District of Massachusetts

BOSTON – Meisum Bakery, Inc. and its owner, Xi Xian Lei, pleaded guilty today in U.S. District Court in Boston in connection with a $740,000 food stamp fraud scheme that Lei and his employees operated out of a Chinatown bakery.

Both Meisum Bakery, Inc. and Lei pleaded guilty to one count of conspiracy to commit SNAP (Supplemental Nutritional Assistance Program) benefits fraud and two counts of SNAP fraud.  U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for Feb. 22, 2017.

SNAP, formerly known as the Food Stamp Program, administered by the U.S. Department of Agriculture (USDA), provides eligible households with government subsidies for food and allows holders to exchange their SNAP benefits for food at authorized retail food stores.

From about October 2010 through April 2012, Lei and bakery employees purchased SNAP benefits from legitimate SNAP beneficiaries for cash at a discounted value of approximately fifty cents for every SNAP dollar; however, neither Meisum Bakery, Inc. nor Lei was authorized to accept SNAP benefits as payment for goods at the bakery.  Then, bakery employees and Lei redeemed the SNAP benefits by using the beneficiaries’ Electronic Benefit Transfer (EBT) cards to buy goods and earn credit at stores that were authorized to accept SNAP benefits.

During the course of the conspiracy, Meisum Bakery, Inc. and Lei defrauded the USDA of approximately $740,000 in SNAP funds.

The charge of conspiracy provides for a sentence of no greater than five years in prison and three years of supervised release, and for a corporation, no greater than five years of probation and a fine of $500,000.  The charge of SNAP fraud provides for a sentence of no greater than five years in prison and three years of supervised release, and for a corporation, no greater than five years of probation and a fine of $10,000.  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; William G. Squires, Special Agent in Charge of the U.S. Department of Agriculture, Office of Inspector General, Office of Investigations, Northeast Region; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Boston Police Commissioner William Evans, made the announcement today.  Assistant U.S. Attorney Giselle J. Joffre of Ortiz’s Major Crimes Unit is prosecuting the case.

BOSTON – A former vice president of Lenox National Bank was sentenced yesterday in U.S. District Court in Springfield for embezzling more than $150,000 from the bank.    

Joseph E. Leskovitz, 53, of Lenox, Mass., was sentenced by U.S. District Court Judge Mark G. Mastroianni to 22 months in prison, three years of supervised release and ordered to pay $154,783 in restitution.  In July 2016, he pleaded guilty to three counts of embezzlement of bank funds and one count of money laundering. 

Between approximately 2009 and February 2014, Leskovitz was the vice president of Lenox National Bank, which was acquired in 2015 by Adams Community Bank.  Leskovitz stole money from certificates of deposits he was entrusted to manage for family members and clients.  In addition, Leskovitz opened a loan in the name of a family member without the family member’s knowledge and stole the loan proceeds.

United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement.  Assistant U.S. Attorney Karen L. Goodwin of Ortiz’s Springfield Branch Office prosecuted the case.

BOSTON – A Dracut attorney pleaded guilty in U.S. District Court in Boston yesterday to filing false federal tax returns.

John F. Paczkowski, 73, pleaded guilty to two counts of filing false personal tax returns for 2009 and 2010.  U.S. District Judge George A. O’Toole scheduled sentencing for Feb. 16, 2017.

Paczkowski operated a legal office in Dracut as a sole practitioner.  In this capacity, he was required by the Massachusetts Board of Bar Overseers and the Rules of Professional Conduct to hold client funds in a trust separate from his own funds.  However, Paczkowski embezzled and misappropriated funds from the trust account and used clients’ funds for his own uses.  Paczkowski failed to report to the IRS more than $630,000 he took from clients and failed to pay more than $192,000 in federal taxes. 

The charging statute provides for a sentence of no greater than three 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 the federal district judge based on the U.S. Sentencing Guidelines and other sentencing factors.

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.  Assistant U.S. Attorney Victor A. Wild of Ortiz’s Economic Crimes Unit prosecuted the case.

BOSTON – A Palmer man pleaded guilty today in U.S. District Court in Springfield to possessing child pornography.

Charles Benoit, 65, pleaded guilty to one count of conspiring to possess child pornography before U.S. District Court Judge Mark G. Mastroianni who scheduled sentencing for Feb. 14, 2017.

From 2009 to 2010, Benoit used Limewire, an online peer-to-peer file sharing program, to search for and download child pornography.  Benoit used search terms such as “preteen hard core” and “PTHC.”

The charging statute provides a sentence of no greater than five 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 and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today.  The case is being prosecuted by Alex Grant of Ortiz’s Springfield Branch Office.

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/.

BOSTON – A Topsfield man was sentenced in U.S. District Court in Boston late yesterday for filing false tax returns with the Internal Revenue Service (IRS) over the course of four years.

John H. Molloy, Jr., 53, was sentenced by U.S. District Court Judge George A. O’Toole, Jr., to one year of probation and ordered to pay restitution of $332,019 to the IRS, a fine of $5,000, and complete 100 hours of community service.  In August 2016, Molloy pleaded guilty to four counts of filing false tax returns.

Molloy, an attorney, maintains offices in Jamaica Plain and Revere.  A substantial portion of Molloy’s law practice involved representing victims of automobile accidents.  From 2006 to 2009, Molloy deposited settlement checks from automobile insurers into his business accounts, but used these business accounts to pay personal expenses.  All of these funds were income to Molloy and should have been reported to the IRS; however, Molloy actively concealed almost

$1 million of income from the IRS over a four-year period.  When accountants asked Molloy which funds in his business accounts should be reported to the IRS, Molloy told them that substantial chunks of money were not income and did not need to reported—even though he knew this was untrue.  From 2006 to 2009, Molloy failed to report $979,341 of income to the IRS, failing to pay $332,019 in taxes. 

United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Anthony DiPaolo, Chief of Investigations of the Massachusetts Insurance Fraud Bureau, made the announcement.  Assistant U.S. Attorney David S. Schumacher of Ortiz’s Criminal Division prosecuted the case.

BOSTON – Seven members of the U.S. Attorney’s Office received the Attorney General’s David Margolis Award for Exceptional Service – the highest honor in the Department of Justice – during a ceremony today at the Justice Department for their role in investigating and prosecuting Boston Marathon bomber Dzhokhar Tsarnaev.

“As the world watched, this extraordinary team worked countless hours, under tremendous pressure, to ensure the successful prosecution of Dzhokhar Tsarnaev,” said United States Attorney Carmen M. Ortiz.  “Their efforts went well beyond the normal scope of preparing for a trial, combing through warehouses full of evidence, working closely with the families of the deceased and the many severely injured victims, all in the face of intense media scrutiny and security challenges.  I am honored to work alongside these committed public servants whose collective accomplishments, compassion, and dedication are nothing short of remarkable.”

In prepared remarks, Attorney General Loretta E. Lynch said, “We also express our gratitude to the team that successfully investigated and prosecuted the case against the surviving perpetrator of the Boston Marathon terrorist attacks.  You undertook this emotional, complex, and high-stakes case with quiet dedication.  You forged a tightly knit team from a wide array of law enforcement agencies, and together, you built an incredible body of evidence.  When you tried the case in court, you spoke not simply for this department – you spoke for the people of Boston and this great nation who sought justice for this cold-blooded and cowardly attack.”

The following individuals from the United States Attorney’s Office were honored at the 64th Annual Attorney General’s Award for Exceptional Service for their role in the investigation and prosecution of Dzhokhar Tsarnaev:  Assistant U.S. Attorneys William Weinreb, Aloke Chakravarty and James Farmer; Christina DiIorio-Sterling, Chief of Public Affairs; Cara Henderson, Community Outreach Program Manager; and Victim/Witness Specialists Kathleen Griffin and Jessica Pooler.  The trial team also included former AUSA Nadine Pellegrini, who was ineligible for the nomination as she has departed from the USAO.  The USAO and her colleagues would like to acknowledge Ms. Pellegrini’s outstanding contribution to the Tsarnaev case. 

On April 15, 2013, Dzhokhar and Tamerlan Tsarnaev detonated two powerful IEDs near the Boston Marathon finish line, killing two young women and an eight-year-old boy, maiming 17, and injuring hundreds more in the largest mass-casualty terrorist attack on U.S. soil since 9/11.  Following a manhunt during which the brothers killed an MIT police officer, Tamerlan Tsarnaev was killed in a shoot-out with police and Dzhokhar Tsarnaev was arrested.  The worldwide investigation involved more than 6,000 items of physical and digital evidence, over 100,000 photographs and videos, and more than 1,000 witness interviews. 

The high-profile trial commenced less than two years after the bombings.  Over the course of 10 weeks, the prosecution team introduced over 1,000 exhibits and called more than 100 witnesses to the stand, including 14 victims who lost limbs in the bombings, family members of those killed, other survivors and eye witnesses, experts in the areas of fingerprints, DNA, bombs, and ballistics, law enforcement officers and terrorism experts.  The prosecutors also cross-examined nearly 50 defense witnesses.  A jury found Tsarnaev guilty on all 30 counts in the indictment charging terrorism and other violent offenses.  The same jury later sentenced Tsarnaev to death following an approximately three-week sentencing trial.   He was sentenced to death on six counts and consecutive life sentences on seven others, and ordered to pay $101 million in restitution to the victims. 

In addition to the U.S. Attorney’s Office employees, 29 investigators, legal professionals and operational support personnel from the Federal Bureau of Investigation, U.S. Marshals Service and National Security Division, among other agencies, were also being recognized for exceptional service.

BOSTON – The majority owner of New England Compounding Center (NECC) and her husband were sentenced today in U.S. District Court in Boston in connection with illegally withdrawing cash following the 2012 fungal meningitis outbreak.

Carla Conigliaro, 53, of Dedham, Mass., the majority owner of NECC was sentenced by U.S. District Court Judge Richard G. Stearns to one year of probation and ordered to forfeit $4,600 and to pay a fine of $4,500.  Her husband, Douglas Conigliaro, 55, also of Dedham, Mass., was sentenced by Judge Stearns to two years of probation and ordered to forfeit $119,647 and to pay a fine of $55,000.  In July 2016, they each pleaded guilty to withdrawing cash from their bank accounts in a manner intended to defeat financial reporting requirements.

In September 2012, a nationwide outbreak of fungal meningitis was traced back to contaminated vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC, a compounding pharmacy located in Framingham, Mass.  Beginning on Oct. 31, 2012, the day a search warrant was executed at NECC, Carla and Douglas Conigliaro began withdrawing unusual sums of cash from their personal bank accounts.  The cash transactions were structured by the Conigliaros in a manner so as to evade the $10,000 reporting requirement for the filing of a currency transaction report.  The Conigliaros admitted to withdrawing $124,000 in cash in this manner. 

In December 2014, following a two-year investigation, the Conigliaros and 12 other employees and associates of NECC were charged in a federal indictment.  The indictment did not charge the Conigliaros with having an active role in the operations or management of NECC, but did charge them with transferring assets following the fungal meningitis outbreak. 

NECC’s owner and head pharmacist Barry J. Cadden and supervisory pharmacist Glenn A. Chin were charged with 25 racketeering acts of second-degree murder in seven states.  Ten other defendants, including six pharmacists, the director of operations, the national sales director, an unlicensed pharmacy technician, and another owner, were charged with additional crimes including racketeering, mail fraud, conspiracy, and violations of the Food, Drug and Cosmetic Act.  Cadden and Chin are scheduled to stand trial on Jan. 5, 2017. 

United States Attorney Carmen M. Ortiz; Jeffrey J. Ebersole, Special Agent in Charge of the U.S. 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 Nieves, 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.  The case is being prosecuted by 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.

The details contained in the indictment are allegations.  The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.

BOSTON – A former Boston Police Officer was sentenced yesterday in connection with purchasing and using gift cards obtained from the return of stolen merchandise.

Eddie Odney, 38, was sentenced by U.S. District Court Senior Judge Mark L. Wolf to 36 months of probation, a fine of $10,000 and forfeiture of $1,600.

In August 2016, Odney pleaded guilty to one count of access device fraud and, as part of his plea agreement, resigned as a Boston Police Officer.

Over the course of over a year and a half, including all of 2015, Odney purchased approximately $5,000 worth of gift cards that he knew were obtained from the return of stolen merchandise at stores including T.J. Maxx, Macy’s, and HomeGoods.  Odney paid cash for the cards and used them to make over $1,600 in purchases in 2015. 

United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation; and Superintendent Frank Mancini of the Boston Police Department’s Anti-Corruption Division; made the announcement.  The case was prosecuted by Assistant U.S. Attorney Eugenia M. Carris of Ortiz’s Public Corruption Unit.

BOSTON – A Waltham man pleaded guilty 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 million in cruise trip deposits. 

Bret A. Gordon, 43, pleaded guilty to six counts of wire fraud and two counts of filing a false personal tax return.  U.S. District Court Judge Denise J. Casper scheduled sentencing for Feb. 8, 2017.

In 2013, Gordon established and owned a 65% interest in Tom Harper Cruises, a business selling overseas river cruise vacations.  As the company’s manger, 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.  The funds received by the company were customer payments for trips, which were operated by independent cruise companies, so Tom Harper Cruises needed to retain sufficient funds to pay those independent companies. 

As a result of Gordon’s actions, 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 $3,167,128.  

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 tax year 2013, and about $900,000 that he had taken in tax year 2014. 

The mail fraud 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.  The tax statute provides for a sentence of no greater than three 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 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 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 Ortiz’s Economic Crimes Unit is prosecuting the case. 

BOSTON – A former New England La Cosa Nostra (NELCN) caporegime pleaded guilty today in U.S. District Court in Boston to obstructing a federal investigation into the murder of a Boston nightclub owner in the 1990s.

Robert P. DeLuca, 70, pleaded guilty to one count of obstruction of justice and two counts of making false statements.  U.S. District Court Judge Denise J. Casper scheduled sentencing for Feb. 1, 2017.  In June 2016, DeLuca was arrested in Florida and indicted.

DeLuca pleaded guilty to lying to federal prosecutors and investigators regarding the 1993 disappearance of Stephen DiSarro who operated The Channel, a South Boston nightclub.  In March 2016, authorities discovered DiSarro’s remains behind a mill in Providence, R.I.  According to court documents, DiSarro disappeared in May 1993 after then LCN boss Frank Salemme and Frank Salemme, Jr.’s involvement with The Channel became the focus of a federal grand jury investigation. 

DeLuca also pleaded guilty to lying about his knowledge of other organized crime murders.  He made false statements in connection with his cooperation deal with federal authorities in Rhode Island after his 2011 racketeering arrest and indictment.  Despite a cooperation agreement with federal authorities, DeLuca lied about his knowledge of DiSarro’s disappearance and other LCN-perpetrated murders. 

DeLuca has also agreed to plead guilty in Rhode Island Superior Court to conspiracy to commit the 1992 murder of Kevin Hanrahan. 

The obstruction of justice statute provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000.  The false statements statute provides for a sentence of no greater than five 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 Attorneys Carmen M. Ortiz of the District of Massachusetts and Peter F. Neronha of the District of Rhode Island; Rhode Island Attorney General Peter F. Kilmartin; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  The Massachusetts and Rhode Island State Police provided assistance with the investigation.  Assistant U.S. Attorneys Fred M. Wyshak, Jr. of Ortiz’s Public Corruption Unit and William Ferland of Neronha’s Office are prosecuting the case.

BOSTON – A Weymouth woman pleaded guilty today in U.S. District Court in Boston in connection with a fraud scheme in which she stole approximately $701,826 from her employer. 

Katelin Garland, 39, pleaded guilty to two counts of wire fraud.  U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for Feb. 1, 2017.

As an administrative manager, Garland was responsible for depositing checks received, maintaining the record-keeping system, and requesting checks payable for entities in connection with business services.  From approximately October 2011 to October 2015, Garland took advantage of flaws in her employer’s accounting and auditing systems and requested checks payable to fictitious names, which she then endorsed for deposit to a bank account she controlled.  To conceal the scheme, Garland made false entries in her employer’s record-keeping system concerning those payments.  She used the funds to pay for routine living expenses, tickets to sporting events, private school tuition for her children, and to purchase a boat, travel, and to shop.

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 based upon the U.S. Sentencing Guidelines and other statutory factors. 

United States Attorney Carmen M. Ortiz and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service made the announcement today.  Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit is prosecuting the case. 

BOSTON –Three former district managers of pharmaceutical giant Warner Chilcott have been sentenced in connection with committing health care fraud and violating HIPAA in order to increase sales of Warner Chilcott osteoporosis drugs.

Landon Eckles, 30, of Huntersville, N.C., was sentenced yesterday by U.S. District Court Judge George A. O’Toole, Jr. to one year of probation and a fine of $10,000.  In November 2015, he pleaded guilty to wrongful disclosure of protected health information, in violation of the criminal provisions of the Health Insurance Portability and Accountability Act (HIPAA). 

From 2007 to 2012, Eckles served as a Warner Chilcott district manager in the company’s osteoporosis division in a mid-Atlantic district.  In 2011, Atelvia®, an osteoporosis drug, was launched, but it was not covered by many insurance companies primarily because a generic alternative was available.  Therefore, insurance companies required physician approval, known as a prior authorization, before covering Atelvia®.  In order to drive sales, Eckles directed certain sales representatives to fill out Atelvia® prior authorizations even if physicians refused to do so.  In doing so, Eckles and his sales representatives accessed patients’ protected health information. 

In addition, following directions from his supervisors, Eckles encouraged his sales representatives to ensure that patient medical charts in physicians’ offices were “flagged” with Atelvia® brochures, so that physicians would be reminded to prescribe Atelvia® for their patients.  Eckles bragged about this tactic, stating, “I guarantee you that this is going to drive business,” and encouraged his sales representatives to follow suit.  In part, as a result of his scheme, Eckles received a bonus of approximately $60,000 in 2011.

Timothy Garcia, 35, of Los Gatos, Calif., was sentenced by U.S. District Court Chief Judge Patti B. Saris on Sept. 27, 2016 to eight months of home confinement and ordered to forfeit $21,500.  In October 2016, he pleaded guilty to conspiracy to commit health care fraud.  

From 2008 to 2011, Garcia served as a Warner Chilcott district manager in the company’s osteoporosis division managing approximately 12 sales representatives in the San Francisco Bay area.  Recognizing that many physicians were hesitant to submit prior authorizations for Atelvia®, Garcia aggressively pushed his sales representatives to prepare prior authorizations themselves. Furthermore, Garcia stressed the importance of concealing the misconduct of his sales representatives.

In 2011, Garcia received a bonus of more than $60,000, and was promoted to senior district manager in Warner Chilcott’s most prestigious sales division.  As a result of the scheme, insurance companies, including Medicare, paid Warner Chilcott at least $100,000 for Atelvia® based on prior authorizations that were manipulated by Garcia’s sales representatives.

Jeff Podolsky, 49, of East Meadow, N.Y., was sentenced by Chief Judge Saris on Oct. 11, 2016, to eight months of home confinement and ordered to forfeit $28,237 and pay a fine $10,000.  In July 2015, he pleaded guilty to conspiracy to commit health care fraud. 

In 2010 and 2011, Podolsky served as a Warner Chilcott district manager in New York City and Long Island, during which time Atelvia®, as well as its predecessor drug, Actonel®, had poor insurance coverage. Podolsky directed the sales representatives in his district to fill out prior authorizations for physicians who prescribed Actonel® and Atelvia®, by using false clinical justifications as to why the patient needed the drugs, and then submit them to health insurance companies.

As a result of the scheme, Podolsky’s district was the top-grossing district in Warner Chilcott’s osteoporosis division.  In 2011, Podolsky received a bonus of more than $100,000 and was promoted to senior district manager in a more prestigious sales division.  Insurance companies and Medicare paid at least $200,000 for Actonel® and Atelvia® prescriptions that were based on prior authorizations that were manipulated by Podolsky’s sales representatives.

United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Phillip M. Coyne, Special Agent in Charge of the Department of Health and Human Services Office of Inspector General; Leigh-Alistair Barzey, Assistant Special Agent in Charge of the Department of Defense’s Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office; Derek Roy, Resident Agent in Charge of the U.S. Food and Drug Administration’s Office of Criminal Investigations; Donna L. Neves, Special Agent in Charge of the Department of Veterans Affairs, Office of Inspector General; and Scott Rezendes, Special Agent in Charge of the Office of Personnel Management’s Office of Inspector General.  Assistant U.S. Attorney David Schumacher and Miranda Hooker of Ortiz’s Health Care Fraud Unit prosecuted the case.

BOSTON – Three Bristol County based drug-dealers pleaded guilty in U.S. District Court in Boston this week in connection with operating a drug trafficking ring in southeastern Massachusetts.

Luis Lopez, a/k/a “Juan Gonzalez,” 42, of Tiverton, RI and Fall River, Mass. pleaded guilty on Tuesday, Oct. 25, 2016, to conspiracy to distribute five kilograms or more of cocaine, conspiracy to distribute heroin and fentanyl, possession of fentanyl and acetylfentanyl with the intent to distribute and laundering of monetary instruments.  U.S. District Court Senior Judge Rya W. Zobel took the plea under advisement until sentencing, set for Jan. 31, 2017.

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 Chindy Diaz, Israel Santiago, and others.  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.

If the Court accepts the plea agreement, Lopez will be sentenced to 15 years in prison, five years of supervised release, and ordered to pay a money judgement of $2 million and forfeit three properties valued at approximately $1.2 million and numerous vehicles and motorcycles owned by Lopez and Hillside Auto. 

Israel Santiago, a/k/a “Reysito,” 39, of Fall River also pleaded guilty on Tuesday, Oct. 25, 2016, to conspiracy to distribute cocaine.  Judge Zobel took the plea under advisement and scheduled sentencing for Jan. 31, 2017.     

In June 2016, Santiago attempted to ship a package containing one kilogram of cocaine to 24/7 Fitness in New Bedford.  Once the package arrived, Santiago was to provide the cocaine to Lopez; however, unbeknownst to Lopez and Santiago, the package had been seized and opened by investigators, who discovered the cocaine.  Due to the ongoing investigation, Santiago and Lopez were not arrested at that time, but were arrested a few weeks later.

Chindy Diaz, 38, of New Bedford, pleaded guilty yesterday to conspiracy to distribute and possess with the intent to distribute five kilograms or more of cocaine.  Judge Zobel took the plea under advisement and scheduled sentencing for Jan. 26, 2017. 

Diaz helped Lopez obtain packages of cocaine from Puerto Rico.  Specifically, Diaz had cocaine shipped to her home, as well as the homes of her associates.  When the cocaine arrived in the mail from Puerto Rico, Diaz would bring it to Lopez at his residence in Fall River.  In addition, Diaz helped coordinate the shipment of drug proceeds back to Puerto Rico. 

The charge of conspiracy to distribute cocaine provides for a sentence of no greater than 20 years in prison, three years to life of supervised release and a fine of up to $1 million.  The charge of conspiracy to distribute and possess with the intent to distribute five kilograms or more of cocaine provides a sentence of no greater than life in prison, five years to life of supervised release and a fine of $100,000.  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; Bristol County District Thomas M. Quinn; 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 Investigation in Boston; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Fall River Police Acting Chief Albert Dupere; New Bedford Police Chief Joseph C. Cordeiro; Fairhaven Police Chief Michael Myers; and Bristol County Sheriff Thomas M. Hodgson, made the announcement today.  Assistant U.S. Attorney Eric Rosen of Ortiz’s Narcotics and Money Laundering Unit is prosecuting the cases. 

BOSTON – A Dorchester man was sentenced late yesterday on charges of tampering with a witness by attempting to kill him.

“Mr. Casanova attempted to take a man’s life in order to ensure his silence,” said United States Attorney Carmen M. Ortiz.  “Witness tampering not only impacts a criminal case, it shakes the very core of our justice system.  Witnesses play a critical role in the government’s ability to hold criminals accountable and often times bring closure to victims.  This sentence demonstrates the strength of the legal system to hold violent individuals accountable for their crimes.” 

“Attempting to coerce the legal system through intimidation and murder has very serious consequences, as Mr. Casanova is now finding out,” said Matthew Etre, Special Agent in Charge of HSI Boston.  “Thankfully Mr. Casanova’s attempt to silence what he thought was a federal witness to the criminal activities of this notorious gang failed. HSI remains vigilant and will continue to work with our law enforcement partners to track down criminals such as this and protect those who come forward to assist law enforcement.”

Jaquan Casanova a/k/a “Cass,” “Joffe,” “Joffy,” and “Joffy Joe,” 24, was sentenced by U.S. District Court Judge Denise J. Casper to 28 years in prison and five years of supervised release.  In June 2016, he was convicted by a federal jury following a seven-day trial of tampering with a witness by attempting to kill him and lying to a federal agent about his involvement in a sex trafficking ring. 

On April 30, 2013, Casanova shot Darian Thomson (“Bo”) in the head at close range to prevent him from communicating with federal law enforcement officers.  Casanova was a member of a multi-state criminal organization led by Raymond Jeffreys that was involved in sex trafficking, drug trafficking, and fraudulent check cashing.  In March 2013, Thomson was indicted on federal sex trafficking charges while in custody in New Jersey on unrelated state charges.  In April 2013, Thomson was released and returned to Boston, where Casanova attempted to kill him.  Jeffreys and other members of the criminal organization erroneously believed that Thomson had been released as a result of his cooperation with federal law enforcement, and that he would continue to provide information about their criminal activities. 

From 2006 to May 2014, Jeffreys and other members of his organization trafficked women and minor girls in Massachusetts, Maine, New Hampshire, Vermont, Rhode Island, Connecticut, Pennsylvania, New Jersey, New York, Maryland, Nevada, Georgia, Florida and California.  Jeffreys targeted vulnerable girls and women, including those who were poor and homeless, drug addicted, and those who were already working as prostitutes.  Jeffreys used a variety of techniques to persuade and manipulate the women, including making promises about providing for them and their children, and then only doing so if the women performed acts of prostitution.  He also used a variety of techniques to control the girls and women, including threatening that he would kill them.  Jeffreys also taught other men how to engage in sex trafficking and worked with other men as “pimp partners” or “p partners” to share resources, such as car rides, hotel rooms, and payment for online advertisements.

On May 19, 2016, Jeffreys was sentenced to 30 years in prison after pleading guilty to sex trafficking and conspiring to tamper with a witness by attempting to kill him.

U.S. Attorney Ortiz; SAC Etre; and Boston Police Commissioner William Evans, made the announcement.  The case was investigated by Homeland Security Investigations, the Boston Police Department’s Human Trafficking and Homicide Units and the Federal Bureau of Investigation. 

The case was prosecuted by Assistant U.S. Attorneys Amy Harman Burkart and David D’Addio of Ortiz’s Civil Rights Enforcement Team and Special Assistant U.S. Attorney David S. Bradley from the Suffolk County D.A.’s Office.

BOSTON – The U.S. Attorney’s Office hosted a diverse group of education advocates today from across the Commonwealth to participate in a roundtable discussion about civil rights issues in schools.

The U.S. Attorney’s Office’s Education Working Group (EWG) was first announced at the Civil Rights Unit’s “Ending the School-to-Prison Pipeline” Conference in March.  It is composed of a diverse group of stakeholders, including representatives from statewide advocacy groups, local communities and federal and state agencies, committed to protecting the civil rights of students in educational settings across the state. The EWG will meet regularly to share information, best practices, and other strategies that will work to address and prevent civil rights violations in Massachusetts.

“Massachusetts has some of the greatest schools in the country,” said U.S. Attorney Carmen M. Ortiz. “We hope to work together with advocates and community members to ensure that all students – regardless of their race, national origin, gender, religion, or disability status – can access the tremendous educational opportunities our state has to offer.  We look forward to engaging with school districts across the Commonwealth to ensure equal access to education for all students.”

Additional roundtable topics of discussion included harassment and bullying in schools, school discipline, disability discrimination, English Language Learners, and accommodating immigrant and refugee students.  Members of the EWG concluded the two-hour meeting by sharing goals that aim to advance enforcement efforts and ensure equal protections under the law.

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.

BOSTON – The leader of a Lawrence drug trafficking organization that imported fentanyl, heroin and cocaine from Mexico, the Dominican Republic, and elsewhere, into Massachusetts and the northeast was sentenced on Monday, Oct. 24, 2016. 

Jerri Martinez-Tejeda, 32, was sentenced by U.S. District Court Chief Judge Patti B. Saris to 292 months in prison, three years of supervised release and a fine of $400,000.  In June 2016, Martinez-Tejeda pleaded guilty to conspiracy to possess with intent to distribute and distribution of fentanyl, heroin and cocaine; conspiracy to launder money; and unlawful reentry of a deported alien.  

During the course of a three-day sentencing hearing, evidence showed that Martinez-Tejeda arranged for the transport of nine kilograms of fentanyl from California to Massachusetts.  Along the way, federal agents arranged for the Oklahoma Highway Patrol to stop the pickup truck in which the drugs were being transported.  After hearing about the police stop, Martinez-Tejeda and his associates initially thought the drug couriers were lying since they were not immediately taken into custody.  So Martinez-Tejeda hired an enforcer to go to Oklahoma to kidnap and torture the couriers until they admitted their scheme.  Only by taking the couriers into custody was this violent plan thwarted. 

The Court also heard testimony that Martinez-Tejeda was responsible for laundering at least $1.1 million over the course of five and one-half months.  At the time of Martinez-Tejeda’s arrest on July 12, 2015, there was over $500,000 being counted and prepared for transport at Martinez-Tejeda’s house for payment to his Mexican drug supplier, along with drug trafficking paraphernalia including electronic scales, grinders, a hydraulic kilo press, drug ledgers and two handguns. 

United States Attorney Carmen M. Ortiz and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement.  Assistant U.S. Attorney Thomas E. Kanwit of Ortiz’s Narcotics and Money Laundering Unit is prosecuting the case.

BOSTON – U.S. Attorney Carmen M. Ortiz announced today that Assistant U.S. Attorney (AUSA) Eugenia M. Carris will lead the efforts of her Office to monitor the upcoming Nov. 8, 2016 general elections.  The effort is part of the Justice Department’s nationwide Election Day Program.  AUSA Carris has been appointed to serve as the District Election Officer (DEO) for Massachusetts, and is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.

“Every citizen has the right to vote without interference or discrimination,” said U.S. Attorney Ortiz.  “The Department of Justice is committed to preventing fraud on election day in polling locations throughout Massachusetts in order to aggressively protect the integrity of the election process.”

The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur.  The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.

Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input.  It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them.  For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law.  Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.

Voting is the cornerstone of American democracy.  We all must ensure that those who are entitled to vote are able to exercise their right if they choose, and that those who seek to impede that right are brought to justice.  In order to respond to complaints of election fraud or voting rights abuses on Nov. 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, AUSA/DEO Carris will be on duty in this District while the polls are open.  She can be reached at the U.S. Attorney’s Office in Boston at (617) 748-3100.

In addition, the FBI will have Special Agents Kevin Sheahan available in Boston and Joe Brannan available in Springfield to receive allegations of election fraud and other election abuses on election day.  The local FBI field office can be reached by the public at (413) 732-0159.

Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.

 “Ensuring free and fair elections depends in large part on the cooperation of the American electorate,” said U.S. Attorney Ortiz.  “It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”

BOSTON – An Andover man pleaded guilty today to paying employees in cash in order to avoid paying union benefits and employment taxes. 

Ronald P. Mulcahey, 53, pleaded guilty today to making false statements in documents submitted to benefit plans subject to the provisions of Title I of the Employee Retirement Income Security Act of 1974 (ERISA).  Mulcahey also pleaded guilty to tax evasion.  U.S. District Court Judge Richard G. Stearns scheduled sentencing for Jan. 19, 2017.  

U.S. Attorney Carmen M. Ortiz said, “We remain committed to protecting the rights of union members who rely on ERISA funds which provide them with healthcare, pensions, and other services.  The failure of employers to make appropriate contributions to these funds not only violates federal law, it endangers the funds’ fiscal viability and jeopardizes union members who need the services they provide.”

“Ronald Mulcahey used a cash payroll to conceal actual hours worked by his employees in order to avoid paying benefit plan contributions into the Massachusetts Laborer’s Benefit Funds, and to avoid paying federal employment taxes. Actions by employers like Mulcahey have an adverse effect on the American workforce. The Office of Inspector General will continue to work with our law enforcement partners to ensure that employers fulfill their obligations when it comes to remitting benefit plan contributions to employee benefit funds,” stated Michael C. Mikulka, Special Agent in Charge of the New York Regional Office, U.S. Department of Labor, Office of Inspector General.

“IRS Criminal Investigation takes employment tax violations very seriously because the employees are the ultimate victims,” said Joel P. Garland, Special Agent in Charge of the Boston Field Office.  “By paying cash wages off the books, Mr. Mulcahey risks future Social Security, Unemployment or Medicare benefits for his employees. The loss of revenue also damages our nation’s system of taxation.”     

Mulcahey was the owner and sole corporate officer of Wing Inc. Specialty Trades, EWT-Fireproofing, Inc., and Wing Environmental, Inc.  Wing Environmental provided asbestos abatement and demolition services.  The company had a collective bargaining agreement with Laborer’s International Union of North America, Local 1421.  As a union employer, Wing Environmental was required to accurately report to the union benefit funds the number of hours worked by its union employees and to make the corresponding contributions to the funds.  Between January 2008 and June 2011, Mulcahey engaged in a scheme through Wing Environmental to defraud the union benefit funds by paying some of those employees in cash.  By keeping the cash payments off-the-books, Mulcahey and Wing Environmental falsely underreported the union workers’ hours in order to avoid making the required hourly payments to the benefit funds.  Union benefit funds are used to provide healthcare, pensions and other services to union members. 

Wing Specialty Trades and EWT-Fireproofing were non-union companies that provided asbestos abatement, demolition and fireproofing services.  All of Mulcahey’s companies were required by federal tax law to accurately report their total payments to employees and to withhold and pay the IRS the applicable employment and income taxes. Between January 2008 and June 2011, Mulcahey defrauded the IRS by paying certain employees of all three of his companies in cash.  By keeping the cash payments off-the-books, Mulcahey falsely underreported his workers’ wages to the IRS and avoided paying employment taxes on the unreported wages.

U.S. Attorney Ortiz; DOL-OIG SAC Mikulka; IRS-CI SAC Garland; and Susan A. Hensley, Regional Director of the Employee Benefits Security Administration made the announcement today.  Assistant U.S. Attorneys Kristina E. Barclay and Ryan DiSantis of Ortiz’s Public Corruption Unit are prosecuting the case.

BOSTON – The U.S. Attorney’s Office reached a settlement with the Ironworkers District Council of New England Pension and Annuity Funds (Funds) and their trustees, resolving claims that they violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) when they refused to give Thomas Shea, a U.S. Navy Reserve Member, credit toward his pension and annuity funds while he served on active duty military service. 

“It is our responsibility to ensure that servicemembers who make great sacrifices to protect our country are not disadvantaged because of their military service,” said United States Attorney Carmen Ortiz.  “We will continue our vigorous enforcement of USERRA and hold employers who violate those protections accountable.”

Under the terms of the settlement agreement, Shea received a lump sum payment of $180,000 for back pension and annuity payments and monthly pension payments of $2,600.

The settlement agreement resolves the complaint filed by the U.S. Attorney’s Office on behalf of Shea in October 2013 which alleged that the Funds and their Trustees violated USERRA when they refused to credit Shea with service time for his multiple tours of duty in Iraq, Afghanistan, Bahrain, and Kuwait, because he did not satisfy the Ironworker Pension Plan’s reemployment requirements, which were more burdensome than those under USERRA.

USERRA requires that servicemembers who leave their civilian jobs to serve in the military be treated as not having incurred a break in service with regard to their pension plans and other employment benefits. USERRA further provides that each period served by a servicemember shall, upon reemployment, be deemed to constitute service with the employer maintaining the plan for the purpose of determining the non-forfeitability of the person’s accrued benefits and the accrual of benefits under the plan.

In February 2016, the Court found that the Ironworkers’ Pension Plan violated USERRA by imposing additional requirements beyond what is required under USERRA on servicemembers seeking pension credit for military service.  Under the Ironworker’s Pension Plan, returning servicemembers could not receive credit for their military service unless they (1) worked at least 300 hours in the one-year period following discharge from the military; and (2) accrued 2.5 pension credits, which is equal to 3,000 hours, in the subsequent five-year period following release from active duty.

This case was investigated by the U.S. Department of Labor and the Veterans’ Employment and Training Service.  Assistant U.S. Attorney Jennifer A. Serafyn, Chief of Ortiz’s Civil Rights Unit, and Special Litigation Counsel Andrew Braniff and Trial Attorney Nadia Said of the Justice Department’s Civil Rights Division, Employment Litigation Section, handled the case.

The protection of servicemembers’ rights is a priority for the U.S. Attorney’s Office.  Additional information about USERRA can be found at www.usdoj.gov/crt/emp, www.servicemembers.gov and www.dol.gov/vets/programs/userra/main.htm.

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. 

BOSTON – The President of Telexfree, Inc., a pyramid scheme that was disguised as an internet telecom company, pleaded guilty in U.S. District Court in Worcester today.

Merrill, 55, of Ashland, pleaded guilty to one count of wire fraud conspiracy and eight counts of wire fraud.  U.S. District Court Judge Timothy S. Hillman scheduled sentencing for Feb. 2, 2017.  Merrill’s trial was scheduled to begin today.

“The pyramid scheme Mr. Merrill operated defrauded thousands of victims throughout Massachusetts, and in fact, around the world,” said United States Attorney Carmen M. Ortiz.  “Mr. Merrill lined his pockets on the backs of hard working individuals who, in some cases, invested their entire savings.  We hope today’s guilty plea brings some degree of justice to the many victims in this case.”

“The significance of a guilty plea in a case of this magnitude cannot be overstated,” said Special Agent in Charge Matthew Etre of Homeland Security Investigations Boston. “James Merrill is finally facing justice for his role in bilking more than $3 billion from innocent investors, in more than 240 countries around the world, for what amounted to little more than greed.  HSI special agents will continue to aggressively investigate those who seek to profit by taking advantage of others.”

Between February 2012 and April 2014, Merrill was the President of TelexFree, Inc., which sold a “voice-over-internet-protocol” (VOIP) telephone service, similar to Skype, for which customers could sign up on a website maintained by TelexFree.  TelexFree, however, was a pyramid scheme whereby all of the money TelexFree paid out came, not from sales of its product, but from new participants continuously paying TelexFree to sign up as “promoters” for the company. 

TelexFree’s website prominently featured Merrill as the leader of the company and as an experienced businessman in the telecom field.  As the website advertised at various times, participants paid $1,425 or $339 to sign up with TelexFree, after which they would be paid $100 per week or $20 per week to post classified ads every day on the internet.  The company couched those payments in terms of “buying back” unused VOIP packages the participants were unable to sell, but the practical reality was that participants were guaranteed an annual return of over 200% on their money without having to sell anything.  Among other things, emails showed Merrill’s awareness that the ad-posting was intended only to ensure that people visited TelexFree’s web site as opposed to generating actual retail sale of the VOIP product.  Participants spent minutes a day cutting and pasting ads into various classified ad sites provided by TelexFree, which were already saturated with thousands of ads posted by earlier participants. 

Participants were also given substantial financial incentives to recruit others to join the scheme.  To receive bonuses for recruiting others, in theory each participant needed to have one VOIP customer.  But in reality, participants met this requirement simply by buying the product themselves and, in 97% of instances, never using it.  In this way, TelexFree created the illusion that it had hundreds of thousands of legitimate VOIP customers.  On paper the company sold about 12.4 million VOIP plans, but in reality it had a minute number of legitimate customers, an even smaller number of which had actually paid money to TelexFree for the service.  Overall, the nearly 2 million who participated in TelexFree made 96% of their compensation, not from selling the company’s VOIP service, but from ad-posting and recruiting others to join.

TelexFree derived only a fraction of its total revenue in a two-year period from sales of VOIP service – approximately 2%.  The remaining 98% came from new people buying into the scheme. TelexFree could only pay the returns it had promised to its existing promoters by bringing in money from newly-recruited promoters.

Beginning in late 2012, involvement in TelexFree spread rapidly, and by April 2014, well over a million people worldwide had signed up with the company.  This included over 20,000 people in Worcester, Mass. alone, and thousands more in Boston, Framingham, Chelsea and other communities statewide.  Meanwhile, beginning in 2013, Merrill received increasingly frequent warnings that the company was a pyramid scheme.  Beginning in August 2013, Merrill began to take steps to change how the company did business, but Merrill never alerted the public, even though over a million people signed up for TelexFree between that month and TelexFree’s collapse.

In December 2013, Merrill wired himself and two co-conspirators a total of $10 million from TelexFree accounts.  On April 14, 2014, Telexfree filed for bankruptcy, at which point it owed approximately $5 billion to its participants, while having only about $120 million on hand (about 2% of what it owed).  At that point, approximately 965,225 participants lost money in the scheme, with total losses of about $1,755,927,755.  Overall, these victims came primarily from the United States (all 50 states), Brazil, China, Portugal, Peru, other Central and South American nations, Italy, and Russia, with smaller victim populations in dozens of other countries.

According to the terms of the plea agreement, Merrill will be sentenced to no more than 10 years in prison.  Merrill also agreed to forfeit approximately $140 million, numerous real estate properties, luxury vehicles and boats.  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. 

U.S. Attorney Ortiz and HSI SAC Etre made the announcement today.  The U.S. Attorney’s Office also received valuable assistance from the Federal Bureau of Investigation, the Brazilian Federal Police based in Vitoria, Brazil, the Securities & Exchange Commission, and the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth of Massachusetts. Assistant U.S. Attorneys Andrew E. Lelling and Neil J. Gallagher, Jr., of Ortiz’s Economic Crimes Unit are prosecuting the case.

If you believe that you are a victim of the alleged TelexFree, Inc. scheme, please enter a claim for reimbursement on the following site:  https://telexfreeclaims.com/

BOSTON – A Canadian man pleaded guilty today in U.S. District Court in Boston in connection with his role in a drug trafficking and money laundering organization that imported Canadian marijuana and MDMA, the club drug also known as “ecstasy” or “mollie,” into the United States.

David Nguyen, 40, of Toronto, Canada, pleaded guilty to one count of conspiracy to distribute MDMA and marijuana and one count of money laundering conspiracy.  Nguyen was indicted in January 2014 and arrested in Canada in May 2014.  In July 2016, Nguyen was ordered to be extradited, and in October 2016, he temporarily surrendered to the United States.  U.S. District Court Judge Denise J. Casper scheduled sentencing for Dec. 19, 2016.                                                               

From February 2010 to about March 2012, Nguyen conspired with others to move MDMA and marijuana over the Canadian-U.S. border.  Nguyen and a Canadian co-conspirator, Gurshuran Singh, recruited couriers to drive MDMA and marijuana to Joshua Rabinovitch in  Salem, Mass.  Rabinovitch then sold the drugs in the U.S. and returned the proceeds to Canada. 

In April 2012, Singh also recruited, Adeel Bhutta, to pick up $240,000 in drug proceeds from Rabinovitch’s sale of MDMA in Massachusetts. 

In July 2014, Bhutta was sentenced to 28 months in prison for his role in the money laundering conspiracy.  In February 2015, Rabinovitch was sentenced to 24 months in prison for his role in the drug trafficking and money laundering conspiracies.  In August 2016, Singh pleaded guilty to participating in the drug and money laundering conspiracies and is scheduled to be sentenced on Dec. 7, 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.  The money laundering charge provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $500,000 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.

United States Attorney Carmen M. Ortiz and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today.  The Department of Justice’s Office of International Affairs provided assistance in securing Nguyen’s extradition to the United States.  Assistant U.S. Attorneys Seth B. Kosto of Ortiz’s Cybercrime Unit and Timothy E. Moran of Ortiz’s Organized Crime and Gang Unit are prosecuting the case. 

BOSTON – The U.S. Attorney’s Office has reached a $1,025,000 civil settlement with First American Mortgage Trust, d/b/a NXTLoan.com, a small mortgage lender based in Brighton, Mass., and its founder and CEO, Barry S. Polack, in connection with allegations that they submitted false insurance claims on mortgages insured by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA). 

The settlement resolves allegations that NXTLoan.com, at Polack’s direction, ignored FHA’s due diligence requirements and falsely certified that NXTLoan.com loans qualified for FHA insurance when they did not.  The settlement also resolves allegations that Polack falsely certified to FHA that NXTLoan.com complied with quality control requirements and failed to report known loan defects.

“This settlement is another example of the government’s efforts to hold mortgage lenders and individuals accountable for fraudulent underwriting of government-insured mortgages,” said United States Attorney Carmen M. Ortiz.  “In order to obtain HUD insurance, NXTLoan.com certified that its loans complied with HUD’s quality standards while ignoring defects that made the loans ineligible for FHA insurance.”

“This settlement agreement resolves allegations that First American Mortgage Trust, entrusted by American taxpayers to comply with FHA regulations, failed to conform with certain FHA requirements in connection with submission of insurance claims insured by FHA,” said Inspector General David A. Montoya for HUD.  “This settlement demonstrates a continued commitment to address business practices that potentially harm the FHA program and its participants.”

“We will not tolerate the reckless disregard for FHA’s underwriting standards,” said Tonya Robinson, Acting General Counsel for the U.S. Department of Housing and Urban Development.  “FHA’s insurance fund, and the millions of families who rely upon it, depend on the good faith and integrity of the mortgage lenders with whom we do business.  We will continue to work aggressively to weed out participants in the FHA program who purposefully fail to meet our most basic requirements.”

“This settlement is the latest example of our continued work of holding FHA Direct Endorsement Lenders accountable for adhering to strict underwriting standards,” said Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development Office of Inspector General, Northeast Regional Office.  “I am thankful for the cooperation between my office and the Department of Justice and am especially appreciative of the U.S. Attorney’s Office’s perseverance in bringing this matter to a fair and just resolution.” 

NXTLoan.com and Polack participated as a direct endorsement lender (DEL) in the FHA insurance program.  A DEL has the authority to originate, underwrite and approve mortgage loans for FHA insurance.  If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan.  DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance; to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices; and to self-report any deficient loans identified by their quality control program.

As part of the settlement, NXTLoan.com and Polack admitted that on certain occasions between 2005 and 2011, NXTLoan.com did not conduct the due diligence required by FHA, and as a result, some NXTLoan.com loans did not meet FHA’s quality standards and were ineligible for FHA insurance.  Nevertheless, NXTLoan.com underwriters, supervised by Polack, certified those loans for FHA insurance.  When those loans defaulted, FHA paid insurance claims on loans that never should have been FHA insured.  In addition, NXTLoan.com, at times, did not conduct post-closing loan audits, even though Polack certified annually to FHA that NXTLoan.com had complied with FHA underwriting requirements.  When NXTLoan.com began conducting audits on closed loans, NXTLoan.com and Polack did not report to FHA any serious issues identified by the audits.

The settlement took into consideration NXTLoan.com’s and Polack’s financial circumstances and recent improvements to NXTLoan.com’s business practices.

This matter was investigated by the U.S. Department of Housing and Urban Development’s Office of the Inspector General and Office of General Counsel.  It was handled by Assistant U.S. Attorney Brian LaMacchia of Ortiz’s Civil Division.

BOSTON - A Sharon man was sentenced today in U.S. District Court in Boston in connection with illegally selling tobacco products and laundering the proceeds.

Kaleem Ahmad, 47, was sentenced by U.S. District Court Judge William G. Young to two years in prison, one year of supervised release and restitution in an amount to be determined by the Court at a later time.  The Court also ordered forfeiture of hundreds of thousands of dollars in tobacco products and over $138,000 belonging to Ahmad and the tax-evading wholesale tobacco business in which he engaged.  In May 2016, he pleaded guilty to conspiring to defraud Massachusetts of wholesale tobacco taxes and to filing a false personal income tax return.

Muhammad Saleem Iqbal, his partner, and Ahmad operated a wholesale business in Norwood under the name “Pick N Dip,” that sold tobacco products, including cigars and smokeless tobacco (such as snuff and chewing tobacco), as well as other non-tobacco items, to convenience stores, gas stations and other retail businesses.  Under state law, smokeless tobacco wholesalers must file an excise tax form monthly and pay a 210% excise tax on smokeless tobacco brought into Massachusetts.  Cigar wholesalers must file an excise tax form quarterly and must pay a 40% excise tax on cigars brought into Massachusetts.

In order to evade tobacco taxes, beginning around 2010, the three repeatedly purchased tens of thousands of dollars of smokeless tobacco and cigars in Pennsylvania where no taxes are imposed for these products.   They then arranged to have the products covertly transported to Massachusetts for resale, without filing the records required by Massachusetts state law and federal law, and without paying excise taxes.

Ahmad and others transported more than $50,000 in cash at a time from Massachusetts to Pennsylvania where the money was used to purchase additional untaxed smokeless tobacco and cigars.  They also engaged in large cash transactions in order to conceal and disguise the nature, location, source, ownership and control of the proceeds of their illegal tobacco business and to avoid transaction reporting requirements under federal and state law. 

Iqbal was sentenced yesterday to 42 months in prison, two years of supervised release and ordered to pay restitution of $28,027,946 for his role in the scheme.

United States Attorney Carmen M. Ortiz; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and David W. Hall, Special Agent in Charge of the U.S. Department of State, Diplomatic Security Service, Boston Field Office, made the announcement today.  Valuable assistance was also provided by the Massachusetts Department of Revenue.  Assistant U.S. Attorneys Stephen P. Heymann of Ortiz’s Economic Crimes Unit and Doreen Rachel, Chief of Ortiz’s Asset Forfeiture Unit, handled the case.

BOSTON – A United States Postal Service employee was re-arrested today after law enforcement discovered evidence that he sexually exploited a child sometime between 1999 and 2001.

Stephen Mantha, 62, of Spencer, was charged in a criminal complaint unsealed today with sexually exploiting a minor boy sometime between 1999 and 2001.  Mantha was originally charged on Sept. 21, 2016, with possession of child pornography and accessing with the intent to view child pornography.  He was arrested at that time, but was released to home detention on Sept. 26, 2016 pending trial.

It is alleged that, beginning in the summer of 2015, USPS Office of Inspector General investigators were alerted to suspicious internet searches being conducted by Mantha on a computer at the Shrewsbury processing and distribution center where he worked as an electronic technician.  A subsequent investigation revealed that Mantha was using the USPS computer to search for, and view, images of child pornography on the internet. 

On Sept. 21, 2016, a search warrant was executed at Mantha’s residence where computers, DVDs/CDs, video cassettes, an external hard drive, and over a dozen thumb drives were recovered.  A preliminary on-scene forensic review of three of the thumb drives revealed images of child pornography.  Since that time, federal agents have continued to review the materials and discovered a video of Mantha sexually assaulting a young boy, approximately seven years old.  According to court documents, federal agents located and interviewed the victim depicted in the video (now an adult), and the victim confirmed the sexual exploitation. 

The charge of sexual exploitation of a child provides for a mandatory minimum of 10 years and 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 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; Eileen Neff, Special Agent in Charge of the United States Postal Service’s Office of Inspector General; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Chief David Darrin of the Spencer Police Department; and Chief James Hester, Jr. of the Shrewsbury Police Department, made the announcement today.  Assistant U.S. Attorney Mark Grady of Ortiz’s Worcester Branch Office 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.

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/.     

BOSTON – A Sharon man was sentenced today in U.S. District Court in Boston in connection with illegally selling tobacco products and laundering the proceeds.

Muhammad Saleem Iqbal, 53, was sentenced by U.S. District Court Judge William G. Young to 42 months in prison, two years of supervised release and restitution of $28,027,946.  The Court also ordered forfeiture of hundreds of thousands of dollars in tobacco products and over $150,000 belonging to Iqbal and the tax-evading wholesale tobacco business in which he engaged.  In May, 2016, he pleaded guilty to conspiring to defraud Massachusetts of wholesale tobacco taxes and to filing a false personal income tax return.

Iqbal and a business partner operated a wholesale business under the name “Pick N Dip,” in Norwood that sold tobacco products, including cigars and smokeless tobacco (such as snuff and chewing tobacco), as well as other non-tobacco items, to convenience stores, gas stations and other retail businesses.  Under state law, smokeless tobacco wholesalers must file an excise tax form monthly and pay a 210% excise tax on smokeless tobacco brought into Massachusetts.  Cigar wholesalers must file an excise tax form quarterly and must pay a 40% excise tax on cigars brought into Massachusetts.

In order to evade tobacco taxes, beginning around 2010, Iqbal and his business partner repeatedly purchased tens of thousands of dollars at a time worth of smokeless tobacco and cigars in Pennsylvania where no taxes are imposed for these tobacco products.   They then arranged to have these tobacco products covertly transported to Massachusetts for resale, without filing the records required by Massachusetts state law and federal law, and without paying excise taxes.

At the direction of Iqbal and his business partner, their employees repeatedly engaged in large cash transactions in order to conceal and disguise the nature, location, source, ownership and control of the proceeds of their illegal tobacco business and to avoid transaction reporting requirements under federal and state law.  Their employees also transported more than $50,000 in cash at a time from Massachusetts to Pennsylvania where the money was used to purchase additional untaxed smokeless tobacco and cigars.

One of Iqbal’s co-defendants, Kaleem Ahmad, is scheduled to be sentenced tomorrow.

United States Attorney Carmen M. Ortiz; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and David W. Hall, Special Agent in Charge of the U.S. Department of State, Boston Field Office, made the announcement today.  Valuable assistance was also provided by the Massachusetts Department of Revenue.  Assistant U.S. Attorneys Stephen P. Heymann of Ortiz’s Economic Crimes Unit and Doreen Rachel, Chief of Ortiz’s Asset Forfeiture Unit, handled the case.

BOSTON – A Randolph man pleaded guilty today in U.S. District Court in Boston to two bank robberies.

Gary S. Judge, 37, pleaded guilty to two counts of bank robbery before U.S. District Court Judge Richard G. Stearns who scheduled sentencing for Jan. 18, 2017.

On July 28, 2014, an individual, later determined to be Judge, entered a branch of the 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 Judge $5,622 in cash and Judge 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 the Braintree and Milton robberies and 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. 

The charging statute 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. 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.  The Milton and Braintree Police Department assisted with the investigation.  Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit is prosecuting the case. 

BOSTON – A Brookline man was convicted today by a federal jury in Boston of conspiracy and securities fraud after tipping off two friends in connection with an insider trading scheme that netted more than $1 million in illegal profits.  

Amit Kanodia, 49, was convicted following a six-day jury trial of one count of conspiracy and 10 counts of securities fraud, with each count representing the purchase of Cooper Tire securities by co-conspirators Iftikar Ahmed and Steven Watson.  Kanodia was acquitted of eight additional counts of securities fraud related to other purchases made by Ahmed and Watson.  U.S. District Court Judge Nathaniel G. Gorton scheduled sentencing for Jan. 18, 2017 at 3pm.  Ahmed remains a fugitive from justice.  Watson has pleaded guilty and is set to be sentenced in November. 

In the spring of 2013, Kanodia tipped off his two friends, Ahmed and Watson, about the contemplated acquisition of Cooper Tire & Rubber Company by India-based Apollo Tyre.   Kanodia learned about the possible acquisition from his wife who was the General Counsel of Apollo at the time.  In 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.  Both Ahmed and Watson paid Kanodia a portion of their illegal profits.

The conspiracy 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/loss, whichever is greater.  The securities fraud statute provides for a sentence of no greater than 20 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. 

United States Attorney Carmen M. Ortiz 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, Chief of Ortiz’s Economic Crimes Unit, and Brian Perez-Daple, also of Ortiz’s Economic Crimes Unit are prosecuting the case.

BOSTON – A Granby, Mass. accountant was sentenced today in U.S. District Court in Worcester in connection with filing false tax returns.

James Lowe, 53, was sentenced by U.S. District Court Judge Timothy S. Hillman to four months in prison and one year of supervised release, with the first three months to be served in home detention.  In June 2016, he pleaded guilty to three counts of filing false corporate tax returns for his accounting business and three counts of filing false personal income tax returns from 2011 to 2013. 

Lowe was the owner of an accounting and tax return preparation business in Chicopee.  From 2011 to 2013, Lowe under-reported his income on both his corporate and personal income tax returns by not disclosing certain checks generated from his accounting business.  Rather than depositing the checks into his business bank account, Lowe cashed some of these checks and deposited some of them into his personal bank account.  The false tax returns resulted in more than $118,000 in tax loss.

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 Alex Grant prosecuted the case.

BOSTON – A Stoughton man pleaded guilty today in U.S. District Court in Boston to emailing bomb threats to multiple schools and universities in three different states. 

Anthony Rae, 25, pleaded guilty before U.S. District Court Judge Indira Talwani to five counts of sending bomb threats.  A sentencing date has not been scheduled. 

Over the course of nine months, Rae used several different email accounts to send bomb threats to educational institutions in three different states.  Rae began in October 2014 when he sent two emails from a Gmail account he created threatening to bomb an elementary school in Chicago, Ill., and several public schools in Norwood, Mass.  Subsequently, Rae hacked his mother’s Hotmail account and used it to send two separate bomb threats to his own school – ITT Technical Institute in Norwood. 

In June 2015, law enforcement officers obtained a search warrant for Rae’s residence and seized numerous electronic devices.  The following day, Rae used a computer available to tenants of his apartment complex to continue his bomb threat spree – sending a bomb threat to Rhode Island College in Providence.  On June 19, 2015, he was arrested and charged in state court for the Massachusetts’ threats.  In October 2015, Rae was charged federally by criminal complaint. 

The charging statute provides for a sentence of no greater than 10 years in prison, three years 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 and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  This case was also investigated by the Chicago Police Department’s Arson Section, Norwood and Stoughton Police Departments, Rhode Island State Police Computer Crimes Unit, and the Rhode Island College and North Carolina State University Campus Police Departments.  Significant assistance was also provided from the Massachusetts MetroLEC Cyber Crimes Unit and the Norfolk District Attorney’s Office.  Assistant United States Attorney Jordi de Llano of Ortiz’s Criminal Division is prosecuting the case.

Boston – Fourteen individuals were indicted yesterday in U.S. District Court in Springfield in connection with a large-scale heroin trafficking organization that was supplied by sources in the Dominican Republic and New York.

Thirteen men and one woman from Springfield, Mass. and Bronx, NY were indicted on conspiracy to distribute and possess with intent to distribute heroin.  On Sept. 22, 2016, all of the following individuals, with the exception of Carlos Sierra (aka Rivera) who remains a fugitive at large, were arrested and charged in a criminal complaint with conspiring to distribute heroin: 

• Alberto Marte, 31, of Springfield;
• Marcos Pena, 29, of Springfield;
• Julian Declet, 32, of Springfield;
• Jiovanni Rodriguez, 29, of Springfield;
• Jose Miguel Ramos, 36, of Springfield;
• Pablo Rosario, 32, of Bronx, NY;
• Carlos Sierra (aka Rivera), 40, of Springfield (fugitive);
• Mirelvy Vasquez, 26, of Springfield;
• Diolfi Antonio Marte Vasquez, 25, of Springfield; 
• Anthony Patino, 31, of Springfield;
• Juan Perez, 29, of Springfield;
• Eduardo Ferndandez, 38, of Hazelton, Penn.;
• Anyuly Tavarez, 30, of Springfield; and
• William Brantley, 45, of Springfield.

“The devastating impact of the heroin epidemic is evident by the lives it cuts short and the families it touches.,” said United States Attorney Carmen M. Ortiz.  “By combining federal, state and local resources, we can stem the flow of  heroin into Massachusetts’ and stop the deadly and damaging impact it has on our communities.”

“Here in western Massachusetts, local, state, and federal law enforcement agencies are successfully working together to combat the opioid crisis,” said Hampden County District Attorney Anthony D. Gulluni.  “This investigation shows that we will hold accountable those who seek to profit from addiction by selling and trafficking drugs on our streets and in our neighborhoods. I thank United States Attorney Carmen Ortiz and our federal partners for bringing these indictments forward.” 

“DEA is addressing the threat of heroin and fentanyl, both internationally and domestically.  We prioritize our resources by identifying, targeting and destroying these extremely violent and very organized cartels,” said Special Agent in Charge Michael J. Ferguson.  “DEA and its law enforcement partners have effectively dismantled the command and control elements as well as the distribution network in New England and the Dominican Republic that are responsible for putting this poison on the streets of Springfield and Chicopee as well as throughout New England.”

According to court documents, Alberto Marte, the head of a drug trafficking organization, had direct contact with heroin supply sources in the Dominican Republic.  On a monthly basis, members of the organization transported between eight and 20 kilograms of heroin to the Springfield area.  The organization then packaged the heroin and distributed it using a variety of stamps, including “Donald Trump” and “Hollywood.”  The Hollywood brand of heroin has been associated with a number of overdose deaths in western New England that occurred in late 2015 and early 2016.  During the course of the investigation, more than five kilos of heroin was seized by federal agents.     

This case was brought as part of the federal response to the growing opioid abuse epidemic in Massachusetts and other New England states.  Heroin is highly addictive, and users can quickly develop a tolerance, prompting them to seek higher potencies and greater quantities of the narcotic.  Between 2000 and 2014, opioid overdose deaths have more than tripled with a spike in recent years in Massachusetts.

“The indictments handed down in this investigation charge a violent criminal group allegedly responsible for flooding western Massachusetts with a highly-addictive and often lethal form of heroin,” said Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston. “Working alongside our law enforcement partners, HSI will continue to use its unique authorities to ensure this poison and those who peddle it are removed from our communities.”  

“The Springfield Police Department continues to work with its local, state and federal partners to address criminality and quality of life issues for the residents of Springfield,” said Commissioner John Barbieri. “We are fortunate to have the invaluable assistance of our partners in this collaborative effort.”

“I would like to offer my gratitude to the DEA, and all agencies involved in this operation,” said Chicopee Police Chief William Jebb.  “Once again, this shows that by working as a cohesive unit, sharing information, and sharing together, major operations such as this come to a successful conclusion.  This eight month-long investigation resulted in the arrest of 13 individuals, over three kilos of heroin, eight firearms and thousands of dollars.  Our city has unfortunately seen too many overdoses, and deaths, from heroin.  Because of the efforts of all involved, this dangerous drug was kept off of our streets, and resulted in many lives saved.”

The charge of conspiracy to distribute and possess with the intent to distribute 1000 grams or more of heroin provides for a minimum mandatory sentence of 10 years and up to life in prison, a lifetime of supervised release and a fine of $350,000.  The charge of conspiracy to distribute and possess with the intent to distribute a quantity of heroin provides for a sentence of no greater than 20 years in prison, a lifetime of supervised release and a fine of $55,000.  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.

U.S. Attorney Ortiz; District Attorney Gulluni; DEA SAC Ferguson; HSI SAC Etre; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Springfield Police Commissioner Barbieri; Chicopee Police Chief Jebb; Holyoke Police Chief James Neiswanger; and West Springfield Police Chief Ronald Campurciani, made the announcement today.  Assistant U.S. Attorney Neil Desroches of Ortiz’s Springfield Branch Office is prosecuting the case. 

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 a court of law.

BOSTON – A former accountant for an investment advising company pleaded guilty today in U.S. District Court in Boston in connection with a fraud scheme in which he stole more than $3.5 million from his employer. 

Gary Tiffany II, 32, pleaded guilty to two counts of wire fraud and one count of monetary transactions in property derived from specified unlawful activity.  U.S. District Court Senior Judge Mark L. Wolf scheduled sentencing for Jan. 16, 2017.

Tiffany was responsible for maintaining his employer’s checkbook and making electronic payments on the company’s account to vendors and for office expenses and reimbursements.  He was also responsible for downloading monthly bank statements and emailing them to his supervisor to be used to reconcile his employer’s accounts.  From about April 2011 through November 2015, Tiffany made wire transfers totaling more than $3 million from his employer’s accounts to his personal accounts, and he forged signatures on about 46 checks payable to himself totaling about $456,000.  Tiffany concealed his scheme by making false entries in his employer’s electronic accounting system and altering bank statements he obtained online before forwarding them to his supervisor.  Tiffany obtained a total of about $3,557,304 from his employer’s accounts, nearly all of which he used for his own benefit. 

The wire fraud 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.  The monetary transactions statute provides for a sentence of no greater than 10 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 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 Office; 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 Investigations in Boston, made the announcement today.  Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit is prosecuting the case. 

BOSTON –Haverhill-based skilled nursing facility operator Whittier Health Network, Inc., and its Director of Long Term Care, Leo Curtin, have agreed to pay $2.5 million to resolve allegations concerning inflated Medicare claims.

The agreement announced today concerns rehabilitation therapy that Massachusetts-based Therapy Resources Management (TRM) purportedly provided at Whittier facilities in Massachusetts and New York.  The settlement resolves allegations that Whittier and Mr. Curtin failed to take sufficient steps to prevent TRM from engaging in a pattern and practice of fraudulently inflating the reported amounts of therapy provided to Medicare Part A patients in Whittier facilities.  Specifically, the facilities submitted bills for therapy that allegedly did not occur as reported, because the therapists were actually conducting initial evaluations when they claimed to be providing therapy.  In addition, the therapists reported therapy time using estimates that often were rounded up from the actual minutes of therapy provided, despite Medicare rules specifically prohibiting the reporting of estimated or rounded numbers of minutes.

“This settlement and last week’s settlement with another TRM-served nursing home chain, Health Concepts, are the latest in a series of resolutions involving inflated Medicare billing at skilled nursing facilities,” said United States Attorney Carmen M. Ortiz.  “We will continue our efforts to ensure that the provision of care in nursing facilities is based on patients’ clinical needs rather than the financial interests of the companies providing care.”

“Whittier Health Network put its financial gain ahead of the care of their patients,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The FBI will continue to aggressively investigate skilled nursing facilities that inflate their billing and exploit the nation’s healthcare system.”

“Patients and taxpayers rightly expect nothing less than suitable, high-quality health care,” said Phillip M. Coyne, Special Agent in Charge, Office of Inspector General of the U.S. Department of Health and Human Service’s Boston Regional Office.  “Providers more concerned with increasing Medicare profits, though, can expect my agency working with law enforcement partners to aggressively investigate and prosecute.” 

HHS Hotline.  The government encourages anyone with information about the practices described above, or similar practices involving rehabilitation therapy in nursing facilities, 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/.

This matter was investigated by the Department of Health and Human Services, Office of the Inspector General; the Federal Bureau of Investigation; and the Department of Veterans Affairs, Office of Inspector General.  The case was handled by Assistant U.S. Attorney Gregg Shapiro of Ortiz’s Affirmative Civil Enforcement Unit.

BOSTON – A New York man and his sister-in-law were sentenced in U.S. District Court in Springfield in connection with a scheme to cash fraudulent tax refund checks.

Robert Evans, 54, of Wallkill, NY, was sentenced today by U.S. District Court Judge Mark G. Mastroianni to two years of probation including three months of home confinement and ordered to pay $517,714 in restitution.  In January 2016, Evans pleaded guilty to one count of theft of government money.  Evelyn Manzueta, 52, of Springfield, was sentenced on Oct. 6, 2016, by U.S. District Judge Timothy S. Hillman to one year in prison, three years of supervised released and ordered to pay $1,377,376 in restitution.  In June 2016, she pleaded guilty to theft of government property. 

From January 2012 to May 2013, Manzueta orchestrated the cashing of 236 fraudulent tax refund checks. She cashed nearly $500,000 through her own accounts and enlisted friends and family members, including her brother-in-law Evans, to cash the remaining checks.  Evans cashed $517,714 through his accounts.  In total, $1,377,376 in fraudulent tax returns were cashed through the scheme.

The U.S. Department of Treasury issued the checks based on tax returns, submitted by unknown individuals, which were later determined to be fraudulent.  Although the tax returns used the names and Social Security numbers of real people living in Puerto Rico, their addresses were falsely listed as Massachusetts and New York.  The tax returns also contained false employment information.  Both Evans and Manzueta, knowing the tax return checks were fraudulent, cashed them through their bank accounts. 

This case is part of an ongoing effort to prosecute perpetrators of Stolen Identity Refund Fraud (SIRF) schemes.  In these schemes, individuals use stolen identities to steal money from the U.S. Treasury by filing fake tax returns that claim tax refunds. SIRF crimes are often perpetrated by large criminal enterprises with individuals at all stages of the scheme: those who steal the Social Security Numbers and other personal identifying information, those who file false returns with the IRS, and those who facilitate obtaining the refunds. These criminal enterprises exploit the speed and relative anonymity of highly automated systems that store personal information, preparing and filing tax returns electronically, and generating income tax refunds quickly.  The IRS estimated that, in 2013, the government lost $5.8 billion to SIRF schemes.

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 Karen L. Goodwin of Ortiz’s Springfield Branch Office prosecuted the case.

BOSTON – A Worcester man was sentenced on Wednesday, Oct. 5, 2016, in U.S. District Court in Worcester on child pornography charges.  

Christopher Rondeau, 31, was sentenced by U.S. District Court Judge Timothy S. Hillman to 68 months in prison and five years of supervised release.  In July 2016, Rondeau pleaded guilty to receiving child pornography.

On Sept. 21, 2015, law enforcement officers executed a federal search warrant at Rondeau’s residence in Worcester.  In the home, agents recovered several computers and other storage devices with over 1,700 images and videos containing child pornography.   While Rondeau was not home at the time of the warrant, he was located and arrested soon after. 

Following his arrest, Rondeau confessed to downloading child pornography and also explained that agents would find sexualized communications with a 14-year-old girl on his cellphone.  A search of the phone thereafter confirmed the presence of those messages. 

United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; and Worcester Police Chief Steven M. Sargent, made the announcement.  Assistant U.S. Attorney Mark Grady of Ortiz’s Worcester Branch Office prosecuted 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.   

BOSTON – Three Cape Cod men were charged in a second superseding indictment in connection with the “Nauti-Block” drug trafficking ring. This brings the total number of defendants charged in federal court in this, and related cases, to 19. 

The second superseding indictment charges three additional defendants and adds new charges to existing defendants.  Christian Chapman, 26, of Yarmouth, was charged with conspiracy to distribute and possess with the intent to distribute heroin.  Browning Mejia, 26, of Yarmouth, was charged with use of a telephone to facilitate a felony drug trafficking offense, namely, conspiracy to distribute and possess with the intent to distribute Suboxone, a Schedule III controlled substance.  Aaron Mott-Frye, 27, of Wareham, was charged with conspiracy to distribute and possess with the intent to distribute cocaine.

The second superseding indictment stems from the April 2016 takedown of the “Nauti-Block” drug trafficking organization that charged Denzel Chisholm, Christopher Wilkins, and others in connection with the sale of significant amounts of heroin on Cape Cod. 

The second superseding indictment also added the following charges against existing defendants:

• Denzel Chisholm and Christopher Wilkins were charged with conspiring to distribute one kilogram or more of heroin;
• Tyrone Gomes was charged with conspiring to distribute 100 grams or more of heroin;
• Shaun Miller was charged with possession of two firearms by a convicted felon;
• Denzel Chisholm and Browning Mejia were charged with use of a telephone to facilitate a drug trafficking offense;
• Christopher Wilkins and Mott-Frye were charged with conspiracy and possession with the intent to distribute and distribution of cocaine; and
• Bethanne Hutchings was charged with maintaining a place for drug purposes.

Aaron Mott-Frye was arrested this morning and appeared in U.S. District Court in Boston.  Chapman is currently awaiting trial in Barnstable County for charges related to a recent shooting at Pufferbelly’s nightclub.  Mejia is currently serving a state prison sentence for his role in a 2009 Cape Cod shooting.  Mejia and Chapman will appear in federal court after they are transferred from state custody.   

This case was brought as part of the federal response to the growing opioid abuse epidemic in Massachusetts and other New England states.  Barnstable County, which includes Cape Cod and associated islands, has been particularly hard hit.  With a population of just over 200,000 people, it saw 66 fatal overdoses in 2015 – a 65% increase from 2013 – according to the Massachusetts Department of Public Health.

The charge of conspiracy to distribute and possess with intent to distribute heroin and cocaine and possession with the intent to distribute heroin and cocaine provide for a sentence of no greater than 20 years in prison, a lifetime of supervised release and a fine of $1 million.  The charge of conspiracy involving greater than 100 grams of heroin provides for a sentence of five years to life in prison, four years of supervised release and a fine of $5 million.  The charge of conspiracy involving one kilogram of heroin provides for a sentence of 10 years to life in prison, five years of supervised release and a fine of $10 million. The charge of conspiracy to possess a firearm in furtherance of a drug trafficking offense provides 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 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; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; 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; Barnstable County District Attorney Michael O’Keefe; Barnstable County Sheriff James M. Cummings; Bristol County Sheriff Thomas Hodgson; Chief Paul MacDonald of the Barnstable Police Department; and Chief Frank Frederickson of the Yarmouth Police Department, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Eric Rosen of Ortiz’s Narcotics and Money Laundering Unit.  

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 a court of law.

BOSTON – Luis Cirilo, 45, of Springfield was charged in U.S. District Court in Springfield yesterday with failing to register as a sex offender.

As alleged in court documents, Cirilo as convicted in 1997 of sodomy in the first degree.  In violation of court orders, he traveled from Pennsylvania to Springfield, Mass. and failed to register as a sex offender from June 2014 to Nov. 12, 2015, when he was arrested on state charges of indecent assault and battery on a child under 14. 

The charging statute provides for a sentence of no greater than 10 years in prison, a lifetime 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 and John Gibbons, United States Marshal for the District of Massachusetts, made the announcement.  The case is being prosecuted by Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Branch Office.

The details contained in the indictment are allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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/.

BOSTON – A Montague man was sentenced today in U.S. District Court in Springfield in connection with filing false income taxes associated with his restaurant.

Ioanis Dimitriou, 49, was sentenced by U.S. District Court Judge Mark G. Mastroianni to three months in prison, one year of supervised release and ordered to pay a fine of $219,960.  In April 2016, Dimitriou pleaded guilty to five counts of filing false tax returns from 2008 to 2012. 

Dimitriou was the owner of a restaurant in Greenfield, Mass.  that generated a substantial amount of cash sales, which he took from the business and did not declare as income.  Dimitriou systematically deleted records from his computer system and kept two sets of books that depicted the actual sales of the business and the sales disclosed on his tax returns.  As a result, Dimitriou paid only five percent of the more than $232,000 in taxes that he owed.

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 Alex J. Grant of Ortiz’s Springfield Branch Unit prosecuted the case.

BOSTON – A Southbridge man pleaded guilty today in U.S. District Court in Worcester in connection with being a felon in possession of a firearm and distributing drugs.

Alehandros Medina, 24, pleaded guilty to distribution of cocaine, ketamine, MDMA and Methylone; being a felon in possession of a firearm and attempted money laundering.  U.S. District Court Judge Timothy S. Hillman scheduled sentencing for Feb. 3, 2017.    

On several occasions between November 2014 and October 2015, Medina sold cocaine, MDMA (commonly referred to as ecstasy), and ketamine to an undercover federal agent.  In August 2015, Medina traveled to Oregon and was stopped by police who confiscated approximately $22,000 from Medina that he intended to use to purchase marijuana.  In  October 2015, federal agents arrested Medina in Southbridge as he was delivering cocaine to an undercover agent.  Later that day, agents seized cocaine and a loaded .38 caliber revolver from Medina’s residence.   

The charge of possession with intent to distribute and distribution of cocaine provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $1 million.  The charge of distribution of ketamine provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $500,000.  The charge of conspiracy to commit money laundering provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $500,000.  The charge of being a felon in possession of a firearm 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; Michal J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; and Southbridge Police Chief Shane Woodson, made the announcement today.  Assistant U.S. Attorney Greg A. Friedholm of Ortiz’s Worcester Branch Office is prosecuting the case. 

BOSTON – A Boston man was arrested today in connection with his role in a scheme to steal personal information and bank account numbers to withdraw money from retirement accounts. 

Kevin Marseille, 26, of Boston, was indicted on identity theft, access device fraud, and conspiracy to commit those offenses.  Marseille was arrested today and is schedule to be arraigned tomorrow before U.S. District Court Magistrate Judge Judith G. Dein. 

The indictment alleges that, in 2014, Marseille approached Jasmine Banks, who, at the time, worked as a customer service employee at Mercer, Inc., in Norwood, Mass.  Marseille used Banks to obtain personally identifiable information and bank account information for individuals whose retirement accounts were administered by Mercer, a New York-based company which provides consulting and related services for employers, including administration of retirement benefit plans. 

As alleged in the indictment, from approximately February 2014 to April 2014, Banks accessed customer account information from her computer and provided this information to Marseille via email.  Marseille obtained the names, addresses, and bank account and routing numbers for approximately 270 Mercer account holders.  In many cases, he also obtained account holders’ dates of birth and social security numbers.  He further sought and obtained detailed account access information for four retirement accounts with substantial balances. 

The retirement account information was allegedly used to load a prepaid card with nearly $20,000 in fraudulently obtained funds.  Marseille then used the prepaid card to purchase electronic and other consumer goods at retailers in greater Boston, including Target and Best Buy.  Intervention by Mercer and law enforcement prevented further account access and withdrawals.  Mercer has cooperated fully with the government’s investigation.

In March 2016, Banks pleaded guilty to conspiracy to commit access device fraud and identity theft. 

The charge of identity theft 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 charges of access device fraud and conspiracy each 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.

United States Attorney Carmen M. Ortiz and Stephen A. Marks, Special Agent in Charge of the United States Secret Service, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney David J. D’Addio of Ortiz’s Cybercrime Unit.

The details in the indictment are allegations.  The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

BOSTON – The owner of a New Bedford gym pleaded guilty today in U.S. District Court in Boston in connection with a wide-ranging conspiracy that distributed heroin throughout Bristol County, Mass. and Providence, RI. 

Sharik Mendes, 39, of New Bedford, pleaded guilty to one count of conspiracy to distribute and possess with the intent to distribute heroin.  Mendes had been previously charged by criminal complaint in June 2016 with Tyson Depina and Eric Desousa, both of whom have pleaded not guilty and who have been indicted by a federal grand jury.  U.S. District Court Judge Douglas P. Woodlock scheduled sentencing for January 11, 2017.

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 agreed to accept responsibility for conspiring to distribute between 600 and 700 grams of heroin. 

The charging statute provides for 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.

This case was brought as part of the federal response to the growing opioid abuse epidemic in Massachusetts and other New England states.  Heroin is highly addictive, and users can quickly develop a tolerance, prompting them to seek higher potencies and greater quantities of the narcotic.  Between 2000 and 2014, opioid overdose deaths have more than tripled with a spike in recent years in Massachusetts.

United States Attorney Carmen M. Ortiz; 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 today.  The case is being prosecuted by Assistant U.S. Attorney Eric S. Rosen of Ortiz’s Narcotics and Money Laundering Unit. 

BOSTON – A Suffolk University employee was sentenced today in U.S. District Court in Boston in connection with fraudulently obtaining over $40,000 in federal student loan funds by falsifying her own records to make it appear that she was a Suffolk University graduate student when in fact she was not.

Ashley Ciampa, 28, of Medford, was sentenced today for student loan fraud.  U.S. District Court Judge F. Dennis Saylor, IV sentenced Ciampa to two years of probation including six months of home detention with electronic monitoring and restitution in the amount of $47,453.  Ciampa pleaded guilty in June 2016.

In 2009, Ciampa began working in the Registrar’s Office at Suffolk University.  In 2013, she enrolled in Suffolk’s MBA program free of charge as an employee.  In a first-semester business ethics class, Ciampa failed to attend class or complete the required coursework, but instead used her computer access in the Registrar’s Office to assign herself an “A” for the course.  In subsequent semesters, she repeatedly assigned herself passing grades for classes she never attended.  By maintaining the appearance that she was a graduate student, she was able to borrow $47,453 in federal student loans beginning in 2014, which she spent for vacations and other personal expenses.

United States Attorney Carmen M. Ortiz and Brian Hickey, Special Agent in Charge of the U.S. Department of Education, Office of Inspector General, Region I and II, made the announcement today.  The case was prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.

BOSTON – The former owner of the Myriad Ballroom in Mendon, Mass., pleaded guilty today in U.S. District Court in Worcester to tax fraud charges.   

Jon “Eddie” Rouleau, 63, pleaded guilty to Information charging him with one count of intentionally aiding in the preparation of a false tax return.  U.S. District Court Judge Timothy S. Hillman scheduled sentencing for January 12, 2017.

Rouleau owned and operated the Myriad Ballroom for decades until he sold the business and property in 2014.  Federal agents initiated an investigation in 2013 when Rouleau advertised that the Ballroom was for sale.  Rouleau told the agents, who posed as potential buyers, that the annual gross receipts and profits of the Ballroom were significantly greater than reported on the Ballroom’s tax returns, including the gross receipts and profit reported in 2012. 

The charging statute provides for a sentence of no greater than three years in prison to be followed by one year of supervised release and a fine of up to $100,000 plus the costs of prosecution.  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 and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made announcement today.  The case is being prosecuted by Assistant U.S. Attorney Greg A. Friedholm of U.S. Attorney Ortiz’s Worcester Branch Office. 

BOSTON – A jury convicted a previously-convicted sex offender yesterday in connection with possessing child pornography.

Neil Sweeney, 51, was convicted following a six-day jury trial in U.S. District Court in Worcester of possessing and distributing child pornography.  U.S. District Court Judge Timothy S. Hillman scheduled sentencing for Jan. 10, 2016.

The charges arose from an federal online undercover operation. In April 2015, Sweeney used Gigatribe, an Internet file sharing program, to distribute dozens of videos and images of minors engaging in sexually explicit conduct to an undercover federal agent. 

In 1995, Sweeney was convicted in Worcester Superior Court for the indecent assault and battery on two boys, both under the age of 14.  As a result of those convictions, Sweeney was required to register as a Level 3 Sex Offender. 

The charging statutes provide for a mandatory minimum sentence of 15 years and no greater than 40 years in prison, five 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; Harold Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; and Worcester Police Chief Steven Sargent, made the announcement.  The case is being prosecuted by Assistant U.S. Attorneys Greg A. Friedholm and Karin M. Bell of Ortiz’s Worcester Branch Office. 

BOSTON – The U.S. Attorney’s Office reached a settlement agreement yesterday with the Lexington Chinese School resolving allegations that the school violated Title III of the Americans with Disabilities Act (ADA) by failing to provide reasonable modifications to students with disabilities.   

“Children should never be turned away from an education because they have a disability,” said United States Attorney Carmen M. Ortiz.  “More than 25 years ago, Congress passed the ADA to ensure that individuals with disabilities can fully participate in all parts of society.  My office is committed to enforcing this law, and making sure that all places of public accommodation – from schools, to camps, to after school programs – provide children with the modifications they need so that they can participate alongside their peers.”

Lexington Chinese School is a private, non-profit, volunteer-run school in Belmont that provides weekly Chinese language classes and other extracurricular activities to approximately 400 students.  The school allegedly discriminated against two students with disabilities (who are, in fact, siblings) by refusing to make reasonable modifications to serve them in class, and by eventually refusing to allow them to enroll in the school. 

Under the terms of the settlement agreement, the school will implement a disability non-discrimination policy; implement a process by which reasonable modifications will be provided to students with disabilities; and facilitate training for teachers who are serving students with disabilities.  Additionally, Lexington Chinese School will pay $7,000 in monetary relief to the family of the two students who were the subject of this alleged discrimination.  

This matter was handled by Assistant U.S. Attorney Michelle Leung and Special Assistant U.S. Attorney Gregory Dorchak of Ortiz’s Civil Rights Unit.

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. 

BOSTON – A member of MS-13 pleaded guilty on Friday, Sept. 30, 2016, in connection with the stabbing of a rival gang member in Chelsea in December 2015. 

Mauricio Sanchez, also known as “Tigre,” 29, of Chelsea, pleaded guilty in U.S. District Court in Boston to conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as racketeering conspiracy.  U.S. District Court Judge Dennis Saylor IV scheduled sentencing for Dec. 22, 2016. 

After a three-year investigation, Sanchez was one of 61 persons named in a January 2016 superseding indictment targeting the criminal activities of alleged leaders, members, and associates of Mara Salvatrucha (MS-13) in Massachusetts.  As alleged in court documents, MS-13 was identified as a violent transnational criminal organization whose branches or “cliques” operate throughout the United States, including in the District of Massachusetts.  MS-13 members are required to commit acts of violence to maintain membership and discipline within the group.  Specifically, MS-13 members are required to attack and murder gang rivals whenever possible.

In court filings and at Friday’s plea hearing, Sanchez was identified as a member of MS-13’s Eastside Loco Salvatrucha (ESLS) clique.  As an ESLS member, Sanchez “jumped in” new members and paid dues to fund MS-13 activities in Massachusetts and in El Salvador.  As part of his plea agreement, Sanchez admitted that he and other MS-13 members stabbed a gang rival, believed to be a member of 18th Street, near Bellingham Square in Chelsea on Dec. 27, 2015.

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.  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.

Sanchez is the sixth defendant to plead guilty. Other defendants pleaded guilty to drug trafficking and immigration offenses.

United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Commissioner Thomas Truco of the Massachusetts Department of Corrections; Sheriff Frank Cousins of the Essex County Sheriff’s Department; Sheriff Steven W. Thompkins of the Suffolk County Sheriff’s Department; Daniel F. Conley, Suffolk County District Attorney; Marian T. Ryan, Middlesex County District Attorney; Jonathan Blodgett, Essex County District Attorney; Boston Police Commissioner William Evans; Chief Brian A. Kyes of the Chelsea Police Department; Chief Steven A. Mazzie of the Everett Police Department; Chief Kevin Coppinger of the Lynn Police Department; Chief Joseph Cafarelli of the Revere Police Department; and Chief David Fallon of the Somerville Police Department, made the announcement today.

BOSTON – A husband and wife from Alpharetta, GA were charged today in U.S. District Court in Boston in connection with a scheme to defraud Framingham-based Staples, Inc. of more than $1.4 million. 

John Douglas, 46, was charged in an Information with conspiracy to commit wire fraud and mail fraud.  His wife, Analyn Douglass [sic], 41, was separately charged in an Information with conspiracy to ship stolen goods in interstate commerce.  

According to the Information, 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 web site 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 and the associate allegedly used a similar method to claim more than $527,000 in cash rebates from Staples for products that they did not purchase. 

Staples discovered the fraud and referred the matter to the Federal Bureau of Investigation and the United States Attorney’s Office for investigation.  Staples has cooperated with the government’s 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/loss from the offense, whichever is greater.  The charge of conspiracy to ship stolen goods provides 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/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.

United States Attorney Carmen M. Ortiz; 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.  The case is being prosecuted by Assistant U.S. Attorney David J. D'Addio of Ortiz’s Cybercrime Unit.

The details contained in the Informations are allegations.  The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

BOSTON – A Georgetown woman was charged in U.S. District Court in Boston with embezzling over $60,000 from her former employer.

Michelle Higson, 41, was indicted on one count of bank fraud and two counts of uttering a forged security.   Higson was arrested this morning and is scheduled to appear before U.S. District Court Magistrate Judge Judith Dein this afternoon.

According to the indictment, Higson worked as a part-time bookkeeper at a Rowley-based company.  In her position as bookkeeper, Higson was responsible for handling the company’s accounts payable, and used the company’s accounting software program to do so.  From December 2013 through January 2015, Higson stole a series of the company’s checks and made them payable to cash.  Higson then forged her employer’s signatures on the stolen checks, endorsed them herself, and deposited them for cash, which she used for personal expenses. 

To conceal her criminal conduct and avoid detection by company officials, Higson allegedly falsified entries in the company’s general ledger to make it appear as if the stolen checks had been issued to satisfy payment to bona fide vendors.  In total, Higson embezzled over $60,000. 

The charge of bank fraud provides for a sentence of no greater than 30 years in prison, five years of supervised release, and a fine of $1 million.  The charge of uttering a forged security provides for 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 and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service made the announcement today.  The case is being prosecuted by Assistant United States Attorney Anne Paruti of Ortiz’s Major Crimes Unit.

BOSTON – An executive of a California-based biopharmaceutical company was arrested yesterday and charged in U.S. District Court in Boston in connection with trading on insider information and profiting nearly $1 million.

Robert Gadimian, 46, of Burbank, Calif., was indicted on seven counts of securities fraud and insider trading. 

According to the indictment, from November 2011 to October 2014, Gadimian was the Senior Director of Regulatory Affairs at Puma Technology, Inc., a biopharmaceutical company based in California whose principal focus was the development of a breast cancer drug called “neratinib.”  Puma was involved in several ongoing drug trials for neratinib including one that a Massachusetts-based consulting firm was conducting for Puma.

The indictment further alleges that by virtue of his position at Puma, including his attendance at steering committee meetings and project team meetings related to ongoing drug trials, Gadimian learned sensitive, non-public information about the ongoing trials and made significant profits from trading on the inside information.  Gadimian also did so in violation of Puma’s insider trading policy.  Specifically, Gadimian allegedly profited approximately $95,000 in 2013 and approximately $1,060,000 in 2014. 

Specifically, the indictment alleges that in July 2014, Gadimian purchased a series of short-term Puma call options in advance of a July 22, 2014 public announcement that Puma achieved positive results during one of the trials.  The following day, Puma’s stock price jumped approximately 295 percent, and Gadimian then allegedly sold all the call options he purchased and profited $910,000 from his illegal trades.

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.  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.

The Securities and Exchange Commission, which conducted a parallel civil investigation, cooperated with criminal authorities in bringing this case. 

United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Neil J. Gallagher, Jr. of Ortiz’s Economic Crimes Unit.

The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.

BOSTON – Providence-based skilled nursing facility operator Health Concepts, Ltd., and its Chief Operating Officer, John Gage, have agreed to pay $2.2 million to resolve allegations concerning inflated Medicare claims.

“This settlement is another in a series of resolutions involving inflated Medicare billing at skilled nursing facilities,” said United States Attorney Carmen M. Ortiz.  “We continue our efforts to ensure that the provision of care in nursing facilities is based on patients’ clinical needs rather than the financial interests of the companies providing care.”

“Veterans have sacrificed so much for this country and deserve the very best we can provide, especially during elderly care.  When VA places these veterans in nursing homes, we expect that standard of care to be met. We will continue to investigate any nursing facility that bases their level of care on financial interests rather than the needs of our country’s veterans.  We are proud to have contributed to this multi-agency investigation,” said Jeffrey G. Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office.

The agreement announced today resolves allegations concerning rehabilitation therapy that Massachusetts-based Therapy Resources Management (TRM) purportedly provided at Health Concepts facilities in Rhode Island.  The settlement resolves allegations that Health Concepts and Mr. Gage failed to take sufficient steps to prevent TRM from engaging in a pattern and practice of fraudulently inflating the reported amounts of therapy provided to Medicare Part A patients in Health Concepts facilities.  Specifically, the facilities submitted bills for therapy that allegedly did not occur as reported, because the therapists were actually conducting initial evaluations when they claimed to be providing therapy, and because the therapists reported therapy time using estimates that often were rounded up from the actual minutes of therapy provided, despite Medicare rules specifically prohibiting the reporting of estimated or rounded numbers of minutes. 

“Health Concepts put its financial gain ahead of the care of their patients,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The FBI will continue to aggressively investigate skilled nursing facilities that inflate their billing and exploit the nation’s healthcare system.”

“Patients and taxpayers rightly expect nothing less than suitable, high-quality health care,” said Phillip M. Coyne, Special Agent in Charge, Office of Inspector General of the U.S. Department of Health and Human Service’s Boston Regional Office.  “Providers more concerned with increasing Medicare profits, though, can expect my agency working with law enforcement partners to aggressively investigate and prosecute.”   

HHS Hotline.  The government encourages anyone with information about the practices described above, or similar practices involving rehabilitation therapy in nursing facilities, 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/.

The case was handled by Assistant U.S. Attorney Gregg Shapiro of Ortiz’s Affirmative Civil Enforcement Unit.

BOSTON – A former employee of a pain management clinic was charged today in U.S. District Court in Boston in connection with a scheme to falsify patient medical records in order to obtain payments from the Medicare program and commercial insurance companies.

Moustafa Moataz Aboshady, 33, an Egyptian national residing in Lake Forest, Calif., was indicted on one count of conspiracy and two counts of making false statements in connection with health care benefit programs.  Aboshady was arrested today in California.

As alleged in the indictment, Aboshady was a medical resident in Massachusetts and Rhode Island, employed at New England Wellness & Pain Management, P.C., which was also known as New England Pain Associates, P.C., Greystone Pain Management, Inc., and New England Pain Institute, P.C., or NEPA. NEPA had locations in Massachusetts and Rhode Island. The indictment alleges that Aboshady was part of a conspiracy involving other members of NEPA, including its owner and members of a satellite office in Cairo, Egypt, to submit claims for payment to Medicare and commercial insurance companies for services not rendered.

As part of the scheme, Aboshady allegedly falsified, and instructed others to falsify, patient encounter notes.  Such false information included, but was not limited to, detailed descriptions of extensive physical examinations and treatment plans, and durations of face-to-face interactions with patients to create the appearance of lengthy and involved patient appointments, when in fact these services did not take place.  Aboshady instructed the Cairo office to create false electronic signatures on the encounter notes and how to make the timestamps for those signatures look realistic.  In an email dated Feb. 13, 2013, Aboshady provided the following instruction to the Cairo office in connection with creating false entries in the encounter note for one of the patients:

ROS [review of systems] cardiac, no one has rheumatic fever in america.  pls don’t use it.[]no one asks about varicose viens. remove otoscopic exam from ent.[]remove thyroid exam.[]chest exam leave ronchi and wheezes only.[]Cardiac remove palpation, rubs and gallops. Abdomen remove masses and hepatosplenomegally.[]change the rest of physical exam the way i did. Pls sign the note as 8:12 or 8:17 instead of 8:00. 

Pls share with threst [sic]. it takes me forever to fix notes.

According to the indictment, Aboshady was also responsible, in conjunction with the Cairo office, for fabricating the dates of urine drug test results, so that the tests appeared to have been performed within days of specimen collection rather than weeks or months thereafter.  This information was necessary to support billing codes submitted to insurance companies.  In fact, NEPA tested patients’ urine weeks and sometimes three months after the specimens had been collected and stored the specimens in unrefrigerated in large plastic bags and containers. 

On some occasions, Aboshady and the owner of NEPA allegedly falsified, and caused the Cairo office to falsify, medical records shortly after patients’ appointments.  Other times, in response to audits or requests for medical records by Medicare programs and insurance companies, he falsified medical records months and even over a year after patients’ appointments. 

The indictment further alleges Aboshady falsified, and instructed others to falsify, patient records despite an email from a physician assistant to Aboshady and the NEPA owner in June 2012, at the beginning of the charged conspiracy, stating that: 

I have recently noticed there are some notes written under my name that have been changed/edited without my knowledge . . . . I know exactly what I write in my notes so it is very easy for me to see when a note has been edited . . . . [I]t holds me responsible for a physical exam that I did not do, if the note[] says that I have.  I purposely do not include portions of the physical exam in my note that I did not do.  

Fathalla Mashali, the owner of NEPA, is scheduled to stand trial on Feb. 27, 2017.

The charging statutes provide for a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000 on each count, restitution 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.

United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations; Anthony DiPaolo, Chief of Investigations of the Massachusetts Insurance Fraud Bureau; and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Maxim Grinberg of Ortiz’s Health Care Fraud Unit.

The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.