District of Massachusetts
Press releases recorded for this federal judicial district.
New Bedford Woman Sentenced for Stealing over $60,000 in Social Security BenefitsRead the Press Release
BOSTON – Lynn Medeiros, 49, of New Bedford, was sentenced today in U.S. District Court in Boston for stealing over $60,000 in Social Security benefits by continuing to collect her disabled son’s benefits after he left her custody.
Medeiros was sentenced by U. S. District Court Judge Nathaniel M. Gorton to four months in prison, one year of supervised release, including six months of home confinement, and ordered to pay $63,798 in restitution to the Social Security Administration.
In April 2005, Medeiros applied for Social Security Supplemental Security Income (SSI) disability benefits on behalf of her son. By signing the application, Medeiros acknowledged her responsibility to notify Social Security if her son left her custody or otherwise changed his living arrangements. Her son was approved for benefits, and his monthly Social Security checks were issued to Medeiros as his representative payee.
Beginning in August 2007, Medeiros’s son ceased to reside with her. However, each year from 2008 to 2013, Medeiros submitted forms to Social Security falsely stating that her son was still living with her and that she was spending the Social Security money on his behalf. In this manner, from August 2007 through August 2014, Medeiros converted $63,798 in benefits to her own use.
United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. The case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Five Boston-Area Men Charged with Extortion and GamblingRead the Press Release
BOSTON – Five men were arrested and charged today in the U.S. District Court in Boston with conducting an illegal gambling business, making extortionate loans and collecting loans by extortionate means.
Joseph Yerardi, 62, of Newton; Anthony Corso, 51 of Cambridge; Michael Burke, 45, of Winthrop; Robert Conway, 27, of, Lynnfield; and Michael Habicht, 59 of Boston, were indicted on one count of operating an illegal gambling business from March 2015 through April 2016. Yerardi and Corso were also indicted on three counts of conspiracy to make and making extortionate extensions of credit. In addition, Yerardi, Corso, Burke and Conway were indicted on various counts of conspiring to collect and collecting extensions of credit by extortionate means from six debtors. The defendants will appear before U.S. District Court Magistrate Judge Jennifer C. Boal at 11:30 a.m.
The charge of operating an illegal gambling business provides a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. The extortion charges each provide 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; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. Assistance with the investigation was also provided by the Internal Revenue Service’s Criminal Investigation, the Massachusetts Department of Correction, and the Boston, Medford, and Quincy Police Departments. The case is being prosecuted by Assistant U.S. Attorney Timothy E. Moran of Ortiz’s Organized Crime and Gang Unit.
The details contained in the charging document are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Boston Medical Center Agrees to Pay $1.1 Million to Resolve Allegations that it Improperly Billed Medicare and MedicaidRead the Press Release
BOSTON – United States Attorney Carmen M. Ortiz announced today that Boston Medical Center (BMC) and two of its physician practice organizations have agreed to pay $1.1 million to resolve allegations that BMC improperly billed Medicare and Medicaid.
“Hospitals have a responsibility to ensure that they are billing federal health care programs appropriately,” said U.S. Attorney Ortiz. “When taxpayer money is on the line, we have a duty to make certain that it is spent appropriately. We commend BMC for taking steps to address its billing issues both before and after the government’s investigation arose.”
“Taxpayers fund Medicare and Medicaid services to care for medically vulnerable populations,” said Special Agent in Charge Phillip M. Coyne, Office of Inspector General for the U.S. Department of Health and Human Services. “With our law enforcement partners we will continually work to protect people relying on these government health programs.”
Specifically, the settlement resolves allegations that (1) BMC billed Medicare for more units of Rituxan, an expensive cancer drug, than BMC actually infused in its patients; (2) BMC billed Medicare and Medicaid for services at its pre-surgical treatment center even though the global fee for the subsequent surgeries covered those same treatments; and (3) BMC submitted claims to Medicare for outpatient podiatry services where the clinical documentation did not support the reasonableness and necessity of the services.
After learning of the government investigation, BMC informed the United States that it already had repaid certain improperly used funds, had undertaken an audit of the Rituxan issue, and was about to commence an audit of the pre-surgical treatment billing issue. BMC subsequently worked cooperatively with the U.S. Department of Health and Human Services, Office of the Inspector General, and the Department of Justice to address the remaining matters at issue.
The settlement resolves allegations filed by BMC’s former Chief Compliance Officer, Kathleen Heffernan. 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.
This matter was investigated by the U.S. Department of Health and Human Services, Office of the Inspector General, and the Federal Bureau of Investigation. It was handled by Assistant U.S. Attorney Gregg Shapiro of Ortiz’s Civil Division.
Hanson Man Charged with Child EnticementRead the Press Release
BOSTON – A Hanson man was arrested today and charged in U.S. District Court in Boston in connection with sending sexually explicit videos to two pre-teen girls.
Mark L. Leach, 48, was charged in a criminal complaint with one count of coercion and enticement of a child. Leach is scheduled to appear before U.S. District Court Magistrate Judge M. Page Kelley at 4:30 p.m. today.
According to the complaint, law enforcement learned that Leach had used the Skype screen name “funtimehockey” to send sexually explicit messages via text, live video and audio with two pre-teen girls. The victims told law enforcement that Leach asked them to send naked and sexually explicit photos and videos of themselves. Leach also allegedly exposed himself.
Leach was arrested by law enforcement this morning as he was leaving his home. According to the complaint, during a consensual interview, Leach admitted that he had set up the Skype account to communicate with the minor girls, and requested that the girls expose themselves to him during conversations. He also admitted that he masturbated in front of them.
The charging statute provides for a minimum mandatory sentence of 10 years and no greater than a lifetime in prison, up to a lifetime of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Hanson Police Chief Michael Miksch; and Whitman Police Chief Scott D. Benton, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
Members of the public who have questions, concerns or information related to this case, or any information relating to the sexual exploitation of children, should call (617) 748-3274.
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.
Dover Insurance Broker Charged with Tax FraudRead the Press Release
BOSTON – A Dover, Mass. insurance broker was arrested today in connection with filing fraudulent personal tax returns.
Anthony J. May, 61, was indicted on two counts of filing false tax returns for tax years 2008 and 2009.
According to the indictment, May owned and operated Clients First Financial LLC, a business selling life insurance products, and Advantage Life Settlements, LLC, which served as a broker for individuals to sell their own life insurance policies to third party investors. May allegedly operated his businesses out of an office suite in Hingham where he also rented space to other independent insurance agents. As alleged in the indictment, May failed to report substantial amounts of the gross receipts he received from insurance commissions, life settlement broker fees and business rental income in his 2008 and 2009 tax returns.
The charging statute provides for a sentence of no greater than three years in prison, one year of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district judge based on the U.S. Sentencing Guidelines and other sentencing factors.
United States Attorney Carmen M. Ortiz and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Victor A. Wild of Ortiz’s Economic 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.
Charlton Man Pleads Guilty to Child ExploitationRead the Press Release
BOSTON – A Charlton man pleaded guilty today in U.S. District Court in Worcester in connection with soliciting hundreds of teenage girls on several social media platforms.
Matthew Clem, 31, pleaded guilty to an Information charging him with three counts of producing child pornography. U.S. District Court Judge Hillman scheduled sentencing for July 13, 2016. Clem also faces state child rape charges in the Worcester Superior Court.
Clem posed as 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.
The charging statute provides a mandatory minimum sentence of 15 years and no greater than 30 years in prison, a minimum of five years and up to a lifetime of supervised release and a fine of $250,000 on each count. Pursuant to a plea agreement, Clem will be sentenced to a minimum of 15 years and no greater than 21 years in prison if the Court accepts the agreement. 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; 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; and Worcester Police Chief Gary Gemme, made the announcement today. The case is being 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 www.projectsafechildhood.gov/.
Greenfield Restaurant Owner Pleads Guilty to Cooking the BooksRead the Press Release
BOSTON – Ioanis Dimitriou, 48, of Montague, pleaded guilty yesterday in U.S. District Court in Springfield to five counts of filing false tax returns from 2008 to 2012. Sentencing is scheduled for Aug. 30, 2016.
Dimitriou was the owner of a restaurant in Greenfield, Mass., which generated a substantial amount of cash sales which he took from the business and did not declare as income. Dimitriou systematically deleted records from his computer system and kept two sets of books which depicted the actual sales of the business and the sales disclosed on his tax returns. As a result, Dimitriou paid only five percent of the more than $232,000 in taxes that he owed.
The charging statute provides a sentence of no greater than three years in prison, one year of supervised release and a fine of $100,000 and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; made the announcement today. The case is being prosecuted by Alex J. Grant of Ortiz’s Springfield Branch Unit.
Northampton Man Charged with Child Exploitation OffenseRead the Press Release
BOSTON – A Northampton man was charged yesterday in U.S. District Court in Springfield with offering to distribute child pornography.
James J. Smith, 37, was charged in a complaint with one count of offering to distribute material involving the sexual exploitation of children. During an initial appearance in court yesterday, Smith was detained pending a detention hearing on April 12, 2016.
According to the complaint, on Jan. 8, 2015, a search warrant executed at Smith’s residence recovered a cell phone containing a storage card. After waiving his Miranda rights, Smith unlocked the phone and law enforcement officers found approximately 110 images of child pornography, including images of an eight-year-old girl. The phone also contained e-mail addresses and Craigslist correspondence concerning children engaged in sexually explicit conduct. Law enforcement officers recovered e-mails in which Smith offered to distribute, and did distribute, child pornography involving children aged 10 and younger as well as e-mails in which Smith offered to receive, and did receive, child pornography. Smith also sent messages in which he expressed a sexual interest in a16-year-old girl.
The charging statute provides for a minimum mandatory sentence of 15 years and no greater than 30 years in prison, up to a lifetime of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Northampton Police Chief Jody Kasper; and Easthampton Police Chief Bruce McMahon, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Members of the public who have questions, concerns or information related to this case, or any information relating to the sexual exploitation of children, should call (617) 748-3274.
New York Man Pleads Guilty to Fake Lottery ScamRead the Press Release
BOSTON – A New York man pleaded guilty today in U.S. District Court in Boston in connection with his role in a bogus lottery scheme in which the victims were told they had won millions of dollars in lotteries but must first pay the taxes in order for their winnings to be released to them.
Wilder Vladimir Merelan, of West Hempstead, NY, 29, pleaded guilty to an Information charging him with one count of conspiracy to commit mail and wire fraud. U.S. District Court Senior Judge Mark L. Wolf scheduled sentencing for Aug. 10, 2016.
From 2012 to 2015, Merelan’s Jamaican co-conspirators solicited victims, who ranged in age from 69 to 91. The victims were told that they had won millions of dollars in a lottery but had to pay taxes on their winnings to the IRS before the funds could be released to them. Victims mailed checks or wired funds to Merelan, who kept a portion for himself and then distributed the rest as directed by his co-conspirators. Merelan was described to these victims as a “sub agent” for the IRS. Approximately 16 victims, including a Massachusetts man, sent more than $830,000 to Merelan in an effort to secure their supposed lottery winnings. Some of the funds were stopped by banks or intercepted by the U.S. Postal Service. However, Merelan received $733,999.
After depositing the checks and receiving the wire transfers into his bank accounts, Merelan withdrew cash, wired funds to individuals in the United States and Jamaica, and purchased reloadable prepaid cards, essentially draining his accounts of the funds he had received.
The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the 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; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Shelly Binkowski, Inspector in Charge of the Postal Inspection Service; and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.
Convicted Drug Trafficker and Money Launderer Sentenced to PrisonRead the Press Release
BOSTON – A Brockton man was sentenced today in U.S. District Court in Boston in connection with orchestrating a cross-country conspiracy to distribute cocaine and marijuana.
Miguel Fernandes, 40, was sentenced by U.S. District Court Judge F. Dennis Saylor, IV, to 12 years in prison, four years of supervised release, and forfeiture of $1 million and a 2007 Ferrari. In January 2016, Fernandes pleaded guilty to conspiracy to possess with intent to distribute 500 grams or more of cocaine, possession with intent to distribute 100 kilograms or more of marijuana, and conspiracy to launder monetary instruments.
A two-year federal investigation revealed a well-organized conspiracy responsible for the transportation and distribution of cocaine and marijuana from Los Angeles to Boston. Fernandes, who at the time of the offense lived in Los Angeles, Calif. under the alias “Orlando Sanchez,” obtained the drugs from sources in Los Angeles, and utilized various means, including the USPS express mail system, to ship the drugs to various cities in the greater Boston area. Fernandes and his co-conspirators also laundered the proceeds made from the sale of those drugs. The conspiracy utilized “funnel accounts” controlled by individuals in Los Angeles who allowed deposits for Fernandes to be made to their accounts in Massachusetts and withdrawn in Los Angeles. As many as 40 funnel accounts were utilized, through which Fernandes and his co-conspirators laundered as much as $5 million in drug sale proceeds.
As the organizer and leader of the operation, Fernandez oversaw all aspects of the conspiracy. He also reaped the greatest rewards. At the time of his arrest, Fernandes had acquired a mint condition 2007 Ferrari 430 which he was ordered to forfeit to the government.
Co-defendants Michael Alves, 28, Alex Gomes, 26, and Nelson Teixeira, 36, all of Brockton, each pleaded guilty to conspiracy to launder monetary instruments. In February 2016, Alves was sentenced to 27 months in prison, and Gomes was sentenced to 30 months in prison.
In March 2016, Teixeira was sentenced to one year and one day in prison for his role. Marcos Andrade was acquitted of conspiracy to launder monetary instruments in January 2016 after trial.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Lisa A. Quinn, Special Agent in Charge of the U.S. Secret Service; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Karen Beausey and James Arnold of Ortiz’s Narcotics and Money Laundering Unit.
Stock Broker and Partner Arrested for Microcap Stock Manipulation SchemeRead the Press Release
BOSTON – A former New Hampshire stock broker and his Florida-based partner were arrested today on charges arising out of their participation in a market manipulation scheme which was actually part of an FBI undercover operation.
Robert Raffa, 56, of Penacook, NH., and David Aubel, 57, of Marco Island, Fla., were charged in a criminal complaint with conspiracy and wire fraud based on their involvement in a scheme to manipulate the market for the publicly traded securities of Green Energy Renewable Solutions, Inc., a penny stock company that claimed to be in the business of developing and operating waste processing and recycling facilities near Detroit, MI. They were arrested at their respective homes in New Hampshire and Florida.
According to the charging documents, in early 2012, Raffa and Aubel used four foreign entities to covertly acquire nearly all of Green Energy’s unrestricted stock without reporting their controlling interest as required by law. They then hired a promoter to send blast e-mails touting Green Energy to potential investors. Meanwhile, it is alleged that Raffa and Aubel were furiously selling their shares without disclosing that they had orchestrated the campaign encouraging investors to buy.
As alleged in the criminal complaint, the initial promotion enabled Raffa and Aubel to sell more than 1.5 million shares of Green Energy stock for proceeds of about $950,000. However, Raffa and Aubel continued to control a substantial amount of Green Energy stock after the promotion ended, so they used manipulative trading techniques to stabilize Green Energy’s stock price while they searched for another promoter to run a second touting campaign. Their search led them to a stock promoter who was secretly cooperating with the FBI and an undercover FBI agent who claimed to have access to a network of corrupt stock brokers who would buy Raffa’s and Aubel’s shares and place them in customer accounts in exchange for kickbacks. Raffa and Aubel allegedly executed a trade in which they sold 174,000 shares of their Green Energy stock to an account purportedly controlled a corrupt broker, which in fact was controlled by the FBI. Following the trade, Raffa and Aubel wired $6,000 to an account they believed to be controlled by the corrupt broker, but which was actually controlled by the FBI.
In a parallel action, the Securities and Exchange Commission (SEC) announced securities fraud charges today against Raffa and Aubel in connection with the scheme.
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.
Today’s charges follow a series of cases filed by the U.S. Attorney for the District of Massachusetts and the SEC in which more than 30 individuals have been criminally charged and convicted for using kickbacks and other schemes to trigger investment in, or manipulate the stock of, thinly-traded stocks.
The charge of conspiracy provides a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000, or twice the gross loss. 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. 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 United States Attorney’s Office received valuable assistance from the SEC during the investigation of this matter. The case is being prosecuted by Assistant U.S. Attorney Vassili Thomadakis of Ortiz’s Criminal Division and SEC attorney Andrew Palid, who was appointed as a Special Assistant U.S. Attorney.
The details contained in the charging document are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Southbridge Man Pleads Guilty to Illegally Exporting Assault Rifle and Pistol PartsRead the Press Release
Boston – A Southbridge, Mass., man pleaded guilty in U.S. District Court in Worcester today in connection with illegally shipping hundreds of firearm parts to people in 22 countries, including France, Finland, Indonesia, New Zealand, Thailand, Spain, Australia, and Germany.
David L. Maricola, 60, Southbridge, Mass., pleaded guilty to a 32-count indictment charging him with conspiracy, illegally exporting defense articles, making false statements on customs forms, and money laundering. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for June 30, 2016.
In 2015, Maricola and Arto Laatikanien, a 32-year old Finnish citizen, were indicted in connection with illegally exporting hundreds of assault rifle and firearm components, including parts for M16, M4, AR-15 assault rifles, Glock pistols, and UZI submachine guns.Between November 2010 and March 2012, Maricola shipped more than $100,000 worth of firearm components to Laatikainen in Finland though the U.S. Postal Service.After receiving the parts, Laatikainen sold them to criminal organizations in Finland, including the Cannonballs Outlaw Motorcycle Gang.
At today’s hearing, Maricola admitted to illegally exporting and conspiring to illegally export hundreds of firearm parts overseas using the Postal Service, lying on customs declaration forms about the contents and value of the articles he was sending, and money laundering. Maricola acknowledged that he had obtained many of the parts he illegally exported overseas from Gunbroker.com, an auction type website, and instructed his customers to send money to him using Paypal. Additionally, Maricola admitted that he repeatedly falsely described gun parts on customs forms as merely being “AIRSOFT” or replica firearms rather than being for actual, lethal guns. On numerous occasions, Maricola also falsely described AR-15 assault rifles parts as “aluminum sculptures.”
Laatikanien remains in Finland as Finland does not extradite its own nationals.
The charges of illegally exporting defense articles and money laundering each provide for a sentence of no greater than 20 years in prison. The charges of conspiracy and making false statements each provide for a sentence of no greater than five years in prison. In addition, the charge of illegally exporting defense articles provides for no greater than three years of supervised release and a fine of $1 million on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Leigh-Allistair Barzey, Special Agent in Charge of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office; and Michael S. Imbrogna, Special Agent in Charge of the Department of Commerce, Bureau of Indutry and Security, Office of Export Enforcement, Boston Field Office, made the announcement today. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and U.S. Postal Inspection Service provided substantial assistance during the investigation. The case is being prosecuted by Assistant U.S. Attorney B. Stephanie Siegmann of Ortiz’s National Security Unit.
Pennsylvania Man Sentenced for Cyberstalking and “Sextorting” Massachusetts College StudentRead the Press Release
BOSTON – A Pennsylvania man was sentenced today in U.S. District Court in Boston for engaging in a “sextortion” campaign against a Boston-area college student.
James F. Connor V, 20, of West Chester, Penn., was sentenced by U.S. District Court Judge William G. Young to time served, three years of supervised release, the first 10 months to be served in home confinement, a $5,000 fine and 500 hours of community served. In January 2016, Connor pleaded guilty to one count of cyberstalking and one count of extortion.
In 2012, Connor and the victim met through social media and developed an online relationship. In the course of that relationship, the victim sent Connor naked pictures of herself through Snapchat and engaged in sexually explicit video chats with him using FaceTime. Connor preserved many of these images without her consent. After the relationship ended, Connor attempted to continue communications with the victim and initiated a campaign of harassment and intimidation. He threatened to harm her physically and harm her reputation by publicly disseminating the sexually explicit images. Connor also repeatedly threatened to commit suicide if the victim did not take his calls, and sent her pictures of himself holding a knife to his throat with blood, which was later determined to be fake, dripping down his neck.
In September 2015, Connor escalated his campaign of harassment when he began blackmailing the victim and threatening to send the sexually explicit images to her parents and Twitter followers if she did not send additional naked pictures and engage in sexually explicit video chats with him. As part of Connor’s cyberstalking and sextortion campaign, he sent the victim a detailed list of sexual demands, which included, among other things, that she send him five sexually explicit pictures and have five sexually explicit video chat sessions per week over a five week period. Connor also insisted that she break up with her current boyfriend.
Connor frequently employed a telephone and text message spoofing, or anonymizing, application that allows users to easily change telephone numbers to conceal their identity. In October 2015, Connor was arrested and charged via criminal complaint after the victim reported the threats and prior pattern of harassment to law enforcement authorities.
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 was prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
Former Nurse Sentenced for Stealing Narcotics from HospitalRead the Press Release
BOSTON – A former nurse at Baystate Franklin Medical Center in Greenfield, Mass. was sentenced today in U.S. District Court in Springfield for stealing pain medication from the hospital’s automated drug dispensing machine.
Daniel Herlocker, 41, of Brattleboro, Vt., was sentenced by U.S. District Court Judge Mark G. Mastroianni to two years of probation, including three months of home confinement. In January 2016, he pleaded guilty to acquiring and obtaining controlled substances by deception and subterfuge.
In the fall of 2014, while Herlocker was employed as a nurse at Baystate Franklin Medical Center, he diverted Dilaudid, also known as hydromorphone, and morphine from sterile cartridge units known as carpujects. The carpujects were stored in an automated drug dispensing machine. Herlocker syphoned the drugs from the carpujects with sterile needles and replaced the medications with sterile saline solution.
This case was brought as part of the federal response to the growing opioid abuse epidemic in Massachusetts and other New England states. Theft of controlled substances by medical professionals not only puts patients at risk when they are deprived of their medication, but also fuels the pipeline of illegal prescription opioids
United States Attorney Carmen M. Ortiz; Russell Hermann, Acting Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, New York Field Office; and Monica Bharel, MD, MPH, Commissioner of the Massachusetts Department of Public Health, Division of Food and Drugs, Drug Control Program, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Karen L. Goodwin of Ortiz’s Springfield Branch Office.
Jury Convicts Woburn Woman of $1.3 Million FraudRead the Press Release
BOSTON – Following a six-day trial, a Woburn woman was convicted yesterday in U.S. District Court in Boston in connection with defrauding over $1.3 million from investors.
Rosalind Herman, 60, was convicted by a jury on investment adviser fraud, tax fraud, wire fraud and conspiracy. U.S. District Court Judge William G. Young scheduled sentencing for June 29, 2016.
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 investment funds obtained from clients were used to fund personal expenses for Herman, her family and Caplitz. In total, more than a dozen victims lost more than $1.3 million in savings, most of which were retirement savings.
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.
Caplitz previously pleaded guilty to fraud and tax charges, and testified against Herman at trial. He is scheduled to be sentenced on May 17, 2016.
The charges of investment advisor fraud and conspiracy 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, whichever is greater. The charge of tax fraud provides a sentence of no greater than three years in prison, one year of supervised release, a fine of $250,000, or twice the gross gain or loss, whichever is greater. The charge of wire fraud provides a sentence of no greater than 20 years in prison, six years of supervised release, 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; 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 is being prosecuted by Assistant U.S. Attorneys Sara Miron Bloom and Mary B. Murrane of Ortiz’s Economic Crimes Unit.
Two Former Senior Executives of Global Financial Services Company Charged in Scheme to Defraud Clients through Secret Trading Commissions on Billions of Dollars in Securities TradesRead the Press Release
Two former high-ranking executives of a Boston-based financial services company that is one of the world’s largest asset managers and custody banks were charged in an indictment that was unsealed today with a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Special Agent in Charge Harold H. Shaw of the FBI’s Boston Division made the announcement.
Ross McLellan, 44, of Hingham, Massachusetts, and Edward Pennings, 45, were charged in a five-count indictment with conspiring to commit securities fraud and wire fraud, as well as two counts each of securities fraud and wire fraud. McLellan, a former executive vice president of the bank who served as president of its U.S. broker-dealer unit, was arrested this morning in Hingham and will appear in U.S. District Court in Boston later today.
“The defendants are charged with reaping millions of dollars of illicit profits by abusing their clients’ trust and secretly setting their own inflated compensation,” said Assistant Attorney General Caldwell. “The charges announced today reflect our continued commitment to hold individuals accountable for toying with the integrity of our financial system.”
“The secret conversations and backroom plotting laid bare in today’s charges paint a vivid picture of a brazen fraud,” said U.S. Attorney Ortiz. “The defendants never thought anyone would hear those conversations – conversations in which they plotted to overcharge their clients by millions of dollars, and to hide their tracks. With each trade, they chipped away at the savings of thousands of retirees whose pensions they were charged with safeguarding. Bankers who abuse their clients’ trust in this way must be held accountable. And we will work hard to ensure that they are.”
“As alleged, Ross McLellan and Edward Pennings cheated and lied to investors so that the bank could line its pockets,” said Special Agent in Charge Shaw. “Actions like theirs undermine investor confidence. This case demonstrates the FBI's commitment to unraveling elaborate and complex schemes, motivated by sheer greed, that ultimately undermine our financial markets.”
The indictment alleges that, between February 2010 and September 2011, McLellan and Pennings, together with others, conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions, the indictment alleges. McLellan and Pennings then allegedly took steps to hide the commissions from the clients and others within the bank, including compliance staff.
The government’s ongoing investigation is being conducted by the FBI’s Boston Division. The case is being prosecuted by Trial Attorney Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant U.S. Attorney and Deputy Chief of Economic Crimes Stephen E. Frank of the District of Massachusetts. The Fraud Section and the U.S. Attorney’s Office of the District of Massachusetts have also received valuable assistance from the U.S. Securities and Exchange Commission as well as from authorities in the United Kingdom, including the City of London Police. The Criminal Division’s Office of International Affairs also provided assistance.
Three Brockton Men Charged with Distributing FentanylRead the Press Release
BOSTON – Three men, two of whom were arrested this morning, were charged in U.S. District Court in Boston for trafficking fentanyl in the Brockton area. The third defendant was already in state custody. In addition, 36 grams of fentanyl and a firearm were recovered following the execution of a federal search warrant.
Luis DaCosta, 21, aka “Jesse” and “Slu;” Gilvan Monteiro, 25, aka “G;” and Edson Gomes, 19, aka “E” and “Evil,” were charged in a complaint with one count of conspiracy to possess fentanyl with intent to distribute. DaCosta and Gomes were arrested today. Monteiro was already in state custody on unrelated matters. DaCosta and Gomes were detained pending a detention hearing scheduled for April 15, 2016.
As alleged in the complaint, from December 2015 to March 2016, the defendants sold fentanyl on numerous occasions in the Brockton area, and several times the drug was seized by law enforcement from the defendants’ associates. In addition, on Feb. 11, 2016, law enforcement seized a loaded Smith and Wesson .40 caliber handgun from an associate of Gomes’s during a vehicle stop.
Documents filed in court today also allege that the defendants have violent histories and gang associations. Monteiro has a lengthy criminal record which includes narcotics and firearms offenses and assault and battery with a dangerous weapon. According to the affidavit, law enforcement seized fentanyl from Monteiro’s customers on numerous occasions. Gomes, who also has a violent criminal history, is alleged to have engaged in gang-related shootings and a car chase with police as recently as December 2015. According to the affidavit, DaCosta was recently released on bail after he allegedly shot a person in Rhode Island on March 19, 2016. DaCosta also allegedly sold fentanyl to a person that overdosed in February 2016.
Gomes was arrested without incident in Brockton. DaCosta was arrested at the Roadway Inn on Belmont Street, also in Brockton. During the execution of a federal search warrant at the Roadway Inn, officers recovered a firearm, approximately 36 grams of suspected fentanyl and related drug paraphernalia. A woman also present in the Roadway Inn was arrested on state firearms and drug charges.
This case was brought as part of the federal response to the growing opioid abuse epidemic in Massachusetts and other New England states. A recent surge in overdose deaths has been attributed in part to the addition of Fentanyl to heroin. Fentanyl is a powerful synthetic opiate that is 50 to 100 times more potent than morphine and, when added to heroin, creates a toxic mixture substantially more potent, and more dangerous, than heroin alone.
The charging statute provides a sentence of no greater than 20 years in prison, three years 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; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Plymouth County District Attorney Timothy Cruz; and Brockton Police Chief John Crowley, made the announcement today. The case was investigated by the Massachusetts State Police assigned to the Plymouth Country District Attorney’s Office, MSP CAT Team, MSP Gang Unit, the New England High Intensity Drug Trafficking Area (HIDTA), and Brockton Police Department. The case is being prosecuted by Assistant U.S. Attorney Glenn A. MacKinlay of Ortiz’s Organized Crime and Gang Unit.
The details contained in the complaints are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Senior Executives of Global Financial Services Company Charged in Scheme to Defraud Clients through Secret Trading CommissionsRead the Press Release
BOSTON – Two former high-ranking executives of a Boston-based financial services company, which is one of the world’s largest asset managers and custody banks, have been charged with engaging in a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades.
Ross McLellan, 44, of Hingham, Mass. and Edward Pennings, 45, who is believed to be living abroad, were charged in a five-count indictment with conspiring to commit securities fraud and wire fraud, as well as two counts each of securities fraud and wire fraud. McLellan, a former executive vice president of the bank who served as president of its U.S. broker-dealer unit, was arrested this morning in Hingham and will appear in U.S. District Court in Boston later today.
U.S. Attorney Carmen M. Ortiz of the District of Massachusetts, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge Harold M. Shaw of the Boston Field Office of the Federal Bureau of Investigation made the announcement.
“The secret conversations and backroom plotting laid bare in today’s charges paint a vivid picture of a brazen fraud,” said U.S. Attorney Ortiz. “The defendants never thought anyone would hear those conversations – conversations in which they plotted to overcharge their clients by millions of dollars, and to hide their tracks. With each trade, they chipped away at the savings of thousands of retirees whose pensions they were charged with safeguarding. Bankers who abuse their clients’ trust in this way must be held accountable. And we will work hard to ensure that they are.”
“The defendants are charged with reaping millions of dollars of illicit profits by abusing their clients' trust and secretly setting their own inflated compensation,” said Assistant Attorney General Caldwell. "The charges announced today reflect our continued commitment to hold individuals accountable for toying with the integrity of our financial system.”
"As alleged, Ross McLellan and Edward Pennings cheated and lied to investors so that the bank could line its pockets. Actions like theirs undermine investor confidence. This case demonstrates the FBI's commitment to unraveling elaborate and complex schemes, motivated by sheer greed, that ultimately undermine our financial markets," said Special Agent in Charge Shaw.
The Indictment alleges that, between February 2010 and September 2011, McLellan and Pennings, together with others, conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions. McLellan and Pennings then allegedly took steps to hide the commissions from the clients and others within the bank, including by directing that the commissions not be broken out in post-trade reports.
For example, the Indictment alleges, among other things, that:
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In a telephone call in March 2010, Pennings instructed an unidentified co-conspirator in the transition management unit not to talk about the plans to charge hidden commissions on one transaction “with anyone . . . because it’s not going to help our story.Don’t even share it with the rest of the team, to be honest.”
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In June 2010, McLellan and the unidentified co-conspirator requested that the bank’s traders provide them with the reported daily high and low prices of securities the bank had traded for the client so that they could determine the amount of the commissions to be applied to each security without attracting the client’s attention by exceeding the bounds of reported prices.
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In March 2011, McLellan instructed a U.S. fixed income trader to charge a one basis point (0.01%) commission to each trade conducted for another client – notwithstanding that the written trading instructions for the transaction said to charge zero commissions – and subsequently instructed the trader to delete any reference to the commissions from the trading results he sent to the transition manager assigned to the project.
In June 2011, when one of the affected clients inquired about whether it had, in fact, been charged commissions in breach of its agreement with the bank, it is alleged that Pennings initially denied that any commissions had been charged. Later – at McLellan’s direction – Pennings acknowledged only that some commissions had been “inadvertently” charged on securities traded in the United States, but did not disclose that they had, in fact, been intentionally charged, in the United States and in Europe. McLellan and Pennings then allegedly sought to mislead the bank’s compliance staff into believing that the commissions had been charged in error and that the amount of the overcharges was limited to the commissions applied on U.S. securities.
The ongoing investigation is being conducted by the Federal Bureau of Investigation. The United States Attorney’s Office and the Fraud Section have also received valuable assistance from the Securities & Exchange Commission as well as from authorities in the United Kingdom, including the City of London Police. The Criminal Division’s Office of International Affairs also provided assistance. The case is being prosecuted by Assistant U.S. Attorney Stephen E. Frank, Deputy Chief of Ortiz’s Economic Crimes Unit and Trial Attorney Aisling O’Shea of the Criminal Division’s Fraud Section.
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Cape Cod Drug Traffickers Arrested and ChargedRead the Press Release
BOSTON – Thirteen individuals have been charged with federal drug trafficking and firearms charges following an investigation led by the Bureau of Alcohol, Tobacco, Firearms & Explosives. Three face state first-degree murder charges following a State Police and Barnstable Police investigation led by District Attorney Michael O’Keefe.
Thirteen Cape Cod residents affiliated with the Nauti street gang and drug trafficking organization were charged with federal drug and firearm violations. One individual was charged in a separate, related complaint with possession of a firearm by a felon. In addition, the Cape and Islands District Attorney’s Office charged three individuals with the murder of Christine Santos Ferreira.
In October 2015, law enforcement initiated an effort to address the rising opiate epidemic in Massachusetts and on Cape Cod in particular. Barnstable and Bristol counties each have an overdose death rate of 16-20 per 100,000 people, which is the highest in Massachusetts and exceeds the national average. As alleged in the federal criminal complaint, Denzel Chisholm and Christopher Wilkins, along with the other charged defendants, are responsible for a significant quantity of the heroin that has been distributed on Cape Cod. The investigation led to the state murder charges against Denzel Chisholm, Shannelle Chisholm and Tyrone Gomes.
According to state and federal criminal complaints, Ferreira was found shot and stabbed numerous times in the east bound rest area between Exits 6 and 7 on Route 6 in Barnstable on Sept. 19, 2015. Investigators believe that Chisholm orchestrated the murder of Ferreira in retaliation for her testimony against a fellow member of the Nauti street gang in 2011.
According to the federal criminal complaint, Chisholm and Wilkins pooled money and purchased heroin from a common source, which they then distributed to their customers who included Oliver Hamilton, Brooke Cotell, Shaun Miller, Tyrone Gomes, Stephanie Davis, Anthony Hall, and Benjamin Roderick, for further distribution.
According to the affidavit, in February 2016, Wilkins and Chisholm began distributing heroin tinted “blue” due to the “cut” put in the heroin, which was later seized from multiple sources on Cape Cod, indicating its widespread distribution. The complaint describes the lengths that Chisholm and Wilkins went to in order to shield themselves from law enforcement detection. Chisholm allegedly employed a girlfriend, Eelyese Mateo, to deliver heroin and store it at her Hyannis home. Chisholm and Wilkins also stored and sold heroin from a stash house operated by Bethanne Hutchings. On March 12, 2016, Chisholm left Hutchings a sample of heroin at her home for her to try. That night, Hutchings overdosed, was found unresponsive by local authorities, and was administered Narcan which ultimately saved her life.
In addition to heroin trafficking, it is further alleged that Wilkins, Chisholm and their co-conspirators possessed and used firearms. In March 2016, investigators intercepted telephone calls in which Benjamin Roderick, a heroin customer of Wilkins, offered to trade a .38 caliber firearm to Wilkins for 10 grams of heroin. Wilkins agreed to the deal, but just before they were to meet, law enforcement officers stopped Roderick’s vehicle and recovered the firearm. In a related complaint, Matthew Monroe was charged with possession of a firearm by a felon after he sold an Uzi semi-automatic rifle to a cooperating witness in a Hyannis hotel room.
The following defendants were charged in a federal criminal complaint with:
Conspiracy to distribute and possess with intent to distribute heroin:
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Denzel Chisholm, aka “Den” and “Din,” 26, of Barnstable;
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Christopher Wilkins, aka “Degree” and “Half Circle,” 29, of Hyannis;
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Tyrone Gomes, 31, of Hyannis;
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Eelyese Mateo, aka “El Chapo,” 20, of Hyannis;
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Bethanne Hutchings, 50, of Hyannis;
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Oliver Hamilton, 26, of Hyannis;
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Stephanie Davis, 21, of Harwich; and
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Anthony Hall, aka “Nova,” 31, of Sandwich.
Possession of heroin with the intent to distribute:
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Brooke Cotell, 22, of Hyannis;
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Shaun Miller, aka “Shizz” and “Shizz Miller,” 31, of Hyannis; and
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Jason Mello, 27, of Barnstable.
Conspiracy to possess a firearm in furtherance of a drug trafficking offense:
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Benjamin Roderick, aka “B Dot,” 26, of Hyannis; and
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Christopher Wilkins.
The following defendant was charged in a related federal criminal complaint with:
Possession of a firearm by a felon:
1. Matthew Monroe, 25, of Barnstable.
The defendants will appear in U.S. District Court in Boston. Gomes and Chisholm will appear in federal court after first being arranged and charged with related murder charges in Massachusetts state court. Gomes was previously in custody.
The charge of conspiracy to distribute and possess with intent to distribute heroin and possession with the intent to distribute heroin provides a sentence of no greater than 20 years in prison, up to a lifetime of supervised release and a fine of $1,000,000. The charge of conspiracy to possess a firearm in furtherance of a drug trafficking offense 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.
The Cape and Islands District Attorney’s Office charged the following defendants in a criminal complaint with:
First degree murder:
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Denzel Chisholm;
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Shannelle Chisholm, 26, of Mashpee; and
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Tyrone Gomes
United States Attorney Carmen M. Ortiz; Cape and Islands District Attorney Michael O’Keefe; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Barnstable County Sheriff James M. Cummings; Bristol County Sheriff Thomas Hodgson; Barnstable Police Chief Paul MacDonald; Yarmouth Police Chief Frank Frederickson; and U.S. Marshal John Gibbon for the District of Massachusetts made the announcement today. The federal cases are being prosecuted by Assistant U.S. Attorney Eric Rosen of Ortiz’s Narcotics and Money Laundering Unit. The state cases are being prosecuted by the Cape & Islands District Attorney’s Office.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.
For information on the state charges, please contact First Assistant District Attorney Michael A. Trudeau, First Assistant District Attorney Brian S. Glenny or Assistant District Attorney Tara L. Miltimore at the Cape & Islands District Attorney’s Office.
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Wellesley Executive Sentenced to Prison for Million-Dollar EmbezzlementRead the Press Release
BOSTON – The former controller of a Cambridge-based technology company was sentenced in U.S. District Court today for embezzling $1 million from the company.
Andy Kim, 44, of Wellesley, was sentenced by U.S. District Court Judge F. Dennis Saylor, IV to 18 months in prison and year of supervised release. In December 2015, Kim pleaded guilty to two counts of wire fraud.
Kim worked at the company from 2004 until he was fired in July 2015 after the discovery of the theft. Kim stole $500,000 from the company on two separate occasions, once in July 2014 and again in June 2015. On both occasions, Kim had access to the company’s checking account. He disguised the transactions as transfers of capital to the company’s owner, fabricated records that purported to document legitimate capital transfers, and then planted those records in the company’s files.
On both occasions, Kim wired the money to a bank account belonging to a Massachusetts real-estate investment company. After the July 2014 transfer, the real estate company forwarded the funds to Kim’s personal bank account. In the second fraudulent transfer, Kim arranged for the money to be wired to the real estate company, and then invested the funds on his behalf.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. This case was prosecuted by Assistant U.S. Attorney Brian A. Pérez-Daple of Ortiz’s Economic Crimes Unit.
United States to Auction James “Whitey” Bulger PossessionsRead the Press Release
BOSTON – The U.S. Marshals Service will auction items belonging to James “Whitey” Bulger and Catherine Greig on June 24-26th at the Boston Convention and Exhibition Center. U.S. Marshal John Gibbons and U.S. Attorney Carmen Ortiz made the announcement today.
“The U.S. Marshals Service will execute the order signed by Judge Casper. Our goal is to maximize the proceeds of the auction to compensate the victims of Bulger’s brutal crimes,” said Marshal Gibbons.
“We are pleased that we will soon be auctioning a significant portion of Bulger's and Greig's personal possessions, which will mark another milestone in the course of their successful prosecutions,” said U.S. Attorney Carmen M. Ortiz. “Although the proceeds we obtain will never be enough to make up for the harm the victims and their families have suffered, it is our hope that this process and the restitution we will be able to distribute as a result of the auction will give some relief to the victims and families in this case."
Pursuant to a court order signed today by U.S. District Court Judge Denise J. Casper, the U.S. Marshals Service will be conducting a sale of the forfeited items of James Bulger and Catherine Greig.
The U.S. Marshals entered into an agreement with the Boston Convention and Exhibition Center to host the auction, which will include items seized from the couple’s Santa Monica apartment, and other possessions in the government’s custody. The auction will be open to the public and the items will be available simultaneously through an online auction. A list of auction items will be made available at a later date.
Marshal Gibbons, U.S. Attorney Ortiz and the U.S. Marshals Service Asset Forfeiture Division made the announcement today.
Former Operative of Boston “Boiler Room” Sentenced to Prison for Fraud and Conspiracy ChargesRead the Press Release
BOSTON – A former Boston resident was sentenced today in U.S. District Court in connection with his participation in a fraudulent “boiler room” operation that misled investors and caused over $4 million in losses.
Jonathan Fraiman, 36, was sentenced by U.S. District Court Judge F. Dennis Saylor, IV to six years in prison, three years of supervised release, and ordered to pay restitution of $3,800,466. Following an 11-day trial in December 2015, Fraiman was convicted of mail fraud and conspiracy to commit mail and wire fraud
In December 2007, Fraiman joined Envit Capital LLC (Envit), a company which, with its various related entities, purported to invest in and manage a hedge fund and private equity funds. Envit originally operated in Boston, and later opened an office in Boca Raton, Fla. Upon joining Envit, and through August 2009, Fraiman conspired with Envit’s CEO and Chairman, co-defendant Edward Laborio, to solicit investments, by, among other things, making fraudulent misrepresentations about the historical rate of return of certain Envit entities and falsely promising certain investors quarterly fixed dividends on their investments. As part of the scheme, Fraiman purported to act as some investors’ investment adviser, a position he exploited to convince his clients to invest monies, including retirement assets and trust monies, in Envit through bogus promises of guaranteed dividends and false assurances regarding the financial health of the company. As part of the conspiracy, Fraiman and Laborio periodically rolled out new Envit “offerings,” which invariably were based on deceptive representations about the company, to both existing and new investors in order to raise more funds for Envit, from which they both personally profited. Investors lost over $4 million through their investment in Envit and its related entities.
Laborio, who was also charged in the indictment, was a fugitive and was found deceased in Barcelona, Spain in summer 2015.
In imposing sentence, Judge Saylor noted the “coldhearted” nature of the crimes of which Fraiman was convicted, particularly given that some of the victims were elderly individuals who had lost retirement savings in the scheme.
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 U.S. Attorney’s Office also acknowledges the valuable assistance provided by the U.S. Securities and Exchange Commission, Boston Regional Office. The case was prosecuted by Assistant U.S. Attorneys Vassili Thomadakis and Eric P. Christofferson of Ortiz’s Criminal Division.
Chelmsford Man Charged with Attempting to Destroy Power Lines in Tyngsborough with Incendiary DeviceRead the Press Release
BOSTON – A previously-convicted Chelmsford man was charged today in U.S. District Court in Boston in connection with attempting to destroy high-voltage power lines with an incendiary device.
Danny M. Kelly, 61, was charged in a complaint with attempting to maliciously destroy and damage property used in interstate and foreign commerce and in an activity affecting interstate and foreign commerce by means of fire. Kelly was detained following an appearance before U.S. District Court Magistrate Judge Page Kelley today.
According to the complaint, on March 30, 2016, a brush fire broke out near Locust Avenue in Tyngsborough, Mass., in the vicinity of high-voltage power lines that bring power to the greater Boston area from Canada. After fire crews extinguished the fire, emergency and National Grid officials observed several suspicious objects dangling from the power lines. The objects were rendered safe by law enforcement officials and determined to be homemade incendiary devices containing materials which together make thermite, a substance that can cut through metal objects, such as power lines. At least one of the devices had been activated and fell to the ground and ignited the brush fire.
According to the complaint, federal agents also found a typed note on one of the high-voltage grid poles. The unsigned note took credit for cutting the lines, threatened future attacks, and threatened to disseminate on terrorist and anarchist websites the instructions on how to make the thermite devices.
As alleged in the complaint, federal law enforcement agents quickly recognized several similarities between this attack on the power infrastructure and an extortionate scheme in 2004-2005 in which Kelly had cut approximately 18 cable and telephone lines. The FBI also learned of recent shipments to Kelly’s residence of chemicals from which thermite can be made. During the search of Kelly’s residence, the FBI found an additional thermite device as well as additional chemicals and other materials related to the crime.
Kelly was convicted in federal court for the 2004-2005 crime, and has a long history of grievances with the court system, the immigration system, and the Town of Chelmsford.
The charge provides for a mandatory minimum sentence of five years and no greater than 20 years in prison, five years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Richard McKeon, Superintendent of the Massachusetts State Police; Chief James Spinney of the Chelmsford Police Department; and Chief Richard Howe of the Tyngsborough Police Department, made the announcement today. The Bureau of Alcohol, Tobacco, Firearms and Explosives, National Guard Civil Support Team, Massachusetts Department of Fire Services, National Grid and Tyngsborough Fire Department are also assisting in the investigation. The case is being prosecuted by Assistant U.S. Attorney Aloke Chakravarty of Ortiz’s National Security 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.
Abington Man Sentenced for Stealing Social Security BenefitsRead the Press Release
BOSTON – An Abington man was sentenced today in U.S. District Court in Boston for stealing $65,311 in Social Security benefits.
Mark Gardner, 57, was sentenced by U.S. District Court Senior Judge Mark L. Wolf to three years of probation, including six months of home confinement, and was ordered to pay $65,311 in restitution to the Social Security Administration and a fine of $6,000. In November 2015, Gardner pleaded guilty to stealing public money.
Gardner’s mother died in 2009, but her monthly Social Security benefits continued to be directly deposited into a bank account held jointly in her name and Gardner’s name. Although Gardner was not entitled to this money, he routinely withdrew the Social Security money for his own use. In total, from 2009 to 2014, Gardner took $65,311 in Social Security funds to which he was not entitled.
This case was brought as part of an ongoing effort by the U.S. Attorney’s Office, in partnership with the Social Security Administration, to investigate and prosecute the posthumous fraud of Social Security benefits. In many of these cases, family members, knowing they are not entitled to government benefits, continue to withdraw and spend the funds after a relative has died. In the past year, the U.S. Attorney’s Office has prosecuted several similar cases involving a total of more than $1 million in stolen government money.
Last month, Lucy Girard, of Townsend, Mass., pleaded guilty to stealing $208,068 from Social Security; Brian Sandiford, of Jamaica Plain, was sentenced for stealing $70,811 from Social Security; and Shirley Warner, of Haydenville, Mass., pleaded guilty to stealing $45,491 from Social Security. Next week, Richard Alan Hersey, of Winthrop, will be sentenced for stealing $444,287 in Social Security and federal pension benefits.
United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. The Gardner case was prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Lawrence Elementary School Classroom Assistant Charged with Opioid Distribution CrimeRead the Press Release
BOSTON – A 4th grade classroom assistant in a Lawrence school was arrested yesterday afternoon and charged in connection with an undercover operation involving cocaine and oxycodone pills in the greater Boston area.
Reynaldo Sanchez, 25, of Lawrence, was charged in a criminal complaint with one count of attempted possession and intent to distribute oxycodone. Sanchez was released on conditions after an appearance today in U.S. District Court in Boston.
As alleged in the criminal complaint, in August 2015, federal agents began investigating Sanchez for his involvement in a narcotics and money laundering organization operating in the Boston area. During the investigation, Sanchez arranged to purchase from undercover federal agents 10 – 15 kilograms of cocaine for a price of $33,000 per kilogram. The complaint further alleges that between March 29, 2016, and March 31, 2016, Sanchez sought to purchase what he believed were 11,000 oxycodone pills for $13 per pill from an undercover agent posing as a drug courier. At the time of his arrest, Sanchez was carrying a duffle bag containing $48,000.
The charging statute provides for 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; Matthew J. Etre, Special Agent in Charge of the Homeland Security Investigations, Boston Field Office; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement. Assistance was also provided by the Middlesex County District Attorney’s Office, Massachusetts Bay Transportation Authority Police; and the Lawrence, Franklin, Wareham and Dartmouth Police Departments. The case is being prosecuted by Assistant U.S. Attorney Carlos A. López of Ortiz’s Narcotics and Money Laundering Unit.
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 the court of law.
Chelsea Man Indicted for Massachusetts and Puerto Rico Cocaine Distribution SchemeRead the Press Release
BOSTON – A Chelsea resident was arrested today in connection with distributing cocaine in Massachusetts and Puerto Rico.
Jose Ramirez-Baez, 39, was indicted on one count of conspiracy to distribute and possess with the intent to distribute 500 grams or more of cocaine, two counts of attempted possession with the intent to distribute 500 grams or more of cocaine, and three counts of money laundering.
According to the indictment, from June 2014 to March 2016, Ramirez-Baez conspired to possess and distribute cocaine in Chelsea, Everett and Puerto Rico. He also allegedly possessed with intent to distribute heroin in Massachusetts in December 2015 and January 2016. According to the indictment, on three occasions between Sept. 28, 2015 and Nov. 12, 2015, Ramirez-Baez deposited a total of $18,700 in an account bearing the name J&Y Landscaping at a Bank of America branch in Medford. Ramirez-Baez deposited the money in an effort to conceal the fact that it was derived from proceeds of narcotics trafficking.
The narcotics charges provide a sentence of no greater than 40 years in prison, a minimum of four years and up to a lifetime of supervised release and a fine of $5 million on each count. The charge of money laundering provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $500,000 on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Manny J. Muriel, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; 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 Eric Rosen of Ortiz’s Narcotics and Money Laundering 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.
Rhode Island Man Sentenced to Prison for Trafficking in Counterfeit Viagra from ChinaRead the Press Release
BOSTON – A Pawtucket, R.I. man was sentenced today in U.S. District Court in Boston for trafficking in counterfeit prescription medications.
Ricky Lugo, 49, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to a year and a day in prison and ordered to pay restitution of $104,239. In October 2015, he was charged with four counts of trafficking in counterfeit versions of erectile dysfunction medications, including Pfizer Inc.’s Viagra, Eli Lilly’s Cialis, and Bayer’s Levitra.
From June 2013 to March 2014, Lugo sold counterfeit Viagra, Cialis, and Levitra on Craigslist and in person. Lugo purchased the counterfeit pharmaceuticals from sources outside the United States, including from China. Lugo knew that the goods he was selling were counterfeit, but nonetheless sold and attempted to sell thousands of the tablets.
At today’s sentencing hearing, Judge Gorton said that Lugo’s crime was serious, and that it was important that he be punished as a form of general deterrence to others that might consider selling counterfeit pharmaceuticals on the Internet. Judge Gorton noted that but for the extenuating circumstances of Lugo’s medical condition, he would have sentenced him to a longer term of imprisonment.
United States Attorney Carmen M. Ortiz; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; 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 Amy Harman Burkart of Ortiz’s Cybercrime Unit.
Dedham Man Pleads Guilty to Armed Bank RobberyRead the Press Release
BOSTON – A Dedham man pleaded guilty yesterday in U.S. District Court in Boston to armed bank robbery.
Lawrence J. Costello, 54, pleaded guilty to one count of armed bank robbery. U.S. District Court Judge Nathan M. Gorton scheduled sentencing for July 27, 2016.
On May 12, 2014, Costello and another individual, armed with what appeared to be semi-automatic weapons, entered a Bank of America branch in Attleboro. Once inside, Costello jumped over the teller’s counter, and took $17,687 in cash while holding the tellers at gunpoint. The men fled in a green Ford pickup truck. The pickup truck was recovered a short time later and determined to have been stolen. During the investigation, law enforcement recovered a pair of red and black gloves which testing revealed contained Costello’s DNA. Costello was arrested a few weeks later in Bourne, Mass.
The charge provides for a sentence of no greater than 25 years in prison, five years of supervised release, a fine of $250,000 and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Attleboro Police Chief Kyle Heagney; Bourne Police Chief Dennis Woodside, made the announcement today. The case was handled by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
Boston Man Charged with Multi-Million Dollar Scheme to Defraud Brokerage FirmsRead the Press Release
BOSTON – A Boston man was arrested today in connection with a three-year, multi-million dollar fraud scheme.
Nathaniel Ponn, 27, of Boston, was charged in a criminal complaint with two counts of wire fraud. He will appear before U.S. District Court Magistrate Judge Judith G. Dein at 2:15 today.
According to court documents, it is alleged that from 2012 to April 2015, Ponn opened more than 400 brokerage accounts at nine investment firms throughout the United States, and used false names, social security numbers, assets and income to open many of them. The firms allow customers to transfer funds from another financial institution into the customer’s brokerage account through an Automated Clearing House (ACH) transfer, by providing the account number and financial institution where the account was held and the amount to be transferred.
According to the complaint, from February 2014 to April 2015, Ponn provided ACH transfer information to brokerage firms for accounts he opened on more than 350 occasions, totaling more than $8.5 million in attempted transfers. In each instance, the bank account Ponn provided did not have the amount of funds requested or, in some circumstances, did not even exist. Although the ACH transfers were rejected, the fraudulent transfers created the false appearance that the brokerage accounts had cash available to purchase securities.
Through this scheme, Ponn was allegedly able to purchase securities totaling more than $2.7 million in accounts at eight investment firms. When the firms discovered that the ACH transfers were rejected, they liquidated the securities in Ponn’s accounts.
The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $1 million on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
The U.S. Attorney’s Office received valuable assistance from the Securities and Exchange Commission, which filed suit today against Ponn arising out of the scheme to defraud investment firms.
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 Mark J. Balthazard of Ortiz’s Economic Crimes 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.
Western Massachusetts Power Plant Owner and Management Companies Agree to Plead to Tampering and False Reporting; Operations & Maintenance Company Enters into Consent JudgmentRead the Press Release
BOSTON – Berkshire Power Plant’s owner and management company have agreed to plead guilty to tampering with emissions equipment and submitting false information to both environmental and energy regulators. The former plant operation and maintenance company also agreed to pay a state civil penalty.
United States Attorney Carmen M. Ortiz and Massachusetts Attorney General Maura Healey announced the resolution today following a joint federal and state investigation into allegations that Berkshire Power Plant in Agawam, Massachusetts tampered with its air pollution monitoring equipment and falsely reported data to environmental and energy regulators regarding its emissions levels and its availability to produce power.
“This resolution addresses a pattern of behavior by multiple persons and entities in obstructing the enforcement of laws designed to protect the air we breathe,” said United States Attorney Carmen Ortiz. “The comprehensive resolution, including the first ever criminal charges for false statements to the Federal Energy Regulatory Commission, demonstrates the seriousness with which we take conduct which undermines environmental compliance and the fair regulation of energy markets.”
“The deliberate scheme Berkshire Power Plant management and staff undertook gave them an unfair competitive advantage over responsible companies, and undermined a system that depends on honest data reporting,” said Tyler Amon, Special Agent in Charge of the U.S. Environmental Protection Agency’s Criminal Investigation Division in Boston. “Maximizing profit to minimize the cost of controlling pollution is placing greed over protecting nearby communities. EPA will continue to pursue cases that maintain data integrity, so we can do our job to protect clean air.”
“Fraud against the Commonwealth is very serious and will be aggressively prosecuted, criminally and civilly, by this Office, especially when the consequence of the fraud is to expose the public to health and safety risks,” said Massachusetts Attorney General Maura Healey. “This type of conduct can not be tolerated.”
“Reporting environmental information accurately is essential to state and federal efforts to improve air quality. Cases where information is misrepresented will be pursued to the fullest extent to protect the integrity of our air quality programs,” said MassDEP Commissioner Martin Suuberg. “Some of the funds generated by this settlement will support innovative programs to improve air quality in the Commonwealth, including the woodstove change-out and electric vehicle subsidy programs.”
Berkshire Power Co. (“BPC”), the owner of Berkshire Power Plant (“the Plant”), and Power Plant Management Services (“PPMS”) the Plant manager, agreed to plead guilty to felony charges that they violated and conspired to violate the federal Clean Air Act. These charges arose from air pollution monitoring equipment tampering and related false emissions reporting between 2009 and 2011. PPMS also agreed to plead guilty to charges that it violated the Federal Power Act, the first ever criminal charges under this statute, for making false statements to the regional power grid administrator, ISO-New England, regarding the Plant’s availability to produce power.
Under the terms of the plea agreements, BPC and PPMS agree to pay a total of $4.25 million related to the criminal charges. BPC will pay $2.75 million in criminal fines for the Clean Air Act violations and make a $750,000 community service payment to the American Lung Association to fund a program for the replacement of polluting wood burning stoves in western Massachusetts. PPMS will pay $500,000 in criminal fines for the Clean Air Act and Federal Power Act violations and make a $250,000 community service payment to the American Lung Association’s wood stove change-out program. The wood stove program payments would be established only after sentencing.
Between them, BPC, PPMS, and the Plant’s former operation and maintenance company, EthosEnergy Power Plant Services, LLC (formerly Wood Group Power Plant Services, LLC), will also pay over $4 million in civil penalties. EthosEnergy agreed to resolve allegations that it violated sections of the Commonwealth’s Public Health Law dealing with air pollution stemming from its employees’ involvement with the air pollution monitoring equipment tampering at the Plant. Under the terms of the state Consent Judgment, EthosEnergy will pay a $1.1 million civil penalty, and make a $200,000 payment to fund the installation of electric vehicle charging stations in the Commonwealth.
In addition to the criminal fines outlined above, BPC and PPMS have agreed to pay $3,042,563 plus interest to the Federal Energy Regulatory Commission in civil penalties and disgorgement for their misrepresentations to ISO-New England regarding the Plant’s availability to produce power.
According to documents filed in federal and state court, between January 2009 and March 2011, BPC engaged PPMS to manage the Plant, including overseeing day-to-day operations and maintenance and to act as the owner’s representative for the Plant.A PPMS employee served as the Plant General Manager and as BPC’s on-site representative.BPC also retained Wood Group during this same time to provide the day-to-day Plant operation and maintenance.
PPMS and BPC caused the Wood Group employees at the Plant to tamper with the Plant’s air pollution monitoring equipment to conceal the fact that the Plant was emitting air pollutants in excess of permitted levels.This tampering was accomplished by intentionally biasing the Plant’s Continuous Emissions Monitoring System so it would show lower emissions levels than were actually being produced by the Plant.BPC and PPMS then used this inaccurate data in filing required emissions reports with United States Environmental Protection Agency (“USEPA”) and the Massachusetts Department of Environmental Protection (“MassDEP”).The purpose of the tampering was to avoid lost revenues that would have resulted from reducing power production to stay within the Plant’s air pollution emissions limits, or by taking the Plant out of service to implement needed repairs of the Plant’s pollution control and other equipment.
Excess nitrogen oxide (“NOx“) emitted from fossil-fuel-burning power plants and mobile sources, like cars and trucks, combines in the atmosphere with volatile organic compounds emitted from industrial and residential sources to form ground-level ozone. At ground level, ozone is a respiratory pollutant that can cause many human respiratory effects, and even premature mortality, especially in vulnerable elderly persons and young children. NOx emissions also cause environmental damage to coastal waters, aquatic life, and other property, and contribute to the formation in the atmosphere of fine particulates that also harm humans, aquatic life, and vegetation.
During the course of the tampering investigation, criminal investigators also learned that PPMS made and caused staff at the Plant to make false statements to the ISO-New England, about the Plant’s availability to produce power for the New England grid. They also caused staff at the Plant to falsely claim to the ISO that the Plant was available to produce power when it was not. PPMS did this to maximize the Plant’s revenues and to minimize repair expenditures.
In February 2015, Ortiz’s office filed charges against Frederick Baker and Scott Paterson, respectively, a former Wood Group manager and instrument control technician at the Plant at the time the tampering occurred. It is alleged that Baker had, at the direction of the PPMS on-site General Manager, directed Wood Group employees at the Plant, including Paterson, to tamper with the Continuous Emissions Monitoring System. In light of the fact Wood Group spearheaded the disclosure of the tampering conduct to USEPA and MassDEP, and provided a high level of cooperation during the case, the case against EthosEnergy is being resolved with a civil settlement.
The federal criminal case is being prosecuted by Sara Miron Bloom of Ortiz’s Economic Crimes Unit and Daniel Licata, an Assistant Attorney General with the Massachusetts Attorney General’s Office working as a Special Assistant United States Attorney, with the assistance of Dianne Chabot, USEPA Criminal Enforcement Counsel.
The case was investigated by USEPA-CID, the Massachusetts Environmental Crimes Strike Force (an interagency investigative team dedicated to developing the most significant environmental enforcement cases) and the Massachusetts Environmental Police, with the technical assistance of attorneys, analysts and engineers from MassDEP and EPA Region 1.
The state civil case is being handled by Assistant Attorney General Frederick Augenstern of Attorney General Healey’s Environmental Protection Division, with assistance from attorneys from MassDEP’s Office of General Counsel, and engineers in MassDEP’s Boston Office.
The details contained in the criminal information and civil complaint are allegations. The defendants in the criminal cases are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. By entering into the Consent Judgment, EthosEnergy does not admit to the truth of the allegations contained in the Complaint.
Former Blackstone Woman Pleads Guilty to Stealing Customers’ Personal InformationRead the Press Release
BOSTON – A former Blackstone woman pleaded guilty today in U.S. District Court in Boston in connection with her role in a scheme to steal personal information from clients of her former employer.
Jasmine Banks, 29, pleaded guilty to one count of conspiracy to commit identity theft and access device fraud. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for June 22, 2016.
In 2014, Banks was a customer service employee for Mercer, Inc., in Norwood, and assisted customers with retirement plans that were administered by Mercer. In connection with her work, she had access to detailed account information and personally identifiable information (PII) for customers’ accounts. From February 2014 through April 2014, Banks accessed Mercer account information at her computer and provided the names, addresses, and bank account of approximately 270 Mercer account holders to one of her co-conspirators via email and text message. In many cases, she also provided dates of birth and social security numbers. In addition, Banks selected 401(k) accounts with large balances and sent the co-conspirator detailed account access information for four of them. Based on the information Banks provided, a fraudulent withdrawal of $23,485 was made from one of the retirement accounts.
Mercer fully cooperated with law enforcement to prevent further account breaches and withdrawals.
The charge provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000 or twice the 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 Lisa A. Quinn, Special Agent in Charge of the U.S. Secret Service, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney David J. D’Addio of Ortiz’s Cybercrime Unit.
Former Insurance Salesman Sentenced for Tax EvasionRead the Press Release
BOSTON – A former insurance salesman was sentenced today in U.S. District Court in Boston for evading taxes in connection with the theft of more than $470,000 that he stole from three clients.
Paul Disidoro, 64, of Georgetown, Mass., was sentenced by U.S. District Judge William G. Young to 18 months in prison, three years of supervised release and restitution of $613,806. In December 2015, Disidoro pleaded guilty to attempting to evade taxes.
For many years, Disidoro operated an insurance business in Massachusetts, and from 2007 through 2010 he also acted as a financial adviser for some clients. During that period, Disidoro stole more than $470,000 from three clients and used the money for his personal benefit, including online gambling. He concealed the income from his tax preparer, and failed to report the embezzled funds on his federal income tax returns. In doing so , Disidoro evaded $144,000 in taxes.
United States Attorney Carmen M. Ortiz; Manny J. Muriel, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Anthony DiPaolo, Chief of Investigations of the Insurance Fraud Bureau of Massachusetts, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.
Two Hampden County Men Indicted for Large Scale Drug ConspiracyRead the Press Release
A Holyoke man and a Chicopee man were charged in U.S. District Court in Springfield yesterday in connection with operating a scheme to transport drugs and cash between Texas and western Massachusetts that were concealed in secret compartments of vehicles.
Javier Gonzalez, 44, of Holyoke, and Jamil Roman, 38, of Chicopee, were indicted on one count of conspiring to distribute and possess with intent to distribute cocaine and heroin and one count of distribution and possession with intent to distribute cocaine. They were charged in a criminal complaint and arrested in March 2014.
According to charging documents, in January 2014, a long-term investigation of a cocaine distribution conspiracy centered in Holyoke and West Springfield led law enforcement to Gonzalez and Roman. It is alleged that Gonzalez used tractor trailers associated with his business, JGL Truck Sales, to drive to Texas to pick up kilograms of cocaine and heroin from his Mexican supply source. He then returned to Massachusetts where Roman sold the drugs on his behalf. In order to transport the drugs, Gonzalez had vehicles modified to contain hidden compartments. He hid the drugs and cash in the compartments of the vehicles, loaded them onto his tractor trailer, and drove to Texas. Gonzalez allegedly made trips to Texas to transport the drugs and cash multiple times per year for the last several years.
According to court documents, on March 25, 2014, Gonzalez was stopped in Agawam by law enforcement as he drove the JGL tractor trailer south. During a search of the tractor trailer, $1.17 million was recovered from a hidden compartment of the cab. Also that day, $350,000 was recovered from the residence of Roman.
The charge of conspiring to distribute and possess with intent to distribute cocaine and heroin provides for a sentence of no greater than a lifetime in prison, a minimum of five years and up to a lifetime of supervised release and a fine of $10 million and restitution. The charge of distribution and possession with intent to distribute cocaine provides for a sentence of no greater than 40 years in prison, a minimum of four years and up to a lifetime of supervised release and a fine of $5 million and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement. The case is being prosecuted by Assistant U.S. Attorneys Neil L. Desroches and Kevin O’Regan of Ortiz’s Springfield Office.
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.
Twenty Seven South End Alleged Gang Members Charged with Drug and Firearm OffensesRead the Press Release
Boston – Twenty seven individuals, many of whom are affiliated with the Lenox Street Cardinals, and other street gangs operating in the Lenox Street Housing Development area of Boston’s South End, have been charged with federal and state drug and firearms offenses.
Seventeen federal indictments and one criminal complaint were unsealed today in U.S. District Court in Boston, charging 19 defendants with distribution and possession of drugs and firearms in the Lenox Street Housing Development. In addition, eight individuals from the same area were charged in criminal complaints with drug distribution by state authorities.
“Through their sale of weapons and drugs, these defendants bring violence, fear and intimidation to a community in the heart of this City,” said United States Attorney Carmen M. Ortiz. “Lenox Street’s residents, surrounded by illegal activity and the violence that accompanies it, are made to feel like prisoners in their own homes. As the Department of Justice, we are committed to assisting residents in reclaiming their right live in a peaceful environment free from drugs, guns and violence.”
“ATF will continue to aggressively partner with its federal, state, and local law enforcement counterparts to dismantle criminal street gangs, and their drug trafficking and violence committed through the use of firearms”, said Daniel Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division. “Furthermore, it demonstrates that law enforcement will not standby and allow these criminal street gangs to get away with such acts, which creates fear for the residents within the community.”
“These arrests send a strong message that illegal drugs and guns have no place on the streets of Boston,” said Boston Police Commissioner William B. Evans. “I want to commend all of my officers and our partners from the ATF, the U.S. Attorney’s Office and the Suffolk County District Attorney’s Office for their coordinated efforts during this lengthy investigation.”
“The children and families who live at the Lenox Street Housing Development deserve a safe, healthy environment free of the violence that goes hand in hand with the drug trade. Local, state, and federal authorities will never waver in our commitment to those families and their right to live free of fear,” said Suffolk County District Attorney Daniel F. Conley.
The investigation was initiated in January 2015 with the principal goal of curtailing drug and gun trafficking that tyrannizes the Lenox Street Housing Development and severely disrupts the lives of residents. The Development and surrounding areas have historically suffered from the violence that accompanies these illegal activities. According to the Boston Police Department’s Boston Regional Intelligence Center (BRIC), the Lenox area was one of the City’s top 10 hotspots for violence in 2015. In fact, there were 30 shootings and more than 75 reports of shots fired in the area from March 2012 to June 2015.
The following defendants were charged in federal indictments or criminal complaint with:
Distribution of controlled substances within 1,000 feet of a public housing project:
1) Byron Alexander, aka “Shizz”
2) Dontane Bryant, aka “Tane”;
3) Tyler Deloach, aka “Tek”;
4) John Depina, aka “Dough”;
5) Stephen Freeman, aka “Stizz”;
6) Perry Hasberry, aka “Percy”
7) Rasean Hills, aka “Bleed”;
8) Keron-Randall Lewis, aka “Talent”;
9) Frank Melo, aka “Cuts”;
10) Pablo Moreta, aka “Migo”;
11) Anthony Nunez, aka “Dizzo”;
12) Hassan Parham, aka “Hizzy”;
13) James Richardson, aka “9-Ball”;
14) Derek Roberts, aka “Keas”;
15) Ellis Santos, aka “Slim Black”;
16) Anthony Williams aka “Batz.”
Distribution of a controlled substance:
17) Lawrence Bogarty, aka “LB”; and
18) Daryl Tolbert, aka “Blaze.”
Felon-in-possession of a firearm and ammunition:
19) George Deeble, aka “Smiley”; and
20) Pablo Moresta, aka “Migo.”
Ten of the nineteen federal defendants were arrested this morning and will appear later this afternoon in federal court.
The charge of distribution of controlled substances within 1,000 feet of a public housing project provides a mandatory minimum sentence of one year and no greater than 40 years in prison, a minimum of six years of supervised release and a fine of up to $2 million. The charge of distribution of a controlled substance provides a sentence of no greater than 20 years in prison, a minimum of three years of supervised release and a fine of up to $1 million. The charge of being a felon in possession of a firearm and ammunition 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.
The Suffolk County District Attorney’s Office charged the following individuals in criminal complaints:
Distribution of cocaine:
1) Spencer Oyeyemi
2) Danielle Stokes
3) Monique McFarlin
4) Marquetta Matthews
Distribution of heroin:
5) Hector Delvalle
Distribution of methamphetamine:
6) Shomari Copeland
Possession of a firearm:
7) Markus Perry
Possession and illegal sale of firearm and ammunition:
8) Steven Allen
The investigation is continuing.
The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Boston Police Department’s Youth Violence Strike Force and District D-4 Drug Control Unit; and the Boston Housing Authority Police. The federal cases are being prosecuted by Assistant U.S. Attorneys in Ortiz’s Organized Crime and Gang Unit. The state cases are being prosecuted by Assistant District Attorneys in Conley’s Gang and Drug Units.
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.
Lynn Tax Preparer Pleads Guilty to Fraud and Identity TheftRead the Press Release
BOSTON – A Lynn tax preparer pleaded guilty today in U.S. District Court in Boston in connection with a scheme to file fraudulent tax returns without her clients’ knowledge and pocket the excess refunds.
Claudia Carredano, 46, pleaded guilty to a criminal Information charging her with one count of wire fraud and one count of identity theft. U.S. District Court Judge George A. O’Toole, Jr. scheduled sentencing for June 23, 2016.
Carredano co-owned Maya Multi Services, a tax return preparation business operating on the North Shore. From 2008 to 2011, Carredano devised and executed a scheme to defraud the Internal Revenue Service by filing false tax returns on behalf of her clients. To do this, Carredano filed dozens of false tax returns for her clients, and, without their knowledge, included fraudulent dependents in order to increase the refund amount. She then directed the inflated portion of the refunds to be deposited into her bank account. In order to conceal the scheme, Carredano gave her clients versions of their tax returns which did not reflect the fraudulent dependents and sought smaller refunds than the returns she actually filed with the IRS.
The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain to the defendant or loss to the victims, whichever is greater. The charge of identity theft provides for a sentence of no greater than 15 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain to the defendant or loss to the victims, whichever is greater. Actual sentences for federal crimes are typically less than maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
If you were one of Carredano’s clients between 2008 and 2011 and believe you may have been affected by the fraud described above, please send an email to: [email protected].
United States Attorney Carmen M. Ortiz and Manny J. Muriel, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was investigated with the cooperation of the Massachusetts Department of Revenue. This case is being prosecuted by Assistant U.S. Attorney Brian A. Pérez-Daple of Ortiz’s Economic Crimes Unit.
Former Teamster Sentenced for Extorting Boston Businesses and Benefit FraudRead the Press Release
BOSTON – A former member of Boston Teamster Local 82 was sentenced today in connection with extorting businesses in Boston and fraudulently receiving more than $40,000 of unemployment benefits.
James Deamicis, 52, of Quincy, was sentenced by U.S. District Court Judge Denise J. Casper to 12 months and one day in prison, one year of supervised release and restitution and forfeiture in the amount of $42,091. In November 2015, Deamicis was convicted by a federal jury of three counts of extorting businesses in Boston. Additionally, he pleaded guilty to three counts of mail fraud and one count of theft of government property.
Deamicis, a former member of Teamsters Local 82, worked in the trade show and moving industries loading and unloading trucks. Since 2007, Deamicis, and others, extorted various entities in Boston including hotels, event planners, catering companies, pharmaceutical companies, hospitals, music entertainment companies, and non-profit organizations, none of which had collective bargaining agreements with Local 82. Deamicis threatened to picket and disrupt business, sometimes just hours before an event, if the entity did not accede to his demand to hire and pay him and fellow union members for unwanted and unnecessary jobs.
Additionally, from 2008 to 2011, Deamicis received $41,391 in unemployment insurance benefits that he was not entitled to receive because he was working as a member of Local 82. During the three year period, Deamicis earned $126,423, making him ineligible for benefits; however, he falsely reported to the Massachusetts Department of Unemployment Insurance that he earned only $22,249 so that it appeared that he was eligible to receive unemployment insurance. Although Deamicis was employed, he endorsed each of the 73 unemployment insurance checks he received and thereby falsely certified that he had no earnings except as reported in his benefit claim certification.
United States Attorney Carmen M. Ortiz; Scott S. Dahl, Inspector General of the U.S. Department of Labor, Office of Inspector General; Jonathan Russo, District Director of the U.S. Department of Labor, Office of Labor-Management Standards; and Susan A. Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Laura J. Kaplan of Ortiz’s Organized Crime and Gang Unit.
Haydenville Woman Pleads Guilty to Stealing Social Security BenefitsRead the Press Release
BOSTON – A Haydenville, Mass. woman pleaded guilty today in U.S. District Court in Springfield to stealing more than $45,000 of her deceased mother’s Social Security benefits.
Shirley Warner, 52, pleaded guilty to theft of public money. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for June 20, 2016.
In July 2010, Warner’s mother died, but her monthly Social Security benefits continued to be directly deposited into a joint bank account in her and Warner’s names. From August 2010 to March 2014, Warner continued to receive her deceased mother’s benefits totaling $45,491.
This case was brought as part of an ongoing effort by the U.S. Attorney’s Office, in partnership with the Social Security Administration, to investigate and prosecute the posthumous fraud of Social Security benefits. In many of these cases, family members, knowing they are not entitled to government benefits, continue to withdraw and spend the funds after a relative has died. In the past year, the U.S. Attorney’s Office has prosecuted several similar cases involving a total of more than $1 million in stolen government money.
Earlier this month, Lucy Girard, of Townsend, Mass., pleaded guilty to stealing $208,868 from Social Security and federal housing benefits, and Brian Sandiford, of Jamaica Plain, was sentenced for stealing $70,811 from Social Security from 2010 to 2014.
Next month, Richard Alan Hersey, of Winthrop, will be sentenced for stealing $444,287 in Social Security and federal pension benefits from 1991 to 2015. Hersey pleaded guilty in November 2015.
The charge of theft of public money 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 and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of the Inspector General, Office of Investigations, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Deepika Bains Shukla of Ortiz’s Springfield Branch Office.
Brockton Man Sentenced to Ten Years for Bank Robbery SpreeRead the Press Release
BOSTON – A Brockton man was sentenced on Friday, March 18, 2016, in U.S. District Court in Boston for robbing multiple banks in 2014.
James Patterson, 47, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 121 months in prison, three years of supervised release and restitution in of $34,871. Patterson was convicted by a jury following a six-day trial in November 2015.
From April to July 2014, Patterson robbed five banks: the Beverly Bank on Dodge Street in Beverly on April 16th; the People’s United Bank on Dodge Street in Beverly on May 10th; the Century Bank on Fellsway West in Somerville on June 4th; the South Shore Bank on Turnpike Street in Stoughton on June 12th; and the North Shore Bank on Highland Avenue in Salem on July 20th. On each occasion, Patterson wore sunglasses, gloves, and covered his lower face with a bandana or clothing. After entering each bank, Patterson announced that it was a robbery and demanded large bills from the bank tellers.
Patterson was arrested on Aug. 4, 2014, near the Century Bank on Cambridge Street in Burlington carrying a black BB gun that had the appearance of a semi-automatic pistol. At the time of his arrest, Patterson was wearing a hat, sunglasses, long pants pulled over shorts, a heavy pullover top and latex gloves. The lower part of his face was covered with black clothing.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. The Beverly, Somerville, Stoughton, Salem, Peabody and Burlington Police Departments assisted with the investigation. The case was prosecuted by Assistant U.S. Attorneys Kenneth G. Shine and Robert E. Richardson of Ortiz’s Major Crimes Unit
Boston Man Convicted in Illegal Gun Trafficking SchemeRead the Press Release
BOSTON – A Boston man was convicted by a federal jury on Friday, March 18, 2016, in connection with his role in a scheme to illegally transport firearms into Massachusetts.
Shayne Parker, 41, of Dorchester, was convicted following a five-day trial of interstate transportation of firearms and being a felon in possession of 50 rounds of ammunition. U.S. District Court Judge F. Dennis Saylor, IV scheduled sentencing for June 10, 2016. In March 2015, Parker was arrested and charged in a criminal complaint. Parker has several felony convictions, including for violence and drug trafficking crimes.
In spring 2014, a joint law enforcement investigation uncovered a scheme in which firearms were bought in guns stores in New Hampshire and transported to Massachusetts for sale on the streets of Boston. The purchasers of the firearms were paid with drugs for their help.
During the course of the scheme, 16 guns were trafficked into Boston within three-weeks using three different straw purchasers. Ronald Scott, who was convicted in New Hampshire, purchased the guns and ammunition while Parker drove Scott to and from each of the five purchase locations in New Hampshire and handled the weapons and ammunition.
One of the guns – a 9mm semi-automatic firearm – was recovered on April 2, 2014, after Boston Police Officers pursued and arrested another individual. The firearm had been purchased 11 days before by Parker and his associates. In addition, during a search of a residence in Mattapan, law enforcement officers seized a .380 caliber semi-automatic weapon and a box containing 50 rounds of ammunition. The ammunition had been purchased just 22 days prior at Dick’s Sporting Goods in New Hampshire and transported to Massachusetts by Parker.
The charging statutes each provide a sentence of no greater than 10 years in prison, three years of supervised release, a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Boston Police Commissioner William B. Evans, made the announcement. The case is being prosecuted by Assistant U.S. Attorney Glenn MacKinlay of Ortiz's Organized Crime and Gang Unit.
Lowell Man Convicted of $440,000 Embezzlement SchemeRead the Press Release
BOSTON – A a representative of a Spanish seafood distributor pleaded guilty today in federal court to bank fraud charges in connection with the theft of more than $440,000.
Jorge Manuel Silva, 58, of Lowell pleaded guilty today to two counts of bank fraud before U.S. District Judge Nathaniel M. Gorton. Silva is scheduled to be sentenced on June 22nd.
At today’s plea hearing, Silva admitted that he was an independent contractor for Seaport Fish Co. (“Seaport”), 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 bank account. Instead, Silva diverted more than $903,000 in Seaport customer checks into two corporate accounts of a business owned by Silva. Sometimes, but not always, weeks or months after he had deposited the customer checks into his accounts, Silva reimbursed Seaport with checks drawn on his own bank accounts.
To conceal the theft, Silva prepared false deposit slips and emailed them with copies of the customer checks to headquarters in Spain, purportedly to show that the customer checks had been, or were to be, deposited into Seaport’s bank account. In fact, those customer checks had all been deposited into Silva’s own accounts. Silva then wrote checks on his two corporate accounts, using Seaport funds, to pay expenses for his other businesses and also for personal expenses. Silva diverted about $440,000 of Seaport funds for his own use.
The maximum sentence for each count of bank fraud is up to 30 years in prison followed by five years of supervised release and a fine of $1,000,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Shelly A. Binkowski, Inspector in Charge of Postal Inspection Service’s Boston Division made the announcement today. The case is being prosecuted by Sandra S. Bower of Ortiz’s Economic Crimes Unit.
Man Arrested in Multi-Million Dollar Ponzi SchemeRead the Press Release
BOSTON – A former Massachusetts-resident was arrested at the Miami airport on Sunday for allegedly running a Ponzi scheme.
Mark Anderson Jones, 64, who currently resides in Jamaica, was charged with wire fraud after allegedly leading investors to believe that they would be providing financing to Jamaican businesses. Jamaican banks can take time to close loans to businesses and Jones claimed that he was offering these businesses “bridge loans” as an interim measure (i.e., to “bridge” the gap between the date a loan was sought from Jamaican banks and the distribution of funds by those banks).
According to the complaint, between 2007 and 2015, Jones obtained approximately $10 million in investments from over 20 individuals. In reliance on Jones’s representations that their money would be used to fund bridge loans, Jones’s investors, including investors in Massachusetts, provided financing and expected a return on their investments. In reality, however, beginning in at least November 2014, Jones stopped using investor money to fund loans. Instead, he used new investor money to pay back other investors. It is alleged that, in November 2014 and January 2015, Jones obtained $500,000 in new investments, most of which he used to pay other investors bogus investment returns.
The statutory maximum penalty for wire fraud is 20 years in prison, three years of supervised release and a fine of $250,000, or twice the gross loss to the victim. 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 Ortiz and Special Agent in Charge Harold Shaw of the Federal Bureau of Investigation’s Boston Division made the announcement today. Valuable assistance was also provided by the United States Postal Inspection Service and the Internal Revenue Service’s Criminal Investigations in Boston. The case is being prosecuted by Assistant United States Attorney Sarah E. Walters, Chief of Ortiz’s Economic Crimes Unit and Special Assistant U.S. Attorney Eric A. Forni from the SEC.
The details contained in the complaint affidavit are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Martha’s Vineyard Man Sentenced for Social Security Fraud and Tax EvasionRead the Press Release
BOSTON – An Oak Bluffs man was sentenced today in U.S. District Court in Boston for stealing $160,025 in Social Security benefits and falsifying his 2010 tax return.
Vernon Harris, 63, was sentenced by U.S. District Court Judge Douglas P. Woodlock to six months in prison, three years of supervised release, and was ordered to pay $160,025 in restitution to the Social Security Administration and $21,605 to the Internal Revenue Service. In December 2015, Harris pleaded guilty to theft of public money and tax evasion.
In 2002, Harris applied for Social Security Disability Insurance benefits. In his application, Harris stated that he stopped working in 2001 due to his disabilities; however, in reality, Harris was running a trucking brokerage firm called SilkRoad Logistics out of his home on Martha’s Vineyard when he applied for benefits. Harris wrote himself checks from the business’s account totaling as much as $60,000 to $70,000 in some years and concealed the business from the Social Security Administration (SSA). Harris listed his wife as the proprietor of SilkRoad Logistics on tax returns to conceal the fact that he operated the business. In a 2012 letter Harris sent to the SSA, he falsely affirmed, “my wife is and has been the sole income earner in our household since my disability in 2001.” Harris continued to collect disability benefits while running SilkRoad Logistics until 2015. In total, he illegally received $160,025 in benefits. Harris also falsified information pertaining to SilkRoad Logistics on his 2010 federal income tax return.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; and Many J. Muriel, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Lawrence Man Sentenced to Prison for Heroin TraffickingRead the Press Release
BOSTON – A Lawrence man was sentenced yesterday in U.S. District Court in Boston for trafficking heroin in Haverhill.
Jonathan Santiago, 31, was sentenced by U.S. District Court Chief Judge Patti B. Saris to two years in prison and three years of supervised release. In December 2015, Santiago pleaded guilty to possessing with intent to distribute and distributing heroin.
On three occasions, between Nov. 19 and Dec. 1, 2014, Santiago sold drugs to a cooperating witness in Haverhill. Santiago sold a combined 18.3 grams of heroin in the first and second sales. On the third occasion, he sold 17.8 grams of fentanyl. Fentanyl is similar to heroin and morphine, but 30-50 times more powerful. When taken in the same dosage as heroin, fentanyl can cause overdose or death.
The case is part of Operation Zero Tolerance, a joint federal and state investigation of gang-related criminal activity in and around Haverhill focusing particularly on opiate-related drug overdoses. As part of the investigation, law enforcement identified Santiago as an associate of Haverhill gang members.
This case was prosecuted as part of the federal response to New England’s opioid crisis. In 2014, the year in which Santiago was dealing heroin and fentanyl, more than 1,000 people in Massachusetts died of opiate overdoses. In fact, since 2005, more Massachusetts residents have been killed by opiate-related overdoses than in car accidents.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Haverhill Police Chief Alan R. DeNaro, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Timothy E. Moran of Ortiz’s Narcotics and Money Laundering Unit.
Boston Interagency Committee on Violence Prevention Announces Boston’s 3rd Annual National Youth Violence Prevention Week EventsRead the Press Release
BOSTON – The Boston Interagency Committee on Violence Prevention will host events and competitions for young people in the Boston community in recognition of National Youth Violence Prevention Week, April 4-8, 2016.
“I’m thrilled to once again be a part of this event, which showcases how young people channel their incredible talents to resist and prevent violence in their schools and communities,” said United States Attorney Carmen M. Ortiz. “Each year, I’m awed by the strength of Boston’s young people to stand up for peace and defend their right to violence-free communities. With the activism and advocacy that youth have been demonstrating, I’m sure this year will be no different!”
National Youth Violence Prevention Week aims to raise awareness and to educate young people, parents, and communities as a whole, about effective ways to prevent and reduce youth violence. The campaign, which is held in cities across the country, features activities, competitions and events that bring young people together to make their schools and communities safer by using peaceful forms of self-expression.
DJs from JAM’N 94.5 will host a city-wide Peace Rally at the Reggie Lewis Center at Roxbury Community College on April 7th from 5:30 to 7:30 pm, which will be the highlight of the week. At the rally, the winners of the anti-violence themed contests for Boston students will be announced, and the Floorlords, Vine Street Dancers, and Seekers of Knowledge dance groups will perform. There will also be surprise audience-participation contests with prizes, and guest-appearances by top officials. Over 500 people attended the 2015 Peace Rally.
The Boston Interagency Committee on Violence Prevention recently announced the creative anti-violence themed contests in schools and community centers. Boston students in grades K-5 will submit posters with a theme of “Youth Standing STRONG Against Violence;” grades 6-8 will enter poetry with the same theme; and high school students are invited to create hip-hop music videos with an anti-violence message.
Prizes for the top three entries in each category include Target gift cards, Red Sox tickets, and a spotlight on JAM’N 94.5’s “Saturday Night Jump Off.” Sponsoring agencies will also receive Staples gift cards in recognition of their support.
Another event taking place in Boston during National Youth Violence Prevention Week will be held at the Umana Barnes Middle School in East Boston on April 4th. The U.S. Attorney’s Office and the Suffolk County District Attorney’s Office will team up to present a combined program encouraging positive decision-making and alternatives to violence.
The Boston Interagency Committee on Violence Prevention consists of representatives from the U.S. Attorney’s Office, the Office of the Governor of Massachusetts, the Massachusetts Attorney General’s Office, Suffolk County District Attorney’s Office, Suffolk County Sheriff’s Department, City of Boston Mayor’s Office, Boston Police Department and Boston Centers for Youth & Families.
Sponsors of the event include JAM’N 94.5 Radio, Roxbury Community College, MassHousing, Crystal Rock Beverages, Boston Police Athletic/Activities League and the Youth Violence Prevention Funders Learning Collaborative.
For further information, visit www.cityofboston.gov/bcyf/programs and click on “Youth Standing Strong Against Violence,” or send an email to [email protected].
Townsend Woman Pleads Guilty to Stealing over $200,000 in Government BenefitsRead the Press Release
BOSTON – Lucy Girard, 78, of Townsend, Mass., pleaded guilty today in U.S. District Court in Boston to stealing over $200,000 in Social Security and federal housing benefits.
In February 2016, Girard was charged in a felony information. U.S. District Court Senior Judge Rya W. Zobel scheduled sentencing for June 1, 2016.
In 1994, Girard was listed as the informant of death on her mother’s death certificate when she passed away in Massachusetts. Girard did not properly notify the Social Security Administration of her mother’s death so the agency continued to mail her monthly checks. Although Girard was not entitled to this money, she routinely signed her late mother’s name on the back of the checks, cashed them, and spent the money. In January 2009, the payments were converted to a monthly direct deposit into an account that Girard controlled, and she spent the money after it was deposited each month for her own personal benefit. In 2014, in response to inquiries from Social Security, Girard falsely stated that her mother died very recently in Florida. In total, from 1994 to 2014, Girard stole $208,868.
In 2014, Girard applied to live at housing subsidized by the U.S. Department of Housing and Urban Development. Although the application directed Girard to disclose all of her income, she did not disclose the Social Security money that she was illegally receiving on behalf of her late mother. Girard would have been ineligible for subsidized housing if she had disclosed that income.
This case was brought as part of an ongoing effort by the U.S. Attorney’s Office, in partnership with the Social Security Administration, to investigate and prosecute the posthumous fraud of Social Security benefits. In many of these cases, family members, knowing they are not entitled to government benefits, continue to withdraw and spend the funds after a relative has died. In the past year, the U.S. Attorney’s Office has prosecuted several similar cases involving a total of more than $1 million in stolen government money.
Last week, Brian Sandiford, of Jamaica Plain, was sentenced for stealing $70,811 from Social Security from 2010 to 2014.
On April 11, 2016, Richard Alan Hersey, of Winthrop, will be sentenced for stealing $444,287 in Social Security and federal pension benefits from 1991 to 2015. Hersey pleaded guilty in November 2015.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Office of Inspector General, Social Security Administration, Office of Investigations, Boston Field Division; and Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Regional Office, made the announcement today. The Girard case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Leominster Restaurant Owner Pleads Guilty to Conspiracy to Commit ArsonRead the Press Release
BOSTON – The owner of West End Diner in Leominster pleaded guilty today in U.S. District Court in Worcester in connection with setting fire to his restaurant in order to collect the insurance proceeds.
Jeffrey Cordio, 50, of Leominster, Mass. pleaded guilty to an Information charging him with one count of conspiracy to use fire to commit mail fraud. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for June 1.
In January 2006, Cordio and his wife purchased the West End Diner at 270 West Street in Leominster. Due to significant financial distress and a desire to relocate to Florida, Cordio and an accomplice set fire to the diner and fled the scene during the afternoon of Nov. 13, 2013. The Leominster Fire Department responded to the alarm and was able to largely contain the blaze to the basement of the building. The following day, Cordio initiated an insurance claim with Norfolk & Dedham Mutual Fire Insurance Company; however, the claim was ultimately denied after investigators determined that the fire was intentionally set.
The charge of conspiracy to use fire to commit mail fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. If the Court accepts the plea agreement, Cordio will serve a sentence of four years in prison and three years of supervised release. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Cordio’s accomplice previously pleaded guilty in state court to accessory before the fact.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Leominster Police Chief Michael Goldman, made the announcement today. The Massachusetts State Police Fire and Explosive Investigation Section, the Leominster Fire Department and the Worcester County District Attorney’s Office also assisted with the investigation. The case is being prosecuted by Assistant U.S. Attorney Greg A. Friedholm of Ortiz’s Worcester Branch Office.
Dracut Pharmacy Settles Improper Dispensing and Recordkeeping AllegationsRead the Press Release
BOSTON – The U.S. Attorney’s Office reached a $42,500 civil settlement today with Alexander’s Pharmacy in Dracut, Mass., and its owner and operator, George Kontos, in connection with the improper dispensing of controlled substances and the failure to keep proper records and maintain effective controls against diversion.
“Ensuring the proper dispensing and handling of prescription drugs is a critical part of our ongoing efforts to protect patient safety and prevent drug diversion,” said United States Attorney Carmen M. Ortiz. “We will continue to monitor and investigate those handling controlled substances, whether they are large pharmacy chains or small, independently owned pharmacies, to ensure they adhere to the DEA’s regulations.”
“DEA registrants are responsible for dispensing and handling controlled substances and ensuring that complete and accurate records are properly kept in compliance with the Controlled Substance Act,” 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.”
According to the settlement, Alexander’s Pharmacy, without physician authorization, improperly filled prescriptions with larger dosage pills than prescribed because it had exhausted its inventory of the prescribed dosage. In addition, Alexander’s records did not account for hundreds of pills in the pharmacy’s inventory, including medications at high risk of diversion, such as oxycodone and alprazolam. Furthermore, Alexander’s failed to maintain invoices, document substituted medications, and account for medications that customers did not pick up.
Kontos and Alexander’s Pharmacy cooperated with the DEA’s investigation and implemented new recordkeeping and security measures. Kontos and Alexander’s Pharmacy also agreed to permit the DEA to perform inspections of the pharmacy during the next three-and-a-half years without a warrant.
U.S. Attorney Ortiz and DEA Special Agent in Charge Ferguson made the announcement today. The case was handled by Assistant U.S. Attorney Brian LaMacchia of Ortiz’s Civil Division.
Dorchester Man Sentenced for Sex Trafficking Two Teenage RunawaysRead the Press Release
BOSTON –A Dorchester man was sentenced today in U.S. District Court in Boston for transporting two 14 year-old girls from Massachusetts to Rhode Island for the purpose of prostituting them.
Derek Miranda, a/k/a Dub, 21, was sentenced by U.S. District Court Chief Judge Patti B. Saris to 57 months in prison and five years of supervised release. In December 2015, Miranda pleaded guilty to transporting the two girls from Massachusetts to Providence, R.I. on or about Jan. 15, 2015 with the intent for them to engage in prostitution.
On Jan. 14, 2015, Miranda met two 14 year-old girls who had run away from their homes in Lowell and brought them to a hotel in Brockton where he provided them with different clothes and told them that he “had guys coming over.” One of the girls texted a friend for help who then notified the police and a search was initiated. The girls left the hotel and temporarily stayed with a friend in Brockton. However, as runaways with no place to go, they contacted Miranda who arranged to have them picked up by an Uber driver. Miranda then had them driven to a house in Providence where he intended to have the girls provide sex for a fee. One of the girls texted a friend to notify local law enforcement authorities who then rescued them and arrested Miranda.
United States Attorney Carmen M. Ortiz and Matthew Etre, Special Agent in Charge of the Homeland Security Investigations in Boston, made the announcement today. The case was investigated with the assistance of the Massachusetts State Police assigned to Attorney General Maura Healey’s Office, the Providence, Lowell and Brockton Police Departments, and the Rhode Island Attorney General’s Office. The case is being prosecuted by Assistant U.S. Attorney S. Theodore Merritt of Ortiz’s Civil Rights Enforcement Team and Special Assistant U.S. Attorney Deborah Bercovitch, Chief of AG Healey’s Human Trafficking Division.
Marion Man Pleads Guilty to Weapons ChargesRead the Press Release
BOSTON – On the morning his trial was slated to begin, a Marion, Mass., man pleaded guilty in U.S. District Court in Boston to illegally possessing a revolver, a sawed-off shotgun and ammunition.
Jeffrey E. Tosca, Jr., 32, pleaded guilty to being a felon in possession of a firearm and ammunition and to possession of an unregistered firearm. U.S. District Court Judge F. Dennis Saylor IV scheduled sentencing for May 31, 2016.
Late in the evening of September 14, 2013, Tosca made threats from his home in Marion to shoot members of law enforcement and others. Law enforcement, including a SWAT team, quickly responded and took steps to secure the area. Several hours later, law enforcement arrested Tosca without incident and seized weapons and ammunition discovered in a storage container buried on the grounds of his residence.
Tosca has previously been convicted on multiple criminal charges, including 2012 and 2010 convictions on state weapons charges, a 2010 conviction for possession of narcotics, knowingly receiving stolen property and resisting arrest, and convictions in 2005 and 2006 for possession with intent to distribute controlled substances.
The charging statutes 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; Daniel J. Kumor, 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 Marion Police Department and the Plymouth County Sheriff’s Office also assisted with the investigation. The case is being prosecuted by Assistant U.S. Attorneys Suzanne Sullivan Jacobus and Mary B. Murrane of Ortiz’s Major Crimes Unit.
Lawrence Tax Preparer Pleads Guilty to Filing False Tax ReturnsRead the Press Release
BOSTON – A Lawrence tax preparer pleaded guilty today in U.S. District Court in Boston in connection with filing false tax returns with the IRS resulting in over $220,000 in fraudulent refunds.
Leonidas Nunez, 60, pleaded guilty to one count of conspiracy to defraud the United States with respect to claims and six counts of filing false, fictitious or fraudulent claims with the IRS.
From October 2010 to April 2011, Nunez conspired with others to defraud the IRS by presenting false income tax returns. The fraudulent returns falsely alleged income earned by Puerto Rican residents who had not had federal income tax withheld and who were not required to file income tax returns in the United States. Nunez and his co-conspirators caused the IRS to deposit the resulting fraudulent refunds into bank accounts controlled by Nunez and his co-conspirators. Together, they filed over 100 fraudulent returns with the IRS for tax year 2010, resulting in over $550,000 in fraudulent claims and over $220,000 in refunds.
The charge of conspiracy to defraud the U.S. 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 filing false claims provides a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Manny J. Muriel, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Robert A. Fisher of Ortiz’s Public Corruption Unit.