District of Massachusetts
Press releases recorded for this federal judicial district.
Everett Man Alleged to Support ISIL Charged with Additional Charge of Obstructing JusticeRead the Press Release
Boston – David Daoud Wright, a/k/a Dawud Sharif Abdul Khaliq, a/k/a Dawud Sharif Abdul Khaliq, 26, of Everett, Mass., was charged today in a five-count second superseding indictment. This indictment added one additional obstruction of justice count in connection with Wright’s deletion of data on his laptop computer on June 2, 2015.
This indictment supersedes the April 2016 first superseding indictment which charged Wright and his co-conspirator Nicholas Alexander Rovinski with conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL) and committing acts of terrorism transcending national boundaries. The indictment also charged Wright with conspiracy to obstruct justice and obstruction of justice in connection with Wright’s instructions to his uncle, Usaamah Abdullah Rahim, during a telephone conversation at 5:19 a.m on June 2, 2015 to destroy his (Rahim’s) laptop computer and phone before attacking the “boys in blue.”
Today’s new charge alleges that within minutes of learning from a family member that his uncle, Usaamah Abdullah Rahim, had attempted to attack a police officer and was shot dead by law enforcement officers in a Roslindale, Mass. parking lot on June 2, 2015, Wright deleted data from his laptop computer by restoring it to factory settings and deleting call logs on his cellphone that showed he had spoken to Rahim that morning.
Beginning in at least February 2015, Wright allegedly began discussing ISIL’s call to kill non-believers in the United States with Rahim and Rovinski and they began plotting and recruiting members for their “martyrdom” operation. In March 2015, Wright drafted organizational documents for a “Martyrdom Operations Cell” and conducted internet search queries about firearms, the effectiveness of tranquilizers on human subjects and the establishment of secret militias in the United States. Simultaneously, Rahim was communicating with ISIL members overseas, including Junaid Hussain. On Aug. 24, 2015, Hussain was killed in an airstrike in Raqqah, Syria.
It is further alleged that beginning in or about May 2015, Hussain communicated directly with Rahim. Rahim in turn communicated Hussain’s instructions to Wright, with regard to the murder of an individual residing in New York. Wright, Rovinski and Rahim each allegedly conspired to commit attacks and kill persons inside the United States on behalf of ISIL. In preparation for their attack, Rovinski conducted research on weapons that could be used to behead their victims. While detained pending trial, Rovinski sought to continue their planned attacks and wrote letters to Wright from prison discussing ways to take down the U.S. government and decapitate non-believers.
On Sept. 22, 2016, Rovinski pleaded guilty to conspiring to provide material support to ISIL and conspiring to commit acts of terrorism transcending national boundaries. He therefore is not charged in the second superseding indictment.
Wright’s arraignment is set for February 28, 2107 at 10:00 a.m.
The charge of conspiracy to provide material support provides for a sentence of no greater than 20 years in prison, a lifetime term of supervised release and a fine of $250,000. The charge of conspiracy to obstruct justice provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. The charge of obstruction of justice provides for a sentence of 20 years in prison, three years of supervised release and a $250,000 fine. The charge of conspiracy to commit acts of terrorism transcending national boundaries provides for a sentence of life in prison, a lifetime supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting U.S. Attorney William D. Weinreb of the District of Massachusetts, Acting Assistant Attorney General for National Security Mary B. McCord and Special Agent in Charge Harold H. Shaw of the FBI’s Boston Division made the announcement today.
This investigation is being conducted by the Boston Joint Terrorism Task Force (JTTF) and the Rhode Island JTTF with critical assistance from the Boston Police Department; Boston Regional Intelligence Center; Massachusetts State Police; Commonwealth Fusion Center; Everett Police Department; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Rhode Island State Police; Warwick, Rhode Island, Police Department; Rhode Island Fusion Center; Naval Criminal Investigative Service; and member agencies of the JTTF.
The case is being prosecuted by Assistant U.S. Attorney B. Stephanie Siegmann of the District of Massachusetts’s National Security Unit and Trial Attorney Greg R. Gonzalez of the National Security Division’s Counterterrorism Section.
The details contained in the charging documents are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Disbarred Somerset Attorney Convicted of Fraud and Witness TamperingRead the Press Release
BOSTON – A disbarred Somerset attorney was convicted today by a federal jury in connection with his scheme to defraud an acquaintance of $60,000 and of witness tampering based on his efforts to influence the victim’s testimony at trial.
John Silvia, 67, purportedly the “Managing Member” of Richardson Consulting, LLC, was convicted following a five-day trial of two counts of wire fraud, five counts of mail fraud, one count of structuring cash transactions and one count of witness tampering. U.S. District Court Judge George A. O’Toole, Jr. scheduled sentencing for May 23, 2017.
In 2013, Silvia convinced an acquaintance, a nurse caring for his wife, to invest $60,000 in a real estate venture and a purported “performance bond.” In reality, however, Silvia used the money for personal expenses, including to pay for his portion of Red Sox season tickets and an interest in a Marriott timeshare. Long after the money was gone, Silvia lulled his victim into believing that the money had been used as promised and that the investment, along with interest, would be returned.
In the months leading up to trial, when it was clear that Silvia’s victim was preparing to testify against him, Silvia pulled together more than $70,000, which he deposited in small increments—some on the same day—into six different bank accounts. He then prepared a series of checks and attempted to pay back his victim the full $60,000 “plus interest.” As the jury concluded, Silvia intentionally “structured” the cash deposits in this way so as to avoid mandatory bank reporting requirements and detection. As the jury also concluded, Silvia’s belated attempt to repay the victim—years after the initial investment and within a few months of his anticipated testimony—was really an attempt to influence the victim’s testimony.
In February 2016, Silvia was convicted of eight counts of securities fraud arising out of his effort to sell ownership interests in Advanced Space Monitor (ASM) that he was not entitled to sell. In furtherance of his fraud, Silvia created and used a fake “Subscription Agreement” that purportedly gave him the right to receive and sell shares in ASM when, in reality, he did not have the right to do so. Silvia cut and pasted the signature of ASM’s founder on the document purporting to give Silvia ownership interest in the company. Silvia defrauded multiple investors out of more than $300,000 based on false representations about his ability to sell the shares. Many of his victims were his friends and family members.
Silvia, who was licensed to practice law in Massachusetts in 1975, has been disbarred since 2003.
The charges of mail fraud, wire fraud and witness tampering each provide for a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000, or twice the gross loss to the victims, and restitution. The structuring charge provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000, or twice the gross gain or loss. The charge of securities fraud provides a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $5 million, or twice the gross loss to the victims, and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The Massachusetts Securities Division, which filed an administrative action charging Silvia with violation of Massachusetts securities laws, referred this case to the U.S. Attorney’s Office and cooperated with the criminal investigation. The case is being prosecuted by Assistant U.S. Attorney Neil Gallagher of Weinreb’s Economic Crimes Unit and Eric Forni of the Securities and Exchange Commission who was appointed as a Special Assistant U.S. Attorney.
Wilmington Man Pleads Guilty to Threatening Mosque and Illegally Possessing Firearms and Child PornographyRead the Press Release
BOSTON – A Wilmington man pleaded guilty today in U.S. District Court in Boston in connection with making threats over Facebook to burn a local mosque, unlawfully possessing dozens of firearms, ammunition and child pornography.
Patrick Keogan, 44, of Wilmington, pleaded guilty to two counts of making a threat over Facebook to injure or intimidate another individual or to unlawfully damage or destroy a building by means of fire; one count of being a convicted felon in possession of firearms and ammunition; and one count of possessing child pornography. He has been in custody since his arrest in July 2016. U.S. District Court Judge Douglas P. Woodlock scheduled sentencing for May 15, 2017.
Followign the terrorist attacks in Paris, France, on Nov. 13, 2015, Keogan posted threatening images on the Facebook page of the Islamic Society of Boston Cultural Center (ISBCC), a Roxbury-based cultural center that offers a mosque and educational, spiritual, and social services to the New England Muslim community. Keogan posted on the ISBCC’s Facebook page an image depicting a mosque in flames with lettering superimposed that stated “Burn your local mosque,” along with the statement “Hello scumbags,” next to a smiley face emoji. Keogan posted the same threatening image on the Facebook page of the Islamic Society of Northeastern University (ISNU).
Warrants authorizing searches of Keogan’s Facebook account revealed multiple posts that approved of burning mosques as early as 2013. For example, in 2013 Keogan shared a post with the following summary: “On July 4th, Joplin, Missouri’s Islamic Center — the city’s only mosque — suffered roof damage after an unidentified man set it on fire by tossing a burning object onto the building.” Keogan wrote in response: “Somewhere out there is an unknown hero. The people’s champion. A true God amongst mortal men. May your days be many & troubles be few my good man.” On or about Nov. 17, 2015, Keogan posted a status update saying, “Canada enters the Mosque Burning Winter Olympics of 2016 early! Who will take the Gold? Who will take the Silver? and WHO will take the Bronze??? We'll have to wait til the snow clears to find out folks but lets keep our fingers crossed for some fierce competition! And remember- you (yes you) are a qualified competitor of your own nation- so get out there and help your Country be number one in this winter’s Mosque Burning Olympics!”
Keogan’s Facebook account also showed that he had been buying, selling, trading, building, modifying, possessing, and shooting firearms and ammunition, despite his prohibition from doing so as a convicted felon. A GPS tracking device on Keogan’s car, placed pursuant to a warrant, allowed federal agents to track Keogan to a gun store in New Hampshire on or about May 1, 2016, where he purchased two boxes of 8mm rifle ammunition and two bags of loose 8mm rifle ammunition, and then drove the ammunition directly back to his residence in Wilmington. Upon Keogan’s arrest in July 2016, authorities searched his residence and found dozens of firearms, including light machine guns, assault rifles, and sniper rifles, and thousands of rounds of ammunition. A later search of Keogan’s iPhone and iPad revealed he was in possession of child pornography.
The charging statutes for the threats and firearms/ammunition charges each provide for a sentence of no greater than 10 years in prison, three years of supervisory release, a fine of $250,000, and forfeiture of the firearms and ammunition. The charging statute for the child pornography charge provides a sentence of no greater than 20 years in prison, supervised release for at least five years and maximum of life, restitution, a fine of $250,000, and forfeiture. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge Federal Bureau of Investigation, Boston Field Division; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; and Wilmington Police Chief Michael Begonis, made the announcement today. Assistant U.S. Attorney Scott L. Garland of Weinreb’s Civil Rights Enforcement Team is prosecuting the case.
Former Town Administrator of Nahant and Saugus Sentenced for Filing False Tax ReturnsRead the Press Release
BOSTON – The former town administrator of Nahant and Saugus was sentenced today in U.S. District Court in Boston in connection with failing to report over $375,000 of his income on his federal tax returns from 2010 to 2013.
Andrew R. Bisignani, 70, was sentenced by U.S. District Court Judge Leo T. Sorokin to one year of probation, the first four months of which is to be served in Coolidge House and the following six months on home confinement. In December 2017, he pleaded guilty to four counts of filing false tax returns.
Bisignani, the former town administrator of Nahant and Saugus, admitted that from 2010 to 2013, he collected rental income from three real properties in Revere, Mass. During the same years, Bisignani collected interest and loan income by making multiple, private, short-term loans that were secured by Massachusetts real estate. Bisignani underreported his total rental real estate income when submitting his individual tax returns to the IRS in 2010, 2011, 2012 and 2013. He also underreported the interest income he received in connection with his private loans for 2010, 2011 and 2012.
Acting United States Attorney William D. Weinreb; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorney Kristina E. Barclay of Weinreb’s Public Corruption Unit is prosecuting the case.
23 Arrested for Distributing Heroin and FentanylRead the Press Release
BOSTON – Twenty-three men and women involved in two drug trafficking organizations operating in Taunton and Boston were arrested and charged today in connection with distributing heroin and fentanyl. In addition, the Drug Enforcement Administration, along with state and local partners, conducted 12 searches in Fall River, New Bedford, Bridgewater, Boston, Brighton and Providence.
According to court documents, Fernando Rivera-Rodriguez, 31, of Boston and Fernando Hernandez, 42, of Providence, RI, allegedly led drug trafficking organizations in Boston and Taunton, respectively. Rivera-Rodriguez and Hernandez were charged along with 21 others for conspiring to distribute heroin and fentanyl from the summer of 2016 through the present. The defendants were held following initial appearances in U.S. District Court in Boston this afternoon. Yeurvs Tejeda and Carlos Gonzalez-Figueroa remain fugitives at large.
“Today’s arrests will help stem the flow of heroin and fentanyl into our communities,” said Acting U.S. Attorney William D. Weinreb. “The defendants in this case knew the drugs that they were distributing were potent and potentially lethal, yet they continued to brazenly ignore the dangers and even expand their reach into Maine.”
“DEA is committed to investigating and dismantling large-scale violent, fentanyl and heroin drug trafficking organizations (DTO), like these operating in the South Coast and Boston area,” said Special Agent in Charge Michael J. Ferguson. “As we all know, drug trafficking, along with the gun and physical violence that often accompanies it, is a serious threat to our families and our communities. Those that are suffering from a fentanyl and heroin substance use disorder need treatment and recovery but those that distribute and profit from spreading this poison need to be held accountable. This investigation demonstrates the strength of collaborative local, state and federal law enforcement efforts in Massachusetts and our strong partnership with the U.S. Attorney’s Office to seek and bring to justice anyone who engages in these crimes.”
“The greater Taunton area has been one of the regions hardest hit by opioid trafficking and overdose deaths,” said Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police. “We in law enforcement focus long-term interdiction efforts, like this operation, as frontal attacks on the hot zones of heroin and fentanyl trafficking. Today’s efforts by federal, state and local police and the U.S. Attorney’s Office will impact the heroin and fentanyl trade in Bristol County.”
The following are charged with conspiracy to distribute heroin and fentanyl:
Fernando Rivera-Rodriguez, a/k/a Alex, a/k/a Antonio Moraima, 31, of Boston;
Glendalee Rodriguez, 33, of Fall River;
Juan Morales-Ortiz, a/k/a Josiel, 27, of Boston;
Jancer Soto, 25, of Boston;
Jose Camacho, a/k/a Traga, 37, of Boston;
Wilmi Hernandez-Diaz, 21, of Boston;
Yeurys Tejeda, a/k/a Santos, 28, of Boston;
Jose R. Narvaez-Arroyo, a/k/a Pacha, 35, of Boston;
Jeffrey Freitas, 31, of Bridgewater;
Isis Y. Lugo-Guerrero, a/k/a Izzy, 44, of Boston;
Jose Negron, a/k/a Edwin Padilla, a/k/a Luisito Bulto, 36, of Boston;
Malvin Berrios, a/k/a Bori, 34, of Boston;
Roger Longmire, 34, of Taunton;
Stephanie O’Sullivan, 30, of Taunton;
Omar Guzman, 39, of Taunton;
Marisa Ruiz, 32, of Taunton;
John Paul Tanguay, 33, of Taunton;
Daniel Wren, 31, of Taunton;
David Tejeda, 34, of New Bedford;
Fernando Hernandez, a/k/a Mora, 42, of Providence, RI;
Jose Arias, 21, of Providence, RI;
Carlos Miguel Gonzalez-Figueroa, 32, of Providence, RI; and
Crystal Rivera, 30, of Providence, RI.
Hernandez allegedly ran a heroin and fentanyl trafficking organization in Taunton, assisted by Arias, Ruiz, Guzman, and Rivera. The organization sold heroin and fentanyl to customers including Tanguay, Wren, O’Sullivan, and Longmire, who also re-distributed a portion of the drugs. The complaint further alleges that Hernandez obtained drugs from a network of suppliers that included Rivera-Rodriguez and Figueroa.
According to the complaint affidavit, Rivera-Rodriguez operated a drug trafficking organization in Boston, and was assisted by Hernadez-Diaz, Soto, Morales-Ortiz, Rodriguez, Lugo-Guerrero, Negron, Camacho and Yeurys Tejeda. Their customers included David Tejeda, Berrios, and Freitas. The affidavit alleges that Arroyo brokered a kilogram drug deal for Rivera-Rodriguez and that Rivera-Rodriguez and his associates obtained a significant quantity of illegal drugs by robbing other drug traffickers.
A court-authorized wiretap revealed the callous way in which the defendants talked about the deadly effects of the drugs they were distributing. For example, according to the affidavit, Fernando Rivera-Rodriguez, promoted his heroin by telling a drug distributor, that “when you see those people being knocked over . . . you are going to call me back.” The drug distributor did call Rivera-Rodriguez back complaining that the heroin was deadly, saying: “That stuff is not even drug[s]. That is going to kill someone. I think that guy died.” When Rivera-Rodriguez asked, “Did it knock him over?” the distributor said, “I believe so,” and added, “. . . that stuff is that fentanyl. That could kill you.” In response, Rivera-Rodriguez simply said, “Nah, so it’s okay.”
The wiretap also revealed Rivera-Rodriguez boasting about robbing cash and jewelry. For example, Rivera-Rodriguez told Yeurys Tejeda, “We took a little house and we took 13,000 and like three chains, man, and a couple of bracelets, right there in Saugus. And a little while ago, we took another one and took 7,000 from some people also.” Federal agents believe that Rivera-Rodriguez was telling Santos about robbing two houses and stealing over $20,000 in cash and jewelry.
The charging statute provides a sentence of no greater than 20 years in prison, a minimum of three years and up to a lifetime of supervised release and a fine of $1 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William Weinreb; Michael Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Fall River Police Chief Daniel S. Racine; New Bedford Police Chief Joseph C. Cordeiro; Taunton Police Chief Edward James Walsh; Boston Police Commissioner William B. Evans; and Bristol Country District Attorney Thomas M. Quinn, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Ted Heinrich of Weinreb’s Narcotics and Money Laundering Unit.
The details contained in the complaint are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
New England HIDTA Recognized for Investigative ExcellenceRead the Press Release
BOSTON – The New England High Intensity Drug Trafficking Area (HIDTA) was recognized on Thursday, Feb. 9, 2017, with the National HIDTA of the Year Award for its outstanding work in reducing drug trafficking in the region.
“The New England HIDTA has been instrumental in disrupting the flow of dangerous drugs in the region,” said Acting United States Attorney William D. Weinreb. “Their work is unquestionably demanding, dangerous and at times thankless, but through their dogged determination communities across New England are safer places for children and families to call home. I hope this award validates their hard work and reaffirms their commitment in these challenging times. Congratulations to the leadership and each member of the NEHIDTA team.”
“New England HIDTA is both honored and humbled to be recognized as HIDTA of the year for 2016,” said Jay Fallon, Executive Director of New England HIDTA. “This award serves to honor the efforts of all entities affiliated with the HIDTA Program. We will continue to address the burgeoning drug threat in New England holistically with our partners in law enforcement, treatment, prevention and education.”
In 2015, the New England HIDTA disrupted or dismantled 170 drug trafficking organizations (DTOs) and 19 money laundering organizations (MLOs). This represents 6% of all DTOs and 10% of all MLOs disrupted or dismantled nationwide. In addition, in 2015, the New England HIDTA trained more than 3,400 students, supported more than 12,000 de-conflictions, and provided analytical support to nearly 400 cases.
The New England HIDTA has also championed innovative and progressive approaches to law enforcement and counterdrug policy. The HIDTA’s SCOPE of Pain initiative, conducted in collaboration with Boston University School of Medicine, has become a model for public health and public safety partnerships to combat the opioid epidemic. The New England HIDTA also is recognized as one of the founding members of the HIDTA Heroin Response Strategy, which now encompasses eight regional HIDTAs and 20 states.
The New England HIDTA and its leadership have also been reliable and trusted partners to the White House Office of National Drug Control Policy (ONDCP) and to the entire National HIDTA Program. They frequently host events in collaboration with ONDCP leadership and support the implementation of the National Drug Control Strategy priorities throughout the New England region.
The HIDTA program, created by Congress through the Anti-Drug Abuse Act of 1988, facilitates cooperation and intelligence sharing between federal, state, local, and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States. There are currently 28 HIDTAs, which include approximately 16% of all counties in the United States and 60% of the U.S. population. The New England HIDTA was designated in 1999 to eliminate DTOs and improve efficiency and effectiveness of law enforcement. For more information on the New England HIDTA, visit their website.
Waltham Man Sentenced for Defrauding Customers of Former Newton Travel AgencyRead the Press Release
BOSTON – A Waltham man was sentenced today in U.S. District Court in Boston in connection with a scheme in which he defrauded hundreds of customers of the now-defunct Tom Harper Cruises of more than $2.9 million in cruise trip deposits.
Bret A. Gordon, 44, was sentenced by U.S. District Court Judge Denise J. Casper to 46 months in prison, three years of supervised release and ordered to pay $2,891,092 in restitution to victims. In November 2016, Gordon pleaded guilty to six counts of wire fraud and two counts of filing a false personal tax return.
In 2013, Gordon established and owned a 65% interest in Tom Harper Cruises, a business selling overseas river cruise vacations. As the company’s manager, Gordon had exclusive control of its bank accounts and finances. Soon after Tom Harper Cruises began operating, Gordon started to take money from its bank account for his own use, primarily for casino gambling. Most of the funds Gordon took were customer deposits for trips that the company needed to retain in order to pay the independent cruise companies that operated those trips.
As Gordon’s conversion of company funds increased, Tom Harper Cruises became unable to pay some of its regular business expenses and, inevitably, to pay the independent cruise companies for the trips ordered by customers. In June 2015, Tom Harper Cruises closed its doors and filed for bankruptcy. Between September 2013 and June 2015, Gordon took about $2,258,500 from Tom Harper Cruise’s accounts for his own use. About 400 customers were left without the trips they planned for, after paying Tom Harper Cruises a total of approximately $2.9 million.
Gordon also failed to report the money he had taken as income on his personal income tax returns. He failed to report about $165,000 that he received in 2013, and about $900,000 that he had taken in 2014.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office; and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. Assistant U.S. Attorney Mark J. Balthazard of Weinreb’s Economic Crimes Unit prosecuted the case.
Healthcare Sales Representative Sentenced for Obstructing Federal InvestigationRead the Press Release
BOSTON – A sales representative for multiple healthcare companies was sentenced today in U.S. District Court in Boston in connection with obstructing an investigation into kickbacks paid to medical professionals.
Terrence Kyle Tackett, 50, of Florence, Ky., was sentenced by U.S. District Court Judge Allison D. Burroughs to three years of probation, with the first six months in community confinement and then six months on home detention, 100 hours of community service to be completed during the last two years of probation, and a fine of $15,000. In May 2016, Tackett pleaded guilty to one count of obstruction of a criminal investigation of health care offenses.
From 2012 to 2013, Tackett worked as a sales representative in Kentucky for California-based healthcare company Cardio Dx, and from August 2013 to February 2015, he worked for Aegerion Pharmaceuticals, Inc., a Cambridge-based pharmaceutical company. From 2012 through February 2015, Tackett gave medical professionals gift cards and personal checks in exchange for ordering or prescribing the products he promoted and to get access to private patient information protected by HIPAA. During a January 2015 meeting with investigators, Tackett falsely denied and attempted to conceal the kickbacks he had been paying to physicians and their staffs for years in Kentucky and southern Ohio.
Acting United States Attorney William Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Phillip Coyne, Special Agent in Charge of U.S. Health and Human Services, Office of Inspector General, Office of Investigations; Mark McCormack, Special Agent in Charge of U.S. Food and Drug Administration, Office of Criminal Investigations, Metro Washington Field Office; and Susan Hensley, Director of U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office, made the announcement today. Assistant U.S. Attorneys Kriss Basil and Young Paik of Weinreb’s Office prosecuted the case with assistance from the Justice Department’s Consumer Protection Branch.
Easthampton Man Agrees to Plead Guilty to Distributing Child PornographyRead the Press Release
BOSTON – An Easthampton man pleaded guilty today in U.S. District Court in Springfield to child pornography charges.
James J. Smith, 38, pleaded guilty to six counts of distribution of child pornography, one count of transportation of child pornography, one count of receipt of child pornography, and one count of possession of child pornography. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for May 4, 2017.
In January 2015, Smith’s cell phone, which was recovered during a search of his home, was found to contain approximately 110 images of child pornography, including images of a known eight-year-old girl. Smith also emailed and engaged in Craigslist correspondence with multiple people in which they discussed the sexual abuse of children. Smith offered to distribute, and did distribute, child pornography involving children aged ten and younger with his online associates. Smith also offered to receive, and did receive, child pornography from an online associate.
If the Court accepts the plea agreement, Smith will be sentenced to between 120 months and 151 months in prison and 10 years of supervised release. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Northampton Police Chief Jody Kasper; and Easthampton Police Chief Robert Alberti, made the announcement today. Assistant U.S. Attorney Alex J. Grant of Weinreb’s Springfield Branch Office is prosecuting the case.
Biopharmaceutical Employee Arrested for Insider TradingRead the Press Release
BOSTON – The Director of Statistical Programming for a Cambridge-based biopharmaceutical company was arrested and charged today with participating in an insider trading scheme.
Songjiang Wang, 52, was charged with conspiracy to commit securities fraud. Wang’s friend, Schultz “Jason” Chan, was the Director of Biostatistics at a different Cambridge-based biopharmaceutical company. According to the criminal complaint, from November 2013 to September 2015, Wang and Chan conspired to commit securities fraud by trading insider information regarding successful clinical drug trials at their respective companies. Specifically, Wang allegedly traded on inside information Chan provided regarding a clinical study conducted by Chan’s employer. In addition, Wang tipped Chan in advance of a series of announcements made by Wang’s employer regarding various clinical trial results. Furthermore, Wang allegedly gave Chan cash, which Chan used to purchase shares of Wang’s employer. Chan subsequently sold those shares and paid Wang back.
In June 2016, Chan was charged with securities fraud in connection with tipping Wang and with trading in his own employer’s stock while in possession of inside information about a study.
The charging statute provides for a sentence of no greater than 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. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division, made the announcement today. The United States Attorney’s Office received valuable assistance from the Securities & Exchange Commission. Assistant U.S. Attorney Sarah E. Walters and Stephen E. Frank, Chief and Deputy Chief, respectively, of Weinreb’s Economic Crimes Unit are 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.
Acting U.S. Attorney Weinreb Highlights Obligations of Cities and Towns Under Religious Anti-Discrimination LawRead the Press Release
BOSTON – Acting U.S. Attorney William D. Weinreb sent a letter to cities and towns across Massachusetts highlighting the obligations of cities and towns under a federal law that prohibits religious discrimination. The Religious Land Use and Institutionalized Persons Act (RLUIPA) protects against substantial burdens on religious exercise, unequal treatment, and unreasonable limitation for religious assemblies and institutions such as churches, mosques, and synagogues.
The U.S. Attorney’s Office is charged with ensuring that religious institutions and organizations have an equal opportunity to buy and develop land free from unreasonable and burdensome restrictions. To aid in this effort, the U.S. Attorney’s Office recently sent the attached letter to cities and towns highlighting their obligation to comply with RLUIPA.
RLUIPA, which was enacted in 2000, ensures that religious institutions are protected from unduly burdensome, unreasonable, and discriminatory zoning and landmarking. The protections apply widely to religious schools, religious camps, religious retreat centers, and religious social service facilities such as group homes, homeless shelters, and soup kitchens. Among other things, RLUIPA prevents municipalities from placing restrictions or burdens on land use by religious organizations that are not applied to comparable secular institutions.
“All Americans have the right to come together and worship in accordance with their religious beliefs, free from unreasonable burdens,” said Acting U.S. Attorney William D. Weinreb. “This letter will help cities and towns throughout Massachusetts understand the requirements of the law and ensure that they do not unintentionally discriminate against religious individuals and institutions.”
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.
Rhode Island Man Sentenced to 15 Years in Prison for Drug Trafficking and Money LaunderingRead the Press Release
BOSTON – A Rhode Island man was sentenced yesterday in U.S. District Court in Boston in connection with a wide-ranging conspiracy that distributed cocaine, heroin and other narcotics throughout Bristol County, Mass., and Rhode Island.
Luis Lopez a/k/a Juan Gonzalez, 43, of Tiverton, Rhode Island, was sentenced by U.S. District Court Judge Rya W. Zobel to 15 years in prison and five years of supervised release after pleading guilty in October 2016 to conspiracy to distribute cocaine, heroin and fentanyl and money laundering. Lopez also agreed to forfeit property worth over $1 million, including three properties in Rhode Island, a used car dealership based in Fall River, Mass., and a number of luxury vehicles.
From 2014 to 2016, Lopez imported, at a minimum, 50 to100 kilograms of cocaine from Puerto Rico to Massachusetts, and distributed it in New Bedford and Fall River with co-conspirators. Lopez also conspired with others to distribute heroin, fentanyl and acetylfentanyl. Lopez admitted that a kilogram of a fentanyl/acetylfentanyl mix that was found at a drug stash house in June belonged to him. Lopez also laundered drug proceeds through Hillside Auto, a used car business he purchased in Fall River in the name of a relative.
Acting United States Attorney William D. Weinreb; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Fall River Police Chief Daniel S. Racine; and New Bedford Police Chief Joseph C. Cordeiro, made the announcement. Assistant U.S. Attorney Eric S. Rosen of Weinreb’s Narcotics and Money Laundering Unit is prosecuting the case.
New Hampshire Asbestos Abatement Company Pleads Guilty to Defrauding Union Benefit FundsRead the Press Release
BOSTON – An asbestos removal company pleaded guilty today in connection with an illegal “double breasted shop” scheme aimed at enabling them to defraud the Massachusetts Laborers Benefit Fund (MLBF). In this case, the company utilized a second corporate entity to pay union members at non-union rates without union benefits.
AQE, Inc. of Windham, NH, pleaded guilty to 18 counts of mail fraud, one count of benefit fund embezzlement, and 18 counts of filing false documents with an ERISA fund, after being indicted in January of 2016. U.S. District Court Judge Patti B. Saris scheduled sentencing for May 4, 2017.
AQE, Inc. employed members of the Tewksbury Local 1421 of the Laborers International Union of North America. It paid members of Local 1421 for jobs which required union participation from the AQE, Inc. payroll which was a union signatory corporation. When the jobs did not require a union signatory company, union members were paid from the payroll of Air Quality Experts, Inc.—a separate entity used as part of AQE, Inc.’s single business. In these instances, union members did not receive union rates, and benefits were not paid by AQE, Inc. to the MLBF, which provides medical and pension benefits to 8,000 laborers and their families in Massachusetts. AQE, Inc. sent “remittance reports” to the MLBF which failed to report thousands of hours worked by members of Local 1421. By significantly under reporting the hours worked by union members, AQE, Inc. failed to pay hundreds of thousands of dollars to the MLBF.
AQE, Inc. has agreed to pay $500,000 in restitution to the MLBF as part of the plea.
The charging statutes each provide for a sentence of at least one year, and no greater than five years of probation, a fine of $500,000 or twice the loss or gain from the offense, and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Cheryl Garcia, Special Agent in Charge of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, New York Region; and Susan Hensley, Regional Director of the Department of Labor, Employee Benefits and Security Administration, made the announcement today. Assistant U.S. Attorneys Fred M. Wyshak, Jr. and Ryan M. DiSantis, of Weinreb’s Public Corruption Unit, are prosecuting the case.
Former Pepperell Man Who Fled to Canada on Snowmobile Pleads Guilty to Bankruptcy FraudRead the Press Release
BOSTON – A former Pepperell man pleaded guilty today in U.S. District Court in Worcester in connection with concealing $3–$4 million in his bankruptcy filings.
Cyril Gordon Lunn, 68, pleaded guilty today to concealing assets from his bankruptcy creditors and making a false statement under the penalty of perjury in one of his bankruptcy schedules. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for May 3, 2017.
From 1985 until 2001, Lunn was the owner of CY Realty Corporation, a construction and land development business in Pepperell. 1998 to September 2001, Lunn transferred a variety of assets belonging to CY Realty and himself, including $3-$4 million in cash, from the United States to Canada, where he deposited some or all of the funds in safe deposit boxes. In the fall of 2001, Lunn filed for bankruptcy for CY Realty and himself; however, he failed to disclose in either bankruptcy case the asset transfers, including the millions in cash. Lunn’s actions were discovered after he testified about the asset transfers during a 2004 Canadian civil lawsuit. In March 2005, Lunn rented a snowmobile in Maine and fled across the border into Canada where he remained a fugitive until he was extradited from Canada in 2016.
Lunn also pleaded guilty to making a false statement in one of his bankruptcy filings by falsely stating that he had closed all safe deposit boxes by September 2001, when in fact, he had failed to disclose a safe deposit box that he had opened at the Granite Bank in New Hampshire, and which he continued to access after the bankruptcy filing.
The charging statutes provide for a sentence of no greater than 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. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorney Mark J. Balthazard of Weinreb’s Economic Crimes Unit is prosecuting the case.
Alleged Prison Escapee Charged with Attempted Bank RobberyRead the Press Release
BOSTON – A former Army Reservist who was previously charged with the theft of military weapons, and then later escaped while in federal custody, has now been charged with two counts of attempted bank robbery.
James W. Morales, 35, of Cambridge, was first arrested in November 2015 on federal weapons charges arising from the theft of military weapons from a U.S. Army Reserve facility in Worcester, Mass. Morales then escaped from federal custody while detained at the Donald W. Wyatt Detention Facility in Central Falls, Rhode Island on Dec. 31, 2016.
On the morning of Jan.5, 2017, at approximately 9:21 a.m., it is alleged that Morales entered a branch of Bank of America in Cambridge and passed the teller a note that read, “I WANT ALL OF THE LARGE DENOMINATIONS W/BAND’S FROM THE 2ND (BOTTOM) TILL NOW BE CALM – BE COOL – NO DYE PACKS.” The teller was able to flee to the back of the bank behind a locked door, and Morales exited the bank without any money. The bank’s video surveillance system recorded Morales’ attempted robbery.
Later that same day, at approximately 3:11 p.m., Morales allegedly entered a branch of Citizen’s Bank in Somerville and passed the teller a note that read “I WANT THE MONEY IN THE TILL NOW!! 100’s 50’s 20’s Be Calm, Be Cool, be Quick.” When the teller stated, “I can’t,” Morales wished the teller a nice day and exited the bank. The bank’s video surveillance system recorded Morales’ attempted robbery.
At approximately 3:40 p.m., Massachusetts State Police troopers responding to the report of the bank robbery observed Morales who had fled. After a foot pursuit, Morales was apprehended.
The charge of bank robbery provides for a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000 and restitution on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge bases upon the US Sentencing guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; United States Marshal John Gibbons for the District of Massachusetts; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Cambridge Police Commissioner Brent Larabee; and Somerville Police Chief David Fallon, made the announcement today. Assistant U.S. Attorneys Mark Grady of Weinreb’s Worcester Branch Office and Kelly Lawrence of Weinreb’s Major Crimes Unit are prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Waltham Financial Advisor to Plead Guilty to Securities FraudRead the Press Release
BOSTON – A Waltham-based financial advisor has agreed to plead guilty in connection with defrauding his clients by engaging in a multi-year “cherry-picking” scheme.
Michael J. Breton, 50, the managing partner of an investment advisory firm, Strategic Capital Management, LLC (SCM), was charged in an Information with securities fraud.
It is alleged that from 2011 through at least July 2016, Breton, using a master brokerage account, regularly purchased shares in publicly-traded companies the day that those companies announced earnings from the previous quarter. Breton allegedly purchased shares in those companies shortly before the earnings announcements and then allocated the shares after the earnings announcements. Thus, Breton allocated the shares to one of his accounts or to the client accounts after knowing whether the company had announced positive or negative news about its earnings, which determined whether the trade was likely to be profitable in the short term. Throughout the scheme, Breton allocated more profitable trades to himself and allocated unprofitable trades to his clients, thereby stealing more than $1.3 million in potential profits from his clients.
“Investment advisory clients, by necessity, entrust their advisors with great discretion over their life savings,” said Acting United States Attorney William D. Weinreb. “As today’s charges demonstrate, when advisors abuse that trust—by stealing from their very own clients—they will be held criminally accountable.”
“Motivated by greed, Mr. Breton used his clients’ trust against them,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “By making the conscious decision to place his own interests above theirs, his behavior undermined the financial security of hard-working individuals. The FBI will do everything it can to protect investors, while rooting out fraud like this.”
The securities fraud statute provides for a sentence of no greater than 25 years in prison, five years of supervised release and a fine of $5 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Breton has agreed to plead guilty to securities fraud and pay forfeiture of $1,326,696. The U.S. Attorney’s Office has agreed to recommend a sentence of no greater than three years in prison.
The Securities and Exchange Commission today filed a parallel civil action. Breton has agreed to partially resolve the SEC’s claims by, among other things, agreeing to the entry of an SEC order permanently barring him from working in the securities industry.
Acting U.S. Attorney Weinreb and FBI SAC Shaw made the announcement today. The U.S. Attorney’s Office received valuable assistance from the Securities and Exchange Commission. Sarah E. Walters, Chief of Weinreb’s Economic Crimes Unit, is prosecuting the case.
New Bedford Gym Owner Sentenced for Heroin TraffickingRead the Press Release
BOSTON – The owner of a New Bedford gym was sentenced yesterday in U.S. District Court in Boston in connection with a wide-ranging conspiracy involving heroin distribution throughout Bristol County, Mass. and Providence, R.I.
Sharik Mendes, 39, of New Bedford, was sentenced by U.S. District Court Judge Douglas Woodlock to 30 months in prison. In October 2016, he pleaded guilty to one count of conspiracy to distribute and possess with the intent to distribute heroin.
In 2015 and 2016, Mendes, the owner and operator of the HEART gym in New Bedford, was receiving large quantities of heroin from two suppliers based in Rhode Island. Mendes then distributed the heroin to lower-level distributors in the New Bedford area. In total, Mendes accepted responsibility for conspiring to distribute between 600 and 700 grams of heroin.
Acting United States Attorney William D. Weinreb; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Fall River Police Chief Daniel S. Racine; and New Bedford Police Chief Joseph C. Cordeiro, made the announcement. Assistant U.S. Attorney Eric S. Rosen of Weinreb’s Narcotics and Money Laundering Unit is prosecuting the case.
Georgia Couple Admits to Scheme to Defraud StaplesRead the Press Release
BOSTON –A Georgia couple appeared in U.S. District Court in Boston today to admit their involvement in a scheme to defraud Framingham-based Staples, Inc. of more than $1.4 million.
John Douglas, 46, of Alpharetta, Georgia, pleaded guilty to conspiracy to commit wire fraud and mail fraud. U.S. District Court Judge Indira Talwani scheduled his sentencing for April 26, 2017. John Douglas’s wife, Analyn Douglass [sic], 41, entered a deferred prosecution agreement, having admitted her involvement in the conspiracy to ship stolen Staples goods in interstate commerce. If Douglass abides by the terms of her agreement with the government, the charge against her will be dismissed after one year.
The Douglases and others engaged in a complex scheme to defraud Staples of more than $1.4 million worth of customer loyalty rewards and product rebates. John Douglas and one of his associates created more than 1,100 Staples rewards accounts, often using fictitious names, addresses, and contact information. He then created a computer script to query a Staples website and seek unclaimed customer loyalty rewards for purchases that he did not make. The computer script made thousands of queries a day, amassing more than $889,000 worth of rewards in small increments, often less than a dollar at a time. The Douglases and others then used the rewards like cash to buy merchandise at Staples retail locations throughout the southern United States and along the eastern seaboard, as far north as Massachusetts. Analyn Douglass sold much of the fraudulently obtained Staples merchandise on eBay.
In addition, the Douglases used a similar method to claim more than $527,000 in cash rebates from Staples for products that they did not purchase.
Staples, who has cooperated with the government, discovered the fraud and referred the matter for investigation.
The charges of conspiracy to commit wire fraud and mail fraud provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss from the offense, whichever is greater. The charge of conspiracy to ship stolen goods provides for a sentence of no greater than 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. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. Assistant U.S. Attorney David J. D'Addio of Weinreb’s Cybercrime Unit is prosecuting the case.
Fall River Man Sentenced for Escape from Federal FacilityRead the Press Release
BOSTON – A federal inmate was sentenced today in U.S. District Court in Boston in connection with escaping from the Coolidge House Residential Reentry Center in Boston.
Jason Barreto, 30, was sentenced by U.S. District Court Judge Richard G. Stearns to one year and one day in prison. In August 2016, he pleaded guilty to one count of escape from a federal custody.
In September 2011, Barreto was convicted in U.S. District Court in Rhode Island of conspiracy to distribute oxycodone and was sentenced to 70 months in prison. On May 21, 2015, Barreto was transferred from the U.S. Penitentiary Big Sandy in Kentucky to Coolidge House Residential Reentry Center in Boston to serve the remainder of his sentence. Barreto was scheduled to be released on Nov. 1, 2015.
On Sept. 17, 2015, following an incident at Coolidge House, Barreto walked out of the facility without authorization and did not return. On April 8, 2016, after receiving information regarding Barreto’s location, the U.S. Marshal Service arrested Barreto in Atlantic City, New Jersey.
Acting United States Attorney William D. Weinreb and U.S. Marshal John Gibbons of the District of Massachusetts made the announcement. Assistant U.S. Attorney Nicholas Soivilien of Weinreb’s Major Crimes Unit is prosecuting the case.
Springfield Man Arrested for Identity Theft and Theft of Social Security BenefitsRead the Press Release
BOSTON – A Dominican man living in Springfield was charged and arrested today for using an American citizen’s identity to obtain over $100,000 in Social Security benefits.
Bartolo Ramirez, 48, was charged with falsely representing a Social Security number and theft of public money. He is detained pending a detention and probable cause hearing on Wednesday, Jan. 25, 2017.
According to the criminal complaint, Ramirez was born in the Dominican Republic, entered the United States as a stowaway in 1990, and was apprehended by authorities. He was allowed to leave the United States voluntarily in 1993. By 2007, Ramirez had returned to the United States and settled in Springfield, Mass., where he obtained a Social Security card and state ID card using the name and Social Security number of an American citizen. In 2008, Ramirez applied for Social Security disability benefits under the American citizen’s identity, and collected more than $100,000 in benefits. Ramirez also used the American citizen’s name when he was arrested in Massachusetts in 2012 in an unrelated case.
The charge of misrepresenting a Social Security number provides for a sentence of no greater than 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. The charge of theft of public money provides for a sentence of no greater than 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. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations; William Squires, Special Agent in Charge of the U.S. Department of Agriculture, Office of Inspector General, Office of Investigation, Northeast Field Office; and Suzanne M. Bump, State Auditor of the Commonwealth of Massachusetts, made the announcement today. Special Assistant U.S. Attorney Timothy Landry of Weinreb’s Major Crimes Unit is prosecuting the case.
The details contained in the criminal complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Malden Woman Indicted for Theft of Government BenefitsRead the Press Release
BOSTON – A Malden woman was indicted yesterday for collecting over $176,000 in government benefits by providing false information about her family.
Julie Mijal, 39, was charged with three counts of theft of public money and three counts of making false statements. Mijal was previously charged in a criminal complaint in October 2016.
According to court documents, Mijal has lived in Malden with her children and their father since at least 2003. During that time, Mijal and her children’s father owned a house together and used the same address on their driver’s licenses, tax returns and other records.
During the same years, however, Mijal collected need-based Supplemental Security Income (SSI) benefits by telling the Social Security Administration that she only lived with her children, and not with their father. Social Security uses the household’s total income to determine whether someone is eligible for SSI benefits. As a result, Social Security did not count the father’s income when determining whether Mijal and her children were eligible for benefits. Mijal collected $87,053 in SSI benefits that she would not have received if she had reported that her children’s father was also part of the household. In a similar manner, Mijal collected $47,745 in Supplemental Nutrition Assistance Program benefits and $41,435 in MassHealth benefits.
The charge of theft of public money provides for a sentence of no greater than 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. The charge of making a false statement provides for a sentence of no greater than 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. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; and Suzanne M. Bump, State Auditor of the Commonwealth of Massachusetts, made the announcement. Special Assistant U.S. Attorney Timothy Landry of Weinreb’s Major Crimes 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.
Chelsea Man Indicted for Multiple Bank RobberiesRead the Press Release
BOSTON – A Chelsea man, dubbed the “Spelling Bee Bandit,” was indicted yesterday in connection with four bank robberies in the Greater Boston area.
Jason S. Englen, 34, was charged with the robberies of TD Bank in Arlington on Oct. 31, 2016; TD Bank in Reading on Nov. 5, 2016; Salem Five in Burlington on Nov. 7, 2016; and TD Bank in Peabody on Nov. 13, 2016. In December 2016, Englen was arrested and charged in a criminal complaint.
According to court documents, on Oct. 31, 2016, a man entered a branch of TD Bank in Arlington, approached a teller and presented a deposit slip with the word “ROBERY” written on it. The teller handed the man money from the drawer, and the man then fled the bank. Nearly identical incidents occurred on Nov. 5th at a branch of TD Bank in Reading, on Nov. 7th at a branch of Salem Five in Burlington, and on Nov. 13th at a branch of TD Bank in Peabody. During each robbery, the man handed the teller a note with the word “ROBERY” or “ROBERT” demanding cash. During the last robbery, the man told the teller he wanted $20 and $50 dollar bills.
Based on the similarity of the robberies and the physical description of the robber provided by the bank tellers, a bulletin was circulated seeking the public’s help in identifying the perpetrator. As a result, law enforcement received information that the individual involved in the robberies was Englen. Englen, who was already in state custody on unrelated charges, was arrested by federal authorities on Dec. 12, 2016.
The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000 and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge bases upon the US Sentencing guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Suffolk County Sheriff Steven Tompkins; Arlington Police Chief Frederick Ryan; Reading Police Chief Mark D. Segalla; Burlington Police Chief Michael Kent; and Peabody Police Chief Thomas Griffin, made the announcement today. Assistant U.S. Attorney Kenneth G. Shine of Weinreb’s Major Crimes Unit is prosecuting the case.
Randolph Man Sentenced for Bank RobberiesRead the Press Release
BOSTON – A Randolph man was sentenced yesterday in U.S. District Court in Boston for two bank robberies.
Gary S. Judge, 37, was sentenced by U.S. District Court Judge Richard G. Stearns to 57 months in prison, three years of supervised release and ordered to pay $6,292 in restitution. In October 2016, he pleaded guilty to two counts of bank robbery.
On July 28, 2014, an individual, later determined to be Judge, entered Century Bank in Braintree carrying a shoe box. He handed the teller a demand note that stated “PUT THE MONEY IN THE BOX NOW, $20’S $50’S AND $100’S.” The teller handed him $5,622 in cash and Judge then exited the bank. After law enforcement officers arrived and interviewed the tellers, details regarding the robbery were immediately disseminated on various law enforcement and public social media sites.
On Aug. 11, 2014, an individual, later determined to be Judge, entered a Milton branch of Citizens Bank carrying a shoe box and handed the teller a note that read, “PUT THE MONEY IN THE BOX NOW!!!$100’s, $50’s, AND $20’s.” The teller handed Judge $670 in cash, which he put in the shoe box, and exited the bank. Included in the currency given to Judge was a red dye pack. A bank customer observed red smoke emanating from the shoe box as Judge drove away in a Chrysler SUV with Massachusetts license plates.
A few weeks later, law enforcement officers received a tip that Judge might have been involved in the robberies. A recent picture of Judge matched bank surveillance photographs from both the Braintree and Milton robberies. It was also learned that Judge’s wife owned a Chrysler SUV matching the description from the Milton robbery. Judge was arrested on Dec. 30, 2014, and admitted to robbing the banks.
Acting United States Attorney William D. Weinreb and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The Milton and Braintree Police Departments assisted with the investigation. Assistant U.S. Attorney Kenneth G. Shine of Weinreb’s Major Crimes Unit prosecuted the case.
Former UPS Employee Pleads Guilty to Drug Trafficking ChargesRead the Press Release
BOSTON – A former United Parcel Service (UPS) employee pleaded guilty on Jan. 17, 2017, in U.S. District Court in Boston in connection with his role in a cocaine trafficking organization that shipped cocaine, secreted in UPS packages, from Puerto Rico to Massachusetts.
Jorge Carrasquillo-Ortiz, 41, of Toa Baja, Puerto Rico, pleaded guilty to one count of attempted distribution of 500 grams of cocaine. U.S. District Court Senior Judge Rya Zobel scheduled sentencing for April 13, 2017.
Carrasquillo-Ortiz, a UPS employee in Puerto Rico, worked on behalf of a drug trafficking organization that shipped cocaine laden packages from Puerto Rico to Massachusetts via UPS. Carrasquillo-Ortiz was paid $1,200 for each kilogram of cocaine that he shipped on behalf of the drug trafficking organization. In June 2016, a cooperating witness began placing recorded telephone calls to Carrasquillo-Ortiz in which they made plans for a six-kilogram shipment. The telephone calls culminated in the delivery of a box containing six kilograms of “sham” cocaine to Carrasquillo-Ortiz in Puerto Rico. Carrasquillo-Ortiz snuck the package through UPS security, and it was placed on a UPS airplane, where it was delivered to Massachusetts. Carrasquillo-Ortiz then called back the cooperating witness, expecting payment for his services; instead, Carrasquillo-Ortiz was arrested at his home in August 2016.
The narcotics charge provides for a minimum mandatory sentence of five years and no greater than 40 years in prison, a minimum of three years and up to a lifetime of supervised release and a fine of $5 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney William D. Weinreb; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement. Assistant U.S. Attorney Eric S. Rosen of Weinreb’s Narcotics and Money Laundering Unit is prosecuting the case.
State Street Corporation Agrees to Pay More than $64 Million to Resolve Fraud ChargesRead the Press Release
Massachusetts-based global financial services company State Street Corporation (State Street) entered into a deferred prosecution agreement and agreed to pay a $32.3 million criminal penalty to resolve charges that it engaged in a scheme to defraud a number of the bank’s clients by secretly applying commissions to billions of dollars of securities trades. State Street also agreed to offer an equal amount as a civil penalty to the U.S. Securities and Exchange Commission (SEC).
Acting Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division, Acting U.S. Attorney William D. Weinreb of the District of Massachusetts and Special Agent in Charge Harold H. Shaw of the FBI’s Boston Division announced today.
“State Street engaged in a concerted effort to fleece its clients by secretly charging unwarranted commissions,” said Acting Assistant Attorney General Bitkower. “The bank fundamentally abused its clients’ trust and inflicted very real financial losses. The department will hold responsible those who engage in this type of criminal conduct.”
“State Street cheated its customers by agreeing to charge one price for its services and then secretly charging them something else,” said Acting U.S. Attorney Weinreb. “Banks that defraud their clients in this way must be held accountable, no matter how big they are.”
“State Street engaged in an elaborate overcharge scheme which resulted in millions of ill-gotten profits and violated the trust of their clients,” said Special Agent in Charge Shaw. “This agreement with State Street demonstrates the FBI’s commitment to aggressively pursue financial fraud, uncover schemes that undermine investor confidence and hold financial institutions accountable.”
According to State Street’s admissions, bank employees conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions. State Street employees took steps to hide the commissions from the clients. State Street also misrepresented its performance to one of these clients in order to conceal a trading loss.
State Street entered into a deferred prosecution agreement (DPA) in connection with a criminal information charging the company with one count of conspiracy to commit wire fraud and securities fraud. Pursuant to its agreement with the department, State Street agreed to pay a criminal penalty of $32.3 million. State Street also agreed to continue to cooperate with the department and with foreign authorities in any ongoing investigations and prosecutions relating to the conduct (including of individuals); to enhance its compliance program; and to retain an independent corporate compliance monitor for a period of three years.
The department reached this resolution based on a number of factors, including that State Street has already fully repaid the clients who were victims of the scheme. State Street did not receive credit for voluntarily disclosing the misconduct and received only partial cooperation credit because the company did not fully cooperate with the investigation from the start and also because inadequacies in its initial internal investigation prevented it from being able to timely disclose all relevant facts.
In connection with the government’s investigation, Ross McLellan, 44, and Edward Pennings, 45, were charged on April 5, 2016, with conspiring to commit securities fraud and wire fraud as well as two counts each of securities fraud and wire fraud. Their trial is currently scheduled for Oct. 23, 2017. The charges against McLellan and Pennings are merely allegations and the defendants are presumed innocent unless and until proven guilty.
The FBI’s Boston Field Office investigated the case. Trial Attorney Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant U.S. Attorney and Deputy Chief of Economic Crimes Section Stephen E. Frank of the District of Massachusetts are prosecuting the case. The SEC provided valuable assistance to the prosecution.
The Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country. Today’s resolution is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
State Street Corporation Agrees to Pay More than $64 Million to Resolve Fraud ChargesRead the Press Release
BOSTON – Boston-based global financial services company State Street Corporation has entered into a deferred prosecution agreement and agreed to pay a $32.3 million criminal penalty to resolve the government’s criminal investigation into a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades. State Street also agreed to offer an equal amount as a civil penalty to the Securities and Exchange Commission (SEC).
In April 2016, the government charged two former high-ranking State Street executives, former Executive Vice President Ross McLellan and former Senior Managing Director Edward Pennings, with conspiracy, securities fraud and wire fraud in connection with the same scheme. McLellan and Pennings are scheduled to go to trial before U.S. District Court Judge Leo T. Sorokin in October 2017.
“State Street cheated its customers by agreeing to charge one price for its services and then secretly charging them something else,” said Acting U.S. Attorney William D. Weinreb. “Banks that defraud their clients in this way must be held accountable, no matter how big they are.”
“State Street engaged in a concerted effort to fleece its clients by secretly charging unwarranted commissions,” said Acting Assistant Attorney General David Bitkower. “The bank fundamentally abused its clients’ trust and inflicted very real financial losses. The department will hold responsible those who engage in this type of criminal conduct.”
“State Street engaged in an elaborate overcharge scheme which resulted in millions of ill-gotten profits and violated the trust of their clients,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “This agreement with State Street demonstrates the FBI’s commitment to aggressively pursue financial fraud, uncover schemes that undermine investor confidence, and hold financial institutions accountable.”
According to admissions made in the resolution documents, State Street conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions. State Street also took steps to hide the commissions from clients and misrepresented its performance to one of these clients in order to conceal a trading loss.
As part of the deferred prosecution agreement, State Street has agreed to pay the criminal penalty; to offer an identical amount to the SEC to resolve civil charges; to continue to cooperate with the Department of Justice and with foreign authorities in any ongoing investigations and prosecutions relating to the conduct, including of individuals; to enhance its compliance program; and to retain an independent corporate compliance monitor for three years. The Justice Department reached this resolution based on a number of factors including the fact that State Street has already fully repaid the clients who were victims of the scheme, has paid a substantial penalty to the UK Financial Conduct Authority, and has offered to pay a civil penalty to the SEC that is equal to the criminal penalty.
Acting U.S. Attorney Weinreb, Acting AAG Bitkower and SAC Shaw made the announcement today. The United States Attorney’s Office and the Fraud Section received valuable assistance from the SEC and from authorities in the United Kingdom. The case is being prosecuted by Assistant U.S. Attorney Stephen E. Frank, Deputy Chief of Weinreb’s Economic Crimes Unit, and Trial Attorney Aisling O’Shea of the Criminal Division’s Fraud Section.
Springfield Man Sentenced for Distributing Crack Cocaine and MarijuanaRead the Press Release
BOSTON – A Springfield man was sentenced yesterday in U.S. District Court in Springfield for selling crack cocaine and marijuana.
Aaron Smith, 33, was sentenced by U.S. District Court Judge Mark Mastroianni to 37 months in prison and three years of supervised release. In September 2015, Smith pleaded guilty to one count of distributing crack cocaine and two counts of distributing marijuana. The charges relate to Smith’s sale of the drugs to an undercover officer in October 2013.
Smith had been previously convicted of a variety of crimes and was found by Judge Mastroianni to be a “career offender” under the United States Sentencing Guidelines.
Acting United States Attorney William D. Weinreb and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorney Kevin O’Regan, Chief of Weinreb’s Springfield Office, prosecuted the case.
Canton Man Convicted of Conspiracy to Distribute Kilo of HeroinRead the Press Release
BOSTON – After three hours of deliberations, a federal jury convicted a Canton man yesterday of heroin distribution charges.
Obinna Obiora, 38, was convicted following a six-day trial of conspiring with others to distribute heroin in the greater Brockton area. U.S. District Court Judge William G. Young scheduled sentencing for April 28, 2017.
Over the course of three weeks between September and October 2015, Obiora and his brother, Chukwuma Obiora, provided heroin in amounts ranging from 300 to 400 grams, to Marvin Antoine. The last time that Obinna Obiora and his brother supplied heroin to Antoine, Antoine stole the heroin and refused to pay. Obinna Obiora called Antoine repeatedly to collect his drug debt. These calls were intercepted on a federally-authorized wiretap.
Chukwuma Obiora previously pleaded guilty to conspiracy to distribute heroin and is set to be sentenced on March 27, 2017 by Judge Young. Antoine is scheduled to stand trial in spring 2017.
The narcotics charge provides for no greater than life in prison, a minimum of five years and up to a lifetime of supervised release and a fine of $10 million. Obiora also faces deportation to Nigeria upon completion of his sentence. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb and Michael Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement today. The Brockton Police Department, Massachusetts State Police and Barnstable Police Department assisted with the investigation. Assistant U.S. Attorneys Eric Rosen and Leah Foley of Weinreb’s Narcotics and Money are prosecuting the case.
Brookline Man Sentenced to Prison for Million Dollar Insider Trading SchemeRead the Press Release
BOSTON - A Brookline man was sentenced today in U.S. District Court in Boston for tipping off two friends in connection with an insider trading scheme that netted more than $1 million in illegal profits.
Amit Kanodia, 49, of Brookline, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 20 months in prison, two years of supervised release including 100 hours of community service, a fine of $200,000 and forfeiture of $242,500. Kanodia was also ordered to forfeit $242,500, which represented his portion of the illegal trading profits. In October 2016, Kanodia was convicted by a federal jury, following a six-day trial, of one count of conspiracy and 10 counts of securities fraud.
The spring of 2013, Kanodia tipped off his two friends, Iftikar Ahmed and Steven Watson, about the contemplated acquisition of Cooper Tire & Rubber Company (“Cooper Tire”) by India-based Apollo Tyres (“Apollo”). Kanodia learned about the possible acquisition from his wife who was General Counsel for Apollo at the time. the months leading up to the public announcement of the acquisition, both Ahmed and Watson purchased shares and options in Cooper Tire, which trades on the New York Stock Exchange. On the day of the announcement, Cooper Tire’s share price increased 41%, and Ahmed and Watson began selling their interests in the company for a combined profit of more than $1 million. connection with their agreement, both Ahmed and Watson paid Kanodia a portion of their illegal profits.
In November 2016, Watson was sentenced to two years of probation and ordered to pay a fine of $25,000. He was also ordered to forfeit the almost $170,000 in illegal trading profits that he made on the scheme. Ahmed is a fugitive.
Acting U.S. Attorney William D. Weinreb and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The U.S. Attorney’s Office received valuable assistance from the Securities & Exchange Commission. Assistant U.S. Attorneys Sarah E. Walters and Brian Perez-Daple, of Weinreb’s Economic Crimes Unit prosecuted the case.
McKesson Agrees to Pay Record $150 Million Settlement for Failure to Report Suspicious Orders of Pharmaceutical DrugsRead the Press Release
BOSTON – McKesson Corporation, one of the nation’s largest distributors of pharmaceutical drugs to pharmacies and other health care providers, agreed to pay a record $150 million civil penalty for alleged violations of the Controlled Substances Act (CSA). The government alleges that, from 2009 forward, McKesson failed to maintain effective controls to prevent diversion of controlled substances, including opioids such as oxycodone, and that McKesson failed to fulfill its legal obligation to report suspicious orders of controlled substances to the Drug Enforcement Administration (DEA).
“The government has launched a multi-pronged attack on the opioid epidemic that is affecting people across the country, including in Massachusetts,” said Acting U.S. Attorney William D. Weinreb. “This settlement penalizes McKesson, which distributes millions of opioid pills every year, for lax oversight and imposes tough compliance measures to ensure that opioids are dispensed only for legitimate medical purposes.”
“The DEA is committed to ensuring that all registrants are in compliance with the required regulations, which are enforceable through the Controlled Substances Act (CSA),” said Special Agent in Charge Michael J. Ferguson. “In response to the ongoing opioid epidemic in Massachusetts and throughout this Nation, DEA’s obligation is to improve public safety and health. Today’s settlement demonstrates DEA’s pledge to work with our law enforcement and regulatory partners to ensure these rules and regulations are followed.”
In 2008, McKesson agreed to a $13.25 million civil penalty and administrative agreement for similar violations. In this case, the government alleged again that McKesson failed to design and implement an effective system to detect and report suspicious orders from independent and small chain pharmacy customers – i.e., orders that were unusual in their frequency, size, or other patterns. The government’s investigation developed evidence that, even after designing a compliance program after the 2008 settlement, McKesson did not fully implement or adhere to its own program. At its distribution center in Methuen, Mass., for example, McKesson processed thousands of oxycodone and hydrocodone orders that were more than 10 times the average size of a pharmacy order from May 2008 through April 2013, but McKesson never reported to the DEA that any of these orders was suspicious.
In addition to the $150 million fine, the nationwide settlement requires McKesson to suspend sales of controlled substances at certain distribution centers and imposes new and enhanced compliance obligations on McKesson’s distribution system. Among other things, McKesson has agreed to specific, rigorous staffing and organizational improvements; periodic auditing; and stipulated financial penalties for failing to adhere to the compliance terms. Critically, the settlement will require McKesson to engage an independent monitor to assess compliance – the first independent monitor of its kind in a CSA civil penalty settlement. Also, as part of the acceptance of responsibility provisions of the settlement, McKesson acknowledged that, at various times, it did not identify or report to the DEA orders placed by certain pharmacies that McKesson should have detected as suspicious.
In addition to the District of Massachusetts, the following U.S. Attorney’s Offices participated in the case: Central District of California, Eastern District of California, District of Colorado, Middle District of Florida, Eastern District of Kentucky, Northern District of Illinois, Eastern District of Michigan, District of Nebraska, District of New Jersey, Northern District of West Virginia and Western District of Wisconsin. This matter was investigated by the following DEA Field Divisions: Boston, Chicago, Denver, Detroit, Miami, Newark, San Francisco, and St. Louis Field Division and the Washington District Office.
U.S. Attorneys’ Offices for the District of Colorado and the Northern District of West Virginia, along with DEA Office of Chief Counsel and Diversion Control Division, led the civil settlement negotiations. In Massachusetts, this matter was handled by Assistant U.S. Attorney Gregg Shapiro.
Medstar Ambulance to Pay $12.7 Million to Resolve False Claims Act Allegations Involving Medically Unnecessary Transport Services and Inflated Claims to MedicareRead the Press Release
Medstar Ambulance Inc., including four subsidiary companies and its two owners, Nicholas and Gregory Melehov, have agreed to pay $12.7 million to resolve allegations that the Massachusetts-based ambulance company knowingly submitted false claims to Medicare, the Department of Justice announced today.
“We expect those who participate in the Medicare program to provide services, including ambulance services, based on the medical needs of patients rather than their desire to maximize profits,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice is committed to ensuring that those who abuse the Medicare program will be held accountable for their actions.”
The settlement resolves allegations that from Jan. 1, 2011, through Oct. 31, 2014, Medstar submitted false claims to Medicare for ambulance transport services. Specifically, the United States alleged that Medstar routinely billed for services that did not qualify for reimbursement because the transports were not medically reasonable and necessary, billed for higher levels of services than were required by patients’ conditions, and billed for higher levels of services than were actually provided.
“Our office is committed to finding and eradicating Medicare fraud wherever it occurs,” said U.S. Attorney Carmen Ortiz for the District of Massachusetts. “While we recognize that Medicare does and should pay for medically necessary ambulance services, it is our job to ensure that ambulance providers do not take advantage of the system or the patients. This settlement is part of the office’s ongoing effort to eradicate health care fraud, and return money to the taxpayers.”
As part of the settlement today, Medstar has agreed to a corporate integrity agreement with the U.S. Department of Health and Human Services (HHS).
“Ambulance service companies should be focused on the needs of the patients,” said HHS Office of Inspector General Special Agent in Charge Phillip Coyne. “Billing Medicare for ambulance rides that were unnecessary or at a higher rate than could be medically justified is unacceptable. Together with our law enforcement partners, we will seek out and stop this fraudulent behavior.”
The allegations were filed in a lawsuit by Dale Meehan, a former employee in Medstar’s billing office, under the whistleblower provisions of the False Claims Act. Those provisions allow private individuals to sue on behalf of the United States and to share in the proceeds of any settlement or judgment. Meehan will receive approximately $3.5 million.
This settlement is the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of Massachusetts, the FBI, and HHS, Office of Audit Services and Office of Inspector General.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $31.4 billion through False Claims Act cases, with nearly $19.6 billion of that amount recovered in cases involving fraud against federal health care programs.” Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
The case is captioned United States ex rel. Meehan v. Medstar Ambulance. Inc., et al., No. 13-CV-12495-IT (D. Mass). The claims settled by this agreement are allegations only; there has been no determination of liability.
Family-Owned Ambulance Company to Pay $12.7 Million to Resolve False Claims AllegationsRead the Press Release
BOSTON – The U.S. Attorney’s Office announced that Medstar Ambulance, Inc., four of its subsidiaries, and its two owners, Nicholas and Gregory Melehov, have agreed to pay $12.7 million to resolve allegations concerning inflated Medicare claims for ambulance transports.
“Our office is committed to finding and eradicating Medicare fraud wherever it occurs,” said United States Attorney Carmen Ortiz. “While we recognize that Medicare does and should pay for medically necessary ambulance services, it is our job to ensure that ambulance providers do not take advantage of the system or the patients. This settlement is part of the office’s ongoing effort to stamp out health care fraud and return money to taxpayers.”
“We expect those who participate in the Medicare program to provide services, including ambulance services, based on the medical needs of patients rather than their desire to maximize profits,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice is committed to ensuring that those who abuse the Medicare program will be held accountable for their actions.”
“Improperly billing the government for services affects every American taxpayer,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The settlement with MedStar Ambulance, Inc. is a result of the FBI’s continued effort to combat inappropriate and questionable billing practices in the area of ambulance transport fraud.”
“Ambulance service companies should be focused on the needs of the patients,” said Department of Health and Human Services, Office of Inspector General Special Agent in Charge Phillip Coyne. “Billing Medicare for ambulance rides that were unnecessary or at a higher rate than could be medically justified is unacceptable. Together with our law enforcement partners we will seek out and stop this fraudulent behavior.”
The agreement resolves allegations that Medstar wrongfully billed Medicare for ambulance services that were not medically necessary or for higher levels of ambulance services than were required or provided. Medstar and its subsidiaries – Medstar EMS, Inc., MetroWest Emergency Medical Services, Inc., Fitchburg Emergency Medical and Pioneer Valley EMS, Inc. – provide ambulance services to municipalities, hospitals and skilled nursing facilities in central and western Massachusetts. The allegations came to the government’s attention when Dale Meehan, a former employee in Medstar’s billing office, filed a complaint in federal court [captioned below] alleging wrongful billing by Medstar. The government contends that after Medstar took its ambulance billing services in house around 2011, it engaged in a pattern and practice of submitting false claims to Medicare for ambulance transport services in which (1) the services did not qualify for reimbursement because the transports were not medically reasonable and necessary, and (2) Medstar billed for higher levels of ambulance transport services than were required by patients’ conditions or billed for higher levels of ambulance transport services than were actually provided.
Once Medstar became aware of the investigation in late 2014, it quickly endeavored to put in place meaningful change, including revamping its ambulance billing software and training its billing employees. Medstar has worked cooperatively with the government throughout its investigation, and has taken swift action to address past misconduct. In addition, Medstar has agreed to a corporate integrity agreement with the U.S. Department of Health and Human Services.
U.S. Attorney Ortiz; Principal Deputy AAG Mizer; FBI SAC Shaw; and HHS SAC Coyne, made the announcement. The case was handled by Assistant U.S. Attorneys Jessica Driscoll and Lisa Asiaf-Schlatz of Ortiz’s Office, and Trial Attorney Kelley Hauser of the Department of Justice’s Civil Division.
HHS Hotline: The government encourages anyone with information about the practices described above, or similar practices involving ambulance billing, to contact the Department of Health and Human Services Office of Inspector General Hotline via telephone, 1-800-HHS-TIPS (1-800-447-8477), or in writing via https://forms.oig.hhs.gov/hotlineoperations/.
United States ex rel. Meehan v. Medstar Ambulance. Inc., et al., No. 13-CV-12495-IT (D. Mass).
Worcester Nurse Pleads Guilty to Drug TamperingRead the Press Release
BOSTON – A Worcester nurse pleaded guilty yesterday in connection with stealing painkillers from the nursing home where she worked and attempting to conceal her crime by replacing the medication with saline.
Lea Roberge, 32, pleaded guilty to two counts of tampering with a consumer product, specifically the Schedule II controlled substance morphine, which is used for pain relief. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for April 5, 2017.
On two separate occasions in March 2015, while working as a registered nurse at Holy Trinity Eastern Orthodox Nursing and Rehabilitation Center, Roberge tampered with morphine sulfate contained in emergency narcotic kits. The kits are available for use at the nursing home in case of an emergency when there is not enough time to obtain medication from the pharmacy. Roberge, who had access to these emergency narcotic kits, used a syringe to extract morphine from six vials and one bottle. In an attempt to avoid detection, she replaced the extracted medication with saline, thereby decreasing the potency of the drug.
The charging statute provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Jeffrey Ebersole, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, New York Field Office; and Commissioner Monica Bharel, MD, MPH, of the Massachusetts Department of Public Health, made the announcement today. Assistant U.S. Attorney Michelle Lauren Dineen Jerrett of Ortiz’s Worcester Branch Office is prosecuting the case.
Latin King Gang Leader Sentenced for Illegal Gun Possession and Drug TraffickingRead the Press Release
BOSTON – A member of the Latin Kings man was sentenced yesterday in U.S. District Court in Boston for drug and gun possession.
Luis Lopez, 31, of New Bedford, was sentenced by U.S. District Court Judge Rickard G. Stearns to 15 years in prison and three years of supervised release. In October 2016, Lopez pleaded guilty to one count of being a felon in possession of a firearm and one count of possession with intent to distribute heroin.
The police sought and received a search warrant for Lopez’s residence in New Bedford, where approximately $2,000, cell phones, a digital scale, packaging materials, heroin and a Glock 9mm handgun with 16 rounds of ammunition were recovered.
Lopez has previously been convicted of drug dealing and committing violent crimes. Lopez is also an alleged Latin King gang leader, which, among other things, is evidenced by tattoos that adorn his face, including a Latin Kings crown and “shoot to kill.”
United States Attorney Carmen M. Ortiz; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco and Firearms, & Explosives, Boston Field Division; New Bedford Police Chief Joseph B. Cordeiro; and Bristol County District Attorney Thomas Quinn, made the announcement. Assistant U.S. Attorney Glenn A. MacKinlay of Ortiz’s Organized Crime and Gang Unit prosecuted the case.
Boston Man Pleads Guilty to Multiple Bank RobberiesRead the Press Release
BOSTON – A Boston man pleaded guilty today in U.S. District Court in Boston to multiple bank robberies throughout the Boston area.
Jeremy D. Woodley, 38, pleaded guilty to three counts of bank robbery. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for April 5, 2017.
On May 5, 2016, an individual later identified as Woodley, entered a branch of the Santander Bank in Boston, handed the teller a demand note indicating a robbery and that he was armed. The teller gave Woodley $599, and he fled the bank. A similar robbery occurred on May 17, 2016, at a different Santander Bank branch, and again on May 21, 2016, at a branch of Commerce Bank in Boston. The perpetrator stole $927 and $1,995, respectively.
Following the May 21st robbery, witnesses observed Woodley exit the bank and enter the rear passenger door of an awaiting motor vehicle. Law enforcement officers observed the vehicle and, after a brief chase, arrested Woodley. At the time of his arrest, Woodley was in possession of the cash stolen from Commerce Bank.
The charging statue provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of up to $250,000 on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing guidelines and other statutory factors
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation; and Boston Police Commissioner William Evans, made the announcement today. Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit is prosecuting the case.
Jury Sentences Gary Lee Sampson to Death for MurderRead the Press Release
BOSTON –A federal jury in Boston sentenced Gary Lee Sampson, 57, to death in connection with a murdering spree in July 2001.
In September 2003, Sampson pleaded guilty to killing Philip McCloskey and Jonathan Rizzo, and in December 2003, he was sentenced to death by a federal jury. In 2004, Sampson also pleaded guilty to state murder charges in New Hampshire for the murder of Robert Whitney. In 2011, a federal judge in Massachusetts overturned Sampson’s death sentence, leading to a retrial of the sentencing phase. By law, U.S. District Court Judge Leo T. Sorokin must impose the jury’s sentence of death.
In 2001, Sampson returned to Massachusetts from North Carolina, where he had committed several bank robberies. In July 2001, Sampson met McCloskey, a 69-year-old retiree, in Weymouth, Mass. Sampson persuaded McCloskey to drive him to a nearby town, where Sampson tied McCloskey up and stabbed him several times, killing him. Sampson then hitchhiked to Plymouth, Mass., where he was picked up by 19-year-old Jonathan Rizzo. Sampson forced Rizzo to drive to a remote area and then led him into the woods, tied him to a tree and repeatedly stabbed and killed him. Sampson then drove Rizzo’s car to New Hampshire and broke into a lake house, where the caretaker, Whitney, a 58-year-old retiree from New Hampshire, arrived and found Sampson inside. Sampson tied Whitney to a chair, strangling him to death. Sampson then fled to Vermont where he was eventually apprehended by authorities.
United States Attorney Carmen M. Ortiz; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorneys Zachary R. Hafer and Dustin Chao are prosecuting the case with assistance of Michael Warbel of the Justice Department’s Capital Case Section.
Connecticut Financial Advisor Agrees to Plead Guilty to Obstructing SEC InvestigationRead the Press Release
BOSTON – A Connecticut financial advisor has agreed to plead guilty in connection with obstructing a Securities and Exchange Commission (SEC) investigation by attempting to conceal secret and improper referral payments he had made to a lawyer in order to secure the business of a wealthy client.
“Today’s charge underscores our determination to investigate and prosecute those who impede SEC examinations and enforcement,” said United States Attorney Carmen M. Ortiz. “The SEC depends on the provision of accurate, truthful information from the people and entities it regulates. When those people choose to mislead the SEC, my office will act to ensure that the truth comes forth.”
“The charges announced today by the United States Attorney’s Office reflect the Office of Inspector General’s commitment to investigate individuals who obstruct SEC enforcement activities,” said SEC Inspector General Carl Hoecker.
John William Rafal, 66, the former president of a financial services company in Connecticut, was charged today with obstructing the SEC’s investigation. U.S. District Court Judge Nathaniel M. Gorton scheduled a plea hearing for Jan. 20, 2017.
It is alleged that in 2011, Rafal struck a deal with an attorney in which Rafal’s company would pay the attorney a $50,000 referral fee in return for referring a wealthy client to the company. Rafal knew that this payment violated federal and state regulations. Rafal’s company discovered the payments, stopped them, and directed Rafal to have the attorney return the fees that had already been paid. Unbeknownst to the company, however, Rafal secretly wrote checks to the attorney out of private checking accounts, paying him the referral fee after all.
In May 2015, Rafal testified about the referral agreement as part of a formal SEC examination. In his testimony, Rafal repeatedly described the referral matter as “cured,” “reverse[d],” “undo[ne],” or “fix[ed]” in an effort to prevent the SEC from learning about his secret payments to the attorney. In his testimony, Rafal never mentioned the checks he had written to the attorney out of his personal accounts.
The charging statute provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine to $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. If the plea agreement is accepted by the Court, Rafal will be sentenced to four months of home confinement and four months of probation, and will pay a fine of $4,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Rafal has also entered into a separate agreement with the SEC which, among other sanctions and penalties, will bar him for life from working in the securities industry. As part of the agreement, Rafal will also pay over $500,000 to the SEC in disgorgement and penalties.
United States Attorney Ortiz and SEC Inspector General Hoecker made the announcement today. Inspector General Hoecker expressed his appreciation to the dedicated prosecutors and IG staff who worked collaboratively on this investigation. The case is being prosecuted by Assistant U.S. Attorney Brian Pérez-Daple of Ortiz’s Economic Crimes Unit.
Maine Man Sentenced for Failing to Register as a Sex OffenderRead the Press Release
BOSTON – A Westbrook, Maine, man was sentenced yesterday in U.S. District Court in Springfield for failing to register as a sex offender.
Phillip Jordan, 51, was sentenced by U.S. District Court Judge Mark G. Mastroianni to 25 months in prison and five years of supervised release. In October 2016, Jordan pleaded guilty to one count of failure to register as a sex offender.
Jordan was convicted in 1984 of rape with a knife, gross sexual misconduct, and kidnapping in York County Superior Court in Maine. He was sentenced to 17 years in prison and required to register as a sex offender for the rest of his life. In August 2015, Jordan traveled from Maine to Springfield, Mass., and remained in the Springfield area until October 2015. Jordan failed to register as a sex offender in Massachusetts despite knowing his obligation to do so.
United States Attorney Carmen M. Ortiz and John Gibbons, U.S. Marshal for the District of Massachusetts made the announcement. Assistant U.S. Attorneys Alex J. Grant and Katharine A. Wagner of Ortiz’s Springfield Branch Office prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Greenfield Man Agrees to Plead Guilty to Child Pornography ChargesRead the Press Release
BOSTON – Derek Lecompte, 26, agreed to plead guilty yesterday in U.S. District Court in Springfield to three counts of sexual exploitation of a child. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for March 30, 2017.
Lecompte admitted that he befriended a 10-year-old boy, took sexually explicit pictures of him, and posted the pictures on the internet.
The charging statute provides a mandatory minimum sentence of 15 years and no greater than 30 years in prison, five years of supervised release, a fine of $250,000. If the Court accepts the plea agreement, Lecompte will be sentenced to 15 years in prison, and 10 years of supervised release. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Northwestern District Attorney David Sullivan; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Greenfield Police Chief Robert H. Haigh Jr., made the announcement today. Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Branch Office 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 better 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/.
Lynn Tax Preparer Sentenced for Tax and Identity FraudRead the Press Release
BOSTON – A Lynn tax preparer was sentenced today in U.S. District Court in Boston in connection with a scheme to file fraudulent tax returns and pocket the excess refunds she fabricated.
Claudia Carredano, 46, was sentenced by U.S. District Court Judge George A. O’Toole, Jr. to 30 months in prison, three years of supervised release and ordered to pay restitution of $320,760 and forfeiture. In March 2016, she pleaded guilty to one count of wire fraud and one count of identity theft.
Carredano co-owned Maya Multi Services, a tax return preparation business operating on the North Shore. From 2008 to 2011, Carredano devised and executed a scheme to defraud the Internal Revenue Service by filing false tax returns on behalf of her clients. To do this, Carredano filed dozens of false tax returns for her clients that included fraudulent dependents—real people who were not the dependents of her clients—intended to increase the tax refund amount, generally without her clients’ knowledge. Carredano then directed the inflated portion of the refunds to be deposited into her bank account. In order to conceal the scheme, Carredano gave her clients versions of their tax returns that did not reflect the fraudulent dependents and sought smaller refunds than the returns she actually filed with the IRS.
United States Attorney Carmen M. Ortiz and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was investigated with the cooperation of the Massachusetts Department of Revenue. Assistant U.S. Attorney Brian A. Pérez-Daple of Ortiz’s Economic Crimes Unit prosecuted the case.
Four Individuals Charged with Importing Steroids from China and Selling them over the InternetRead the Press Release
BOSTON – Four individuals in three states were arrested yesterday in connection with a nation-wide internet steroid distribution business in which raw steroids imported from China were processed and prepared in Florida, and then ordered over the Internet by, and mailed to, customers across the nation. In a series of arrests and searches conducted early yesterday morning, more than 600,000 dosage units of raw steroids, a tableting machine, steroid packaging and shipping materials, approximately $20,000 in cash and several computers were seized. Pursuant to a federal seizure warrant, agents also seized the website ustraininggear.com.
The following defendants were arrested and charged in a criminal complaint in Massachusetts:
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Mark Lopilato, 53, of Sanger, Texas, was charged with distribution of steroids, a Schedule III controlled substance; conspiracy to distribute steroids, a Schedule III controlled substance; importation of a controlled substance; use of a communications facility in the commission of a narcotics offense; and dispensing a controlled substance by means of the internet;
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Rhonda Fulton, 50, of Palm Bay, Fla., was charged with distribution of steroids, a Schedule III controlled substance; conspiracy to distribute steroids, a schedule III controlled substance; use of a communications facility in the commission of a narcotics offense; and dispensing a controlled substance by means of the internet;
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Michael Fulton, 45, of 1208 Palm Bay, Fla., was charged with conspiracy to distribute steroids, a Schedule III controlled substance; importation of a controlled substance; and use of a communications facility in the commission of a narcotics offense;
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Michael Lopilato, 59, of Salem, N.H., was charged with conspiracy to distribute steroids, a Schedule III controlled substance; use of a communications facility in the commission of a narcotics offense; and dispensing a controlled substance by means of the internet.
According to the complaint, from January 2016 to September 2016, an undercover agent purchased steroids over the internet from the website ustraininggear.com, a website that advertises and sells numerous types of steroids. The website provided instructions on how to place orders and pay for steroids, and further provided an email address operated by Mark Lopilato to place orders.
According to court documents, customers ordered steroids from Mark Lopilato who forwarded the orders by email to Rhonda Fulton and Michael Fulton in Florida. Michael Fulton processed and prepared raw steroids according to the customers’ orders, and Rhonda Fulton packaged and mailed them. Mark Lopilato and the Fultons allegedly ordered the raw steroids from China over the internet, then paid for and received the raw steroids by mail. Mark Lopilato paid Rhonda and Michael Fulton for the preparation, packaging and mailing of the steroids to customers, and also paid Michael Lopilato, his brother, to maintain and operate the website.
The charges of conspiracy to distribute steroids, distribution of steroids, importation of a controlled substance, and dispensing controlled substances by means of the internet each provides for a sentence of no more than 10 years in prison, a lifetime of supervised release and a fine of $500,000. The charge of use of a communications facility in commission of a narcotics offense provides for a sentence of no greater than four years in prison, one year of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. Assistant U.S. Attorney Christopher F. Bator of Ortiz’s Narcotics and Money Laundering Unit is prosecuting the case.
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Agents Seize Approximately $20 Million and Arrest Brazilian National in Scheme to Launder TelexFree FundsRead the Press Release
BOSTON –Approximately $20 million in cash hidden inside a box spring in a Westborough, Mass. apartment, was seized late yesterday, and a Brazilian man was arrested in connection with conspiring to launder proceeds of the massive TelexFree pyramid scheme.
Cleber Rene Rizerio Rocha, 28, was charged in a criminal complaint with one count of conspiring to commit money laundering. Rocha was detained following an appearance today before U.S. District Court Magistrate Judge Judith G. Dein.
According to the complaint, in April 2014, federal agents searched the headquarters of TelexFree, Inc., in Marlborough, Mass. Later that day, Carlos Wanzeler, one of the founders of the company, allegedly fled to Brazil, his native country, where he has remained. Wanzeler and TelexFree co-founder James Merrill were indicted in July 2014 on charges that they operated TelexFree as a massive pyramid scheme. Merrill pleaded guilty to those charges in October 2016 and is awaiting sentencing.
The complaint alleges that an intermediary working on Wanzeler’s behalf contacted an associate for help transferring millions of dollars of TelexFree money – still hidden in the greater Boston area – from the United States to Brazil. The associate, who subsequently became a cooperating witness for the government, allegedly arranged with Wanzeler’s nephew in Brazil to launder the cash through Hong Kong, convert it to Brazilian reals, and transfer it to Brazilian accounts.
According to court documents, Rocha, acting as a courier for Wanzeler’s nephew, flew from Brazil to JFK Airport in New York City a few days ago. Yesterday, Rocha met the cooperating witness at a restaurant in Hudson, Mass., and allegedly gave him $2.2 million in a suitcase. After the meeting, agents followed Rocha to an apartment complex in Westborough, Mass., and later arrested him. That night, federal agents searched an apartment at the Westborough complex and seized a massive stockpile of cash hidden in a box spring. The cash appears to total approximately $20 million.
The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistant U.S. Attorneys Andrew E. Lelling and Neil J. Gallagher, Jr., of Ortiz’s Economic Crimes Unit are prosecuting the case.
The details in the complaint are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
U.S. Postal Service Worker Pleads Guilty to Importing a Controlled SubstanceRead the Press Release
BOSTON – An employee of the United States Postal Service (USPS) pleaded guilty today in U.S. District Court in Boston in connection with purchasing and importing anabolic steroids.
John A. Psehoyas, 54, pleaded guilty to one count of importation of a controlled substance. According to the terms of the plea agreement, Psehoyas has agreed to resign from the USPS. U.S. District Court Senior Judge Douglas P. Woodlock scheduled sentencing for April 6, 2017.
Psehoyas was a customer service supervisor at the Lynnfield, Mass. Post Office. From August 2014 to March 2016, Psehoyas purchased anabolic steroids, a controlled substance, from online sources. He had the parcels containing steroids shipped to him from China, Poland, Turkey and Romania. The parcels were addressed to multiple addresses to avoid suspicion, but Psehoyas tracked the parcels using a USPS tracking system.
The charging statute provides for a sentence of no greater than 15 years in prison, three years of supervised release and a fine of $500,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Eileen Neff, Special Agent in Charge of the Office of Inspector General for the U.S. Postal Service, made the announcement today. Assistant U.S. Attorney Eugenia M. Carris of Ortiz’s Public Corruption Unit is prosecuting the case.
Providence Nurse Charged in Connection with Tampering with OxycodoneRead the Press Release
BOSTON – A licensed nurse was charged today in U.S. District Court in Boston in connection with stealing oxycodone pills from a nursing home where she worked, and then attempting to conceal the theft by replacing the medication with another medication.
Charlotte Demers, 35, of Providence, R.I., was charged with tampering with a consumer product, specifically the Schedule II controlled substance oxycodone which is used for pain relief. Demers was released on conditions following an appearance before U.S. District Court Magistrate Judge Marianne B. Bowler.
The complaint alleges that between Sept. 12, 2016 and Oct. 8, 2016, while working as a Licensed Practical Nurse at Countryside Health Care in Milford, Mass., Demers tampered with blisterpacks of oxycodone that had been prescribed for residents of the nursing facility, by removing the oxycodone pills from the blisterpacks, replacing them with another medication, and then re-sealing the package.
The charging statute provides for a sentenced of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Jeffrey Ebersole, Special Agent in Charge of the U.S. Food and Drug Administration, Office of Criminal Investigations, New York Field Office; and Commissioner Monica Bharel, MD, MPH, of the Massachusetts Department of Public Health, Division of Food and Drugs, Drug Control Program, made the announcement today. Assistant U.S. Attorney Michelle L. Dineen Jerrett of Ortiz’s Worcester Branch Office 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.
Springfield Man Pleads Guilty to Firearm ChargeRead the Press Release
BOSTON – A Springfield man pleaded guilty yesterday in U.S. District Court in Springfield to unlawfully possessing a firearm.
Mark Alexander, 26, pleaded guilty to one count of possession of a firearm and ammunition by a felon. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for March 16, 2017.
On Sept.2, 2015, Alexander possessed a .22 caliber pistol. As a result of a prior felony offense, Alexander was prohibited from possessing a firearm and ammunition. Alexander and his co-defendant, Hector Nieves, worked together to sell the pistol and ammunition to a cooperating witness.
In July 2016, Nieves was sentenced to five years in prison for the same charge.
The charging statute provides for a sentence of no greater than 10 years in prison, three years of supervised release, a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division, made the announcement today. The case was investigated by the Federal Bureau of Investigation’s Western Massachusetts Gang Task Force and the ATF. Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Branch Office is prosecuting the case.
Worcester Woman Sentenced for Stealing IdentitiesRead the Press Release
BOSTON – A Worcester woman was sentenced yesterday in U.S. District Court in Worcester in connection with filing false tax returns.
Lydia Torres, 45, was sentenced by U.S. District Court Judge Timothy S. Hillman to one year and one day in prison, one year of supervised release and ordered to pay restitution of $393,093 to the Internal Revenue Service. In August 2016, Torres pleaded guilty to conspiracy to file false claims and identity theft
Beginning around 2010 and 2011, Torres received lists of personal identifying information including, among other things, the names and social security numbers of real people, many of whom resided in Puerto Rico. In addition, she received copies of Puerto Rican tax withholding statements, Social Security cards and Puerto Rican identification cards. Torres used this information to prepare false tax returns in the names of these individuals – making it appear as though the individuals resided and worked in one of the fifty states. In some cases, Torres inserted false dependents on the tax returns to increase the amount of the fraudulent tax refund. She also used this personal identifying information to prepare and file false and fraudulent tax returns that included false Schedule C businesses. Torres submitted these false tax returns to the Internal Revenue Service in order to obtain false tax refund checks. In total, Torres submitted false returns seeking refunds in the amount of approximately $764,000, and the IRS paid out $393,093. Torres received a portion of those funds for her part in the fraud. At least 130 victims had their identities stolen in connection with this scheme.
United States Attorney Carmen M. Ortiz and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorney Karin M. Bell, Chief of Ortiz’s Worcester Branch Office, prosecuted the case.
U.S. Attorney Carmen M. Ortiz Announces DepartureRead the Press Release
BOSTON – United States Attorney Carmen Milagros Ortiz announced today that she will be stepping down from her post as United States Attorney for the District of Massachusetts.
Ms. Ortiz tendered her resignation to the President and Department of Justice last week, and spoke with Attorney General Loretta Lynch yesterday to confirm her departure. Ms. Ortiz will step down on Friday, January 13, 2017.
Today’s announcement marks the end of Ms. Ortiz’s 19-year career as a federal prosecutor in the U.S. Attorney’s Office. She prosecuted white-collar crime in the Office’s Economic Crimes Unit for 12 years before the late Senator Edward Kennedy and Senator John Kerry recommended her to President Barack Obama for the position of U.S. Attorney. President Obama nominated her in September 2009 and the United States Senate voted unanimously to confirm her in November 2009. She is the first woman and the first Hispanic to serve as U.S. Attorney in the District of Massachusetts.
“I have been honored to serve the people of Massachusetts as U.S. Attorney and to have been part of this Administration,” said Ortiz. “It has been a privilege to work alongside some of the most talented professionals in the Department of Justice. Together we prosecuted many significant cases that have resonated around the nation. While I am excited about the future and look forward to embracing new challenges, I will miss participating in the important work this office is involved with on a daily basis. Some of the accomplishments of which I am the proudest have been in the areas of counterterrorism, white collar prosecutions, civil rights enforcement, combatting human trafficking and child exploitation, and community outreach. We have brought countless criminals to justice, sought recourse for many victims and survivors of crime, and worked tirelessly to make our communities safe and healthy places to live and work.”
Under Ms. Ortiz’s leadership, prosecutors in the U.S. Attorney’s Office convicted former Massachusetts Speaker of the House Sal DiMasi, infamous gangster James “Whitey” Bulger, and Boston Marathon bomber Dzhokhar Tsarnaev. Prosecutors also investigated and charged more than sixty alleged MS-13 gang members, crippling the gang’s East Coast leadership; charged fourteen former owners and employees of the New England Compounding Center in connection with a deadly nationwide fungal meningitis outbreak; charged six former employees of Insys Therapeutics, Inc., of running a nationwide racketeering scheme to bribe medical practitioners to unnecessarily prescribe a fentanyl-based pain medication and defraud healthcare insurers; and negotiated a $3 billion settlement with global healthcare giant GlaxoSmithKline LLC to resolve fraud allegations and failure to report safety data -- one of the largest health care fraud settlements in U.S. history.
Ms. Ortiz implemented the Office’s first civil rights initiative in 2010, which paved the way for the creation of a Civil Rights Unit in 2016. The unit enforces federal civil rights laws that protect the rights of the most vulnerable and underserved members of the community. Through the work of the Civil Rights Unit, Ms. Ortiz has worked tirelessly to protect the rights of our nation’s service members, enforce the Americans with Disabilities Act, and combat employment and housing discrimination, hate crimes and human trafficking. Ms. Ortiz also oversaw an independent investigation into allegations of civil rights violations at Boston Latin School that resulted in a resolution with the Boston Public Schools.
While in office, Ms. Ortiz met head-on one of the District’s toughest challenges -- the statewide opioid epidemic through tough enforcement and awareness campaigns. She also created robust re-entry initiatives across the Commonwealth, routinely met with young people to discuss making the right decisions in life, and worked with state and local partners to address the needs of our local communities to fight crime. Ms. Ortiz met regularly with many community groups, including BRIDGES (Building Respect in Diverse Groups Enhances Sensitivity), a group comprised of government representatives and leaders of the Massachusetts Muslim, Arab and Sikh communities to discuss issues of concern. She also convened a number of town halls across the state and met frequently with local community leaders to discuss issues of public safety, community policing and civil rights.
Ortiz said, “As I look ahead, I hope that my time in this office will reflect the many challenges and the vast and diverse caseload that I have overseen during the past seven years, from prosecuting violent crime and public corruption, to enforcing civil rights, to our broad reach into local faith communities, schools and neighborhoods. I will miss the many individuals and groups I have come to know well but I will especially miss my colleagues, many of whom I call my friends. They are some of the most knowledgeable, passionate and hardest-working prosecutors and justice professionals in the country, and it has been an honor to serve with them. I want to thank our many partners in law enforcement, from local and state police to county sheriffs and, of course, our federal partners, for their unwavering support, dedication and commitment to seeking justice.”
Ms. Ortiz is a graduate of George Washington University Law School (J.D.) and Adelphi University (B.B.A.). For more information on Ms. Ortiz’s background, see: https://www.justice.gov/usao-ma/meet-us-attorney.
Three Men Plead Guilty to Extortion and GamblingRead the Press Release
BOSTON – Three men pleaded guilty yesterday in U.S. District Court in Boston in connection with conducting an illegal gambling business.
Joseph Yerardi, 62, of Newton, Anthony Corso, 51 of Cambridge, and Michael Burke, 45, of Winthrop, pleaded guilty in separate hearings before U.S. District Court Judge Denise J. Casper to conducting an illegal gambling business from March 2015 through April 2016, and conspiring to collect and collecting extensions of credit by extortionate means. Yerardi and Corso also pleaded guilty to conspiring to make and making extortionate extensions of credit.
The defendants were involved in a large bookmaking business that made hundreds of thousands of dollars and used threats or other extortionate means to collect debts. Among other things, a debtor reported that Yerardi threatened to stab the debtor “twenty times” for not paying a gambling debt. Corso threatened another debtor by saying he would “smash your [expletive] head off the car”.
In 2009, Yerardi was convicted of racketeering, conducting an illegal gambling business, money laundering, and collection of credit by extortionate means, and sentenced to 100 months in prison. In 1995, Yerardi was convicted of racketeering, extortionate extensions of credit, collection of credit by extortionate means, money laundering, conducting an illegal gambling business and witness intimidation, and sentenced to 135 months in prison.
Judge Casper deferred accepting the defendants’ plea agreements until sentencing. Yerardi is scheduled to be sentenced on March 14, 2017, and Corso and Burke are scheduled to be sentenced on March 21, 2017. If the court accepts the plea agreements, Yerardi will be sentenced to eight years in prison, Corso to five years in prison, and Burke to 12 to 26 months in prison, each to be followed by three years of supervised release. In addition, the defendants agreed to forfeit over $70,000 seized in various searches and from bank accounts and to forfeiture money judgments of $300,00 for Yerardi, $60,000 for Corso and $30,000 for Burke.
The charge of operating an illegal gambling business provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. The extortion charges provide for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalty. Sentences are imposed by a federal district judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Colonel Richard D. McKeon, Jr., Superintendent of the Massachusetts State Police, made the announcement today. Assistance with the investigation was also provided by the Internal Revenue Service’s Criminal Investigation, the Massachusetts Department of Correction, and the Boston, Cambridge, Medford, and Quincy Police Departments. Assistant U.S. Attorney Timothy E. Moran of Ortiz’s Organized Crime and Gang Unit is prosecuting the case.
Fall River Woman Sentenced for Identity Theft and Theft of Social Security BenefitsRead the Press Release
BOSTON – A Jamaican woman living in Fall River was sentenced today in U.S. District Court in Boston in connection with using her sister’s identity to enter the United States and collecting nearly $300,000 in government benefits, while also using five other identities.
Sandra McDonald, 51, was sentenced by U.S. District Court Judge Denise J. Casper to 27 months in prison, three years of supervised release, and restitution in the amount of $297,709 to be divided amongst the Social Security Administration, Massachusetts State Supplemental Program, MassHealth and the Massachusetts Department of Transitional Assistance. In September 2016, McDonald pleaded guilty to passport fraud, theft of public money, and misrepresenting a Social Security number. McDonald has been held in custody since her arrest in May 2016.
In 1990, McDonald, who was born in Jamaica, obtained a U.S. resident alien card under her sister’s name, but with her own photograph and fingerprint on the card. Shortly after entering the United States under her sister’s identity, McDonald obtained a Social Security card, also in her sister’s name. In 1996, McDonald applied for Social Security Supplemental Security Income benefits under her sister’s identity and has received more than $140,000 in benefits illegally. McDonald also used her sister’s identity to illegally receive nearly $30,000 in MassHealth benefits, over $125,000 in other state benefits, open bank accounts and obtain a driver’s license. McDonald also listed her sister’s name as the mother on the birth certificates of four of her own children.
In addition to using her sister’s identity, McDonald used five other identities to obtain state identification cards, driver’s licenses, passports and open bank accounts. McDonald also used other identities—including her sister’s—when she was arrested on several occasions.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations; Suzanne M. Bump, State Auditor of the Commonwealth of Massachusetts; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit is prosecuting the case.
New England Compounding Center’s National Sales Director Pleads GuiltyRead the Press Release
BOSTON – The National Sales Director for New England Compounding Center (NECC), a compounding pharmacy located in Framingham, Mass., pleaded guilty yesterday in U.S. District Court in Boston in connection with conspiring to defraud the Food and Drug Administration (FDA).
Robert A. Ronzio, 42, of North Providence, R.I., pleaded guilty to one count of conspiring to defraud the FDA. U.S. District Court Judge Richard G. Stearns scheduled sentencing for Sept. 27, 2017. Ronzio is cooperating with the government and is expected to testify at the trials of the other NECC defendants.
Ronzio admitted that NECC was a pharmacy dispensing drugs pursuant to physician-created prescriptions when in fact it operated as a manufacturer distributing drugs in bulk. NECC created numerous work-around methods to make it appear to federal and state regulators that NECC was dispensing drugs pursuant to valid patient-specific prescriptions when in fact it was not.
Specifically, Ronzio admitted that NECC sales representatives requested that customers send in a list of patient names with their orders, but informed the customers that NECC would not label the drugs with the names of patients, thereby allowing the customers to use the drugs for any patients. Ronzio further admitted that NECC sales representatives requested customers send patient rosters or appointment schedules with their orders, from which NECC employees created patient-specific prescriptions that could be provided to federal or state regulators. Furthermore, NECC would not request patient names for first orders, and often waived the requirement entirely for certain customers or drug orders. To determine the number of patient names required, NECC owner and head pharmacist Barry J. Cadden is alleged to have created ratios of patient names to the number of drug units sought in an order. Cadden explained to Ronzio, “The MAX total number of units (vials, syringes, etc..) per patient must make sense. I must be able to logically explain to a regulator why we processed x# of units per patient.” Ronzio admitted the reason for these work-around methods was to maintain NECC’s status as a pharmacy and avoid heightened regulatory oversight of the FDA.
The NECC criminal case arose from the nationwide outbreak of fungal meningitis that was traced back to contaminated vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC. The outbreak was the largest public health crisis caused by a pharmaceutical product. The Centers for Disease Control and Prevention reported that 751 patients in 20 states were diagnosed with a fungal infection after receiving injections of NECC’s MPA. Of those 751 patients, the CDC reported that 64 patients in nine states died. The government’s investigation has revealed that those numbers continue to rise.
In December 2014, following a two-year investigation, Ronzio and 13 other owners, employees, and associates of NECC were charged in a 131-count indictment. The indictment did not charge Ronzio with having an active role in the drug manufacturing operations of NECC, but did charge him with conspiring to defraud the FDA.
Cadden and supervisory pharmacist Glenn A. Chin were charged with 25 racketeering acts of second-degree murder in seven states. Eleven other defendants, including six pharmacists, the director of operations, an unlicensed pharmacy technician, and three other owners and executives were charged with additional crimes including racketeering, mail fraud, conspiracy, violations of the Food, Drug and Cosmetic Act, and structuring. Cadden is scheduled to stand trial on Jan. 5, 2017.
United States Attorney Carmen M. Ortiz; Jeffrey Ebersole, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, New York Field Office; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Donna Neves, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; Craig Rupert, Special Agent in Charge of the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. Assistant U.S. Attorneys George P. Varghese and Amanda P.M. Strachan of Ortiz’s Health Care Fraud Unit and John W.M. Claud of the Justice Department’s Consumer Protection Branch 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.