District of Massachusetts
Press releases recorded for this federal judicial district.
Former Boston Police Officer Charged with Access Device FraudRead the Press Release
BOSTON – A former Boston Police officer pleaded guilty today in connection with purchasing and using gift cards obtained from the return of stolen merchandise.
Eddie Odney, 38, pleaded guilty to one count of access device fraud. U.S. District Court Senior Judge Mark L. Wolf scheduled sentencing for Nov. 3, 2016. Odney has agreed to resign his position as a Boston Police Officer, effective today.
Over the course of over a year and a half, Odney purchased approximately $5,000 worth of gift cards that he believed were obtained from the return of stolen merchandise at stores including T.J. Maxx, Macy’s, and HomeGoods. Odney paid cash for these cards and used them to make over $1,600 in purchases.
The charging statute provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation; and Superintendent Frank Mancini of the Boston Police Department’s Anti-Corruption Division; made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Eugenia M. Carris of Ortiz’s Public Corruption Unit.
Former Weymouth Woman Indicted for Bank Fraud and Aggravated Identity TheftRead the Press Release
BOSTON – A former Weymouth woman was charged yesterday in U.S. District Court in Boston in connection with a scheme to withdraw cash from bank accounts.
Sophiah Acloque, 33, was indicted on three counts of bank fraud, three counts of aggravated identity theft and one count of theft of public mail. In June 2016, Acloque was charged by criminal complaint.
According to court documents, in December 2015, Bank of America contacted federal investigators after detecting a fraudulent debit card scheme. It is alleged that an individual(s) posed as bank customers living in Massachusetts and called Bank of America to request that new debit cards and PIN numbers be mailed to the residence of the account holder. It is also alleged that the newly issued cards were stolen from the mail and used to withdraw cash unbeknownst to the bank customers.
On Jan. 25, 2016, law enforcement identified Acloque as a participant in the debit card scheme when she was observed taking mail from the mail box of a Cambridge resident. The resident had not ordered a new card but had been advised by Bank of America that one had been ordered and was expected to arrive around January 25. A subsequent search of Acloque’s car revealed mail addressed to the Cambridge resident, including a Bank of America envelope containing an ATM card and a second envelope containing a PIN.
The indictment charges Acloque with the fraudulent use of Bank of America ATM cards to withdraw cash belonging to three account holders residing in Cambridge, Stoughton and Milton and with stealing mail, including an ATM card and PIN number, from the mail box of the Cambridge resident mentioned above.
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 aggravated identity theft provides a mandatory sentence of two years in prison. The charge of theft of public mail 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 Attorney Carmen M. Ortiz and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service made the announcement. The case is being prosecuted by Assistant U.S. Attorney Giselle J. Joffre of Ortiz’s Major Crimes Unit.
The details contained in the charging documents are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Former FBI Assistant Special Agent in Charge Sentenced for Perjury and Obstruction of Justice During Bulger TrialRead the Press Release
BOSTON – A former Assistant Special Agent in Charge (ASAC) of the FBI’s Boston Office was sentenced today in U.S. District Court in Boston in connection with perjury and obstruction of justice regarding his testimony at the 2013 trial of James “Whitey” Bulger.
Robert Fitzpatrick, 76, of Charlestown, R.I., was sentenced by U.S. District Court Judge F. Dennis Saylor, IV to 24 months of probation and a fine of $12,500. In May 2016, Fitzpatrick pleaded guilty to six counts of perjury and six counts of obstruction of justice.
Fitzpatrick, in his capacity as ASAC of the Boston Division, had overall supervisory responsibility of the organized crime program in Boston between 1981 and 1986—a time period in which Bulger, while an active FBI informant, was involved in eight murders.
Fitzpatrick, who is the author of Betrayal, Whitey Bulger and the FBI Agent Who Fought To Bring Him Down, was called to testify at the Bulger trial on July 29 and July 30, 2013. In pleading guilty, Fitzpatrick admitted that he lied when he testified at Bulger’s trial that he tried to end Bulger’s relationship with the FBI and target Bulger for prosecution but was overruled by higher authorities in the FBI.
Specifically, Fitzpatrick admitted that contrary to his sworn testimony at the Bulger trial:
-
his assignment to Boston in 1980 as ASAC was not a special mission ordered by the Assistant Director of the FBI because there were problems in the office, but rather a routine reassignment;
-
Bulger never said, “I’m not an informant” or otherwise denied being an informant when he met with Fitzpatrick;
-
Fitzpatrick never tried to close Bulger as an FBI informant;
-
Fitzpatrick was demoted from ASAC because he falsified official FBI reports in connection with a shooting incident, not because he reported corruption;
-
Fitzpatrick did not arrest mob boss Gennaro Angiulo; and
-
Fitzpatrick did not find or recover the rifle James Earl Ray used to assassinate Dr. Martin Luther King, Jr. at the Lorraine Motel in Memphis, TN in 1968.
United States Attorney Carmen M. Ortiz and Ronald G. Gardella, Special Agent in Charge of the Department of Justice, Office of Inspector General, New York Field Office, made the announcement today. This case was prosecuted by Assistant U.S. Attorneys Zachary R. Hafer and Fred M. Wyshak of Ortiz’s Public Corruption and Special Prosecutions Unit.
-
Quincy Man Sentenced for Possession of Firearms and AmmunitionRead the Press Release
BOSTON – A Quincy man was sentenced today in U.S. District Court in Boston in connection with being a convicted felon in possession of a firearms and ammunition.
George J. Perry, 40, who was classified by the Court as an armed career criminal, was sentenced by U.S. District Court Judge Rya W. Zobel to 15 years in prison and three years of supervised release. In February 2016, Perry pleaded guilty to being a felon in possession of a firearms and ammunition.
In February 2015, law enforcement became aware that Perry had assaulted a individual in Waltham with a firearm earlier in the day. Law enforcement officers located Perry and found in his backpack two loaded semi-automatic firearms. One of the firearms, a .40 caliber IWI Desert Storm, was loaded with 10 rounds of .40 caliber ammunition. The other firearm was a 9mm Ruger semi-automatic loaded with 17 rounds of 9mm ammunition. Perry was later interviewed and admitted to stealing the firearms from another individual earlier in the day. The other individual, Zeph Pitt, of Waltham, was later located and found to be in possession of five other firearms and thousands of rounds of various caliber ammunition.
Pitt, a previously convicted felon, was convicted of being a felon in possession of firearms and ammunition and scheduled to be sentenced in November 2016.
United States Attorney Carmen M. Ortiz; Lawrence J. Panetta, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco Firearms & Explosives, Boston Field Division; and Waltham Police Chief Keith MacPherson, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
Alleged Associates of La Cosa Nostra Charged with Extortion and LoansharkingRead the Press Release
Five alleged associates of the Genovese La Cosa Nostra (LCN) crime family were charged today with extortion by threat of physical violence, making extortionate extensions of credit and collection on an extension of credit by extortionate means.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Carmen M. Ortiz of the District of Massachusetts; Hampden County, Massachusetts, District Attorney Anthony Gulluni; Special Agent in Charge Harold H. Shaw of the FBI’s Boston Division; and Colonel Richard D. McKeon of the Massachusetts State Police announced.
Ralph Santaniello, 49, of Longmeadow, Massachusetts; Giovanni Calabrese, aka John Calabrese, 53, of Longmeadow; Gerald Daniele, 51, of Longmeadow; Francesco Depergola, 60, of Springfield, Massachusetts; and Richard Valentini, 51, of East Longmeadow, Massachusetts, were each charged with one count of collecting on an extension of credit by extortionate means. In addition, Santaniello, Calabrese and Depergola were each charged with one count of extortion by threat of physical violence; and Daniele was charged with two counts of making extortionate extensions of credit and one count of collecting on an extension of credit by extortionate means.
According to the indictment, the defendants were associates of the Genovese LCN crime family in New York and committed various criminal activities in Springfield, including loansharking (e.g., the making of unlawful loans and extortionate extensions of credit); extortion from persons who were involved in legitimate and illegitimate businesses, including illegal gambling businesses; and the collection of unlawful debts. In conducting their illegal activities, the defendants allegedly used violence and, exploiting their relationship with the LCN, implied threats of murder and physical violence to instill fear in their victims.
The indictment alleges that in 2013, Santaniello, Calabrese, Depergola and Valentini attempted to extort money from a Springfield businessman. Santaniello allegedly assaulted the victim and threatened to cut off his head and bury his body if he did not comply. Over a period of four months, the victim paid $20,000 to Santaniello, Calabrese, Depergola and Valentini to protect himself and his business.
Additionally, according to the indictment, during a six-month period in 2015, Daniele allegedly extended two extortionate and usurious loans to an individual, and then, with the assistance of Santaniello and Calabrese, threatened the individual if he did not make payments on the loan.
The charges and allegations contained in an indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Individuals who believe they may have been victimized by the defendants should contact the FBI at (413) 732-0159.
The FBI Springfield Division’s Organized Crime Unit and the Massachusetts State Police’s Police Detective Unit assigned to District Attorney Gulluni’s Office and State Police Special Services Unit investigated the case. Chief Kevin O’Regan of the U.S. Attorney’s Office of the District of Massachusetts’ Springfield Branch Office and Trial Attorney Marianne Shelvey of the Criminal Division’s Organized Crime and Gang Section are prosecuting the case.
Alleged Associates of La Cosa Nostra Charged with Extortion and LoansharkingRead the Press Release
BOSTON – Five alleged associates of the Genovese La Cosa Nostra (LCN) crime family were arrested today on extortion related charges.
Ralph Santaniello, 49, Giovanni Calabrese, aka John Calabrese, 53, and Gerald Daniele, 51, all of Longmeadow, Mass.; Francesco Depergola, 60, of Springfield, Mass.; and Richard Valentini, 51, of East Longmeadow, Mass., were each charged with federal crimes related to extortion. Santaniello, Calabrese, Depergola and Valentini were charged with conspiracy and interference with commerce by threats and violence. Santaniello, Calabrese and Daniele were charged with conspiracy and the use of extortionate means to collect extensions of credit. Daniele was charged with two counts of making extortionate extensions of credit.
According to the indictment, the defendants were associates of the Genovese LCN crime family in New York and committed various criminal activities in Springfield, including loansharking and extortion from legitimate and illegitimate businesses, including illegal gambling businesses and the collection of unlawful debts. The defendants allegedly used violence, exploited their relationship with the LCN and implied threats of murder and physical violence to instill fear in their victims.
In 2013, Santaniello, Calabrese, Depergola and Valentini allegedly attempted to extort money from a Springfield businessman. Santaniello allegedly assaulted the businessman and threatened to cut off his head and bury his body if he did not comply. Over a period of four months, the businessman paid $20,000 to Santaniello, Calabrese, Depergola and Valentini to protect himself and his business.
Additionally, according to the indictment, during a six-month period in 2015, Daniele extended two extortionate and usurious loans to an individual, and then, with the assistance of Santaniello and Calabrese, threatened the individual if he did not make payments on the loans.
The changing statutes each provide for a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000 and forfeiture. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Carmen M. Ortiz of the District of Massachusetts; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Hampden County District Attorney Anthony Gulluni; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police made the announcement today. The case was investigated by the Massachusetts State Police Detective Unit assigned to District Attorney Gulluni’s office, the Massachusetts State Police Special Services Unit and the Federal Bureau of Investigation in Springfield. Kevin O’Regan, Chief of Ortiz’s Springfield Branch Office and Trial Attorney Marianne Shelvey of the Criminal Division’s Organized Crime and Gang Section are prosecuting the case.
The charges and allegations contained in an indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Roxse Homes Worker Sentenced for Taking BribesRead the Press Release
BOSTON – A former maintenance technician for Roxse Homes, a subsidized housing development in Boston, was sentenced today in U.S. District Court in Boston for his role in a scheme to rent apartments at the housing development to individuals who were not qualified, in exchange for cash bribes.
Ismael Morales, 36, of Jamaica Plain, was sentenced by U.S. District Court Chief Judge Patti B. Saris to two years in prison and two years of supervised release. In May 2016, Morales pleaded guilty to one count of conspiracy and seven counts of corrupt receipt of payments by a federally funded organization. His co-defendant, Mathis Lemons, 42, of Brockton, also pleaded guilty to the same charges and is scheduled to be sentenced on Sept. 20, 2016.
Lemons was the assistant property manager and Morales worked as a maintenance technician for Roxse Homes, a subsidized housing development on Tremont Street in Roxbury. At Roxse Homes, eligible low-income families and individuals can obtain rental housing for a subsidized rate with Section 8 housing benefits from the U.S. Department of Housing and Urban Development. In 2014, there was a shortage of federally subsidized Section 8 housing in Massachusetts, and Roxse Homes maintained a long waitlist of applicants desiring apartments in the complex. The Roxse Homes waitlist had been closed to external applicants since 2009.
From September 2014 to February 2015, Lemons and Morales conspired to rent apartments to individuals who were not eligible for subsidized Roxse Homes apartments because they were not on the waitlist. Morales solicited and accepted money from individuals, and provided those individuals with blank rental applications. Morales also instructed some of the individuals not to date their applications, or to date their applications in 2006 or 2009, when in fact the applications were actually completed in 2014. Lemons then added the unqualified individuals to the Roxse Homes computerized waitlist, and falsely inputted their application dates as 2006 or 2009.
United States Attorney Carmen M. Ortiz; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, New York Regional Office; Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Glenn A. Cunha, Inspector General of Massachusetts; and Boston Police Commissioner William B. Evans, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Kristina E. Barclay and Eugenia M. Carris of Ortiz’s Public Corruption Unit.
Dorchester Man Charged in $4 Million Bank Fraud ConspiracyRead the Press Release
BOSTON – A Dorchester man was indicted today in U.S. District Court in Boston in connection with a large-scale scheme to withdrawal money from bank accounts.
Charles Washington, 43, was indicted today on one count of bank fraud and four counts of bank fraud conspiracy. In June 2016, Washington was charged in a criminal complaint and is being held without bail.
According to the indictment, Washington obtained bank account information, personally identifiable information (PII), and sample signatures for bank customers with high balances. He recruited “runners” of the same gender and approximate age as the accountholders to impersonate them inside bank branches and to make unauthorized withdrawals. Washington allegedly obtained and gave the runners fake driver’s licenses that bore the runners’ photographs and the victim accountholders’ PII, and instructed the runners on how to forge the victims’ signatures. To avoid detection of the scheme, runners allegedly withdrew money from victims’ accounts at several different bank branches.
Washington and others also allegedly recruited runners to open bank accounts, known as drop accounts, in the name of non-existent businesses that the runners purported to control. The businesses were registered and named as if they were title companies, property management companies, contracting businesses, and other businesses for which incoming large-dollar wire transfers would not be unusual. Washington allegedly provided the drop account information to co-conspirators, who caused unauthorized wire transfers of hundreds of thousands of dollars into the drop accounts. Once the drop accounts were funded with unauthorized wire transfers, Washington and co-conspirators accompanied runners to bank branches to withdraw the money in cash, by check, or by wire transfers to other drop accounts before the victims of the unauthorized wire transfers realized that their accounts had been compromised.
Washington and co-conspirators paid runners, recruiters, and the sources for bank account information and PII a percentage of the proceeds that runners successfully withdrew.
According to court documents, Washington and co-conspirators gained access to approximately $4 million, either in bank accounts that they took over or in proceeds unlawfully wired into drop accounts for withdrawal, and successfully withdrew approximately $2 million.
The charge of bank fraud and bank fraud conspiracy provides for a sentence of no greater than 30 years in prison, five years of supervised release, a fine of $1 million 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 Field Division; Stephen A. Marks, Special Agent in Charge of the U.S. Secret Service, Boston Field Office; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Boston Police Commissioner William Evans, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Seth B. Kosto of Ortiz’s Cybercrime Unit.
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.
Boston Man Sentenced for Possession of a Firearm and AmmunitionRead the Press Release
BOSTON – A Boston man was sentenced today in U.S. District Court in Boston in connection with being a convicted felon in possession of a firearm and ammunition.
Ralph Alexandre, 45, was sentenced by U.S. District Court Judge Richard G. Stearns to 40 months in prison and three years of supervised release. In April 2016, Alexandre pleaded guilty to being a felon in possession of a firearm and ammunition.
In October 2014, a cooperating witness provided information to federal agents that Alexandre was attempting to sell firearms. On October 21, 2014, federal agents arranged for the witness to meet with Alexandre at a location in Dorchester. At the meeting, Alexandre sold the witness a .44 caliber Smith and Wesson revolver. The revolver was loaded with one round of .44 caliber ammunition.
United States Attorney Carmen M. Ortiz; Lawrence J. Panetta, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco Firearms & Explosives, Boston Field Division; and Boston Police Commissioner William Evans, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
Owner of Boston Cab Charged with Tax and Fraud OffensesRead the Press Release
BOSTON – Edward J. Tutunjian, who has owned and operated Boston Cab for more than four decades, was charged today in U.S. District Court with payroll tax evasion, employing illegal aliens and with failing to pay overtime wages.
Tutunjian’s company, EJT Management, Inc., through which he operated Boston Cab, also was charged with defrauding the U.S. Department of Housing and Urban Development (HUD) by enabling EJT employees to obtain federal housing subsidies to which they were not entitled. Both Tutunjian and EJT have signed plea agreements in which they agree to make full restitution for their crimes, totaling more than $2.3 million.
Tutunjian, 66, of Belmont, was charged in an Information with five counts of tax evasion, one count of employing illegal aliens and one count of violating the Fair Labor Standards Act for failing to pay overtime wages. EJT Management, Inc. was charged in the same Information with aiding and abetting the theft of public money.
Since approximately 1972, Tutunjian and EJT have operated the Boston Cab taxicab business in the greater Boston area. By 2014, Tutunjian and EJT owned approximately 372 taxi medallions – a government license permitting a car to be used to transport passengers for hire – which they leased to drivers and for which Tutunjian and EJT received millions of dollars in gross revenues each year, mostly in cash. Although the taxi drivers were self-employed, Tutunjian and EJT directly employed mechanics, dispatchers, office workers, and others. It is alleged that a number of those employees were undocumented aliens who, because of that status, were not authorized to work in the United States.
Tutunjian allegedly concealed the size of the company payroll from the IRS, and thereby concealed the amount of federal employment taxes he and EJT would be responsible for paying. He did this by paying employees entirely or partially in cash and keeping such cash payments off the books. By doing this, he ensured there would be no record of cash payments that could be inspected by the IRS. Employees who were illegal aliens, and therefore not authorized to work in the United States, were allegedly paid entirely in cash. EJT did not issue W-2 forms to those employees and did not withhold or pay federal income tax, Social Security tax, or Medicare tax with regard to those illegal alien employees.
Other employees who were citizens or permanent resident aliens received their wages partly in cash and partly by check. Tutunjian filed quarterly employment tax returns for EJT which did not include the amounts which had been paid in cash to EJT employees. In this way, EJT evaded, and aided and abetted its employees in evading, approximately $739,204 in taxes from 2009 to 2013.
Tutunjian also allegedly did not pay the required overtime rate to employees who worked more than 40 hours a week. To conceal this, Tutunjian required certain employees to punch in 40 or fewer hours per week on an electronic time clock whose information was sent to the outside payroll company that prepared the payroll checks and W-2s, even though those employees had actually worked more than 40 hours per week, in some instances 50 or 60 hours a week. It is alleged that Tutunjian paid those workers in cash for their overtime hours, at the regular-time rate rather than the required time-and-a-half.
According to documents filed with the Court, a number of EJT’s employees were living in federally subsidized housing in Cambridge and elsewhere, some of which had waiting lists for prospective tenants. The amount of the federal housing subsidy, as well as the eligibility to live in the units, depended on the tenant’s income. HUD did not rely solely on a tenant’s statement of his/her income, but also compared it to the tenant’s W-2 wages and generally required employers such as EJT to provide written verification. From January 2009 to about May 2013, EJT allegedly aided certain employees to receive housing benefits to which they were not entitled, by providing payroll information, including W-2s, which did not reflect the wages paid to these employees in cash. Additionally, during the same period, EJT provided certifications to the state agency administering the housing subsidy program, which falsely reported the income of certain employees to be only the amounts paid by check but which did not include the wages paid to these employees in cash. In this manner, EJT aided certain employees to obtain HUD housing subsidies to which they were not entitled.
According to the plea agreements also filed today, Tutunjian has agreed to pay $1,391,012 in restitution to the IRS for taxes, interest and penalties, and an additional $699,717 to employees in unpaid overtime wages. EJT has agreed to pay restitution of $219,307 to HUD for the fraudulent housing subsidies. Two of Tutunjian’s relatives, who also operate taxi companies, have agreed to pay $195,903 to the IRS in unpaid taxes for tax years 2009 through 2014. These relatives have not been charged.
In a related case, EJT dispatcher Girma Tilahun, 60, and his wife, Wudnesh Wolde, 53, of Cambridge, have agreed to plead guilty to immigration fraud and pay $234,987 in unpaid federal income taxes and $62,340 to HUD. Tilahun and Wolde allegedly arranged a sham marriage for one of Tilahun’s relatives to a U.S. citizen so that the relative could fraudulently gain legal status in the United States.
Another former EJT employee, Raffi Chapian, 44, of Waltham, has agreed to plead guilty to failing to pay income taxes from 2010 to 2014. Chapian has agreed to serve six months in prison and pay $72,335 in unpaid taxes.
The charge of tax evasion provides a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000, or twice the gross gain or loss. The charge of employment of unauthorized aliens provides for a sentence of no greater than six months in prison and a fine of $3,000 per alien. The charge of violating the Fair Labor Standards Act provides for a sentence of no greater than one year of probation and a fine of $10,000. The charge of aiding and abetting the theft of public money provides for a sentence of no greater than five years of probation and a fine of $500,000. The charge of immigration fraud provides for a sentence of no greater than five years in prison and a fine of $250,000. The charge of failing to pay income tax provides for a sentence of no greater than one year in prison 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; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development; Office of Inspector General, Northeast Regional Office; Nikitas Splagounias, Assistant Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Boston Police Commissioner William Evans; and Cambridge Police Acting Commissioner Christopher Burke, made the announcement today. The Wage and Hour Division and the Employee Benefits Security Administration of the Department of Labor also assisted with the investigation. The case is being prosecuted by Assistant U.S. Attorneys Michael L. Tabak and Sandra S. Bower of Ortiz’s Criminal Division.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Newton Investment Adviser Sentenced for FraudRead the Press Release
BOSTON – A Newton investment adviser was sentenced today in U.S. District Court in Boston in connection with defrauding clients out of more than $1.4 million.
Paul J. Jackson, 59, of Wellesley, was sentenced by U.S. District Court Judge F. Dennis Saylor, IV to 33 months in prison, three years of supervised release and ordered to pay restitution. In October 2015, he pleaded guilty to investment adviser fraud and wire fraud.
Jackson owned and operated Paul J. Jackson & Associates, LLC in Newton, through which he managed retirement funds for clients. Beginning in 2010, Jackson started offering clients, close friends, and family members, what appeared to be attractive investment opportunities. The investments Jackson offered typically involved initial public offerings (IPOs) of high-profile companies, but Jackson did not invest the money as promised. Instead, he took more than $1.4 million dollars of investor money for his own use. For example, Jackson stole more than $500,000 from his brother-in-law, and over $400,000 from a close friend, based on a series of phony offers to invest in companies like Facebook, Twitter, and Alibaba. When investors requested their money back, Jackson lied repeatedly, offering false excuses and never telling them that he had simply taken their money. Jackson even used funds taken from a victim to make a partial repayment to another victim he defrauded.
The Massachusetts Securities Division previously filed a separate administrative action against Jackson, charging him with fraud and seeking to bar him from working in the securities industry.
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 United States Attorney’s Office received valuable assistance from the Securities & Exchange Commission during the investigation of this matter. The case was prosecuted by Assistant U.S. Attorney Eric P. Christofferson of Ortiz’s Economic Crimes Unit.
Former Whitman Police Sergeant Charged with Embezzling Funds from Disabled VeteransRead the Press Release
BOSTON – A former Whitman Police Sergeant was arrested today and charged in connetion with misappropriating funds from the accounts of disabled veterans while he was a U.S. Department of Veterans Affairs-appointed fiduciary and for preparing false income tax returns for clients of his tax preparation business.
Glenn P. Pearson, 60, was arrested today and charged in an indictment unsealed today with wire fraud, misappropriation by a federal fiduciary, making false statements, and preparing fraudulent tax returns. Pearson was arrested today and released on conditions following an arraignment in U.S. District Court in Boston.
According to the indictment, from 2007 to 2012, Pearson was a U.S. Department of Veterans Affairs-appointed fiduciary for eight disabled veterans of the armed forces. Pearson allegedly took advantage of his position to misappropriate and embezzle VA-issued benefit money out of the accounts of several veterans for whom he served as fiduciary. Pearson allegedly used the money to, among other things, pay down the mortgage on his house.
Beginning in 2012, Pearson operated a tax preparation business called FTS Tax Services. From 2012 through 2016, Pearson allegedly prepared numerous returns that included false credits and fictitious deductions in an effort to get his clients larger refunds than they actually were owed. In addition, the indictment alleges that Pearson filed false personal income tax returns for himself from 2010 through 2014, and took steps to obstruct the IRS, such as by preparing false documents for his clients to submit to the IRS during audits.
The charge of wire fraud provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charges of misappropriation of funds by a fiduciary and making false statements provide a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of preparing fraudulent tax returns provides a sentence of no greater than three years in prison, one year of supervised release and a fine of $250,000. The charge of attempting to interfere with the administration of internal revenue laws provides 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; Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division Caroline D. Ciraolo; 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 Investigations in Boston; and Jeffrey Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Vassili Thomadakis of Ortiz’s Criminal Division and Karen E. Kelly, Assistant Chief of the Department of Justice’s Tax Division.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
California Attorney and Two Brothers Charged in Stock Manipulation SchemeRead the Press Release
BOSTON – A California-licensed attorney and his two brothers were charged in U.S. District Court in Boston in connection with a scheme to manipulate the market for the stock of a publicly traded microcap company.
Jehu Hand, 59, was charged in a superseding indictment with conspiracy to commit securities fraud and wire fraud, securities fraud, and wire fraud. His brother Learned Hand, 57, was charged today in an Information with conspiracy to commit securities fraud. His other brother, Adam Hand, 51, previously pleaded guilty to an Information charging him with conspiracy to commit securities fraud. All of the charges arise out of the Hand brothers’ involvement in a pump-and-dump scheme to manipulate the market for the stock of Crown Marketing, a microcap or “penny stock” company that claimed to own patented drug delivery technology. In December 2015, Jehu Hand was charged with destruction of records in a federal investigation as well as charges related to his participation in a scheme to pump and dump the publicly traded securities of another penny stock company, Greenway Technology.
According to the superseding indictment, Jehu Hand and his co-conspirators engaged in a scheme to conceal their control over the majority of Crown’s free-trading stock so that they could “pump” up the company’s share price and then secretly “dump” their shares into the market. Jehu Hand filed false registration statements with the Securities and Exchange Commission (SEC) so that stock that the co-conspirators controlled could be sold to the public. Meanwhile, the co-conspirators, including Learned Hand, who had been named Crown’s CEO, orchestrated the distribution of press releases containing false and misleading statements regarding patented drug delivery technology purportedly owned by Crown. Crown’s share price and trading volume shot up as a result of the hype created by the false press and a related promotional campaign, and the co-conspirators, including Adam Hand, then proceeded to sell millions of shares of Crown stock to unwitting investors at inflated prices. The superseding indictment further alleges that later, in March 2016, after he had already been indicted for his alleged involvement in the Greenway Technology scheme, Jehu Hand deleted thousands of electronic records in an effort to obstruct the government’s ongoing investigation of his activities.
According to court documents, the conspirators’ sales of Crown stock often occurred after the dissemination of blast e-mails touting Crown’s stock to investors.
These charges arise out of a multi-year investigation focusing on preventing fraud in the microcap stock markets. Microcap companies are small publicly traded companies whose stock often trades at pennies per share. Fraud in the microcap markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the SEC.
The United States Attorney’s Office received valuable assistance from the SEC during the investigation of this matter.
The charge of conspiracy provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss. The charges of securities fraud and wire fraud provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss. The charge of destruction of records in a federal investigation 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 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 Vassili Thomadakis of Ortiz’s criminal division and SEC attorneys Andrew Palid and Eric Forni, who were appointed as Special Assistant U.S. Attorneys.
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.
If you purchased shares of Crown between September 2012 and July 2013 and believe that you may be a victim of the alleged scheme, please contact the United States Attorney’s Office at [email protected].
Three Men Indicted for Conspiring to Sell More Than $200,000 in Stolen Gillette Razors OnlineRead the Press Release
BOSTON – Three Boston-area residents, including a former Gillette employee, were charged with conspiring to sell stolen Gillette razor blades on eBay.
Robert A. Liberatore, 51, of Wakefield; Mark S. Girardin, 43, of Randolph; and Joseph Evangelista, 62, of Lowell, were indicted for conspiracy to transport stolen property interstate. Liberatore and Girardin are also charged with one count of interstate transportation of stolen property. The defendants were arrested today and were released conditions following an initial appearance before U.S. District Court Magistrate Judge Judith Dein this afternoon.
According to the indictment, from February to August 2011, the defendants agreed to steal razor blades from the Gillette manufacturing facility in South Boston and sell them online. Evangelista stole newly manufactured razor blades while employed at Gillette, and delivered the stolen blades to Liberatore and Girardin, who sold them on eBay under the business name “Cambridge Dedicated Services.” The defendants sold $208,944 in stolen Gillette razor blades during the course of the scheme.
The charge of conspiracy to transport stolen property interstate 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 amount of loss or gain, whichever is greater. The charge of interstate transportation of stolen property 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 amount of loss or gain, 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 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 Sandra S. Bower and Christine Wichers of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Malden Man Sentenced for Armed Bank RobberyRead the Press Release
Boston – A Malden man was sentenced today in U.S. District Court in Boston for robbing the Hingham Institute for Savings Bank in October 2015.
Anthony Pantone, 56, was sentenced by U.S. District Court Judge Indira Talwani to 78 months in prison and five years of supervised. In May 2016, Pantone pleaded guilty to one count of armed bank robbery.
On Oct.9, 2015, two individuals entered the Hingham Institute for Savings Bank in Boston’s Beacon Hill neighborhood. While one individual, later identified as Russell Dinovo, jumped over the teller’s counter and stole money, the other individual, later identified as Pantone, remained in the lobby holding what appeared to be a handgun. During the robbery, Pantone repeatedly said to Dinovo, “hurry up, let’s go” and “get the drawer.” Pantone also told the tellers not to look at the robbers. After putting $16,320 in a duffel bag, the two individuals fled the bank on foot, and were captured with the duffel bag shortly thereafter in a cab. In addition to the cash, an item that looked like a handgun, but was determined to be a fake gun, was found in the duffle bag.
Dinovo was charged in a separate indictment with one count of armed bank robbery. His case is pending before U.S. District Court Judge Richard G. Stearns.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigations, Boston Field Office; and Boston Police Commissioner William Evans, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.
Former Bank Vice President Convicted of Embezzling Money from Local BankRead the Press Release
BOSTON – A former vice president at the former Lenox National Bank pleaded guilty on Friday, July 29, 2016, in U.S. District Court in Springfield in connection with embezzling more than $150,000 from the bank and attempting to conceal the theft.
Joseph E. Leskovitz, 56, of Lenox, Mass., pleaded guilty to three counts of embezzlement of bank funds and one count of money laundering. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Nov. 15, 2016.
Between approximately 2009 and February 2014, Leskovitz was the vice president of the 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.The charge of embezzlement provides for a sentence of no greater than 30 years in prison, five years of supervised release, a fine of $250,000, or twice the gross gain or loss, whichever is greater. The charge of 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. 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. The case was prosecuted by Assistant U.S. Attorney Karen L. Goodwin of Ortiz’s Springfield Branch Office.
U.S. Attorney Ortiz Announces Partnership with Lowell High-Risk Reentry InitiativeRead the Press Release
BOSTON – U.S. Attorney Carmen M. Ortiz announced today that her Office will partner with the Office of Middlesex County Sheriff Peter Koutoujian to create the Lowell High-Risk Reentry Initiative. Drawing on their experience with reentry programs throughout the Commonwealth, the U.S. Attorney’s Office and the Middlesex County Sheriff’s Office convened the initiative together with the Middlesex County District Attorney’s Office and Lowell Police Department, in an effort to assist individuals being released from prison and prevent them from re-engaging in criminal conduct.
“Our criminal justice system must be focused just as much on preventing crime as in punishing past criminal conduct,” said United States Attorney Carmen M. Ortiz. “It is essential for public agencies to assist individuals released from prison in finding a new way of life when they return to their communities. This means lawful employment, stable housing, critical healthcare, and the other essential elements of a productive life. We look forward to the interagency and community partnerships that will measurably contribute to a decrease in crime and improvement in the quality of life for Lowell residents.”
The Lowell High-Risk Reentry Initiative is part of a nationwide trend to reform the paradigm of punishing repeat criminals with more prison time. A 2010 Harvard University study of Massachusetts county jail high-risk reentry programs, funded by the District of Massachusetts’s Project Safe Neighborhoods grant, compared recidivism rates of county jails that offer pre-release programs for inmates with jails that do not offer the programs. The results of the study revealed a 23 percent reduction in violent recidivism rates for program participants versus those who did not take part in the initiatives.
Through the Lowell High-Risk Reentry Initiative, federal, state, and local law enforcement join forces with social service agencies, mental health and substance abuse providers and faith-based organizations to tackle the complexities associated with reentry into the community after incarceration. Team members with the Lowell High-Risk Reentry Initiative will work with an average of 80 to 90 high-risk inmates per year.
High-risk prisoners participating in the reentry program will be provided with information at bi-monthly meetings regarding pre- and post-incarceration services, as well as the consequences of reoffending. For many, reoffending could result in significant state or federal prison sentences.
Through the Lowell High-Risk Reentry Initiative, participants will be offered “wrap-around” services, receiving focused assistance from social service providers, probation officers and others to ensure accountability and continuity of care. They will be provided enhanced opportunities to participate in employment training, education programs, substance abuse and mental health treatment. Prior to release, participants will be encouraged to build relationships with individuals representing resources that are needed for success on the outside, including the probation officer who is a crucial component of the program. Participants will undergo intense supervision upon release from prison to ensure greater success and accountability.
The Lowell High-Risk Reentry Initiative’s social services and mental health partners include: Career Center of Lowell, Community Teamwork, Lowell House, South Bay Day Services (Lowell Mental Health), Greater Lowell Workforce Development Board, UTEC, South Bay Community Services, Middlesex Community College, and Place of Promise. Middlesex County Superior Court Probation, Lowell District Court Probation and the Massachusetts Department of Revenue are also partners in the initiative.
The Lowell High-Risk Reentry Initiative’s model is based on the award-winning Boston Reentry Initiative (BRI), which has achieved measurable success and national attention for its model of recidivism reduction. Both programs focus their resources on inmates who pose the greatest risks to reoffend.
Quincy Man Pleads Guilty to Defrauding Charities and Law FirmsRead the Press Release
BOSTON – A Quincy man pleaded guilty today in U.S. District Court in Boston to using counterfeit cashier’s checks to defraud victims, including charities and law firms, of at least $1 million.
Manuel Ponce Vazquez, 59, pleaded guilty to an Information charging him with one count of mail fraud. Ponce Vazquez was charged and arrested in April 2016. U.S. District Court Judge Indira Talwani scheduled sentencing for Nov. 4, 2016.
Beginning around August 2013, Ponce Vazquez and his co-conspirators defrauded law firms and other victims by sending them counterfeit cashier’s checks, then convincing them to forward a portion of the checks’ supposed value to bank accounts Ponce Vazquez opened, generally using an alias. Once the checks were discovered to be fraudulent, the victims’ bank accounts were debited, and the victims were left with thousands of dollars in losses, having unwittingly forwarded their own money to Ponce Vazquez.
On several occasions, Ponce Vazquez and his co-conspirators targeted charities and other non-profits. Posing as a philanthropist, a conspirator would tell a charity that he wished to make a large donation of a specified amount. Soon after, the charity would receive a cashier’s check, ostensibly from the supposed donor, but in excess of the expected amount. The conspirator would explain that the excess money had been sent by mistake and ask for it to be returned, claiming in several instances that it was needed urgently to help a child suffering from an acute illness who required surgery within the week. Only after the charity had sent Ponce Vazquez thousands of dollars would it learn that the cashier’s check was a fake.
More frequently, the targets of Ponce Vazquez’s scam were law firms who believed they were being hired to help collect a debt. Before the firms took any action to collect the supposed debt, they received counterfeit cashier’s checks, ostensibly from the debtors, fully repaying the debt. At the direction of one of Ponce Vazquez’s co-conspirators, the firms forwarded the majority of the checks’ purported value to a bank account that Ponce Vazquez controlled, unwittingly paying Ponce Vazquez using the firms’ own money.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greater, 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 Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistance was also provided by Braintree Police Department and the Norfolk District Attorney’s Office. This case is being prosecuted by Assistant U.S. Attorney Brian A. Pérez-Daple of Ortiz’s Economic Crimes Unit.
Majority Owner of NECC and Husband Plead Guilty to Illegal Cash Withdrawals Following OutbreakRead the Press Release
BOSTON – The majority owner of New England Compounding Center (NECC) and her husband pleaded guilty today in connection with illegally withdrawing cash following the fungal meningitis outbreak.
Carla Conigliaro, 53, the majority owner of NECC and her husband, Douglas Conigliaro, 55, both of Dedham, Mass., each pleaded guilty to withdrawing cash from their bank accounts in a manner intended to defeat financial reporting requirements. U.S. District Court Judge Richard G. Stearns scheduled sentencing for Nov. 1, 2016.
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 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; Jeffrey Hughtes, 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.
Woburn Investment Advisor Sentenced to Seven Years for Hedge Fund FraudRead the Press Release
BOSTON – A Woburn investment advisor was sentenced today in U.S. District Court in Boston in connection with defrauding investors of over $1.3 million.
Rosalind Herman, 61, was sentenced to seven years in prison, three years of supervised release, and ordered to pay restitution of $1,819,391. In April 2016, she was convicted by a federal jury of investment adviser fraud, tax fraud, wire fraud and conspiracy charges.
Herman owned and controlled companies in Massachusetts and Nevada that provided investment advice and sold insurance products to individual investors. From 2008 to March 2013, Herman and her business partner, Gregg Caplitz, pitched a new hedge fund company investment to existing clients. The purported investment was billed by Caplitz and Herman as a hedge fund company owned by Herman. No hedge fund ever existed, however, and the more than $1.3 million in investment funds obtained from clients were used to pay personal expenses for Herman, her family and Caplitz.
In addition, from 2003 to 2012, Herman failed to file accurate tax returns for herself and her companies, including the $1.3 million in investor funds she took from investors, and also by fabricating business expenses. In many instances during this time period, Herman failed to file any tax returns for herself or her companies.
In May 2016, Caplitz was sentenced to 42 months in prison after pleading guilty to fraud and tax charges, and testifying against Herman at trial.
United States Attorney Carmen M. Ortiz; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The U.S. Attorney’s Office acknowledges the assistance provided by the Securities and Exchange Commission. The case was prosecuted by Assistant U.S. Attorneys Sara Miron Bloom of Ortiz’s Economic Crimes Unit, and Mary B. Murrane, Chief of Ortiz’s Civil Division.
Nine Charged with Distributing Drugs in Bristol CountyRead the Press Release
BOSTON – Nine individuals were charged in U.S. District Court in Boston in connection with distributing heroin, cocaine, acetylfentanyl and fentanyl in the Bristol County area.
On June 30, 2016, five men and one woman from southeastern Massachusetts and Rhode Island were charged in a criminal complaint with conspiring to distribute cocaine, and three New Bedford residents, in a separate but related criminal complaint, were charged with conspiring to distribute heroin. Today, a federal grand jury indicted eight of these individuals in two separate indictments. A ninth individual, Sharik Mendes, was charged by Information with conspiring to distribute and possess with intent to distribute heroin. The defendants will be arraigned in U.S. District Court in Boston on Aug. 2 and 4, 2016.
The first indictment issued by the federal grand jury charges the following defendants with the following crimes:
-
Luis Lopez, a/k/a “Juan Gonzalez,” 43, of Tiverton, R.I. and Fall River: conspiracy to distribute and possess with the intent to distribute five kilograms or more of cocaine; conspiracy to distribute and possess with the intent to distribute heroin and fentanyl; conspiracy to launder monetary instruments through Hillside Auto Sales, a used car business located in Fall River; and possession with the intent to distribute a mixture and substance containing a detectable amount of fentanyl and acetylfentanyl.In addition, the indictment seeks forfeiture of Lopez’s three houses, used car business, vehicles and motorcycles and $15,000 in proceeds from the drug sales.Lopez is currently in federal custody.
-
Nuno Fonseca, a/k/a “Farigno,” 37, of Fall River: conspiracy to distribute and possess with the intent to distribute 500 grams or more of cocaine; and, conspiracy to distribute and possess with the intent to distribute heroin and fentanyl.Fonseca is currently a fugitive from justice.
-
Chindy Diaz, 38, of New Bedford: conspiracy to distribute and possess with the intent to distribute five kilograms or more of cocaine.Diaz is currently in federal custody.
-
Jorge Sanchez-Lopez, a/k/a “Pri,” and “Cuz,” 42, of Pawtucket, R.I.: conspiracy to distribute and possess with the intent to distribute five kilograms or more of cocaine.Sanchez-Lopez is currently a fugitive from justice.
-
Tyson Britto, a/k/a “Peanut,” 31, of Fall River: conspiracy to distribute and possess with the intent to distribute 500 grams or more of cocaine; conspiracy to distribute and possess with the intent to distribute heroin and fentanyl; and, possession with the intent to distribute heroin, cocaine, fentanyl and acetylfentanyl.Britto is currently federal custody.
-
Israel Santiago, a/k/a “Reysito,” 39, of Fall River: conspiracy to distribute and possess with the intent to distribute cocaine.Santiago has been released on conditions pending trial.
The second indictment issued by the federal grand jury charges the following defendants with the following crimes:
-
Tyson Depina, a/k/a “Tru,” 40, of New Bedford: conspiracy to distribute and possess with the intent to distribute 100 grams or more of heroin; and possession with the intent to distribute heroin.Depina is currently federal custody.
-
Eric Desousa, a/k/a “E,” 22, of New Bedford: conspiracy to distribute and possess with the intent to distribute heroin.Desousa has been released on conditions pending trial.
According to court documents, Luis Lopez was the head of a drug trafficking organization that imported hundreds of kilograms of cocaine from Puerto Rico to New Bedford and Fall River. Jorge Sanchez-Lopez coordinated the shipments of cocaine through the U.S. Mail with the assistance of Chindy Diaz, who received cocaine-filled packages of Lopez’s behalf and delivered it to Lopez at his Fall River residence. Israel Santiago also allegedly helped coordinate the receipt of cocaine on behalf of Lopez. Lopez then sold the cocaine to other drug dealers, including Tyson Britto and Nuno Fonseca. During the course of the investigation, federal agents interception at least three cocaine-filled packages bound for Lopez.
In a related investigation, federal agents learned that Sharik Mendes, who owns and operates the HEART gym in New Bedford, was allegedly receiving large quantities of heroin from at least two suppliers based in Providence. It is alleged that Mendes employed Tyson Depina to distribute the heroin on his behalf. Intercepted phone calls showed that Depina was consistently selling heroin to users and lower-level dealers, and that he was providing Mendes with $1,000 to $2,000 a day for this heroin. In April 2016, Depina was arrested for possessing heroin which he attempted to destroy incident to his arrest. In addition, it is alleged that Depina was also supplied heroin by Desousa, who was distributing it on behalf of a higher-level drug dealer. In early June 2016, Desousa was arrested with 30 grams of heroin in his pockets after agents saw him preparing for a heroin sale. A search of his New Bedford residences recovered 300 grams of heroin.
The Information filed on July 26, 2016 charges Sharik Mendes with conspiracy to distribute and possess with the intent to distribute heroin. Mendes is not detained pending entry of guilty plea and sentencing.
The charges carry the following maximum penalties. 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.
-
Conspiracy to distribute and possess with the intent to distribute heroin:
-
100 grams or more: a minimum of five years and no greater than 40 years in prison, a lifetime of supervised release and a fine of $5 million.(Applicable to Depina).
-
A quantity of heroin: no greater than 20 years in prison, a lifetime of supervised release and a fine of $1 million.(Applicable to Lopez, Britto, Fonseca and Desousa).
-
-
Conspiracy to distribute and possess with the intent to distribute cocaine:
-
Five kilograms or more: a minimum of 10 years and a maximum of life in prison, a lifetime of supervised release and a fine of $10 million. (Applicable to Lopez, Diaz, and Sanchez-Lopez).
-
500 grams or more: a minimum of five years and no greater than 40 years in prison, a lifetime of supervised release and a fine of $5 million.(Applicable to Fonseca and Britto).
-
A quantity of cocaine: no greater than 20 years in prison, a lifetime of supervised release and a fine of $1 million.(Applicable to Santiago).
-
-
Possession of cocaine, heroin, acetylfentanyl, and fentanyl with the intent to distribute: no greater than 20 years in prison, a lifetime of supervised release and a fine of $1 million.(Applicable to Desousa, Depina, Lopez, and Britto).
-
Conspiracy to launder monetary instruments: no greater than 20 years in prison, three years of supervised release, and a fine of $250,000.(Applicable to Lopez).
United States Attorney Carmen M. Ortiz; Bristol County District Attorney 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 Chief John M. Souza; New Bedford Police Chief Joseph C. Cordeiro; Fairhaven Police Chief Michael Myers; and Bristol County Sheriff Thomas M. Hodgson, made the announcement today. The cases are 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.
-
Wilmington Man Charged with Threatening Arson to Boston’s Largest MosqueRead the Press Release
BOSTON – A Wilmington man was charged and arrested today in connection with making threats over Facebook to burn a local mosque and harm Muslims and with unlawfully possessing ammunition.
Patrick Keogan, 44, of Wilmington, was charged in a criminal complaint with making a threat over Facebook to injure or intimidate another individual or to unlawfully damage or destroy a building by means of fire and of being a convicted felon in possession of ammunition. Keogan is scheduled to appear before U.S. District Court Chief Magistrate Judge Jennifer C. Boal this afternoon.
According to charging documents, on or about Nov. 14, 2015, Keogan threatened the Islamic Society of Boston Cultural Center (ISBCC), a Roxbury-based cultural center that offers a mosque and educational, spiritual, and social services to the New England Muslim community. Keogan posted on the ISBCC’s Facebook page an image depicting a mosque in flames with lettering superimposed that stated “Burn your local mosque,” along with the statement “Hello scumbags,” next to a smiley face emoji. Keogan allegedly posted the same threatening image on the Facebook page of the Islamic Society of Northeastern University (ISNU).Through a warrant authorizing a search of Keogan’s Facebook account, law enforcement investigators found posts that approved burning mosques as early as 2013. For example, in 2013 Keogan shared a post with the following summary: “On July 4th, Joplin, Missouri's Islamic Center — the city's only mosque — suffered roof damage after an unidentified man set it on fire by tossing a burning object onto the building.” Keogan wrote in response: “Somewhere out there is an unknown hero. The people’s champion. A true God amongst mortal men. May your days be many & troubles be few my good man.” On or about Nov. 17, 2015, Keogan posted a status update saying, “Canada enters the Mosque Burning Winter Olympics of 2016 early! Who will take the Gold? Who will take the Silver? and WHO will take the Bronze??? We'll have to wait til the snow clears to find out folks but lets keep our fingers crossed for some fierce competition! And remember- you (yes you) are a qualified competitor of your own nation- so get out there and help your Country be number one in this winter’s Mosque Burning Olympics!”
According to court documents, Keogan’s Facebook account also showed that, despite his statutory prohibition as a convicted felon from possessing firearms and ammunition, Keogan continued to buy, sell, trade, build, modify, possess and shoot firearms and ammunition. After obtaining a warrant to place a GPS tracking device on Keogan’s car, federal agents tracked Keogan to a gun store in New Hampshire on or about May 1, 2016. Keogan allegedly purchased two boxes of 8mm rifle ammunition and two bags of loose 8mm rifle ammunition, and then drove the ammunition directly back to his residence in Wilmington.
The charging statutes each provide 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; Harold H. Shaw, Special Agent in Charge Federal Bureau of Investigation, Boston Field Division; Lawrence J. Panetta, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; and Wilmington Police Chief Michael Begonis, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Scott Garland of Ortiz’s Civil Rights Enforcement Team.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
State Street Bank to Pay $382 Million to Settle Allegations of Fraudulent Foreign Currency Exchange PracticesRead the Press Release
BOSTON – Carmen M. Ortiz, the United States Attorney for the District of Massachusetts, Andrew J. Ceresney, Director of the Division of Enforcement for the Securities and Exchange Commission (SEC), and Thomas E. Perez, the United States Secretary of Labor (DOL), announced today that State Street Bank and Trust Company, a Massachusetts-based financial institution, agreed to pay a total of at least $382.4 million, including $155 million to the Department of Justice (DOJ), $167.4 million in disgorgement and penalties to the SEC, and at least $60 million to ERISA plan clients in an agreement with the DOL, to settle allegations that it deceived some of its custody clients when providing them with indirect foreign currency exchange (FX) services.
As part of the settlement with the Department of Justice, State Street, a Massachusetts-based financial company, admitted that contrary to its representations to certain custody clients, its State Street Global Markets division (SSGM) generally did not price FX transactions at prevailing interbank market rates. Instead, State Street admitted that SSGM executed FX transactions by applying a predetermined, uniform mark-up (if the custody client was a FX purchaser) or mark-down (if the custody client was an FX seller) to the prevailing interbank rate for FX. State Street is also alleged to have falsely informed custody clients that it provided “best execution” on FX transactions, that it guaranteed the most competitive rates available on FX transactions, and that it priced FX transactions based on a variety of factors when, in fact, prices were largely driven by hidden mark-ups designed to maximize State Street’s profits.
“State Street’s custody clients, many of whom were public pension funds, financial institutions, and non-profit organizations, had a right to expect that State Street would execute transactions in an honest and forthright manner,” said United States Attorney Carmen M. Ortiz. “Instead, State Street executed FX transactions in a manner that enabled it to reap substantial profits at the expense of its custody clients. Today’s settlement reflects a significant and appropriate penalty for State Street’s deceptive conduct.”
“State Street misled custody clients about how it priced their trades and tucked its hidden markups into a corner where they were unlikely to notice,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement. “Financial institutions cannot mislead their customers about their trading costs.”
“When financial institutions charged with safeguarding retirement plan assets put the firm’s interests ahead of the best interest of their plan clients, or fail to candidly disclose fees, we will hold them accountable. Retirement security is a pillar of middle class life, and the Labor Department and our federal partners are committed to using our authority to protect it,” said Secretary of Labor Thomas E. Perez.
Pursuant to the proposed settlements and other agreements, State Street will pay a total of $382.4 million, of which $155 million will be paid as a civil penalty to the United States to resolve the allegations made by the Department of Justice that State Street violated the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), by committing fraud affecting financial institutions. The United States’ investigation arose from whistleblowers who filed a declaration pursuant to FIRREA.
The SEC has approved a separate agreement to settle the SEC’s investigation concerning State Street’s indirect FX services. Under the terms of the agreement, the Commission will enter an administrative order against State Street, only after the U.S. District Court gives final approval to State Street’s proposed settlement with private plaintiffs in pending securities class action lawsuits concerning its indirect FX pricing service. The administrative order will find that State Street violated Section 34(b) of the Investment Company Act of 1940 (Investment Company Act) and caused violations of Section 31(a) of the Investment Company Act and Rule 31a-1(b) thereunder, by providing its registered investment company (RIC) clients with trade confirmations and monthly transaction reports that were materially misleading in light of State Street’s representations about how it priced FX transactions. Under the terms of the order, State Street will be required to disgorge $75 million in ill-gotten gains and $17.4 million in prejudgment interest, to be paid to RIC clients, and also pay the SEC a civil penalty of $75 million.State Street is simultaneously resolving DOL’s claims under the Employee Retirement Income Security Act (ERISA) by agreeing to pay at least $60 million to State Street’s ERISA plan customers who, DOL found, sustained losses in connection with the conduct alleged above. This amount will be distributed to ERISA plan customers in conjunction with the settlement of certain private class action lawsuits. DOL alleges in the settlement that State Street made false or misleading representations concerning certain FX trades, and concealed from its plan customers how it priced those trades. In the settlement State Street represents that it now makes and will continue to make detailed disclosures to its customers with respect to its FX pricing, and that it now refrains and will continue to refrain from making representations regarding its FX pricing that are not accurate.
State Street will pay an additional $147.6 to resolve private class action lawsuits filed by the Bank’s customers alleging similar misconduct.
The case was handled by Assistant U.S. Attorneys Justin O’Connell and Abraham George of Ortiz’s Civil Division. The SEC’s investigation was conducted by Senior Enforcement Counsels Sue Curtin, Cynthia Storer Baran and Andrew Palid, Senior Trial Counsel Deena Bernstein, and Assistant Regional Director Celia Moore, all of the Boston Regional SEC Office, and Stuart Jackson of the Division of Economic and Risk Analysis. The DOL’s case was investigated by the Employee Benefits Security Administration’s Boston Regional Office with assistance from Senior Trial Attorneys Suzanne Reilly, Nathan Goldstein, and Nathan Henderson, and ERISA Counsel Marjorie Butler.
State Street Bank to Pay $382 Million to Settle Allegations of Fraudulent Foreign Currency Exchange PracticesRead the Press Release
U.S. Attorney Carmen M. Ortiz for the District of Massachusetts, Director Andrew J. Ceresney of the Division of Enforcement for the Securities and Exchange Commission (SEC) and Secretary Thomas E. Perez of the U.S. Department of Labor (DOL), announced today that State Street Bank and Trust Company, a Massachusetts-based financial institution, agreed to pay a total of at least $382.4 million, including $155 million to the Department of Justice, $167.4 million in disgorgement and penalties to the SEC and at least $60 million to ERISA plan clients in an agreement with the DOL, to settle allegations that it deceived some of its custody clients when providing them with indirect foreign currency exchange (FX) services.
As part of the settlement with the Department of Justice, State Street admitted that contrary to its representations to certain custody clients, its State Street Global Markets division (SSGM) generally did not price FX transactions at prevailing interbank market rates. Instead, State Street admitted that SSGM executed FX transactions by applying a predetermined, uniform mark-up (if the custody client was a FX purchaser) or mark-down (if the custody client was an FX seller) to the prevailing interbank rate for FX. State Street is also alleged to have falsely informed custody clients that it provided “best execution” on FX transactions, that it guaranteed the most competitive rates available on FX transactions and that it priced FX transactions based on a variety of factors when, in fact, prices were largely driven by hidden mark-ups designed to maximize State Street’s profits.
“State Street’s custody clients, many of whom were public pension funds, financial institutions and non-profit organizations, had a right to expect that State Street would execute transactions in an honest and forthright manner,” said U.S. Attorney Ortiz. “Instead, State Street executed FX transactions in a manner that enabled it to reap substantial profits at the expense of its custody clients. Today’s settlement reflects a significant and appropriate penalty for State Street’s deceptive conduct.”
“State Street misled custody clients about how it priced their trades and tucked its hidden markups into a corner where they were unlikely to notice,” said Director Ceresney. “Financial institutions cannot mislead their customers about their trading costs.”
“When financial institutions charged with safeguarding retirement plan assets put the firm’s interests ahead of the best interest of their plan clients, or fail to candidly disclose fees, we will hold them accountable,” Secretary Perez. “Retirement security is a pillar of middle class life, and the Labor Department and our federal partners are committed to using our authority to protect it.”
Pursuant to the proposed settlements and other agreements, State Street will pay a total of $382.4 million, of which $155 million will be paid as a civil penalty to the United States to resolve the allegations made by the Department of Justice that State Street violated the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), by committing fraud affecting financial institutions. The United States’ investigation arose from whistleblowers who filed a declaration pursuant to FIRREA.
The SEC has approved a separate agreement to settle the SEC’s investigation concerning State Street’s indirect FX services. Under the terms of the agreement, the Commission will enter an administrative order against State Street, only after the U.S. District Court gives final approval to State Street’s proposed settlement with private plaintiffs in pending securities class action lawsuits concerning its indirect FX pricing service. The administrative order will find that State Street violated Section 34(b) of the Investment Company Act of 1940 (Investment Company Act) and caused violations of Section 31(a) of the Investment Company Act and Rule 31a-1(b) thereunder, by providing its registered investment company (RIC) clients with trade confirmations and monthly transaction reports that were materially misleading in light of State Street’s representations about how it priced FX transactions. Under the terms of the order, State Street will be required to disgorge $75 million in ill-gotten gains and $17.4 million in prejudgment interest, to be paid to RIC clients, and also pay the SEC a civil penalty of $75 million.
State Street is simultaneously resolving DOL’s claims under the Employee Retirement Income Security Act (ERISA) by agreeing to pay at least $60 million to State Street’s ERISA plan customers who, DOL found, sustained losses in connection with the conduct alleged above. This amount will be distributed to ERISA plan customers in conjunction with the settlement of certain private class action lawsuits. DOL alleges in the settlement that State Street made false or misleading representations concerning certain FX trades, and concealed from its plan customers how it priced those trades. In the settlement State Street represents that it now makes and will continue to make detailed disclosures to its customers with respect to its FX pricing and that it now refrains and will continue to refrain from making representations regarding its FX pricing that are not accurate.
State Street will pay an additional $147.6 to resolve private class action lawsuits filed by the bank’s customers alleging similar misconduct.
The case was handled by Assistant U.S. Attorneys Justin O’Connell and Abraham George of Ortiz’s Civil Division. The SEC’s investigation was conducted by Senior Enforcement Counsels Sue Curtin, Cynthia Storer Baran and Andrew Palid, Senior Trial Counsel Deena Bernstein and Assistant Regional Director Celia Moore, all of the Boston Regional SEC Office and Stuart Jackson of the Division of Economic and Risk Analysis. The DOL’s case was investigated by the Employee Benefits Security Administration’s Boston Regional Office with assistance from Senior Trial Attorneys Suzanne Reilly, Nathan Goldstein and Nathan Henderson, and ERISA Counsel Marjorie Butler.
Cambridge Man Sentenced for Possession of a Firearm Later Used to Kill Police OfficerRead the Press Release
BOSTON – A Cambridge man was sentenced today in U.S. District Court in Boston for possession of the firearm with an obliterated serial number, which was later used to murder MIT Police Officer Sean Collier.
Merhawi Berhe, 22, was sentenced today by U.S. District Court Judge William G. Young to six months in prison and two years of supervised release. In March 2016, Berhe pleaded guilty to possession of a firearm with an obliterated serial number.
In January 2013, Berhe was in possession of, and transferred to another individual, a Ruger P95 9mm semiautomatic handgun with an obliterated serial number. That individual subsequently transferred the Ruger to Stephen Silva who then provided the Ruger to Dzhokhar Tsarnaev, one of the Boston Marathon bombers. On April 18, 2013, the Ruger was used by the Boston Marathon bombers to kill MIT Police Officer Sean Collier.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Lawrence J. Panetta, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Boston Field Division; Colon Richard D. McKeon, Superintendent of the Massachusetts State Police; Cambridge Police Commissioner Christopher Burke; and MIT Police Chief John DeFava, made the announcement today. The Portland, Maine Police Department also assisted with the investigation. The case was prosecuted by Ortiz’s Organized Crime and Gang Unit.
Medical Device Manufacturer Acclarent Inc. to Pay $18 Million to Settle False Claims Act AllegationsRead the Press Release
BOSTON – The U.S. Attorney’s Office announced today that California-based medical device manufacturer Acclarent Inc., a subsidiary of Ethicon, a Johnson & Johnson company, has agreed to pay $18 million to resolve allegations that it caused health care providers to submit false claims to Medicare and other federal health care programs by marketing and distributing one of its products, the Relieva Stratus, for use as a drug delivery device without U.S. Food and Drug Administration (FDA) approval of that use.
“The FDA plays a fundamental role in ensuring the safety and efficacy of medical devices and drugs in this country,” said United States Attorney Carmen M. Ortiz. “Every time that patients receive a medical device or fill a prescription they should be able to take for granted that the FDA’s requirements have been met. We will vigorously pursue those who ignore or seek to circumvent these important patient protections.”
“The FDA approval process serves an important role in ensuring that federal health care participants receive devices that are safe, effective and medically appropriate,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will not permit companies to circumvent that process and put profits over patient safety.”
“The FDA's requirement for premarket approval of medical devices is designed to ensure the health and safety of patients,” said George M. Karavetsos, Director of the FDA Office of Criminal Investigations. “The FDA will continue to aggressively pursue those who place the public health at risk and compromise the integrity of the regulatory system.”
“Companies cannot ignore the regulatory process to boost their bottom line,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation's Boston Division. “The FBI hopes this sends a clear message to those who disregard the laws and protections the public relies on for their safety.”
“Marketing medical devices for other than FDA approved uses can expose patients to questionable medical treatments while asking taxpayers to pick up the Medicare cost," said Special Agent in Charge Phillip M. Coyne of the Department of Health and Human Services Office of Inspector General. "Our investigators, working closely with our law enforcement partners, will continue to pursue allegations of such misconduct and deter those tempted to launch such illegal scams.”
“We are pleased to have contributed to this outstanding 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 VA makes every attempt to ensure pharmaceutical and medical devices have gone through the necessary FDA approval processes and have been determined to be safe and effective. When individuals and companies circumvent that process, patients and our veterans suffer.”
Acclarent sold a variety of medical devices used in sinus surgeries, including a device known as the Relieva Stratus MicroFlow Spacer (Stratus). In 2006, Acclarent received FDA clearance to market the Stratus as a spacer to be used only with saline to maintain sinus openings following surgery. The government alleged that Acclarent intended for the Stratus to be used instead as a drug-delivery device for prescription corticosteroids, including Kenalog-40, and that the device was specifically designed and engineered for this use.
The government further alleged that Acclarent marketed the Stratus as a drug delivery device even after the FDA rejected the company’s 2007 request to expand the approved uses for the Stratus. For example, Acclarent employees trained physicians using a video that demonstrated the Stratus being used with prescription corticosteroid Kenalog-40 and also used a white, milky substance resembling Kenalog-40 when demonstrating the Stratus.
In 2010, after the acquisition by Ethicon, Acclarent added a warning to its label regarding use of active drug substances in the Stratus. By May 2013, Acclarent discontinued all sales of the Stratus and the company agreed to withdraw all FDA marketing clearances for the device, which is no longer commercially available in the United States. Ethicon also cooperated with the government’s investigation.
On Wednesday, July 20th, Acclarent’s former Chief Executive Officer, William Facteau, 47, of Atherton, California and former Vice President of Sales, Patrick Fabian, 49, of Lake Elmo, Minnesota were convicted following a six-week jury trial of 10 misdemeanor counts of introducing adulterated and misbranded medical devices into interstate commerce.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $30 billion through False Claims Act cases, with more than $18.3 billion of that amount recovered in cases involving fraud against federal health care programs.
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division; the Food and Drug Administration, Office of Chief Counsel; the Federal Bureau of Investigation, Boston Field Division; the Department of Health and Human Services, Office of Inspector General; the Defense Health Agency; the Food and Drug Administration, Office of Criminal Investigations; Department of Defense, Office of Inspector General, Defense Criminal Investigative Service; the Department of Veterans Affairs, Office of Inspector General. The matter was handled by District of Massachusetts Assistant U.S. Attorneys Sara Miron Bloom, Patrick Callahan and Department of Justice Trial Attorneys Colin Huntley and Ross Goldstein.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Canton Man Indicted for Federal Drug and Firearm OffensesRead the Press Release
BOSTON – A Canton man was charged yesterday in U.S. District Court in Boston in connection with being a felon in possession of a firearm and distribution of cocaine.
Hollis Owens, 44, was indicted on one count of being a felon in possession of a firearm and ammunition, four counts of distribution of a controlled substance and one count of possessing a firearm in furtherance of a drug trafficking crime. Owens was previously charged by complaint and arrested in April 2016.
According to court documents, in the spring of 2016, law enforcement officers were investigating illegal distribution of cocaine in Framingham. During that time, officers conducted several controlled purchases of cocaine from Owens. In April 2016, a search of Owen’s residence revealed approximately 18 grams of crack cocaine, a loaded Smith & Wesson 9mm hand gun, 114 rounds of various caliber ammunition and $1,869 in cash.
Owens was prohibited from possessing a firearm because he had a prior state felony conviction.
The charge of being a felon in possession of ammunition provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of up to $250,000. The charge of distribution of a controlled substance provides a sentence of no greater than 20 years in prison, five years of supervised release and a fine of $1 million. The charge of possessing a firearm in furtherance of a drug trafficking crime provides a minimum mandatory sentence of five years in prison and no greater than a lifetime which must be served consecutive to any other imposed sentence, 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 and Lawrence J. Panetta, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division, made the announcement. The case is being prosecuted by Assistant U.S. Attorney Nicholas Soivilien of Ortiz’s Major Crimes 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.
Additional Charges of Sex Trafficking in “Sinful Innocence” Prostitution CaseRead the Press Release
BOSTON – A Springfield couple was charged in U.S. District Court in Springfield today with additional crimes of sex trafficking in connection with operating a prostitution business advertised as Sinful Innocence.
Milford Lewis, 35, and Tiana Lewis, 31, were charged in a superseding indictment with conspiracy to commit sex trafficking, sex trafficking, interstate transportation to engage in prostitution, interstate inducement to engage in prostitution, and extortionate threats.
In January 2016, Milford and Tiana Lewis were originally charged in a ten count indictment with conspiracy to commit sex trafficking, sex trafficking, interstate transportation to engage in prostitution, interstate inducement to engage in prostitution, and extortionate threats. The superseding indictment contains eight additional charges relating to five additional sex trafficking victims.
According to charging documents, beginning in August 2015, Milford and Tiana Lewis were the CEOs of Sinful Innocence, which purported to be a talent agency for the adult entertainment industry. Through the purported talent agency, the Lewis’s recruited and induced young women to work as models, adult entertainers, adult pornography actors, and escorts. It is alleged that the Lewis’s convinced the women to travel to Springfield from other states, and in one case, they picked a woman up from Connecticut and drove her to Springfield. The young women were quickly put to work as prostitutes at a house in Springfield and in motels in West Springfield, sometimes without receiving pay. Women who wanted to leave or who broke the rules of Sinful Innocence were subjected to beatings and threats to kill or harm them. The women were also allegedly threatened with violence when they were unable to pay a termination fee imposed by Sinful Innocence.
The charge of sex trafficking and conspiracy to commit sex trafficking each provides for a sentence of no greater than a lifetime in prison, five years of supervised release and a fine of $250,000. The sex trafficking statute also imposes a mandatory minimum sentence of 15 years in prison for offenses committed by means of force, threats of force, fraud, or coercion. The charge of interstate inducement to engage in prostitution provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine $250,000. The charge of interstate transportation to engage in prostitution provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine $250,000. The charge of extortionate threats provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000.
United States Attorney Carmen M. Ortiz; Hampden County District Attorney Anthony D. Gulluni; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; West Springfield Police Chief Ronald Campurciani; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. The case is being prosecuted by Alex J. Grant of Ortiz’s Springfield Branch Office.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is brought as a result of the investigative collaboration of the Western Massachusetts Human Trafficking Working Group, which includes the United States Attorney’s Office, the Massachusetts Attorney General’s Office, and the Hampden County District Attorney’s Office, as well as federal, state, and local law enforcement agencies. The Working Group began meetings in August 2015 to work cooperatively to address crimes involving commercial sex trafficking in Western Massachusetts.
Former Acclarent, Inc. Executives Convicted of Crimes Related to the Sale of Medical DevicesRead the Press Release
BOSTON – The former Chief Executive Officer and Vice President of Sales of Acclarent, Inc., a medical device company, were convicted by a federal jury in connection with distributing adulterated and misbranded medical devices.
William Facteau, 47, of Atherton, Cal., and Patrick Fabian, 49, of Lake Elmo, Minn., were convicted by a jury following a six week trial of 10 counts of introducing adulterated and misbranded medical devices into interstate commerce.
The jury concluded that Facteau and Fabian caused the unlawful distribution of a medical device known as the Relieva Stratus Microflow Spacer (“Stratus”) for uses not cleared or approved by the U.S. Food and Drug Administration. Despite the fact that the company had told the FDA that the Stratus was a medical device intended to maintain an opening to a patient’s sinus, Facteau and Fabian launched the product intending it to be used as a steroid delivery device. The FDA, however, had specifically refused Acclarent’s request to clear the Stratus for marketing as a drug delivery device without further submissions to support that use.
The evidence at trial demonstrated that Facteau and Fabian sought to quickly develop and market products, including the Stratus as a drug delivery device, to create a projected revenue stream that would make Acclarent an attractive business for either an initial public offering or acquisition.
The jury acquitted Facteau and Fabian on 14 felony counts of fraud. The 10 counts of conviction were misdemeanor counts related to the same conduct.
The charge of violating the Food, Drug and Cosmetics Act provides for a sentence of no greater than one year in prison on each count, one year of supervised releaseand fine of $100,000 or twice the gross gain or loss. 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; Jeffrey Ebersole, Special Agent in Charge of the U.S. Food and Drug Administration, Office of Criminal Investigations, New York Field Office; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations; Craig Rupert, Special Agent in Charge of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeastern Field Office; and Jeffrey Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office. The case is being prosecuted by Assistant U.S. Attorneys Sara Miron Bloom, Patrick Callahan and William Weinreb of Ortiz’s Criminal Division with the assistance of Trial Attorney Raquel Toledo of the Justice Department’s Consumer Protection Branch and Beth Weinman of the FDA’s Office of General Counsel.
Former Framingham Housing Authority Employee ChargedRead the Press Release
BOSTON – A Milford woman was charged today in U.S. District Court in Boston in connection with stealing over $70,000 in rent payments owed to the Framingham Housing Authority (FHA).
Rosa A. Famania, 33, was charged in a criminal complaint with one count of theft concerning a program receiving federal funds.
According to the complaint, in February 2010, Famania began working for FHA as an accounting assistant, and resigned from her position in August 2015, shortly after FHA suspended her in connection with an internal investigation into missing rent payments. Famania’s responsibilities at the FHA included collecting cash rent payments from FHA tenants; recording these cash payments in the electronic accounting system; securing the cash in a locked cash box; and, depositing the cash payments into a FHA bank account.
The complaint alleges that, between February 2014 and August 2015, Famania stole approximately 181 cash rental payments totaling $70,649 from FHA and utilized an FHA accounting software program to assist in concealing the theft. It is alleged that Famania came into possession of the rent payments, but did not deposit them into the FHA bank account. Instead, Famania allegedly kept the cash rent payments and adjusted the tenants’ balance downward in the electronic accounting system. Federal agents discovered that approximately $55,100 in cash was deposited into a joint account maintained by Famania and her boyfriend between July 2014 and July 2015, and between February 2014 and July 2014, nineteen U.S. Postal Service money orders totaling $17,900 were deposited into another bank account maintained by Famania.
The charging statute provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General, Northeast Regional Office; Shelly Binkowski, Special Agent in Charge of the U.S. Postal Investigation Service; Framingham Police Chief Kenneth Ferguson; and Stephen G. Keane, Executive Director of the Framingham Housing Authority, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney William F. Bloomer of Ortiz’s Public Corruption Unit.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Weymouth Man Charged with Illegally Possessing Assault-Style Weapons and AmmunitionRead the Press Release
BOSTON – A Weymouth man was charged today in U.S. District Court in Boston in connection with possessing several assault-style weapons and ammunition.
Robert Nicholas Kurtzer, 36, was charged in a complaint with one count of being a felon in possession of firearms and ammunition. According to court documents, Kurtzer was prohibited from possessing either ammunition or firearms because of a prior state conviction for armed robbery. Kurtzer was detained pending a detention hearing before U.S. District Court Magistrate Judge Marianne B. Bowler on Tuesday, July 19, 2016.
According to the complaint, for the past two months, federal agents have been conducting an investigation into Kurtzer’s activities. On July 12, 2016, law enforcement officers stopped a pick-up truck in which Kurtzer was a passenger, for a traffic violation. Kurtzer was allegedly observed to be carrying a large knife on his hip and a canister of pepper spray. Law enforcement officers asked Kurtzer if there were any weapons in the vehicle and Kurtzer replied, “Lots of them.” Kurtzer was searched and allegedly found in possession of: (1) a 10.5 inch Smith and Wesson fixed blade knife; (2) a canister of Sabre Red O/C spray; (3) one .300 AAC BLK caliber bullet; (4) several .22 caliber long rifle ammunition; and (5) seven .45 caliber Winchester ammunition.
Following Kurtzer’s arrest, law enforcement officers searched Kurtzer’s Weymouth residence where they uncovered a basement workshop. During the search of Kurtzer's residence and a secondary storage locker the following items were allegedly seized: (1) two assault rifles (including a Midwest Industries AR15-style assault rifle with an optic scope attached to the top, and an AR15-style assault rifle with unknown manufacturer and a 37mm flare launcher attached to it); (2) a Marlin bolt-action rifle with an obliterated serial number; (3) two handguns (including a .45 caliber pistol bearing serial number 0615-020055; and a Colt MKIV Series 80 pistol, bearing an after-market Punisher logo); (4) numerous weapons parts for use in the assembly of assault rifles and handguns; (5) one firearm silencer; (6) approximately six unfinished, partly assembled firearm silencers; (7) numerous rounds of various ammunition; (8) milling machinery used to manufacture handguns and rifles; and (9) approximately 671 rounds of assorted ammunition.
The charging statute provides 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; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Lawrence J. Panetta, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Emily Cummings of Ortiz’s Organized Crime & Gang Unit.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Charlton Man Sentenced to 20 Years in Prison for Child ExploitationRead the Press Release
BOSTON – A Charlton man was sentenced today in U.S. District Court in Worcester in connection with soliciting hundreds of teenage girls on several social media platforms.
Matthew Clem, 31, was sentenced by U.S. District Court Judge Hillman to 20 years in prison and 10 years of supervised release. In April 2016, he pleaded guilty to three counts of producing child pornography. Clem also faces state child rape charges in the Worcester Superior Court.
Clem pretended to be a 15-16 year old boy on several social media platforms in order to meet teenage girls. After chatting with them, Clem proposed that they meet his 19 or 20 year old “cousin,” who Clem claimed was returning from active military duty. The “cousin,” however, was Clem himself who had never served in the military. Evidence on Clem’s cell phone revealed that he had solicited over 1,000 potential victims.
Clem admitted during the plea hearing that in October 2014 he requested and obtained nude photos of a teenage female victim through Kik Messenger, a web-based messaging service. Via text message, Clem specified poses and sexual acts for the victim to photograph and send to him.
From September 2011 to May 2012, Clem video-chatted with another female teenage victim over Skype, a web-based video messaging service. During the video chats, Clem had the victim remove her clothes and conduct sexual acts. Clem also met with the victim and engaged in sexual intercourse with her.
Clem also admitted to communicating with a third teenage victim through Kik Messenger in the spring and fall of 2014. Clem exchanged sexually graphic text messages and images with the teenager and met her on multiple occasions to engage in sexual intercourse.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Worcester District Attorney Joseph D. Early, Jr.; Gregory K. Null, Special Agent in Charge of the U.S. Department of Homeland Security, Office of Inspector General, Office of Investigations; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Worcester Police Chief Steven M. Sargent; North Brookfield Police Chief Mark Smith, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Mark Grady of Ortiz’s Worcester 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 https://www.justice.gov/psc
Worcester Woman Sentenced for $3.6 Million Food Stamp FraudRead the Press Release
BOSTON – A Worcester woman was sentenced yesterday in U.S. District Court in Worcester in connection with a $3.6 million food stamp fraud scheme that she operated out of her Worcester convenience store.
Vida Ofori Causey, 46, was sentenced by U.S. District Court Judge Timothy S. Hillman to one year and one day in prison, three years of supervised release and ordered to forfeit $3,512,906 to the government. The court ordered restitution to be determined after forfeiture is completed. In December 2015, Causey pleaded guilty to one count of conspiracy to commit SNAP benefits fraud, one count of SNAP fraud, and one count of money laundering.
The Supplemental Nutritional Assistance Program (SNAP), formerly known as the Food Stamp Program, administered by the U.S. Department of Agriculture (USDA), provides eligible households with government subsidies for certain foodstuffs, and allows holders to exchange their SNAP benefits for food at authorized retail food stores.
Causey was the owner and operator of J&W Aseda Plaza, a convenience store on Main Street in Worcester. From April 2010 to October 2014, Causey conspired with others to commit SNAP fraud by purchasing SNAP benefits from recipients rather than exchanging them for food. Causey purchased the benefits at a discounted value of approximately fifty cents for every SNAP dollar. By so doing, Causey caused the USDA to electronically deposit into a bank account she controlled the full face value of the SNAP benefits fraudulently obtained. To provide customers with cash for the SNAP benefits, Causey used the cash she received from customers wishing to utilize MoneyGram services. In order to cover those transactions, she transferred money from the account where her SNAP funds were electronically deposited into the account she used for her MoneyGram business.
During the course of the four-year conspiracy, Causey defrauded the USDA of approximately $3,638,900 in SNAP funds.
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; and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement. The case was prosecuted by Assistant U.S. Attorney Michelle L. Dineen Jerrett of Ortiz’s Worcester Branch Office.
U.S. Attorney Ortiz Announces Creation of the Office of Public Affairs and External EngagementRead the Press Release
BOSTON – United States Attorney Carmen M. Ortiz announced today the creation of the Office of Public Affairs and External Engagement (OPAEE). The new executive level Office will be led by Christina DiIorio-Sterling who Ortiz appointed as Chief.
“I am thrilled to announce the creation of the Office of Public Affairs and External Engagement,” said U.S. Attorney Ortiz. “Effective public communication and active community engagement are critical to the success of our public safety mission. OPAEE bridges the gap between the courtroom and the public, enhancing the Office’s ability to anticipate, respond and provide assistance to the public and media.”
During Ortiz’s tenure, the U.S. Attorney’s Office has worked to increase public safety through expanded community outreach and engagement. Among other things, Ortiz’s Office has been in local communities fostering communication and positive messaging to youth through the Your Future, Your Decision program in schools. The Office has also led monthly roundtables with the BRIDGES Collaborative (Building Respect in Diverse Groups to Enhance Sensitivity) and expanded outreach efforts to address discrimination in underserved communities. The Office has also become a leader in strategic planning for the successful reintegration of formerly incarcerated individuals helping support their efforts to lead successful and productive lives upon release.
The OPAEE will enhance the efficiency and effectiveness of these efforts by housing them together in a single executive-level unit led by a member of Ortiz’s senior management team. It will also enhance relationships with the law enforcement community by offering training on emerging trends of criminal activity and officer safety, as well as partnership for grant funding. Finally, it will oversee the work of the Office’s skilled and dedicated victim witness coordinators, who provide critical assistance to victims and witnesses in federal cases that range from white collar crime and terrorism to child exploitation and human trafficking.
As Chief of the OPAEE, DiIorio-Sterling, who will continue to serve as the U.S. Attorney’s Office primary spokesperson and advisor to the U.S. Attorney, will supervise a professional staff of public information officers, community relations coordinators, outreach specialists, victim witness advocates, and reentry and law enforcement engagement staff. She will also oversee policymaking and long-range planning in communications strategy, victim witness matters, outreach programs, effective prevention and reentry programs, and cooperative relationships with law enforcement partners.
“I am confident that the OPAEE will enable the U.S. Attorney’s Office to enhance our work both inside and outside of the courtroom,” said U.S. Attorney Ortiz. “Our staff of experienced and dedicated professionals with expertise in media relations, law enforcement coordination, and victim-witness services, will work cooperatively with legal colleagues and law enforcement partners in our common pursuit of justice for all Americans.”
Springfield Man Sentenced for Firearm PossessionRead the Press Release
BOSTON – A Springfield man previously convicted of rape was sentenced in U.S. District Court in Springfield today in connection with unlawfully selling a firearm and ammunition.
Hector Nieves, 35, was sentenced by U.S. District Court Judge Mark G. Mastroianni to five years in prison and three years of supervised release. In April 2016, he pleaded guilty to one count of possession of a firearm and ammunition by a convicted felon.
On Sept. 2, 2015, Nieves negotiated the sale of a .22 caliber pistol and ammunition to a cooperating witness. He received the cash from the cooperating witness, and arranged for an associate to deliver the firearm and ammunition. As a result of previous convictions for rape and failure to register as a sex offender, Nieves was prohibited from possessing a firearm and ammunition.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Lawrence J. Panetta, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division, made the announcement. The case was also investigated by the Western Massachusetts Gang Task Force. The case was prosecuted by Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Office.
Peruvian Woman Charged with Smuggling Counterfeit Currency through Logan AirportRead the Press Release
BOSTON – A Peruvian woman was charged in U.S. District Court in Boston in connection with smuggling over $1.2 million in counterfeit $100 bills through Boston’s Logan Airport.
Alejandrina Elsa Quispe Ramirez, 47, was arrested yesterday and charged in a criminal complaint with one count of delivering counterfeit currency and one count of importing counterfeit currency into the U.S. Quispe Ramirez was detained following an initial appearance before U.S. District Court Magistrate Judge Marianne B. Bowler.
It is alleged that authorities learned that Quispe Ramirez would be traveling to the U.S. on July 11, 2016, carrying a large amount of counterfeit U.S. currency concealed in her luggage. According to their U.S. visa applications, the purpose of the visit was allegedly to go to Shriners Hospital for Children. Federal agents confirmed that Quispe Ramirez’s younger son had previously been a patient of the hospital; however, he was not scheduled to return to the hospital until at least November 2016.
As alleged in the complaint, on July 11, 2016, Quispe Ramirez landed at Boston’s Logan Airport and federal agents confirmed that U.S. currency was concealed inside the luggage. The agents followed Quispe Ramirez as she took a taxi from Logan Airport to Somerville, and then transferred to a Mazda SUV with Pennsylvania license plates driven by another man. The agents allegedly stopped the vehicle after the driver made an illegal U turn in the middle of the street. During a search, agents found approximately 140 spindles each with $85,000 in counterfeit $100 notes. In total, the three bags contained approximately $1,212,200 in counterfeit currency.
Each charge provides for a sentence of no greater than 20 years in prison, three years of supervised release a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Stephen A. Marks, Special Agent in Charge of the U.S. Secret Service, Boston Field Division; Nora Ehrlich, Acting Director of Field Operations of U.S. Customs and Board Protection; and David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Lori J. Holik, Chief of Ortiz’s Major Crimes Unit.
The details contained in the criminal complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
MS-13 Gang Founder in Massachusetts Sentenced for Illegal ReentryRead the Press Release
BOSTON – The founder of MS-13 in Massachusetts was sentenced today in U.S. District Court in Boston in connection illegally reentering the U.S. after being deported.
Carlos Geovanni Martinez-Aguilar, 38, of Mesquite, Texas, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to three years in prison and two years of supervised release. In April 2016, Martinez-Aguilar pleaded guilty to unlawful re-entry of a deported alien.
In 1977, Martinez-Aguilar was born in El Salvador and illegally entered the United States in 1995. In September 2002, he was convicted in Middlesex Superior Court of unarmed robbery and was deported from the United States to El Salvador in July 2003.
Prior to his 2003 deportation, Martinez-Aguilar was a leader of the MS-13 gang in the North Shore area. Known by his gang nickname, “Buffalo,” Martinez-Aguilar was well known by MS-13 gang members and local law enforcement as a founder of MS-13 in Massachusetts. MS-13, or Mara Salvatrucha, is a transnational street gang with origins in El Salvador, which is notorious for using extreme violence, including violence against their rival gangs.
In 2005, federal law enforcement learned that Martinez-Aguilar had returned to the United States following his deportation. Agents determined that he had been arrested using a false name in Lawrence for assault with a dangerous weapon, making threats, giving a false name to police and armed robbery. However, Martinez-Aguilar posted bail and was released before the Lawrence Police Department learned his true identity. Martinez-Aguilar then defaulted on the charges and a warrant was issued for his arrest as a fugitive.
Federal agents continued to track Martinez-Aguilar, which included referring the case to America’s Most Wanted, a national show that profiles the search for dangerous fugitives. A segment on “Buffalo” aired in early 2009 in an effort to get the public’s assistance in apprehending Martinez-Aguilar.
On Sept. 23, 2015, Martinez-Aguilar was arrested in the Dallas, Texas area.
During today’s sentencing hearing, Judge Gorton referred to MS-13 as a deadly and violent gang and cited the need to protect the public as a basis for his sentence of incarceration.
United States Attorney Carmen M. Ortiz and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement. The case was prosecuted by Assistant U.S. Attorney Glenn MacKinlay of Ortiz's Organized Crime and Gang Unit.
Five Current and Former Employees of Leading Proxy Solicitation Firm Charged with Conspiring to Obtain Confidential Shareholder Voting InformationRead the Press Release
BOSTON – Five current and former employees of one of the nation’s leading proxy solicitation firms were charged today with conspiring to bribe an employee of a prominent proxy advisory firm to obtain confidential information about how the advisory firm’s clients had voted on numerous shareholder proposals.
Donna M. Ackerly, 58, of Hopewell, N.J.; Charles W. Garske, 51, of Wayne, N.J.; Richard J. Gottcent, 59, of Islip Terrance, N.Y.; Keith Haynes, 53, of New York, N.Y.; and Michael Sedlak, 49, of Allentown, Pa., were charged in a criminal complaint with one count of conspiracy to commit wire fraud and honest services wire fraud. Ackerly, Gottcent, Haynes and Sedlak were arrested this morning and will have their initial court appearances today in New Jersey, New York and Pennsylvania. Garske is expected to have his initial court appearance later this week. The defendants are scheduled to appear in U.S. District Court in Boston before Magistrate Judge Marianne B. Bowler on Aug. 4, 2016.
It is alleged that from September 2007 to March 2012, the defendants conspired to provide tickets to concerts and sporting events to Brian M. Bennett, formerly known as Brian Zentmyer, an employee of one of the country’s leading proxy advisory firms, in order to obtain information about whether and how the proxy advisory firm’s clients had voted on particular shareholder proposals. The defendants are also charged with conspiring to defraud clients of their own employer by billing them for at least a portion of the cost of the bribes provided to Bennett, while falsely describing those charges as legitimate expenses.
Bennett, currently of Mount Pleasant, S.C., pleaded guilty in July 2015 to one count of conspiracy to commit wire fraud and honest services wire fraud.
"These defendants are charged with conspiring to use bribes to obtain confidential information to gain an unfair business edge over their law-abiding competitors," said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. "This investigation is another example of the FBI’s commitment to ensuring that nonpublic business information is properly safeguarded, and not misused by individuals and third parties for their own improper advantage."
Proxy advisory firms provide institutional investors with research, analysis and recommendations concerning proposals subject to vote by shareholders in publicly traded companies. The firms may also engage in ancillary businesses, such as helping clients cast their votes, also known as proxy ballots or proxies. Proxy solicitation firms, in turn, assist publicly traded companies in matters requiring shareholder approval by attempting to gather information about institutional investors’ holdings and the direction of their proxy votes. This information can help proxy solicitors and their clients determine whether particular shareholder proposals are likely to pass or fail and can thus help to shape their strategies for affecting the outcome of shareholder votes.
In the course of his work for the proxy advisory firm, Bennett had access to non-public information concerning the firm’s clients, including information about how many shares the clients held in particular publicly traded companies, whether the clients had voted on particular shareholder proposals, and if so, how they had voted. Such information is typically confidential, and the proxy advisory firm’s contracts with its clients required that the firm not disclose this type of confidential information to third parties. In addition, Bennett was subject to the proxy advisory firm’s code of conduct, which prohibited employees from accessing confidential information about the firm’s clients unless necessary to perform their jobs, providing confidential client information to third parties, and accepting gifts “designed to induce an employee to act in a manner inconsistent with the best interests” of the firm.
According to the complaint affidavit, between September 2007 and March 2012, Sedlak requested that Bennett provide him with non-public information about how the proxy advisory firm’s clients had voted on numerous shareholder proposals. In response to Sedlak’s requests, Bennett allegedly accessed the proxy advisory firm’s computer systems, often after-hours, to obtain the confidential, client-specific information Sedlak sought. Bennett then provided that information to Sedlak. Sedlak forwarded the confidential information to other employees of the proxy solicitation firm, including Ackerly, Garske, Gottcent and Haynes. Ackerly, Garske and Haynes then allegedly provided it to the proxy solicitation firm’s clients.
In exchange for the confidential information Bennett provided, it is alleged that Sedlak gave Bennett tickets to concerts and sporting events in Massachusetts and elsewhere, accounting for the tickets in expense reports he then submitted to Gottcent and others, who allegedly approved them. In several instances, Sedlak allegedly sought and received permission from Ackerly, Garske and Haynes to bill at least a portion of the cost of the tickets to clients of the proxy solicitation firm. In those instances, Ackerly, Garske and Haynes are alleged to have provided Sedlak with the names of clients to bill, and to have instructed the firm’s billing department to falsely describe those charges in client invoices as “courier services” or other legitimate-sounding expenses.
The charging document alleges specific examples of confidential information Sedlak obtained from Bennett, and the gifts Sedlak allegedly provided in exchange.
The charging statute provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
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 accouncement today. The United States Attorney’s Office has also received valuable assistance from the Securities & Exchange Commission. The case is being prosecuted by Assistant U.S. Attorneys Sarah E. Walters and Stephen E. Frank, Chief and Deputy Chief, respectively, of Ortiz’s Economic Crimes Unit.
New Bedford Man Sentenced to 11 Years for Armed Bank RobberyRead the Press Release
BOSTON – A New Bedford man was sentenced yesterday in U.S. District Court in Boston for robbing the St. Anne’s Credit Union in New Bedford in September 2013.
David Frates, 36, was sentenced by U.S. District Court Judge Richard G. Stearns to 11 years in prison, five years of supervised release and restitution of $1,098. In May 2015, Frates pleaded guilty to armed bank robbery.
On the morning of Sept. 24, 2013, a man wearing a translucent mask and hooded sweatshirt entered the St. Anne’s Credit Union in New Bedford. Once inside the bank, the man brandished what appeared to be a black semi-automatic firearm, threatened the tellers, and ordered the tellers to give him cash. The man took $1,098 in cash and fled the bank.
A few days later, the New Bedford Police Department received an anonymous tip suggesting that David Frates was involved in the robbery. During an investigation, the clothing Frates was wearing and the weapon he carried were recovered. The weapon was determined to be a BB gun. Frates was arrested and charged in January 2014.
U.S. Attorney Carmen M. Ortiz; Harold H, Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and New Bedford Police Chief Joseph C. Correiro, made the announcement. The case was prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
Lowell Man Sentenced for $440,000 Embezzlement SchemeRead the Press Release
BOSTON – A Lowell man was sentenced today in U.S. District Court in Boston in connection with the theft of more than $440,000 from a Spain-based seafood and fish distributor for which he served as the United States representative.
Jorge Manuel Silva, 59, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 15 months in prison, two years of supervised release and restitution of $440,398. In March 2016, he pleaded guilty to two counts of bank fraud.
Silva was an independent contractor for Seaport Fish Co., a corporation established to distribute fish and seafood in the United States by Freiremar Group, headquartered in Spain. Silva was responsible for coordinating sales to Seaport customers, collecting customer payments, and depositing those payments into Seaport’s account at Bank of America. From July 2008 through June 2010, Silva instead diverted more than $903,000 in Seaport customer checks to two accounts he held at Enterprise Bank in Lowell.
On occasion, Silva reimbursed Seaport with checks drawn on his Enterprise accounts several weeks or months after he had deposited the customer checks into those accounts. On other occasions, he used Seaport funds to pay personal expenses and the expenses for his other businesses. In this fashion, Silva diverted $440,398 of Seaport funds to his own uses.
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 was prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.
Former Network Engineer Pleads Guilty to Cyber AttackRead the Press Release
BOSTON – A Lowell man pleaded guilty today in U.S. District Court in Boston in connection with hacking into and damaging the computer networks of his former employer and three former clients causing damage of over $130,000.
Kamlesh Patel, 40, pleaded guilty to two counts to causing damage without authorization to Internet-connected computers and to one count of using means of identification to commit the offense. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Sept. 28, 2016.
Patel worked as a senior network engineer at Northborough-based Baesis Inc., a company that offered network maintenance and security services to its clients. In October 2010, after Baesis terminated Patel, he used a colleague’s network credentials to access Baesis’s computer network and deleted the company’s image server, a computer that stored copies of clients’ network configurations.
In late January 2011, Patel used his former colleague’s credentials once again to access Baesis’s network and the networks of three former clients. Patel used specialized software to delete data from all four companies’ networks. As a result, the victim companies temporarily lost use of their networks, including Internet and e-mail access. One victim company lost access to its Internet telephone system for several weeks.
Patel’s victims incurred $137,896 in damages. He has agreed to pay this amount in restitution in connection with his plea.
The charges of causing damage without authorization to Internet-connected computers provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. The charge of using means of identification to commit a felony provides for a sentence of no greater than five years in prison, two 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 J. Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistance was provided by the Northborough and Lowell Police Departments. The U.S. Attorney’s Office acknowledges Baesis, Inc. for its assistance with the investigation. The case is being prosecuted by Assistant U.S. Attorney Seth B. Kosto of Ortiz’s Cybercrime Unit.
North Shore Ophthalmologist Agrees to Pay $55,000 to Resolve False Medicare Billing AllegationsRead the Press Release
BOSTON – United States Attorney Carmen M. Ortiz announced today that Martin E. Cutler, M.D., an ophthalmologist with offices in Woburn and Gloucester, and his company, Martin E. Cutler, M.D., P.C., have agreed to pay $55,000 to resolve allegations that they submitted false claims to Medicare. Specifically, the government alleged that, between January 2010 and December 2014, Dr. Cutler and his practice falsely billed Medicare for ophthalmic diagnostic imaging when there was no underlying diagnosis to justify the imaging. They also allegedly falsely billed Medicare for office visits where a prior claim for the same visit had been denied and the new claim was not supported by Dr. Cutler’s documentation.
“This settlement is part of the government’s ongoing efforts to fight Medicare fraud, whether the defendant is a large pharmaceutical company or an individual physician practice,” said U.S. Attorney Ortiz. “Physicians have an obligation to bill only for medically reasonable and necessary services.”
“Our agency will continue to aggressively investigate health care providers that bilk Medicare for unnecessary services just to boost profits,” said Special Agent in Charge Phillip Coyne, U.S. Department of Health and Human Services Office of Inspector General. "And we will not tolerate greed, which can undermine medical decision-making and the public's trust in the health profession."
The settlement resolves allegations filed by a whistleblower, Brian Sachs. See United States, et al., ex rel. Brian D. Sachs v. Martin E. Cutler, M.D., and Martin E. Cutler, M.D., P.C., d/b/a Cutler Eye & Skin Center, No. 14-11879-IT (D. Mass.). The False Claims Act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. Under the terms of the settlement agreement, the federal government will pay the whistleblower $11,000 from the settlement amount.
U.S. Attorney Ortiz and HHS OIG SAC Coyne made the announcement today. It was handled by Assistant U.S. Attorneys Rayford Farquhar and Gregg Shapiro of Ortiz’s Civil Division.
Illinois Man Charged with Attempted Sexual Exploitation of Two Boys Through Online Video GamesRead the Press Release
BOSTON – An Illinois man was indicted yesterday in U.S. District Court in Springfield in connection with exploiting boys through online video games.
Zack Sawyer, 31, was indicted on two counts of attempted sexual exploitation of children. Sawyer was previously charged in a criminal complaint.
According to court documents, Sawyer used online interactive video games including X-Box Live games and MineCraft to communicate with two boys, aged 10 to 13 years old, in Massachusetts.
In approximately May 2010, Sawyer used X-Box Live to contact two 13 year-old boys in Hampshire County, Mass. Sawyer allegedly asked one boy to send him nude photographs, and when the boy refused, Sawyer threatened to rape him and kill him. Sawyer allegedly asked the second boy to send him naked pictures and when the boy refused, Sawyer also threatened to rape him, claiming that he had a drug that would paralyze people. This conduct forms the basis of the current Indictment.
The charging statute provides for a mandatory minimum sentence of 15 years and a maximum of 30 years in prison, a mandatory minimum of five years and a maximum of a lifetime 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; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police Superintendent, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz’s Springfield Branch Office.
Owner of Cape Cod Cleaning Service Sentenced for Filing False Tax ReturnsRead the Press Release
BOSTON – A Wareham business owner was sentenced yesterday in connection with a multi-year scheme in which she under-reported her income by more than $1 million.
Deborah Osgood, 54, was sentenced by U.S. District Court Judge Denise J. Casper to one day in prison, six months home confinement and one year of supervised release. Osgood was also ordered to pay more than $300,000 in restitution. In April, Osgood pleaded guilty to making and subscribing a false tax return.
Osgood was the owner of 2 Busy 2 Clean Cleaning Service, Inc., a residential and commercial cleaning service that operated principally in Cape Cod. Between 2009 and 2013, Osgood instructed some clients of 2 Busy 2 Clean to make checks payable to her personally, rather than to the business. Osgood cashed those checks, but did not deposit the proceeds into the business bank account, or otherwise report them to the accountant she retained to prepare her income tax returns. As a result, she significantly underreported the gross receipts of her business, and thus her own income, when she filed tax returns for years 2009 to 2013. For those five tax years, Osgood did not report more than $1 million in gross receipts, and thus underpaid her federal income taxes by more than $300,000.
United States Attorney Carmen M. Ortiz and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Stephen E. Frank, Deputy Chief of Ortiz’s Economic Crimes Unit.
Nine Men Charged with Distributing Drugs in Bristol CountyRead the Press Release
BOSTON – Nine men have been charged in U.S. District Court in Boston in connection with distributing heroin and cocaine in the Bristol County area.
Six men from southeastern Massachusetts and Rhode Island were charged with conspiring to distribute cocaine, and three New Bedford residents, in a separate but related criminal complaint, were charged with conspiring to distribute heroin. Six defendants were arrested this morning will appear in U.S. District Court in Boston later this afternoon. Three defendants remain fugitives from justice.
According to court documents, Luis Lopez was the head of a drug trafficking organization that imported large quantities of cocaine from Puerto Rico to New Bedford and Fall River. Another defendant coordinated the shipments of cocaine through the U.S. Mail with the assistance of Chindy Diaz, who received cocaine-filled packages on Lopez’s behalf and delivered it to Lopez at his Fall River residence. Israel Santiago also allegedly helped coordinate the receipt of cocaine on behalf of Lopez. Lopez then sold the cocaine to other drug dealers, including Tyson Britto. During the course of the investigation, federal agents intercepted at least three cocaine-filled packages bound for Lopez.
In a related investigation, federal agents learned that Sharik Mendes, who owns and operates the HEART gym in New Bedford, was allegedly receiving large quantities of heroin from at least two suppliers based in Providence. It is alleged that Mendes employed Tyson Depina to distribute the heroin on his behalf. Intercepted phone calls showed that Depina was consistently selling heroin to users and lower-level dealers, and that he was providing Mendes with $1,000 to $2,000 a day for this heroin. In April 2016, Depina was arrested for possessing heroin which he attempted to destroy incident to his arrest. In addition, it is alleged that Depina was also supplied heroin by another defendant, who was distributing it on behalf of a higher-level drug dealer.
The following defendants are charged in a federal criminal complaint with:
Conspiracy to distribute and possess with intent to distribute cocaine:
1) Luis Lopez, a/k/a “Juan Gonzalez,” 43, of Tiverton, R.I. and Fall River;
3) Chindy Diaz, 38, of New Bedford;
5) Tyson Britto, a/k/a “Peanut,” 31, of Fall River; and,
6) Israel Santiago, a/k/a “Reysito,” 39, of Fall River.
The following defendants are charged in a related federal criminal complaint with:
Conspiracy to distribute and possess with the intent to distribute heroin:
1) Sharik Mendes, 39, of New Bedford; and
2) Tyson Depina, a/k/a “Tru,” 40, of New Bedford.
The charges of conspiracy to distribute and possess with intent to distribute heroin and cocaine provide a sentence of no greater than 20 years in prison, 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.
United States Attorney Carmen M. Ortiz; Bristol County District Attorney C. Samuel Sutter; 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 Chief John M Souza; New Bedford Police Chief Joseph C. Cordeiro; Fairhaven Police Chief Michael Myers; and Bristol County Sheriff Thomas M. Hodgson, made the announcement today. The cases are 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.
Massachusetts Man Indicted on Terrorism ChargesRead the Press Release
BOSTON – An Adams man was charged in a superseding indictment today in connection with a plot to engage in terrorist activity inspired by and in the name of ISIL.
Alexander Ciccolo, a/k/a Ali Al Amriki, 23, was indicted on one count of attempting to provide material support to a foreign terrorist organization and one count of attempting to use of weapons of mass destruction. These charges were added to a pending indictment charging Ciccolo with one count of being a convicted person in possession of firearms and one count of assaulting a nurse during a jail intake process by use of a deadly weapon causing bodily injury. Ciccolo is scheduled to appear in U.S. District Court in Springfield on July 7, 2016 at 3:00 p.m.
According to evidence presented at a previous detention hearing, on July 4, 2015, Ciccolo received four firearms which he had ordered from a person who was cooperating with members of the Western Massachusetts Joint Terrorism Task Force, and who had been communicating with Ciccolo about his plans to engage in a terrorist act. Ciccolo was arrested immediately after receiving the firearms, which included a Colt AR-15 .223 caliber rifle, a SigArms Model SG550-1 556 rifle, a Glock 17-9 mm pistol, and a Glock 20-10 mm pistol. Ciccolo had previously been convicted of a crime punishable by more than a year in jail and therefore was prohibited from possessing firearms.
It is alleged that Ciccolo is a supporter of the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. Ciccolo had spoken with a cooperating witness in recorded conversations about his plans to commit acts of terrorism inspired by ISIL, including setting off improvised explosive devices, such as pressure cookers filled with black powder, nails, ball bearings and glass, in places where large numbers of people congregate, like college cafeterias. Prior to his arrest, agents had observed Ciccolo purchase a pressure cooker similar to that used in the Boston Marathon bombings.
It is also alleged that during a search of Ciccolo’s apartment after he was arrested, agents found several partially constructed “Molotov cocktails.” These incendiary devices contained what appeared to be shredded Styrofoam soaking in motor oil. It is alleged that Ciccolo had previously stated that this mixture would cause the fire from the exploded devices to stick to people’s skin and make it harder to put the fire out.
Shortly after his arrest, while he was being processed at the Franklin County Correctional Center, Ciccolo allegedly stabbed a nurse with a pen, leaving a bloody gash on the top of the nurse’s head.
Ciccolo has been detained since his arrest in July 2015.
The charge of attempted provision of material support to a foreign terrorist organization provides a sentence of no greater than 20 years in prison, up to a lifetime of supervised release and a fine of $250,000. The charge of attempted use of a weapon of mass destruction provides a sentence of life in prison, up to a lifetime of supervised release, and a fine of $250,000. The charge of being a prohibited person in possession of firearms provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. The charge of assault with a dangerous weapon causing bodily injury provides 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 and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division, made the announcement today. This investigation was conducted by the Western Massachusetts Joint Terrorism Task Force, and member agencies of the JTTF including the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Springfield, Ludlow, Holyoke, West Springfield, Easthampton, and Pittsfield Police Departments; the Massachusetts State Police, Homeland Security Investigations, and critical assistance from the Adams Police Department and the Massachusetts State Regional Hazardous Materials Response Team.
The case is being prosecuted by Assistant U.S. Attorneys Deepika Bains Shukla and Kevin O’Regan of Ortiz’s Springfield Branch Office and Trial Attorney Andrew Sigler of the National Security Division’s Counterterrorism Section of the Department of Justice.
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.
CVS to Pay $3.5 Million to Resolve Allegations that Pharmacists Filled Fake PrescriptionsRead the Press Release
BOSTON – In one of the largest settlements to date involving federal allegations of prescription drug diversion in Massachusetts, CVS Pharmacy, Inc., has agreed to pay $3.5 million to resolve allegations that 50 of its stores violated the Controlled Substances Act by filling forged prescriptions for controlled substances – mostly addictive painkillers – more than 500 times between 2011 and 2014. In addition, CVS has entered into a three-year compliance agreement with the Drug Enforcement Administration (DEA) that requires CVS to maintain and enhance programs it has developed in recent years for detecting and preventing diversion of controlled substances.
“Pharmacies have a legal responsibility to ensure that controlled substances are dispensed only pursuant to valid prescriptions,” said United States Attorney Carmen M. Ortiz. “When pharmacies ignore red flags that a prescription is fraudulent, they miss a critical opportunity to prevent prescription drugs from entering the stream of illegal opiates on the black market. Diverted painkillers are contributing to the devastating opioid epidemic in our Commonwealth. Although CVS is currently undertaking corrective steps to curb the tide of diversion, this settlement pushes CVS to go further and holds the company accountable for its past conduct.”
“DEA registrants like CVS have a corresponding responsibility to dispense controlled substances in accordance with the Controlled Substance Act. When pharmacies fail to adhere to these responsibilities, it allows for the diversion of prescription pain medication, which contributes to the widespread abuse of opiates, is the gateway to heroin addiction, and is devastating our communities,” said DEA Special Agent in Charge Michael J. Ferguson. “Our obligation is to improve public safety and public health, and we are committed to working with our law enforcement and regulatory partners to ensure that these rules and regulations are followed.”
This settlement resolves two investigations of CVS stores initiated by the DEA after it received an increased number of calls reporting forged oxycodone prescriptions. In the first investigation, the DEA identified forged prescriptions filled 403 times at 40 CVS stores in Massachusetts and New Hampshire. In the second investigation, the DEA identified 120 forged prescriptions filled at 10 CVS stores in and around Boston. The DEA estimated the street value of the diverted pills to be over $1 million.
The forged prescriptions traced back to just a few individuals. One of the forgers, P.R., signed a dentist’s name on 56 of 59 oxycodone prescriptions that P.R. was then able to get filled at five CVS locations. CVS pharmacists filled these prescriptions even though CVS banned P.R. in 2011 and its computer system contained notes warning that P.R. had tried to fill forged prescriptions in the past. P.R. managed to circumvent the ban by opening a new patient profile using her own Arizona driver’s license number but with a different last name. The government alleged that CVS should have known that the new profile was really P.R.’s, and that the quantities and frequency of P.R.’s oxycodone prescriptions were excessive, especially coming from a dentist. Moreover, the government alleged, even if CVS had believed the prescriptions to be real, there were red flags that P.R. was “doctor shopping,” including the fact that P.R. presented oxycodone prescriptions from two different providers during a single week at one CVS store.
Another forger, E.M., signed a dentist’s name on 131 prescriptions for hydrocodone – another highly addictive opioid – and then had them filled at eight CVS stores. One of those stores, in South Dennis, Mass., filled 29 forged prescriptions for E.M. in just six months. Those 29 prescriptions totaled 1,290 pills of hydrocodone, or seven pills a day. At a different CVS store, E.M. was able to fill 28 prescriptions that she had forged for herself and three other alleged patients even though the prescriptions were identical except for the patient name and even though E.M. presented some of the prescriptions just days apart. CVS also filled 107 prescriptions that bore the dentist’s Massachusetts address, even though, by then, the dentist had closed her Massachusetts practice and moved to Maine. CVS pharmacists could have discovered that the address on these prescriptions was no longer valid had they called the phone number on the prescriptions or checked the DEA’s website.
Yet another forger, E.D., was able to fill fake prescriptions for hydrocodone and methadone over 200 times at CVS stores. CVS filled the prescriptions, on which E.D. had forged the name of an emergency room physician who according to the prescriptions worked at Brigham & Women’s Hospital in Boston, even though: (a) the physician did not work at Brigham & Women’s Hospital; (b) the prescriptions were issued more often and for larger pill quantities than is normal for prescriptions issued by an ER physician; and (c) 21 of the prescriptions, which were presented and picked up by E.D., a man, purported to be for female patients (and all were filled by the same CVS pharmacy).
Under DEA regulations, pharmacists dispensing the drugs have a responsibility to ensure that he/she is filling only valid prescriptions written for a legitimate medical purpose by a practitioner acting in the usual course of his/her professional practice. Fulfilling this responsibility requires identifying and resolving red flags that, individually or collectively, indicate that a prescription may be forged or otherwise invalid.
This case was brought as part of the federal response to New England’s opioid crisis. Prescription opioids are habit-forming drugs that lead to the use of other addictive drugs such a heroin. Overdoses from both prescription drugs and heroin have climbed substantially in recent years.
U.S. Attorney Ortiz and DEA SAC Ferguson made the announcement today. The case was handled by Assistant U.S. Attorneys Giselle J. Joffre and Deana K. El-Mallawany of Ortiz’s Civil Division.
U.S. Attorney’s Office Reaches Agreement with Mclean Hospital to Resolve Disability Access IssuesRead the Press Release
BOSTON – The U.S. Attorney’s Office has reached an agreement with The McLean Hospital in resolve accessibility issues in McLean’s Gunderson Residence program. The agreement comes after the U.S Attorney’s Office received a complaint alleging that McLean Hospital turned away prospective patients in wheelchairs because it could not accommodate them at the Gunderson Residence.
“I want to commend McLean Hospital for its eagerness to make the Gunderson Residence accessible to those with mobility-related disabilities,” said United States Attorney Carmen M. Ortiz. “The Hospital’s cooperation demonstrates how much society can achieve when it prioritizes giving disabled individuals full access to all services, including medical care.”
Under the terms of the settlement, McLean will bring the Gunderson Residence’s common areas into compliance with the 2010 ADA Standards for Accessible Design. Additionally, McLean agrees to provide alternative equivalent housing arrangements to patients who qualify for the Gunderson Residence but who are unable to use stairs because of a mobility-related disability. McLean will also train its staff in these new policies.
As soon as it became aware of the complaint, McLean Hospital worked with the U.S. Attorney’s Office to resolve its disability access issue.
The ADA requires places of public accommodation, including hospitals, to provide individuals with disabilities equal access to facilities. More information on the ADA is available at www.ADA.gov.
This case was handled by Special Assistant U.S. Attorney Gregory Dorchak of Ortiz’s Civil Rights Unit.
Second City Official Charged in Music Festival ExtortionRead the Press Release
BOSTON - The City of Boston’s Chief of Staff of Intergovernmental Affairs, Timothy Sullivan, was arrested this morning after a federal grand jury indicted him in connection with the extortion of a music festival production company operating on City Hall Plaza.
Sullivan, 36, of Dorchester, was indicted in a two-count federal indictment charging him with conspiracy to extort a company and extortion of that company. In May 2016, Kenneth Brissette, 52, of Boston was indicted on extortion of the same company.
Brissette was indicted for extorting a company which had already contracted with a non-union company to provide workers for a September 2014 music festival. It is alleged that between July and September 2014, while the company was awaiting the issuance of certain permits and approvals required for its music festival, Brissette and Sullivan repeatedly advised the company that it would need to hire members of Local 11 to work at the music festival. Local 11 had attempted to obtain work from the company since March 2013. The company told Brissette and Sullivan that it had already entered into a contract with a non-union company and hired all of its labor. Nevertheless, Brissette and Sullivan allegedly insisted that half of the company’s labor force consist of union members, although they ultimately agreed that eight members of Local 11 would suffice. As a result of these City officials’ demands three days before the music festival the company entered into a contract with Local 11 for eight additional laborers and one foreman. Shortly thereafter, the City of Boston issued the necessary permits.
Today’s indictment is a superseding indictment, which added two counts against Sullivan and one more count against Brissette.
The charge of extortion provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. The charge of conspiracy to extort provides 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; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Jonathan Mellone, Special Agent in Charge of the New York Region of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation; and Nikitas Splagounias, Special Agent in Charge of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Laura J. Kaplan and Kristina Barclay of Ortiz’s Criminal Division.
The details contained in the Indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Beverly Man Sentenced for Role in Bogus Loan SchemeRead the Press Release
BOSTON – A Florida man, formerly of Beverly, Mass., was sentenced today in connection with an fraud scheme involving 75 victims throughout the United States, including many in Massachusetts.
Robert E. O’Connor, 68, was sentenced by U.S. District Judge Richard G. Stearns to 29 months in prison, three years of supervised release and was ordered to pay restitution of $627,581. In June 2015, O’Connor pleaded guilty to 13 counts of mail fraud and 15 counts of wire fraud, all in connection with a fraudulent advance fee scheme in which individuals were induced to pay up-front fees to his co-defendant, Ann Ursiny, and her business Trace Financial Group, Inc., based on representations that those individuals would receive real estate loans, when in fact Ursiny never intended to make any such loans. O’Connor participated in the scheme by recruiting people to apply for loans and pay the advance fees. O’Connor received a “commission” of $1,000 for each person who paid the advance fees.
O’Connor, who was a self-employed mortgage broker before becoming involved with Ursiny in early 2010, personally solicited approximately 35 people to apply for Ursiny’s nonexistent loans, and also referred a Texas loan broker to Ursiny, which resulted in another 40 people being defrauded. In total, O’Connor was responsible for about $627,000 in losses out of a total of about $933,000 resulting from Ursiny’s scheme. Although O’Connor was unaware at the beginning that Ursiny was operating a scam, after several months when none of his clients received the promised funding, O’Connor began lying both to prospective applicants to get their fees and to existing clients to quiet their complaints. O’Connor told them that some of his clients had in fact received loans from Ursiny or Trace, which he knew was untrue. He also sent a fabricated letter to clients that purported to be from a satisfied customer claiming to have received financing from Trace, knowing the letter was a fake and that none of his clients ever received any funding from Ursiny/Trace. In fact, victims’ funds were used for Ursiny’s personal and family expenses, and to pay “commissions” to agents.
In May 2016, Ursiny was sentenced 50 months in prison, to be served consecutive to the 71 month federal prison sentence imposed for a separate fraud scheme she orchestrated in Colorado.
United States Attorney Carmen M. Ortiz; 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 Mark J. Balthazard of Ortiz’s Economic Crimes Unit.