research Group at Harvard University, which specialized in the area of nanoscience, has received more than $15,000,000 in grant funding from the National Institutes of Health (NIH) and Department of Defense (DOD). These grants require the disclosure of significant foreign financial conflicts of interest, including financial support from foreign governments or foreign entities. Unbeknownst to Harvard University beginning in 2011, Lieber became a “Strategic Scientist” at Wuhan University of Technology (WUT) in China and was a contractual participant in China’s Thousand Talents Plan from in or about 2012 to 2017. China’s Thousand Talents Plan is one of the most prominent Chinese Talent recruit plans that are designed to attract, recruit, and cultivate high-level scientific talent in furtherance of China’s scientific development, economic prosperity and national security. These talent programs seek to lure Chinese overseas talent and foreign experts to bring their knowledge and experience to China and reward individuals for stealing proprietary information. Under the terms of Lieber’s three-year Thousand Talents contract, WUT paid Lieber $50,000 USD per month, living expenses of up to 1,000,000 Chinese Yuan (approximately $158,000 USD at the time) and awarded him more than $1.5 million to establish a research lab at WUT. In return, Lieber was obligated to work for WUT “not less than nine months a year” by “declaring international cooperation projects, cultivating young teachers and Ph.D. students, organizing international conference[s], applying for patents and publishing articles in the name of” WUT.
The complaint alleges that in 2018 and 2019, Lieber lied about his involvement in the Thousand Talents Plan and affiliation with WUT. On or about, April 24, 2018, during an interview with investigators, Lieber stated that he was never asked to participate in the Thousand Talents Program, but he “wasn’t sure” how China categorized him. In November 2018, NIH inquired of Harvard whether Lieber had failed to disclose his then-suspected relationship with WUT and China’s Thousand Talents Plan. Lieber caused Harvard to falsely tell NIH that Lieber “had no formal association with WUT” after 2012, that “WUT continued to falsely exaggerate” his involvement with WUT in subsequent years, and that Lieber “is not and has never been a participant in” China’s Thousand Talents Plan.
Yanqing Ye
According to the indictment, Ye is a Lieutenant of the People’s Liberation Army (PLA), the armed forces of the People’s Republic of China and member of the Chinese Communist Party (CCP). On her J-1 visa application, Ye falsely identified herself as a “student” and lied about her ongoing military service at the National University of Defense Technology (NUDT), a top military academy directed by the CCP. It is further alleged that while studying at Boston University’s (BU) Department of Physics, Chemistry and Biomedical Engineering from October 2017 to April 2019, Ye continued to work as a PLA Lieutenant completing numerous assignments from PLA officers such as conducting research, assessing U.S. military websites and sending U.S. documents and information to China.
According to court documents, on April 20, 2019, federal officers interviewed Ye at Boston’s Logan International Airport. During the interview, it is alleged that Ye falsely claimed that she had minimal contact with two NUDT professors who were high-ranking PLA officers. However, a search of Ye’s electronic devices demonstrated that at the direction of one NUDT professor, who was a PLA Colonel, Ye had accessed U.S. military websites, researched U.S. military projects and compiled information for the PLA on two U.S. scientists with expertise in robotics and computer science. Furthermore, a review of a WeChat conversation revealed that Ye and the other PLA official from NUDT were collaborating on a research paper about a risk assessment model designed to decipher data for military applications. During the interview, Ye admitted that she held the rank of Lieutenant in the PLA and admitted she was a member of the CCP.
Zaosong Zheng
In August 2018, Zheng entered the United States on a J-1 visa and conducted cancer-cell research at Beth Israel Deaconess Medical Center in Boston from Sept. 4, 2018, to Dec. 9, 2019. It is alleged that on Dec. 9, 2019, Zheng stole 21 vials of biological research and attempted to smuggle them out of the United States aboard a flight destined for China. Federal officers at Logan Airport discovered the vials hidden in a sock inside one of Zheng’s bags, and not properly packaged. It is alleged that initially, Zheng lied to officers about the contents of his luggage, but later admitted he had stolen the vials from a lab at Beth Israel. Zheng stated that he intended to bring the vials to China to use them to conduct research in his own laboratory and publish the results under his own name.
The charge of making false, fictitious and fraudulent statements provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. The charge of visa fraud provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. The charge of acting as an agent of a foreign government provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. The charge of conspiracy provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. The charge of smuggling goods from the United States provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General for National Security John C. Demers, United States Attorney Andrew E. Lelling; Special Agent in Charge of the FBI Boston Field Division Joseph R. Bonavolonta; Michael Denning, Director of Field Operations, U.S. Customs and Border Protection, Boston Field Office; Leigh-Alistair Barzey, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office; Philip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General; and William Higgins, Special Agent in Charge of the U.S. Department of Commerce, Office of Export Enforcement, Boston Field Office made the announcement. Assistant U.S. Attorneys B. Stephanie Siegmann, Jason Casey and Benjamin Tolkoff of Lelling’s National Security Unit are prosecuting these cases with the assistance of trial attorneys William Mackie and David Aaron at the National Security Division’s Counterintelligence and Export Control Section.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
These case are part of the Department of Justice’s China Initiative, which reflects the strategic priority of countering Chinese national security threats and reinforces the President’s overall national security strategy. In addition to identifying and prosecuting those engaged in trade secret theft, hacking and economic espionage, the initiative will increase efforts to protect our critical infrastructure against external threats including foreign direct investment, supply chain threats and the foreign agents seeking to influence the American public and policymakers without proper registration.
Former Executive Assistant Sentenced in Connection with Embezzling over $3 MillionRead the Press Release
BOSTON – The former executive assistant of a Waltham-based technology company was sentenced today in connection with a fraud and embezzlement scheme that netted over $3 million.
Shivani Patel, 38, of Vineyard Haven, was sentenced by U.S. District Court Judge Leo T. Sorokin to four years in prison, five years of supervised release, and ordered to pay restitution of $3,819,366 and forfeiture of $3,076,369. In October 2019, Patel pleaded guilty to one count each of bank fraud, money laundering and filing false tax returns.
As an executive assistant to the chief financial officer, Patel’s duties included retrieving incoming mail containing customer checks made payable to her employer, recording the checks into the payment system and depositing the checks into her employer’s bank account.
From at least February 2012 through July 2017, Patel embezzled approximately $3,076,369 from her then employer for her personal use. Specifically, in February 2012, Patel created a company with a name nearly identical to that of her then employer — using her employer’s name but just adding an “s” to the end — and opened a business banking account in the sham company’s name. Thereafter, Patel took customer checks payable to her employer from the mail, deposited those checks into the sham company’s bank account, and concealed her embezzlement by making false entries in her employer’s billing system. To disguise and conceal the nature of these funds, Patel funneled this money through multiple bank accounts.
In addition, Patel filed income tax returns for the tax years 2012 through 2016 in which she intentionally underreported her income by failing to disclose the money she had stolen from her employer.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. Assistant U.S. Attorney Justin D. O’Connell of Lelling’s Securities and Financial Fraud Unit prosecuted the case.
Stock Promoter Sentenced to Prison for Engaging in Manipulative Trading as Part of Pump-and-Dump SchemesRead the Press Release
BOSTON – A stock promoter who engaged in manipulative trading as part of a scheme to defraud investors was sentenced on Friday, Jan. 24, 2020, to six months in prison.
Eric Landis, 54, of Charlottesville, Va., was sentenced by U.S. District Judge Indira Talwani to six months in prison, two years of supervised release and ordered to pay a fine of $50,000. In January 2019, Landis pleaded guilty to one count of securities fraud.
From January 2015 to January 2018, Landis engaged in a scheme to manipulate the stock of at least 97 publicly traded companies. Landis was paid by stock promoters to send e-mails out touting microcap stocks to “lists” that he purportedly controlled. Instead of doing this, Landis generated the appearance of interest in the stocks by placing thousands of manipulative trades himself in the stock of the companies he was paid to promote. Landis’s trading created the mirage that the securities of those microcap companies were in high demand, when they were not. Over the course of a three year period, Landis was paid approximately $3.3 million by the stock promoters as part of his criminal scheme.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. The Boston regional office of the U.S. Securities and Exchange Commission provided assistance with the investigation. Assistant U.S. Attorney Eric S. Rosen of Lelling’s Securities and Financial Fraud Unit prosecuted the case.
Dorchester Man Convicted by Federal Jury for Being a Felon in Possession of FirearmRead the Press Release
BOSTON – A Dorchester man was convicted on Thursday, Jan. 23, 2020, in federal court in Boston for illegally possessing a firearm.
Joquentz Constant, 23, was convicted by a federal jury of one count of being a felon in possession of a firearm. U.S. Senior District Court Judge Douglas P. Woodlock scheduled sentencing for May 26, 2020. Constant was arrested and charged in January 2019 and has been in custody since.
Constant was found to be in possession of a black Regent. 32 caliber revolver bearing obliterated model and serial numbers and containing five rounds of PPU .32 caliber ammunition and one round of WIN .32 caliber ammunition. Due to prior convictions punishable by more than one year in jail, Constant is prohibited from possessing a firearm.
The charging statute provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Kelly Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; Suffolk County District Attorney Rachael Rollins; and Boston Police Commissioner William Gross made the announcement today. Assistant U.S. Attorneys David J. D’Addio and Mackenzie A. Queenin of Lelling’s Criminal Division prosecuted the case.
Dominican National Sentenced for Identity TheftRead the Press Release
BOSTON – A Dominican national formerly residing in Lawrence was sentenced on Friday, Jan. 24, 2020, in federal court in Boston for Social Security fraud and aggravated identity theft.
Freddy Tejada-Diaz, 50, was sentenced by U.S. District Court Judge Richard G. Stearns to two years and one day in prison. Tejada-Diaz will be subject to deportation proceedings upon completion of his sentence. In August 2019, Tejada-Diaz pleaded guilty to one count of false representation of Social Security number and one count of aggravated identity theft.
On Aug, 1, 2016, Tejada-Diaz applied for a Massachusetts identification card using the name, date of birth and Social Security number of a Puerto Rican born United States citizen. At the time of his arrest in April 2019, Tejada-Diaz had an arrest warrant out of Plymouth Superior Court for drug charges and a warrant of removal issued out of a New York immigration court. Tejada-Diaz was identified, among other things, from a fingerprint match to his immigration file bearing his photo, which showed that he was previously ordered removed on Sept. 5, 1996, but did not report to his scheduled immigration hearing. Instead, on Sept. 30, 1996, Tejada-Diaz obtained a Massachusetts identification card in the name of the United States citizen and, until his recent arrest, had been using that identity ever since.
United States Attorney Andrew E. Lelling; Jason Molina, Acting Special Agent in Charge of Homeland Security Investigations in Boston; and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. Assistant U.S. Attorney Lindsey E. Weinstein of Lelling’s Major Crimes Unit prosecuted the case.
Lowell Woman Pleads Guilty to Stealing Approximately $182,000 from EmployerRead the Press Release
BOSTON – A Lowell woman pleaded guilty yesterday in connection with embezzling approximately $182,000 from a veterinary hospital that employed her.
Sasha A. Saulnier, 32, pleaded guilty to six counts of wire fraud before U.S. District Court Judge Nathaniel M. Gorton who scheduled sentencing for April 24, 2020. In August 2019, Saulnier was charged by criminal complaint.
Saulnier was employed by a full-service animal hospital as a client relations specialist from October 2011 until September 2018. During that time, she had various client responsibilities, including selling retail products to customers at the hospital. Saulnier also served in a temporary supervisory role, which gave her access to management software and the ability to manipulate account transactions and accounting data.
From March 2014 through August 2018, Saulnier entered false refund transactions into the company’s management software, and then credited her own personal debit cards, which linked directly to her personal checking account. Specifically, Saulnier occasionally entered a fictitious refund for merchandise that was legitimately purchased by a customer, but never returned, and then credited the bogus refund to her own debit card. Saulnier also fabricated refunds for wholly fictitious retail purchases that were never actually made, and then credited that amount to her own debit card. In an effort to conceal her fraud, Saulnier used dormant accounts of inactive hospital clients, such as those with deceased pets and so-called “test accounts,” set up solely for training purposes. In addition, Saulnier fabricated discounts which she applied to purchases of retail products.
Over the course of the scheme, Saulnier used her position to falsify approximately 482 transactions resulting in refunds and credits totaling more than $182,800 to her own bank account. Saulnier used this money for personal expenses and travel, including trips to Las Vegas, New York City and the Bahamas.
The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release, a fine of $250,000 or up to twice the loss involved, restitution and forfeiture. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorney Lindsey E. Weinstein of Lelling’s Major Crimes Unit is prosecuting the case.
Former Assistant Director of Real Estate for City of Boston Sentenced for Accepting $50,000 in BribesRead the Press Release
BOSTON – The former Assistant Director of Real Estate working for the Boston Planning and Development Agency (BPDA) was sentenced today in federal court in Boston in connection with accepting $50,000 in bribes.
John M. Lynch, 67, was sentenced by U.S. District Court Chief Judge Patti B. Saris to 40 months in prison, one year of supervised release, and ordered to pay restitution of $14,400 and to forfeit $50,000. The government recommended a sentence of 48 months in prison.
In September 2019, Lynch pleaded guilty to one count of bribery involving an organization receiving federal funds and one count of filing a false federal tax return.
“Mr. Lynch’s conduct illustrates the kind of pay-to-play scheme that, if left unchecked, destroys government institutions and the public’s faith in those institutions,” said United States Attorney Andrew E. Lelling. “This office will aggressively prosecute any public official, regardless of party or position, whose greed leads them to breach the public trust and break federal law.”
“It may be difficult for anyone who went to John Lynch’s office seeking nothing more than a fair shake to understand why a public servant one day points his moral compass toward personal ruin knowing how much he will lose in order to gain so little. But public corruption cases aren’t built around employees who appreciate what they have,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Palm-greasing at any level undermines a community’s faith in their government. The FBI encourages anyone who encounters or suspects municipal malfeasance to report it, and to help us to hold those who violate taxpayers’ trust accountable.”
“While John Lynch should have been exercising his authority for the benefit of the City of Boston and its residents, he instead lined his own pockets with ill-gotten proceeds and further sought to defraud the Internal Revenue Service” said Kristina O’Connell, Special Agent In Charge of IRS Criminal Investigation’s Boston Field Office. “Today’s sentencing should serve as a reminder to those who seek to violate the public’s trust that you will be held accountable for your actions.”
In 2017, a Boston real estate developer sought to sell a parcel of residential real estate in Boston, but needed Boston Zoning Board of Appeals (ZBA) approval to extend a permit that would allow the property to be sold as a multi-unit development. In order to secure the permit extension, the developer agreed to pay $50,000 in bribes to Lynch, in return for Lynch using his influence at the BPDA to secure a vote from a ZBA member. In May 2017, the ZBA member voted to grant the permit extension, enabling the developer to sell the property at an additional half a million dollar profit that the developer otherwise would not have received. Per their agreement, the developer then paid Lynch $25,000 in cash and gave Lynch a $25,000 check, which Lynch used to pay a personal bill. Lynch then failed to report those and another $10,000 payment he had received from the real estate developer on this 2018 tax returns.
U.S. Attorney Lelling, FBI Boston SAC Bonavolonta and IRS-CI SAC O’Connell made the announcement today. Assistant U.S. Attorney Dustin Chao of Lelling’s Public Corruption Unit prosecuted the case.
Founder and Former Chairman of the Board of Insys Therapeutics Sentenced to 66 Months in PrisonRead the Press Release
BOSTON – The founder of Insys Therapeutics, John Kapoor, was sentenced today in federal court in Boston for orchestrating a scheme to bribe practitioners to prescribe Subsys, a fentanyl-based pain medication, often when medically unnecessary.
John Kapoor, 76, of Phoenix, Ariz., was sentenced by U.S. District Court Judge Allison D. Burroughs to 66 months in prison, three years of supervised release, and ordered to pay forfeiture and restitution to be determined at a later date. The government recommended a sentence of 15 years in prison.
In May 2019, Kapoor was convicted by a federal jury of racketeering conspiracy along with four other Insys executives.
As a veteran of the pharmaceutical industry, Kapoor learned that he could profit from developing a spray delivery system for a generic drug, then marketing it as a premium product. Kapoor privately funded Insys as it developed Subsys, which was eventually approved to treat cancer patients suffering intense breakthrough pain. With such significant personal financial investment, Kapoor was committed to ensuring that Insys was successful, and he did so by exercising tight control on all aspects of corporate decision making. Kapoor hired, or authorized the hiring of, several top executives who became co-conspirators in the criminal scheme to bribe practitioners, many of whom operated pain clinics, to prescribe Subsys to patients, often when medically unnecessary
In 2012, Kapoor authorized the use of “speaker programs” purportedly intended to increase brand awareness of Subsys through peer-to-peer educational lunches and dinners. However, the programs were used as a vehicle to pay bribes and kickbacks to targeted practitioners in exchange for increased Subsys prescriptions and increased dosage. Kapoor insisted that profits generated should double the amount of money spent paying doctors. In October 2012, Kapoor instructed the Vice President of Marketing to calculate the return on investment (ROI) for each speaker to determine if the speaker had a “positive ROI.” Practitioners who failed to meet satisfactory prescribing requirements were ousted from the speaker program. Kapoor approved bribing doctors that he knew abusively prescribed opioids.
Kapoor controlled and enforced the criminal scheme on a daily basis during a morning meeting, referred to as the “8:30 call,” which also involved many of his co-defendants. One of the topics discussed was the scheme to bribe doctors. Kapoor routinely discussed the suitability of additional funds, and which doctors were writing prescriptions for Subsys or a competitive drug.
Kapoor knew that the success of Insys depended on insurers approving payment for Subsys. In October 2012, Kapoor approved the creation of a pilot program, the “Insys Reimbursement Center” (IRC), which was dedicated to obtaining prior authorization for payment directly from insurers and pharmacy benefit managers. To do so, employees of the IRC posed as employees of the practitioner and used a script of false and misleading representations about patient diagnoses in order to secure approval for the drug by the insurance provider. For example, since insurers were more likely to authorize payment for Subsys if a patient was being treated for cancer-related pain, IRC employees were instructed to mislead insurers regarding the true diagnosis of the patient. Kapoor approved these tactics, and demanded a 100% success rate.
“Out of pure greed, Insys executives, from John Kapoor on down, bribed doctors to prescribe this powerful and highly addictive narcotic to people who did not need it. Despite increasing public fears of a drug epidemic fueled by pain pill prescriptions, these defendants, led by Kapoor, ploughed ahead, setting weekly quotas for doctors on their payroll, urging them to prescribe Subsys in higher and higher doses, all so they could make millions of dollars at patients’ expense. Their disregard for the public’s health and safety is nothing short of appalling. This case is not only about punishing these defendants. It is also about making the next pharmaceutical company think twice about its sales tactics and the basic corporate responsibility to not victimize the public,” said United States Attorney Andrew E. Lelling. “This was a landmark prosecution that successfully held accountable a pharmaceutical company’s top executives for their roles in the illicit marketing and prescribing of opioids.”
“John Kapoor and his loyal lieutenants minimized their actions and distanced themselves from the harm they were committing on patients whose lives they ultimately ruined, and now all of them are finally being held accountable for their criminal conduct,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Their downfall illustrates the FBI’s commitment to attacking the ongoing opioid crisis from every angle, and we will continue to identify and dismantle criminal enterprises like this one to ensure those who are responsible for patient care are taking care of patients, and not themselves.”
“These sentences undoubtedly send a clear message to health care executives relying on illegal schemes to increase profits: they will be held accountable for corporate crimes. The reckless and dangerous violation of law by these pharmaceutical executives is extremely serious, and we will not tolerate those who put profits above the well-being of patients. We will continue to attack the opioid crisis from all angles, including holding the pharmaceutical industry and its leadership accountable,” said Phillip Coyne, Special Agent in Charge of the U.S Department of Health and Human Services, Office of the Inspector General.
“The FDA continues to respond forcefully to the ongoing opioid epidemic – one of the largest public health tragedies our country has faced – by ensuring the safe and appropriate use of these powerful medications. But bribing healthcare providers to prescribe this most powerful type of opioid – an immediate release form of fentanyl – is not only unacceptable, it puts patients at serious risk of overdose and potentially death,” said Judith McMeekin, Acting Associate Commissioner for Regulatory Affairs at the U.S. Food and Drug Administration. “This conduct cannot be tolerated, and the FDA remains fully committed to working with our law enforcement partners to bring to justice those who place profits before the public’s health.”
“The reckless actions by this executive whose product included controlled medications increased the potential for diversion and addiction, which jeopardizes the public health and safety,” said Drug Enforcement Administration Special Agent in Charge Brian D. Boyle. “DEA pledges to work with our law enforcement and regulatory partners to ensure that rules and regulations are followed.”
“Ensuring the integrity of TRICARE and combating the dangers posed to military members and their dependents by improperly prescribed opioids are top priorities for the Defense Criminal Investigative Service (DCIS),” stated Leigh-Alistair Barzey, Special Agent in Charge of the DCIS Northeast Field Office. “Today's sentencing marks the successful conclusion of this investigation and demonstrates the DCIS’ ongoing commitment to work with its law enforcement partners and the USAO-MA to identify, investigate and prosecute individuals and pharmaceutical companies that seek to fraudulently profit at the expense of patients.”
“John Kapoor and the other executives in this case criminally conspired to place profits before patients, all to drive sales of a highly potent and addictive opioid. The prosecution of these pharmaceutical executives demonstrates that healthcare fraud will not be tolerated. The Employee Benefits Security Administration will continue collaborating with our law enforcement partners in these important investigations to protect participants in private sector health plans, detect and deter health care fraud, and contribute to fighting the opioid epidemic,” said Carol S. Hamilton, Acting Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office.
“Today’s sentence is the result of a coordinated investigation by law enforcement agencies who are committed to ending the nation’s opioid crisis,” said Inspector in Charge Joseph W. Cronin of the U.S. Postal Inspection Service’s Boston Division. “Insys Therapeutics executives profited by offering bribes and kickbacks in exchange for prescriptions of a highly addictive fentanyl spray. These practices put the health of the American public at risk and jeopardized the integrity of our mail system.”
“The defendants in this investigation put the company’s bottom line before the welfare of the patients who were in need of genuine care,” said Matt M. Modafferi, Special Agent in Charge of U.S. Postal Service Office of Inspector General. “The sentences imposed on the defendants will serve as a reminder that there are severe consequences when individuals and companies use these type of tactics in order to drive up their pharmaceutical sales. I commend the U.S. Attorney’s Office and our law enforcement partners for their tireless efforts leading up to and through the successful ten week trial of the defendants.”
“These sentences not only hold the defendants accountable, they demonstrate the ongoing commitment of VA OIG to ensure the safety and integrity of VA healthcare programs. VA OIG and its law enforcement partners will continue to vigorously investigate healthcare fraud at VA and hold accountable anyone who puts the well-being of veterans, their dependents, or the public at risk,” said Acting SAC Jeff Stachowiak.
Thomas W. South, Deputy Assistant Inspector General for Investigations, OPM OIG said: “There is no doubt that the unscrupulous practices of Insys Therapeutics and its founder John Kapoor have fueled the devastating national opioid epidemic. We are incredibly proud to have been a part of this groundbreaking case and I applaud the exceptional work of our investigators and law enforcement partners. Bribing physicians across the country to overprescribe Subsys risked the lives of thousands of patients and today’s sentencing is an important step toward accountability and justice.”
Assistant U.S. Attorneys K. Nathaniel Yeager, Fred M. Wyshak and David G. Lazarus prosecuted the case for Lelling’s Health Care Fraud Unit.
Former Insys Therapeutics Vice President of Sales Sentenced for Racketeering ConspiracyRead the Press Release
BOSTON – The former Vice President of Sales of Insys Therapeutics was sentenced today in federal court in Boston for his role in a nationwide conspiracy to bribe medical practitioners to unnecessarily prescribe a fentanyl-based pain medication and defraud healthcare insurers.
Alec Burlakoff, 46, of West Palm Beach, Fla., was sentenced by U.S. District Court Judge Allison D. Burroughs to 26 months in prison, three years of supervised release, and ordered to pay restitution and forfeiture to be determined at a later date. In November 2018, Burlakoff pleaded guilty to one count of racketeering conspiracy and agreed to cooperate with the government.
In May 2019, five top executives including the Founder of Insys, John Kapoor, were convicted by a federal jury of racketeering conspiracy.
From May 2012 to December 2015, Burlakoff and his co-conspirators used various methods to bribe medical practitioners, many of whom operated pain clinics, to prescribe Subsys to patients, often when medically unnecessary. Subsys, a drug owned and manufactured by Insys Therapeutics, Inc., is a powerful, fentanyl-based pain medication approved to treat cancer patients suffering intense breakthrough pain.
One method employed by Burlakoff and his co-conspirators was the Insys Speaker Program (ISP), which was used as a vehicle to bribe doctors and other clinicians to prescribe Subsys to their patients. Insys sales representatives targeted and promised medical professionals the opportunity to be paid as Insys speakers if they wrote prescriptions for Subsys. The more prescriptions written for Subsys – and the higher the dose – the more speaking opportunities were awarded and more money paid to the practitioners. In many instances, the programs were shams.
At trial, Burlakoff testified about the methods used at Insys to induce doctors and nurse practitioners to prescribe Subsys in exchange for bribe payments. Burlakoff also described Insys’ practice of targeting medical practices known for suspect prescribing standards, commonly referred to as “pill mills”:
“[P]ill mills for us meant dollar signs. That's what we saw, dollar signs. It was not run the other way. It was run to the pill mill.”
Burlakoff also testified about the internal tracking Insys conducted to measure the effectiveness of the bribe payments:
“‘Return on investment’ means a successful bribe, an increase in Subsys prescriptions based on the speaker money we have paid the doctor, the speaker.”
The defendants also conspired to mislead and defraud health insurance providers who were reluctant to approve payment for Subsys when it was prescribed for non-cancer patients. The defendants achieved this by setting up the “Insys Reimbursement Center,” (IRC) which was dedicated to fraudulently obtaining prior authorization for payment directly from insurers and pharmacy benefit managers.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Phillip Coyne, Special Agent in Charge of the U.S Department of Health and Human Services, Office of the Inspector General; Judy McMeekin, Pharm.D. Acting Associate Commissioner for Regulatory Affairs of the U.S. Food and Drug; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Leigh-Alistair Barzey, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office; Carol S. Hamilton, Acting Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office; Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division; Matthew Modafferi, Special Agent in Charge of the U.S. Postal Service Office of Inspector General, Northeast Area Field Office; Jeffrey K. Stachowiak, Acting Special Agent in Charge of the Department of Veterans Affairs, Office of Inspector General; and Thomas W. South, Deputy Assistant Inspector General for Investigations of the Office of Personnel Management made the announcement.
Assistant U.S. Attorneys K. Nathaniel Yeager, Fred M. Wyshak and David G. Lazarus prosecuted the case for Lelling’s Health Care Fraud Unit.
Dominican National Pleads Guilty to Identity Theft and Stealing MassHealth BenefitsRead the Press Release
BOSTON – A Dominican national formerly residing in Lawrence pleaded guilty on Tuesday, Jan. 21, 2020, in federal court in Boston to Social Security and benefit fraud.
Cesar Franco Lara, 37, pleaded guilty to one count of false representation of Social Security number and one count of theft of government money. Pursuant to the plea agreement, Franco Lara will receive a sentence of 20 months in prison. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for May 13, 2020.
On Aug. 5, 2016, Franco Lara applied for a Massachusetts identification card using the name, date of birth and Social Security number of a United States citizen born in Puerto Rico. On Aug. 18, 2016, he used that Massachusetts identification card to apply for and receive nearly $3,500 of MassHealth benefits in the U.S. citizen’s name. In an effort to determine the true identity of the defendant, law enforcement found a non-immigrant visitor visa application bearing the defendant’s photograph and fingerprints. This application was refused by the Department of State in 2015. When arrested on federal charges, Franco Lara had on him a MassHealth ID card in the U.S. citizen’s name. His fingerprints were found to be a match of the fingerprints on file from the refused visa application.
The charges of false representation of a Social Security number provides for a sentence of up to five years in prison, three years of supervised release, a fine of $250,000, restitution and forfeiture. The charge of theft of government funds provides for a sentence of up to 10 years in prison, three years supervised release, a fine of $250,000, restitution and forfeiture. Franco Lara will be subject to deportation proceedings upon completion of his sentence. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Jason Molina, Acting Special Agent in Charge of Homeland Security Investigations in Boston; and Phillip Coyne, Special Agent in Charge of Department of Health and Human Services, Office of Inspector General, Office of Investigations, Boston Field Division made the announcement today. Vital assistance was provided by the U.S. Marshals Service’s Fugitive Task Force. Assistant U.S. Attorneys Lindsey E. Weinstein and David G. Tobin of Lelling’s Major Crimes Unit are prosecuting the case.
Belgian National Holding Illinois Attorney’s License Indicted for Money LaunderingRead the Press Release
BOSTON – A Belgian national holding an Illinois law license has been indicted on money laundering charges involving funds obtained from three Massachusetts victims.
Hassan A. Abbas, 52, of Belgium, was indicted on one count of money laundering and two counts of unlawful monetary transactions. Following an initial appearance in federal court in Boston yesterday, Abbas was detained pending a detention hearing set for Jan. 24, 2020.
According to the charging documents, between July 2017 and December 2018, Abbas created sham corporate entities and opened bank accounts in the name of those entities. Those bank accounts were used to receive fraudulently obtained funds from a number of victims. Two Massachusetts victims were victimized through a business email compromise (BEC) scam in which the victims were tricked into wiring money to an individual they thought was their real estate broker. A BEC scheme is a sophisticated scam often targeting individuals and businesses involved in wire transfer payments. The fraud is carried out by compromising and/or “spoofing” legitimate business email accounts through social engineering or computer intrusion techniques, to cause victims to transfer funds to accounts controlled by the scammers. The third Massachusetts victim was allegedly the victim of a romance scam, in which perpetrators create fictitious online personas to develop online romantic relationships with individuals in the U.S., and then leverage those relationships to obtain money and/or property.
Once the fraudulently obtained funds reached the accounts controlled by Abbas, Abbas initiated wire transfers to accounts overseas, and transferred other sums of the fraudulently obtained money to his own personal accounts, which he then spent.
The charge of money laundering provides for a sentence of up to 20 years in prison, three years of supervised release, and a fine of $500,000, or twice the value of the criminally derived property. The charge of unlawful monetary transaction provides for a sentence of up to 10 years in prison, three years of supervised release, and a fine of $250,000, or twice the value of the criminally derived property. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Valuable assistance was provided by the Essex County District Attorney’s Office. Assistant U.S. Attorneys Philip A. Mallard and Mackenzie A. Queenin of Lelling’s Criminal Division are prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Shirley Woman Pleads Guilty to Stealing Social Security BenefitsRead the Press Release
BOSTON – A Shirley woman pleaded guilty today in federal court in Boston to stealing Social Security benefits.
Shirley Daley, 84, pleaded guilty to one count of theft of public funds. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for May 6, 2020. Daley was charged in April 2019.
From June 2005 through December 2017, Daley received Spouse’s/Widow’s Benefits from Social Security using one name and Social Security number, while also receiving Retirement Benefits using a different name and a different Social Security number. When she applied for Retirement Benefits, Daley told the Social Security Administration that she had never been married and that she had never filed for benefits. In fact, Daley had been married and she had been receiving Spouse’s/Widow’s Benefits for four years. From June 2005 through December 2017, Daley stole approximately $319,076 in Social Security benefits.
The charge of theft of public funds provides for a sentence of up to 10 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. Special Assistant U.S. Attorney Karen Burzycki of Lelling’s Major Crimes Unit prosecuted the case.
Harwich Man Sentenced for Unlawful Firearms Possession and Drug OffensesRead the Press Release
BOSTON – A Harwich man was sentenced today in federal court in Boston for firearms and drug offenses.
Timothy Fletcher, 36, was sentenced by U.S. District Court Judge Richard G. Stearns to 168 months in prison and three years of supervised release. In July 2018, Fletcher was convicted by a federal jury of one count of possession of cocaine base with intent to distribute, one count of possession of cocaine with intent to distribute and one count of being a felon in possession of a firearm and ammunition - a Tisas, Model Regent .45 caliber semi-automatic pistol, 58 rounds of .45 caliber ammunition and 60 rounds of 9mm ammunition.
On April 3, 2015, police executed a search warrant at a storage unit in Hyannis where they recovered, among other items, firearms, 124 rounds of ammunition, crack cocaine, powder cocaine, $1420 in cash, drug paraphernalia, two digital scales, boxes of plastic sandwich baggies, approximately 223 pairs of sneakers and various documents containing Fletcher’s name. The firearms, firearm magazines, some of the drugs and the cash were hidden inside various sneakers and sneaker boxes. In addition, Fletcher’s fingerprints were recovered from a magazine found inside a sneaker box with the .45 caliber semi-automatic pistol.
The night before the warrant was executed, Fletcher was stopped by the police and found to be in possession of the key to the storage facility and unit.
United States Attorney Andrew E. Lelling; Kelly Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; Barnstable Police Chief Matthew Sonnabend; and Yarmouth Police Chief Frank Frederickson made the announcement today. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Lelling’s Major Crimes Unit prosecuted the case.
Former Regional Sales Director for Insys Therapeutics Sentenced for Racketeering ConspiracyRead the Press Release
BOSTON – A former Regional Sales Director for Insys Therapeutics was sentenced today in federal court in Boston for bribing practitioners to prescribe Subsys, a fentanyl-based pain medication, often when medically unnecessary.
Sunrise Lee, 38, of Bryant City, MI, was sentenced by U.S. District Court Judge Allison D. Burroughs to 1 year and 1 day in prison, three years of supervised release, restitution to be determined at a later date and ordered to forfeit the proceeds of the offense (the exact amount to be determined at a later date). The government recommended a sentence of 72 months in prison.
In May 2019, Lee was convicted by a federal jury of racketeering conspiracy along with four other Insys executives.
Subsys, a drug owned and manufactured by Insys Therapeutics, Inc., is a fentanyl-based, rapid-onset opioid approved to treat cancer patients suffering intense breakthrough pain. From May 2012 to December 2015, Lee and her co-defendants conspired to bribe practitioners, many of whom operated pain clinics, in order to induce them to prescribe Subsys to patients, often when medically unnecessary. They also conspired to mislead and defraud health insurance providers who were reluctant to approve payment for the expensive drug when it was prescribed for patients without cancer. Medicare would not approve payment for the drug unless the patient was being treated for breakthrough cancer pain.
Lee joined Insys as a District Sales Director, excelling at recruiting and cultivating high prescribers of Insys, including a pain management physician in Michigan and another physician outside Chicago. The prescribers bribed by Lee became some of the most prolific prescribers of the drug. Lee obtained agreements from the doctors to write significant quantities of Subsys prescriptions, and prescriptions in increasing dosages, in exchange for participation in the Insys speaker program, a vehicle used to pay kickbacks. Lee was promoted to Regional Sales Director in 2013. In that capacity, she was responsible for managing nearly a third of the company’s sales force.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Phillip Coyne, Special Agent in Charge of the U.S Department of Health and Human Services, Office of the Inspector General; Judy McMeekin, Pharm.D. Acting Associate Commissioner for Regulatory Affairs of the U.S. Food and Drug; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Leigh-Alistair Barzey, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office; Carol S. Hamilton, Acting Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office; Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division; Matthew Modafferi, Special Agent in Charge of the U.S. Postal Service Office of Inspector General, Northeast Area Field Office; Jeffrey K. Stachowiak, Acting Special Agent in Charge of the Department of Veterans Affairs, Office of Inspector General; and Thomas W. South, Deputy Assistant Inspector General for Investigations of the Office of Personnel Management made the announcement.
Assistant U.S. Attorneys K. Nathaniel Yeager, Fred M. Wyshak and David G. Lazarus prosecuted the case for Lelling’s Health Care Fraud Unit.
Former CEO of Insys Therapeutics Sentenced for Racketeering SchemeRead the Press Release
BOSTON – The former CEO and President of Insys Therapeutics was sentenced today in federal court in Boston for bribing practitioners to prescribe Subsys, a fentanyl-based pain medication, often when medically unnecessary.
Michael Babich, 43, of Scottsdale, Ariz., was sentenced to 30 months in prison, three years of supervised release, and ordered to pay restitution and forfeiture to be determined at a later date. In January 2019, Babich pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud and one count of mail fraud, and agreed to cooperate with the government.
From May 2012 to December 2015, Babich along with the founder of Insys Therapeutics, John Kapoor, and others conspired to bribe practitioners, many of whom operated pain clinics, in order to induce them to prescribe Insys’ fentanyl-based pain medication, Subsys, to patients often when medically unnecessary. Subsys is a powerful, rapid-onset opioid intended to treat cancer patients suffering intense breakthrough pain.
Babich and others used pharmacy data to identify practitioners who either prescribed unusually high volumes of rapid-onset opioids, or had demonstrated a capacity to do so, and bribed and provided kickbacks to the practitioners to increase the number of new Subsys prescriptions, and to increase the dosage and number of units of Subsys. Babich and his co-conspirators also measured the success by comparing the net revenue earned from targeted practitioners with the total value of bribes and kickbacks paid. The defendants used this information to reduce or eliminate bribes paid to practitioners who failed to meet satisfactory prescribing requirements.
Babich, who was called by the government as a witness at the trials of Kapoor and his co-defendants, testified over the course of five days. During his testimony, Babich described the inner workings of the conspiracy in detail. The trial resulted in the conviction of Kapoor; as well as the company’s Vice President of Managed Markets, Michael Gurry; the company’s National Director of Sales, Richard Simon; and two of the company’s Regional Sales Directors, Joseph Rowan and Sunrise Lee.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Phillip Coyne, Special Agent in Charge of the U.S Department of Health and Human Services, Office of the Inspector General; Judy McMeekin, Pharm.D. Acting Associate Commissioner for Regulatory Affairs of the U.S. Food and Drug; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Leigh-Alistair Barzey, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office; Carol S. Hamilton, Acting Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office; Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division; Matthew Modafferi, Special Agent in Charge of the U.S. Postal Service Office of Inspector General, Northeast Area Field Office; Jeffrey K. Stachowiak, Acting Special Agent in Charge of the Department of Veterans Affairs, Office of Inspector General; and Thomas W. South, Deputy Assistant Inspector General for Investigations of the Office of Personnel Management made the announcement.
Assistant U.S. Attorneys K. Nathaniel Yeager, Fred M. Wyshak and David G. Lazarus prosecuted the case for Lelling’s Health Care Fraud Unit.
California Woman Pleads Guilty in College Admissions CaseRead the Press Release
BOSTON – A California woman pleaded guilty today in federal court in Boston in connection with paying $9,000 to have an individual take online classes for her son, in order to earn credits to facilitate his graduation from Georgetown University.
Karen Littlefair, 57, of Newport Beach, Calif., pleaded guilty to one count of conspiracy to commit wire fraud. U.S. District Court Judge Allison D. Burroughs scheduled sentencing for May 13, 2020.
Littlefair agreed with William “Rick” Singer and others to pay approximately $9,000 to have an employee of Singer’s for-profit college counseling business, The Edge College & Career Network (“The Key”), take online classes in place of Littlefair’s son and submit those fraudulently earned credits to Georgetown to facilitate his graduation. The Key employee allegedly completed four classes for Littlefair’s son at Georgetown and elsewhere, and in exchange, Littlefair paid Singer’s company approximately $9,000. Littlefair’s son graduated from Georgetown, using the credits earned by the Key employee, in May 2018.
Singer previously pleaded guilty and is cooperating with the government’s investigation.
Case information, including the status of each defendant, charging documents and plea agreements are available here: https://www.justice.gov/usao-ma/investigations-college-admissions-and-testing-bribery-scheme.
The charge of conspiracy to commit wire fraud carries a sentence of up to 20 years in prison, up to three years of supervised release and a fine of up to $250,000. According to the terms of the plea agreement, the government will recommend a sentence of four months in prison, one year of supervised release, a fine of $9,500 and restitution. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. Assistant U.S. Attorneys Eric S. Rosen, Justin D. O’Connell, Leslie A. Wright and Kristen A. Kearney of Lelling’s Securities and Financial Fraud Unit are prosecuting the cases.
The details contained in the court documents are allegations and the remaining defendants are presumed not guilty unless and until proven guilty beyond a reasonable doubt in a court of law.
Boston Man Pleads Guilty to Fentanyl TraffickingRead the Press Release
BOSTON – A Boston man pleaded guilty today in federal court in Boston to fentanyl distribution.
Anthony Smallwood, 29, pleaded guilty to four counts of distribution and possession with intent to distribute 40 grams or more of fentanyl. U.S. District Court Judge Richard G. Stearns scheduled sentencing for May 27, 2020. Smallwood was previously charged by criminal complaint and arrested on May 22, 2019.
According to court records, between March and May 2019, Smallwood engaged in four separate drug sales of fentanyl to a witness cooperating with the government. These sales totaled over 230 grams of fentanyl.
The charges of distribution of, and possession with intent to distribute more than 40 grams of fentanyl, each carry a mandatory minimum sentence of five years and up to 40 years in prison, a minimum of four years of supervised release and a fine of up to $5 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office; and Boston Police Commissioner William Gross made the announcement today. Valuable assistance was provided by members of the Organized Crime Drug Enforcement Task Force Strike Force. Assistant U.S. Attorney Stephen W. Hassink of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case
Patient Services Inc. Agrees to Pay $3 Million for Allegedly Serving as a Conduit for Pharmaceutical Companies to Illegally Pay Patient CopaymentsRead the Press Release
Patient Services Inc. (PSI), a foundation based in Midlothian, Virginia, has agreed to pay $3 million to resolve allegations that it violated the False Claims Act by acting as a conduit to enable certain pharmaceutical companies to provide kickbacks to Medicare patients taking the companies’ drugs by paying the patients’ copayments, the Department of Justice announced today. The amount of the settlement announced today was determined based on analysis of PSI’s ability to pay after review of its financial condition.
When a Medicare beneficiary obtains a prescription drug covered by Medicare Part B or Part D, the beneficiary may be required to make a partial payment, which may take the form of a co-payment, co-insurance, or deductible (collectively, copays). Congress included co-pay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration – which includes money or any other thing of value – to induce Medicare patients to purchase the companies’ drugs, and it prohibits third parties, such as copay foundations, from acting as a conduit for such payments.
“The Department is committed to ensuring that foundations are not used as mere conduits to funnel kickbacks from pharmaceutical companies to Medicare patients and to increase company profits while avoiding an important cost-control aspect of the Medicare program,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We will continue to combat unlawful kickback arrangements and their pernicious influence on our health care system.”
“Pharmaceutical companies cannot use foundations to funnel drug co-payments disguised as routine charitable donations, all to prop up excessive drug prices. PSI allegedly operated as a vehicle for specific pharmaceutical companies essentially to pay kickbacks at the ultimate expense of the American taxpayers who support the Medicare program,” said U.S. Attorney Andrew E. Lelling of the District of Massachusetts. “We will continue to pursue this kind of enforcement until the practice disappears.”
The government alleged that PSI coordinated with three pharmaceutical manufacturers – Insys, Aegerion, and Alexion – to enable them to pay kickbacks to Medicare patients taking their drugs. PSI allegedly worked with these companies to design and operate certain funds that funneled money from the companies to patients taking the specific drugs the companies sold. These schemes allegedly minimized the possibility that the companies’ contributions to the funds would go to patients taking competing drugs made by other companies and undermined the nature of these contributions as bona fide donations. The United States previously entered into settlement agreements with Insys, Aegerion, and Alexion covering their use of PSI as a conduit to pay their patients’ copays.
As to Insys, the government alleged that, in late 2013, PSI and Insys began discussing a potential copayment assistance fund for Subsys, a sublingual form of fentanyl, a powerful opioid painkiller, which was approved for the treatment of breakthrough cancer pain in opioid-tolerant patients. The government further alleged that PSI worked with Insys to create the “Breakthrough Cancer Pain” fund, to which Insys was the only donor. The government also alleged that PSI allowed Insys to see the status of each patient that it referred to PSI, including whether that patient had received copay assistance from PSI and the amount of the assistance. The government alleged that PSI knew that Insys was referring patients to the Breakthrough Cancer Pain fund who did not have cancer, but PSI stated that it would only prevent “off-label use…if the Donor wants us to.”
The government also alleged that, in 2013, at Aegerion’s request, PSI created a fund for homozygous familial hypercholesterolemia (HoFH), which can be treated by Juxtapid, a drug that was sold by Aegerion. The government alleged that PSI allowed Aegerion to participate in establishing the patient eligibility criteria that PSI used to cover copayment obligations of patients taking Juxtapid, and PSI’s HoFH fund allowed Aegerion to pay for Medicare patients’ copayments to eliminate any price sensitivity to physicians prescribing and patients taking Juxtapid.
The government further alleged that Alexion approached PSI in January 2010 to request that PSI create a fund to provide financial assistance to Soliris patients, including by paying patients’ Medicare copays and other medical expenses for Soliris patients. Soliris was indicated for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH) to reduce hemolysis and for the treatment of patients with atypical hemolytic uremic syndrome (aHUS) to inhibit complement-mediated thrombotic microangiopathy. According to the government, except in rare instances, PSI provided financial assistance from the Complement Mediated Diseases (CMD) fund only if a patient was taking Soliris, and PSI reported information back to Alexion confirming the specific Soliris patients who were approved for copay or other financial assistance from PSI and through which PSI detailed payments to those patients.
“Few things undermine public confidence quite like finding out the pharmaceutical companies and non-profits they entrust with their health and financial peace of mind have been playing fast and loose with the law. Schemes like these, and the individuals and organizations who perpetrate them, are an affliction on our health care systems,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “This settlement demonstrates the FBI’s resolve to ensure that patients receive care that is based solely on sound medical judgment, and not compromised by kickbacks.”
PSI has agreed to a three-year Integrity Agreement (IA) with HHS-OIG as part of the settlement. The IA requires, among other things, that PSI implement measures designed to ensure that it operates independently and that its arrangements and interactions with pharmaceutical manufacturer donors are compliant with the law. In addition, the IA requires compliance-related certifications from PSI’s Board of Directors and detailed reviews by an independent review organization.
“Foundations operating patient assistance programs should operate with integrity and act independently from their donors,” said Gregory E. Demske, Chief Counsel to the Inspector General at the U.S. Department of Health and Human Services. “Our Integrity Agreement is designed to promote such independence and monitor the foundation to reduce the risk of future kickbacks.”
The government’s resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The investigation was conducted by the Department of Justice’s Civil Division and the U.S. Attorney’s Office for the District of Massachusetts, in conjunction with the Department of Health and Human Services, Office of Inspector General, and the Federal Bureau of Investigation.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Fourth Foundation Resolves Allegations that it Conspired with Pharmaceutical Companies to Pay Kickbacks to Medicare PatientsRead the Press Release
BOSTON – The U.S. Attorney’s Office announced today that Patient Services, Inc. (“PSI”), a foundation based in Midlothian, Va., has agreed to pay $3 million to resolve allegations that it violated the False Claims Act by enabling certain pharmaceutical companies to pay kickbacks to Medicare patients taking the companies’ drugs.
The government alleged that PSI worked with various pharmaceutical companies to design and operate certain funds that funneled money from the companies to patients taking the specific drugs the companies sold. These schemes enabled the pharmaceutical companies to ensure that Medicare patients did not consider the high costs that the companies charged for their drugs. The schemes also minimized the possibility that the companies’ money would go to patients who were not taking the companies’ drugs.
When a Medicare beneficiary obtains a prescription drug covered by Medicare Part B or Part D, the beneficiary may be required to make a partial payment, which may take the form of a co-payment, co-insurance, or deductible (collectively, “co-pays”). Congress included co-pay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration – which includes money or any other thing of value – to induce Medicare patients to purchase the companies’ drugs. The law further prohibits third parties, such as co-pay foundations, from conspiring with pharmaceutical companies to violate the Anti-Kickback Statute.
“Pharmaceutical companies cannot use foundations to funnel drug co-payments disguised as routine charitable donations, all to prop up excessive drug prices. PSI allegedly operated as a vehicle for specific pharmaceutical companies essentially to pay kickbacks at the ultimate expense of the American taxpayers who support the Medicare program,” said United States Attorney Andrew E. Lelling. “We will continue to pursue this kind of enforcement until the practice disappears.”
“The Department is committed to ensuring that foundations are not used as mere conduits to funnel kickbacks from pharmaceutical companies to Medicare patients and to increase company profits while avoiding an important cost-control aspect of the Medicare program,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We will continue to combat unlawful kickback arrangements and their pernicious influence on our health care system.”
“Few things undermine public confidence quite like finding out the pharmaceutical companies and non-profits they entrust with their health and financial peace of mind have been playing fast and loose with the law. Schemes like these, and the individuals and organizations who perpetrate them, are an affliction on our health care systems,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “This settlement demonstrates the FBI’s resolve to ensure that patients receive care that is based solely on sound medical judgment, and not compromised by kickbacks.”
“Foundations operating patient assistance programs should operate with integrity and act independently from their donors,” said Gregory E. Demske, Chief Counsel to the Inspector General. “Our Integrity Agreement is designed to promote such independence and monitor the foundation to reduce the risk of future kickbacks.”
The United States alleged that PSI conspired with three pharmaceutical manufacturers – Insys, Aegerion, and Alexion – to enable them to pay kickbacks to Medicare patients taking their drugs. Details of the alleged conduct can be found in attached addendum.
The amount of the settlement announced today was determined based on analysis of PSI’s ability to pay after review of its financial condition.
PSI entered a three-year Integrity Agreement (IA) with HHS-OIG as part of the settlement. The IA requires, among other things, that PSI implement measures designed to ensure that it operates independently and that its arrangements and interactions with pharmaceutical manufacturer donors are compliant with the law. In addition, the IA requires compliance-related certifications from PSI's Board of Directors and detailed reviews by an independent review organization.
PSI is the fourth foundation to settle allegations of kickbacks. In total, the four foundations (PSI, The Assistance Fund, Chronic Disease Fund, and Patient Access Network Foundation) have paid $13 million. In addition, the U.S. Attorney’s Office has collected more than $840 million in total from eight pharmaceutical companies (United Therapeutics, Pfizer, Actelion, Jazz, Lundbeck, Alexion, Astellas and Amgen) to resolve allegations that they used third-party foundations as instruments for kickbacks.
U.S. Attorney Lelling, HHS-OIG Chief Counsel Demske and FBI SAC Bonavolonta made the announcement today. The U.S. Postal Inspection Service also assisted with the investigation. The matter was handled by Assistant U.S. Attorney Gregg Shapiro, of Lelling’s Affirmative Civil Enforcement Unit, and Trial Attorneys Sarah Arni and Augustine Ripa, of the Department of Justice’s Civil Division.
ADDENDUM
PSI’s Breakthrough Cancer Pain Fund. In late 2013, PSI and Insys began discussing a potential copayment assistance fund for Subsys, a sublingual form of fentanyl, a powerful opioid painkiller. Subsys was approved for the treatment of breakthrough cancer pain in opioid-tolerant patients. PSI worked with Insys to create a budget for the “Breakthrough Cancer Pain” fund. Insys was the only donor to the fund. PSI provided Insys, through the Insys Reimbursement Center, with access to a “referral portal,” where Insys could see the status of each patient that it referred to PSI, including whether that patient had received copay assistance from PSI and the amount of the assistance. PSI did not provide access to the referral portal to other manufacturers of fentanyl products that did not donate to the fund. PSI knew that Insys was referring patients to the Breakthrough Cancer Pain fund who did not have cancer, but PSI stated that it would only prevent “off-label use…if the Donor wants us to.” PSI provided Insys with monthly “invoices” to cover the patients who had received assistance from PSI. PSI worked to avoid covering patients taking fentanyl products other than Subsys, noting that PSI “cannot allow them to deplete funds from INSYS.”
PSI’s HoFH Fund. Aegerion sold Juxtapid, which is approved to treat patients with homozygous familial hypercholesterolemia (“HoFH”). In 2013, at Aegerion’s request, PSI created a fund, supported only by Aegerion donations, for HoFH. PSI represented to Aegerion that “it makes more sense to have industry provide a very small amount of funding [in the form of donations for copayment coverage] to gain a reimbursement vehicle rather than give compassionate product.” PSI’s HoFH fund allowed Aegerion to pay for Medicare patients’ copayments to eliminate any price sensitivity to physicians prescribing and patients taking Juxtapid. Aegerion participated in establishing the patient eligibility criteria that PSI used to cover the copayment obligations of patients taking Juxtapid.
PSI’s CMD Fund. Alexion sells Soliris, an intravenously administered complement inhibitor. From Jan. 1, 2010, through June 30, 2016, Soliris was indicated for the treatment of patients with paroxysmal nocturnal hemoglobinuria (“PNH”) to reduce hemolysis and for the treatment of patients with atypical hemolytic uremic syndrome (“aHUS”) to inhibit complement-mediated thrombotic microangiopathy. Alexion approached PSI in January 2010 to request that PSI create a fund to provide Soliris patients with financial assistance, such as coverage for Medicare copays for Soliris, health insurance premiums, infusion and nursing services, and travel expenses. Over the next several months, Alexion and PSI discussed the coverage parameters that Alexion desired for the fund, including Alexion’s desire that PSI “not support a patient with any of these diagnoses for other reasons tha[n] Soliris therapy.” PSI opened an orphan disease fund entitled Complement Mediated Diseases (“CMD”) to provide assistance to patients taking Soliris. Except in rare instances, PSI provided financial assistance from the CMD fund only if a patient was taking Soliris. PSI provided Alexion with access to PSI’s referral portal software, through which PSI reported information back to Alexion confirming the specific Soliris patients who were approved for copay or other financial assistance from PSI and through which PSI detailed payments to those patients.
Former Regional Sales Director for Insys Therapeutics Sentenced for Racketeering ConspiracyRead the Press Release
BOSTON – A former Regional Sales Director for Insys Therapeutics was sentenced today in federal court in Boston for his role in conspiring to bribe practitioners to prescribe Subsys, a fentanyl-based pain medication.
Joseph A. Rowan, 45, of Panama City, Fla., was sentenced by U.S. District Court Judge Allison D. Burroughs to 27 months in prison, three years of supervised release, restitution to be determined at a later date and ordered to pay approximately $2 million in forfeiture. The government recommended a sentence of 120 months in prison.
In May 2019, Rowan was convicted by a federal jury of racketeering conspiracy along with four other Insys executives.
Subsys, a drug owned and manufactured by Insys Therapeutics, Inc., is a fentanyl-based, rapid-onset opioid approved to treat cancer patients suffering intense breakthrough pain. From May 2012 to December 2015, Rowan and his co-defendants conspired to bribe practitioners, many of whom operated pain clinics, in order to induce them to prescribe Subsys to patients. The defendants also conspired to mislead and defraud health insurance providers who were reluctant to approve payment for the expensive drug when it was prescribed for patients without cancer. Medicare would not approve payment for the drug except to treat breakthrough cancer pain.
Beginning in 2012, Rowan joined Insys as a sales representative working exclusively with a doctor in Alabama known to write prescriptions for fentanyl products. Rowan paid the doctor speaker honoraria in exchange for Subsys prescriptions, and was so successful that it became a model within Insys. Rowan was subsequently twice promoted, ultimately becoming a Regional Sales Manager. In this role, Rowan fueled the criminal scheme by approving the use of speaker programs to bribe doctors to write more Subsys prescriptions, and to write Subsys prescriptions at increasingly higher dosages.
In addition, Rowan stressed the importance of the success of the Insys Reimbursement Center (IRC) to sales representatives. During a national sales meeting, Rowan encouraged sales employees to assist the IRC and stated, “what I am saying is this. This is how you get paid…”
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Phillip Coyne, Special Agent in Charge of the U.S Department of Health and Human Services, Office of the Inspector General; Judy McMeekin, Pharm.D. Acting Associate Commissioner for Regulatory Affairs of the U.S. Food and Drug; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Leigh-Alistair Barzey, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office; Carol S. Hamilton, Acting Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office; Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division; Matthew Modafferi, Special Agent in Charge of the U.S. Postal Service Office of Inspector General, Northeast Area Field Office; Jeffrey K. Stachowiak, Acting Special Agent in Charge of the Department of Veterans Affairs, Office of Inspector General; and Thomas W. South, Deputy Assistant Inspector General for Investigations of the Office of Personnel Management made the announcement.
Assistant U.S. Attorneys K. Nathaniel Yeager, Fred M. Wyshak, and David G. Lazarus prosecuted the case for Lelling’s Health Care Fraud Unit.
Former National Sales Director of Insys Therapeutics Sentenced for Racketeering ConspiracyRead the Press Release
BOSTON – The former National Sales Director for Insys Therapeutics was sentenced today in federal court in Boston for his role in conspiring to bribe practitioners to prescribe Subsys, a fentanyl-based pain medication, often when medically unnecessary.
Richard Simon, 48, of Seal Beach, Calif., was sentenced by U.S. District Court Judge Allison D. Burroughs to 33 months in prison, three years of supervised release, restitution to be determined at a later date and ordered to pay approximately $2.3 million in forfeiture. The government recommended a sentence of 132 months in prison.
In May 2019, Simon was convicted by a federal jury of racketeering conspiracy along with four other Insys executives.
Subsys, a drug owned and manufactured by Insys Therapeutics, Inc., is a fentanyl-based, rapid-onset opioid approved to treat cancer patients suffering intense breakthrough pain. From May 2012 to December 2015, Simon and his co-defendants conspired to bribe practitioners, many of whom operated pain clinics, in order to induce them to prescribe Subsys to patients, often when medically unnecessary. The defendants also conspired to mislead and defraud health insurance providers who were reluctant to approve payment for the expensive drug when it was prescribed for patients without cancer.
In September 2012, Simon joined Insys as a District Sales Manager and began actively recruiting high prescribing doctors and engaging in quid pro quo agreements with doctors. When Simon was promoted to National Sales Director, he directed sales managers and sales reps to bribe prescribers and to reach specific and enforceable agreements with doctors to prescribe Subsys.
Ensuring that prescriptions were paid for by insurers was equally important to Simon. So he ordered the creation of the “Charts in Progress” (CIP) Report. The CIP reports, which tracked the progress that the Insys Reimbursement Center made in obtaining payment from insurers and provided it to sales managers, was one of the tools used at Insys to track the success of the criminal scheme.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Phillip Coyne, Special Agent in Charge of the U.S Department of Health and Human Services, Office of the Inspector General; Judy McMeekin, Pharm.D. Acting Associate Commissioner for Regulatory Affairs of the U.S. Food and Drug; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Leigh-Alistair Barzey, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office; Carol S. Hamilton, Acting Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office; Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division; Matthew Modafferi, Special Agent in Charge of the U.S. Postal Service Office of Inspector General, Northeast Area Field Office; Jeffrey K. Stachowiak, Acting Special Agent in Charge of the Department of Veterans Affairs, Office of Inspector General; and Thomas W. South, Deputy Assistant Inspector General for Investigations of the Office of Personnel Management made the announcement.
Assistant U.S. Attorneys K. Nathaniel Yeager, Fred M. Wyshak, and David G. Lazarus prosecuted the case for Lelling’s Health Care Fraud Unit.
Dominican National Charged with Aggravated Identity TheftRead the Press Release
BOSTON – A Dominican national was charged today in federal court in Boston with aggravated identify theft.
Moices Santilit, 63, of Lawrence, was charged on one count of aggravated identity theft. Santilit is currently in state custody and will appear in federal court in Boston at a later date.
According to the charging document, Santilit used the Social Security number of a U.S. citizen in order to fraudulently obtain a valid Massachusetts Asbestos Worker Identification card under the victim’s name.
The charging statute for aggravated identity theft provides for a mandatory sentence of two years in prison to be served consecutive to any other sentence imposed, up to one year of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Jason Molina, Acting Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today. Assistant U.S. Attorney Eugenia M. Carris of Lelling’s Public Corruption & Special Prosecutions Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Two Dentists and Office Manager Indicted for Medicaid Fraud SchemeRead the Press Release
BOSTON – A federal grand jury in Boston has indicted a Worcester dentist, a Chelmsford dentist, and a Worcester office manager for their participation in a scheme to defraud the Massachusetts Medicaid program, commonly known as MassHealth.
Dr. Anthony DiStefano III, 70, of Worcester, was indicted on one count of conspiracy to commit health care fraud, one count of health care fraud, two counts of aggravated identity theft and one count of tax evasion. Dr. Scott Cale, 65, of Chelmsford, and Robin Cronin, 58, of Worcester, were each indicted on one count of conspiracy to commit health care fraud and one count of health care fraud. The defendants were arrested this morning and will appear in federal court in Boston this afternoon.
According to the indictment, in 2005, MassHealth excluded DiStefano, a dentist practicing in Worcester, from participation in the MassHealth program. DiStefano twice sought readmission into MassHealth’s provider network, but was denied both times in light of significant concerns regarding the quality of dental care he delivered to patients. In order to circumvent his exclusion, DiStefano recruited another dentist, Cale, to join his practice. From 2014 to 2018, dental services that DiStefano personally delivered were billed to MassHealth using Cale’s provider identification credentials. Cale then paid DiStefano a share of the money that MassHealth paid Cale. The purpose of this arrangement was to deceive MassHealth into paying for dental services that were not reimbursable (because MassHealth had terminated DiStefano from the MassHealth program). Cronin, DiStefano’s office manager, was aware of the arrangement and personally billed MassHealth for services that were not reimbursable, knowing that the claims were false.
In addition, according to the indictment, DiStefano owed substantial tax liabilities to the Internal Revenue Service for the years 2011-2014. The IRS notified DiStefano of his outstanding tax liability and DiStefano evaded paying his outstanding liability by, for example, ceasing the use of bank accounts and operating his business in cash; cashing Social Security checks and checks from dental insurance companies at check cashing institutions, thus avoiding IRS levies on his bank accounts; and using the aforementioned Medicaid fraud scheme to conceal his income.
The charges of health care fraud and conspiracy to commit health care fraud provide for a sentence of up to 10 years in prison, three years of supervised release and a fine of up to $250,000. The charge of tax evasion provides for a sentence of up to five years in prison, three years of supervised release and a fine of up to $250,000. The charge of aggravated identity theft provides for a sentence of two years in prison to be served consecutive to any other sentence imposed, up to one year of supervised release and a maximum fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Massachusetts Attorney General Maura Healey; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston made the announcement today. Assistant U.S. Attorneys Evan Panich and Chris Looney of Lelling’s Office, as well as Special Assistant U.S. Attorney Kevin Lownds, detailed from Healey Office, are prosecuting the case.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Hyannis Man Pleads Guilty in Connection with Heroin ConspiracyRead the Press Release
BOSTON – A Cape Cod man pleaded guilty today in federal court in Boston to his role in a wide-ranging heroin trafficking conspiracy.
Krymeii Fray, 24, pleaded guilty to conspiracy to distribute and possession with intent to distribute 100 grams or more of heroin. U.S. District Court Judge Allison D. Burroughs scheduled sentencing for May 7, 2020.
In May 2019, Fray and 10 co-defendants were arrested and charged with various drug distribution offenses. According to court documents, in 2018, federal, state and local law enforcement began an investigation focusing on Edwin Otero, the alleged leader of a Cape Cod-wide drug trafficking organization. It is alleged that Otero and his co-conspirators distributed large quantities of heroin throughout Cape Cod -including Hyannis, Mashpee, Centerville, and Osterville and Pawtucket, R.I. Interceptions from Otero’s phone identified Fray as a drug trafficker supplied by Otero.
On May 8, 2019, Otero, and others were involved in a shooting at Fray’s residence related to a drug debt Fray allegedly owed Otero. After the shooting, agents intercepted Otero discussing the fact that he had shot at Fray.
The charge of conspiracy to distribute 100 grams or more of heroin carries a mandatory sentence of five years in prison, a maximum sentence of 40 years in prison, at least four years of supervised release and a fine of $5 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; and Barnstable Police Chief Paul MacDonald made the announcement. Assistant U.S. Attorneys Christopher Pohl and Lauren Graber of Lelling’s Narcotics and Money Laundering Unit are prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Malden Woman Indicted on Bank Fraud and Identity Theft ChargesRead the Press Release
BOSTON – A Malden woman has been indicted by a federal grand jury in connection with a scheme to embezzle more than $795,000 from her employer.
Kayla Figelski, 32, was charged with seven counts of bank fraud and one count of aggravated identity theft. Figelski was previously charged and arrested on Dec. 19, 2019.
According to court documents Between April 2017 and June 2019, Figelski stole at least $795,000 from her employer, a law firm in Malden. Figelski allegedly forged checks to herself from her employer’s checking accounts, including conservatorship and trust accounts her employer maintained for its elderly clients and their estates, and deposited the checks into her own account, from which she withdrew the funds, or directly cashed the checks. It is further alleged that to hide her scheme, Figelski modified bank statements to make it appear that the checks were written out to legitimate vendors rather than to Figelski.
The charge of bank fraud provides a sentence of up to 30 years in prison, five years of supervised release and a fine of up to $1 million. The charging statute for aggravated identity theft provides for a mandatory sentence of two years in prison to be served consecutive to any other sentence imposed, up to one year of supervised release and a fine of $250,000 or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Valuable assistance was provided by the Malden Police Department. Assistant U.S. Attorney Kristen A. Kearney of Lelling’s Securities and Financial Fraud Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Dominican National Pleads Guilty to Identity Theft ChargeRead the Press Release
BOSTON – A Dominican national pleaded guilty today in connection with using the identity of a U.S. citizen.
Wandil Mejia Jimenez, 31, a Dominican national residing in Dorchester, pleaded guilty to on one count of false representation of a Social Security number. U.S. District Court Judge Denise J. Casper scheduled sentencing for May 13, 2020. Mejia Jimenez was arrested in June 2019 and has been detained since that time.
Beginning in 2014, Mejia Jimenez used the name and identifiers of a U.S. citizen to apply for a Massachusetts driver’s license and other identification documents from the Massachusetts Registry of Motor Vehicles. Mejia Jimenez also opened bank accounts, including bank accounts that were closed with negative balances, and was arrested for cocaine trafficking under this citizen’s name. Around the time of his arrest, police seized a Dominican Republic passport in Mejia Jimenez’s true name.
The charge of false representation of a Social Security number provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Jason Molina, Acting Special Agent in Charge of Homeland Security Investigations in Boston; William B. Gannon, Special Agent in Charge of the U.S. Department of State’s Diplomatic Security Service, Boston Field Office; and Colonel Christopher Mason, Superintendent of the Massachusetts State Police made the announcement today. Valuable assistance was provided by the United States Marshals Service for the District of Massachusetts and the office of Massachusetts Auditor Suzanne Bump. Assistant U.S. Attorney Bill Abely, Deputy Chief of Lelling’s Major Crimes Unit, is prosecuting the case.
Boston Man Sentenced for Firearms OffenseRead the Press Release
BOSTON – A Boston man was sentenced yesterday in federal court in Boston for the unlicensed transportation of a firearm.
Kenny Romero, 24, was sentenced by U.S. Senior District Court Judge George A. O’Toole Jr. to 21 months in prison and three years of supervised release. In October 2019, Romero pleaded guilty to one count of unlicensed transportation of firearms and has been detained since his arrest on July 9, 2019.
Law enforcement officers discovered Romero in possession of a firearm during a vehicle stop in December 2016. A subsequent investigation revealed that the firearm, which had been used in a shooting earlier that month, was purchased in Virginia in November 2016. Agents learned that another individual purchased the firearm at Romero’s direction, and Romero subsequently transported the firearm from Virginia back to Massachusetts, where he resides.
United States Attorney Andrew E. Lelling and Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Office made the announcement today. Valuable assistance was provided by the U.S. Attorney’s Office for the Eastern District of Virginia, the ATF - Falls Church Field Office and the Boston Police Department. Assistant U.S. Attorney Anne Paruti of Lelling’s Major Crimes Unit prosecuted the case.
Parent Charged in College Admissions Case Indicted on Additional Tax Fraud ChargeRead the Press Release
BOSTON – A federal grand jury in Boston returned the fourth superseding indictment charging one of the 15 parents implicated in the college admissions case with tax offenses.
John Wilson, 59, of Lynnfield, Mass., was indicted on one count of filing a false tax return. It is alleged that Wilson paid a total of $220,000 to secure his son’s admission to the University of Southern California as a purported water polo recruit. Wilson then deducted the $220,000 from his 2014 tax returns as charitable donations and business expenses. According to the charging document, Wilson’s amended 2014 tax returns improperly deducted $220,000 in payments that he allegedly made in exchange for securing his son’s admission to the University of Southern California.
An arraignment date has not yet been scheduled. Case information, including the status of each defendant, charging documents and plea agreements are available here: https://www.justice.gov/usao-ma/investigations-college-admissions-and-testing-bribery-scheme.
The charge of filing a false tax return provides for a sentence of up to three years in prison, one year of supervised release and a fine of $100,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. The Department of Education, Office of Inspector General provided assistance with the investigation. Assistant U.S. Attorneys Eric S. Rosen, Justin D. O’Connell, Leslie A. Wright and Kristen A. Kearney of Lelling’s Securities and Financial Fraud Unit are prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
IRS Service Center Employee Charged with Filing Hundreds of False Tax ReturnsRead the Press Release
BOSTON – An employee of the IRS Service Center in Andover was charged today with filing over 500 false tax returns for herself and other individuals.
Jennifer Beth True, 44, of Lawrence, was charged with wire fraud and aggravated identity theft. True will make an initial appearance today in federal court in Boston.
According to charging documents, True has been employed by the Internal Revenue Service for over 22 years. In her current position as a Lead Contact Representative, she assists team members in responding to difficult and complex taxpayer inquiries. Throughout her employment, True has been trained in tax law, ethics, information protection and disclosure, privacy, identity theft and identity protection.
It is alleged that True electronically filed over 590 tax returns for herself and other taxpayers between 2012 and 2017, in violation of IRS rules prohibiting employees from “Engaging in the preparation of tax returns for compensation, gift, or favor.” True received between $40 and $100 per return that she prepared, and prepared the vast majority of the tax returns on her personal computer using TaxAct software. The investigation revealed that between approximately February 2012 and April 15, 2018, True prepared at least 70 IRS Forms 1040 – U.S. Individual Income Tax Returns – for taxpayers that included materially false items such as false individual retirement account deductions, false medical expenses, false and inflated unreimbursed business expenses and/or false tax preparation fees. Some returns also included false child and dependent care credits. Additionally, True allegedly amended one taxpayer’s income tax returns for three prior years, in order to claim false deductions. Numerous taxpayers told investigators they had not provided True with the false information and that they did not know that True was including such false information on the returns she prepared.
In addition, on or about Feb. 15, 2015, True electronically filed her own personal IRS Form 1040 for the year 2014. True claimed seven dependents, including a taxpayer who was not True’s dependent and who had paid True to prepare and file her tax returns. As a result of claiming the taxpayer as a dependent, True’s tax obligation for 2014 was reduced. This taxpayer never gave True permission to claim her as a dependent.
The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a $250,000 fine. The charging statute for aggravated identity theft provides for a mandatory sentence of two years in prison to be served consecutive to any other sentence imposed, up to one year of supervised release and a fine of up to$250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; William Kalb, Special Agent in Charge of the Treasury Inspector General for Tax Administration, New York Field; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorney Kristina E. Barclay, of Lelling’s Public Corruption Unit, is prosecuting the case.
The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Dominican National Sentenced for Identity Theft OffensesRead the Press Release
BOSTON – A Dominical national, who has been arrested numerous times under a false identity for heroin offenses, was sentenced today for identity theft charges.
Marlon Suazo Santos, 31, a Dominican national who resided in Dorchester, was sentenced by U.S. Senior District Court Judge Mark L. Wolf to 30 months in prison to be served consecutively to a state drug conviction. Suazo Santos will face deportation proceedings upon completion on his sentence. In October 2019, Suazo Santos pleaded guilty to two counts of false representation of a Social Security number and one count of aggravated identity theft.
Suazo Santos used the identity of a U.S. citizen on more than a dozen applications submitted to the Massachusetts Registry of Motor Vehicles for driver’s licenses and other identification documents. Suazo Santos also used this identity on applications for MassHealth benefits and during booking when arrested for numerous heroin-related offenses and other crimes.
United States Attorney Andrew E. Lelling and Jason Molina, Acting Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today. Assistant U.S. Attorney Bill Abely, Deputy Chief of Lelling’s Major Crimes Unit, prosecuted the case.
South Boston Man Sentenced for Being a Felon in Possession of a Firearm and AmmunitionRead the Press Release
BOSTON – A South Boston man was sentenced today in federal court in Boston for illegally possessing a firearm and ammunition.
Jermaine Tindal, 30, was sentenced by U.S. District Court Judge Leo T. Sorokin to 21 months in prison and three years of supervised release. In April 2019, Tindal pleaded guilty to one count of being a felon in possession of a firearm and ammunition. Tindal was arrested and charged in September 2018 and has been in custody since.
On July 19, 2018, Tindal possessed a Harrington and Richardson 12-gauge shotgun and five rounds of Remington 12-gauge ammunition after previously being convicted in South Carolina of a crime punishable by more than one year in prison. He then sold the shotgun and ammunition to another individual in the Mary Ellen McCormack public housing development.
United States Attorney Andrew E. Lelling and Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division, made the announcement today. Assistant U.S. Attorney Elianna Nuzum of Lelling’s Major Crimes Unit prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. PSN is part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Lawrence Man Pleads Guilty to Distributing FentanylRead the Press Release
BOSTON – A Lawrence man pleaded guilty today in federal court in Boston for selling fentanyl to an undercover officer.
Jonathan Marquez, 32, pleaded guilty to one count of distributing fentanyl. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for May 12, 2020. Marquez was arrested in September 2019 and has been detained since October 2019.
In September 2019, an undercover officer placed an order with a fentanyl dealer, and Marquez then met the undercover officer at an arranged location in Lawrence. Marquez handed the officer 11 individually-wrapped bags containing brownish powder in exchange for cash. Laboratory results later determined that the brownish powder contained fentanyl.
The charging statute provides for a sentence of up to 20 years in prison, at least three years and up to life of supervised release and a fine of up to $1 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; and Jason Molina, Acting Special Agent in Charge of the Homeland Security Investigations in Boston made the announcement today. Assistant U.S. Attorney Bill Abely, Deputy Chief of Lelling’s Major Crimes Unit, is prosecuting the case.
Founder of Swiss Brokerage Firm Pleads Guilty in Connection with Global Securities Fraud SchemeRead the Press Release
BOSTON – The founder and operator of a Swiss asset management firm pleaded guilty today in federal court in Boston to charges that he engaged with others in a massive global securities fraud scheme that netted proceeds of approximately $164 million.
Roger Knox, 49, pleaded guilty to securities fraud and conspiracy to commit securities fraud before U.S. District Court Judge Nathaniel M. Gorton, who scheduled sentencing for April 23, 2020.
Knox, with others, operated a purported asset management firm based in Switzerland called Silverton, and later renamed Wintercap. Through this business, Knox helped facilitate pump-and-dump, and other market manipulation schemes, by selling massive quantities of microcap securities on behalf of “control groups” who secretly owned the stock through nominee shareholders, and who simultaneously orchestrated promotional campaigns and other efforts to artificially inflate the price and trading volume of those shares. Knox then funneled the proceeds of the securities fraud—totaling an estimated $164 million over the last three years—to co-conspirators in the United States, and elsewhere, through a complex money transfer system that disguised the source and nature of the funds.
One security that was traded through Knox’s Silverton firm was a stock called Environmental Packaging Technologies, Inc. (“EPTI”). In June 2017, EPTI was subject to a pump-and-dump scheme using Knox’s Silverton platform. Co-defendants Matthew Ledvina and Milan Patel, knowing that EPTI stock was controlled by another co-defendant, Morrie Tobin, helped create nominee entities to hold Tobin’s stock so that it could be sold in a pump-and-dump in violation of United States securities laws. During the pump-and-dump, Knox’s Silverton platform managed to sell approximately $1.5 million worth of EPTI stock before trading was halted by the Securities and Exchange Commission (SEC).
Ledvina, Patel and Tobin have all pleaded guilty and await sentencing.
The charge of securities fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $5 million. The charge of conspiracy to commit securities fraud provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or gross loss. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. The Boston regional office of the SEC provided assistance with the investigation. Assistant U.S. Attorneys Eric S. Rosen and James Drabick of Lelling’s Securities and Financial Fraud Unit are prosecuting the case.
Former Vice President of Insys Therapeutics Sentenced for Racketeering ConspiracyRead the Press Release
BOSTON – The former Vice President of Managed Markets for Insys Therapeutics was sentenced today in federal court in Boston for his role in conspiring to bribe practitioners to prescribe fentanyl-based pain medication, often when medically unnecessary.
Michael J. Gurry, 56, of Scottsdale, Ariz., was sentenced by U.S. District Court Judge Allison D. Burroughs to 33 months in prison, three years of supervised release, restitution to be determined at a later date, and ordered to pay approximately $3.6 million in forfeiture. The government recommended a sentence of 132 months in prison. In May 2019, Gurry was convicted by a federal jury of racketeering conspiracy along with four other Insys executives.
Subsys, a drug owned and manufactured by a company called Insys Therapeutics, Inc., is a powerful, rapid-onset opioid approved to treat cancer patients suffering intense breakthrough pain. From May 2012 to December 2015, Gurry and his co-defendants conspired to bribe practitioners, many of whom operated pain clinics, in order to induce them to prescribe Insys’ fentanyl-based pain medication, Subsys, to patients, often when medically unnecessary. The drug was expensive, and while bribes paid to prescribers succeeded in generating new prescriptions, insurers were reluctant to approve payment when Subsys was prescribed for patients without cancer.
Within the criminal scheme, Gurry was responsible for creating and overseeing the Insys Reimbursement Center (IRC), which was dedicated to obtaining prior authorization for payment of Subsys prescriptions directly from insurers and pharmacy benefit managers. Beginning in October 2012, Gurry authorized employees of the IRC to lead insurers to believe that they were calling from the office of the prescriber. He also authorized the IRC employees to use a misleading script, known as “the spiel,” to trick insurers into believing that Subsys had been prescribed to the patient to treat breakthrough cancer pain, for which insurers were more likely to authorize payment. Gurry also authorized other tactics that had been found to be more successful in securing payment from insurers. This included citing a diagnosis of “dysphagia” – difficulty swallowing – even when patients were not suffering from the disorder and referencing a history of cancer to mislead insurers.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Phillip Coyne, Special Agent in Charge of the U.S Department of Health and Human Services, Office of the Inspector General; Judy McMeekin, Pharm.D. Acting Associate Commissioner for Regulatory Affairs of the U.S. Food and Drug; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Leigh-Alistair Barzey, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office; Carol S. Hamilton, Acting Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office; Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division; Matthew Modafferi, Special Agent in Charge of the U.S. Postal Service Office of Inspector General, Northeast Area Field Office; Jeffrey K. Stachowiak, Special Agent in Charge of the Department of Veterans Affairs, Office of Inspector General; and Thomas W. South, Deputy Assistant Inspector General for Investigations of the Office of Personnel Management made the announcement.
Assistant U.S. Attorneys K. Nathaniel Yeager, Fred M. Wyshak, and David Lazarus prosecuted the case for Lelling’s Health Care Fraud Unit.
Dominican National Pleads Guilty to Drug TraffickingRead the Press Release
BOSTON – A Dominican national pleaded guilty today in federal court in Boston to heroin trafficking.
Alexander Martinez-Peguero, 38, who resided in Lawrence, pleaded guilty to conspiracy to distribute and possession with intent to distribute 100 grams or more of heroin. U.S. District Court Judge Allison D. Burroughs scheduled sentencing for May 5, 2020. In January 2019, Alexander was charged along with his brother, Angel Martinez-Peguero, 27, who is pending trial.
According to the charging documents, on Dec. 20, 2018, investigators seized nearly one kilogram of heroin from the Martinez-Peguero brothers during a law enforcement operation in Lawrence. Investigators also seized a loaded semi-automatic pistol from Angel Martinez-Peguero’s waistband upon his arrest.
The charge of conspiracy to distribute and to possess with intent to distribute 100 grams or more of heroin carries a mandatory minimum sentence of five years and up to 40 years in prison, at least four years of supervised release and a fine of $5 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration’s New England Division; and Colonel Christopher Mason, Superintendent of the Massachusetts State Police, made the announcement. Assistant U.S. Attorney Philip C. Cheng of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Springfield Man Indicted for Being a Felon in Possession of a FirearmRead the Press Release
BOSTON – A Springfield man was arrested yesterday for being a felon in possession of a firearm.
Luis Velez, 41, was charged in an indictment unsealed today with one count of being a felon in possession of a firearm.
The indictment alleges that on July 5, 2019, Velez, who was previously convicted of a felony, was in possession of a Savage Arms, Model 25 Walking Varminter, .22 caliber rifle, a Hermann Weihrauch, Model ARM 44, .44 caliber revolver, and a Smith & Wesson, Model 625, .45 caliber revolver.
On the felon in possession of a firearm charge, based on his prior criminal record, Velez faces a mandatory minimum sentence of 15 years and up to life in prison, up to five years of supervised release, and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division made the announcement today. Assistant U.S. Attorneys Catherine G. Curley and Neil L. Desroches of Lelling’s Springfield Branch Office are prosecuting the case.
This prosecution is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Somerset Man Sentenced for Illegal Participation in Bank LoanRead the Press Release
BOSTON – A Somerset man was sentenced yesterday in federal court in Springfield for illegally participating in a loan with a financial institution.
Anthony Riccitelli, 60, was sentenced by U.S. District Court Judge Mark G. Mastroianni to four months in prison. In September 2019, Riccitelli pleaded guilty to one count of participation in a loan with a financial institution.
Riccitelli admitted that he loaned $80,000 to Diecast Connections Company, Inc., based in Chicopee, at the same time that he served as a bank officer for Blue Hills Bank. Riccitelli proposed that Blue Hills Bank enter into a $4.2 million loan package with Diecast without disclosing to Blue Hills Bank the $80,000 in private loans he had made to Diecast. Shortly after the closing on the loan, Riccitelli received $80,000 of the loan proceeds, unbeknownst to Blue Hills Bank.
United States Attorney Andrew E. Lelling and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston made the announcement today. Assistant U.S. Attorney Alex J. Grant of Lelling’s Springfield Branch Office prosecuted the case.
Owners of Groveland Companies Charged for Defrauding Government Contracting ProgramsRead the Press Release
BOSTON – Three men were charged today in federal court in Boston with conspiracy to defraud the United States and mail fraud in connection with a scheme to obtain government contracts.
Frank Apicella, 63, of Groveland, Mass.; Michael Sforza, 59, of Alpharetta, Ga.; and James Apicella, 37, of Kingston, NH, were charged with one count of conspiracy to defraud the United States and one count of mail fraud.
According to the charging document, beginning in 2011 the defendants used Tactical Office Solutions (TOS), a company run by James Apicella, to bid for and obtain government contract work that was set aside for Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) and Historically Underutilized Business Zone (HUBZone) companies. Although the work was bid by and awarded to TOS based under these set-aside programs, the work was actually mostly performed by FENS, a company owned and operated by Frank Apicella and Michael Sforza that was not eligible for these contracts.
The charge of conspiracy to defraud the United States provides for a sentence of up to five years in prison, one year of supervised release, a fine of up to $250,000 or twice the gross gain or loss, whichever is greater. The charge of mail fraud provides for a sentence of up to 20 years in prison, three years of supervised release, a fine of up to $250,000 or twice the gross gain or loss, whichever is greater, and forfeiture. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Jeffrey K. Stachowiak, Acting Special Agent in Charge of the Department of Veterans Affairs Office of Inspector General, Criminal Investigations Division, Northeast Field Office; Luis Hernandez, Special Agent in Charge of the General Services Administration Office of Inspector General, New England Regional Office; and Michael Conner, Resident Agent in Charge of the U.S. Army, Major Procurement Fraud Unit, Criminal Investigation Command, made the announcement today. The U.S. Treasury Inspector General for Tax Administration provided assistance with the investigation. Assistant U.S. Attorney Sara Miron Bloom of Lelling’s Securities and Financial Fraud Unit and Annapurna Balakrishna of Lelling’s Civil Division are prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Cape Cod Man Sentenced for Conspiracy to Distribute Fentanyl, Heroin and CocaineRead the Press Release
BOSTON – A Yarmouthport man was sentenced today in federal court in Boston for his role in a wide-ranging operation that distributed heroin and fentanyl throughout Cape Cod.
Kevin Fraga, 26, was sentenced by U.S. District Court Judge Allison Burroughs to 45 months in prison and five years of supervised release. In November 2017, Fraga agreed to plead guilty to one count of conspiracy to distribute and possession with intent to distribute 400 grams or more of fentanyl, 500 grams or more of cocaine and 100 grams or more of heroin.
Fraga and three others were arrested in August 2017 as part of a drug ring that shipped large quantities of fentanyl, cocaine and heroin from Boston to Cape Cod, where it was redistributed. Fraga and his brother, Alex Fraga, were arrested on Aug. 16, 2017, after law enforcement officers seized large quantities of fentanyl, heroin and cocaine from Kevin Fraga’s Jeep and Winnebago, and the home that Alex and Kevin shared in Yarmouthport. Approximately one week later, Kelvin Chales and James Ramirez, alleged drug suppliers to the Fraga brothers, were arrested, and law enforcement seized fentanyl pills and powdered fentanyl from a drug stash house in Dorchester, Ramirez’s home in Dorchester and a safety deposit box at Santander Bank in Dorchester.
Ramirez previously pleaded guilty and is set to be sentenced on Feb. 5, 2020. Chales is scheduled to plead guilty on Jan. 30, 2020.
United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Cape and Islands District Attorney Michael O’Keefe made the announcement today. The Brewster, Harwich, Sandwich, Mashpee, Chatham, Yarmouth, and Barnstable Police Departments and the Barnstable County Sheriff’s Department provided assistance with the investigation. Assistant U.S. Attorneys Eric Rosen, Alathea Porter, and Philip Cheng of Lelling’s Criminal Division prosecuted the case.
The details contained in the charging document are allegations. The remaining defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.