District of Massachusetts

BOSTON – A Brewster man was sentenced today in U.S. District Court in Boston for assaulting a Park Ranger on a Cape Cod National Seashore beach in Eastham, Mass.

Donald L. Savage, 57, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 27 months in prison and three years of supervised release.  In February 2016, Savage was convicted by a federal jury of assaulting a federal officer. 

On June 6, 2015, Savage and his wife requested permission to park in a restricted lot at Coast Guard Beach, which is part of the Cape Cod National Seashore in Eastham.  Park attendants granted Savage permission to park for 10 minutes, and instructed him not to go on the protected beach.  After 30 minutes, Savage had not left the beach and the gate attendants requested assistance from a Park Ranger.  When the Ranger arrived and spoke with Savage, he refused to provide identification despite repeated requests.  Savage became hostile and the Ranger requested that he sit on the ground.  Eventually, Savage provided a driver’s license, but after a few minutes of sitting he got up and began a physical altercation with the Ranger.  During the altercation, which was captured on the Ranger’s body camera, Savage bit the Ranger’s right ring finger causing a significant injury.  The Ranger drew his Taser and ordered Savage to the ground.  After sitting on the ground for five minutes, Savage got up and again physically confronted the Ranger at which point the Ranger tased Savage.  Within minutes, additional law enforcement officers arrived. 

United States Attorney Carmen M. Ortiz; Leslie Reynolds, Chief Ranger of Cape Cod National Seashore; and Eastham Police Chief Edward Kulhawik, made the announcement today.  The case was prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.

BOSTON – A Hingham woman pleaded guilty today in U.S. District Court in Boston to defrauding mortgage companies in connection with multiple mortgages she obtained on a single residence. 

Denise Bruce, 56, pleaded guilty to five counts of bank fraud.  U.S. District Court Senior Judge Douglas P. Woodlock scheduled sentencing for Aug. 18, 2016.

Between 2004 and 2008, Bruce fraudulently obtained five mortgage loans from different banks in amounts ranging from $325,000 to $487,500 on her Hingham property by submitting false information regarding her employment history, income, assets, and debt.  Bruce also filed fraudulent discharges of mortgages with the Plymouth County Registry of Deeds to create the appearance that earlier loans had been paid in full, when in fact, none of the loans had been paid.  In total, Bruce obtained $2,129,000 in proceeds from her fraudulent loans. 

United States Attorney Carmen M. Ortiz; Steven Perez, Special Agent in Charge of the Federal Housing Finance Agency, Office of Inspector General, Northeast Region; and Christy Goldsmith Romero, Special Inspector General for the Office of the Special Inspector General for the Troubled Asset Relief Program, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Victor A. Wild of Ortiz’s Economic Crimes Unit. 

BOSTON –An Andover attorney was sentenced today in U.S. District Court in Boston in connection with his role in converting and laundering more than $1.6 million in fraudulently-obtained IRS refund checks through several different bank accounts, including several of his attorney trust accounts.

R. David Cohen, 64, was sentenced by U.S. District Court Judge Leo T. Sorokin to 54 months in prison and three years of supervised release during which time he is not permitted to practice law or act as a notary.  The Court also ordered Cohen to pay over $1.6 million in restitution as well as forfeiture.  In January 2016, Cohen was convicted by a federal jury in of one count of conspiracy to covert government funds, 14 counts of conversion and receipt of stolen United States property, and one count conspiracy to commit money laundering.

Cohen engaged in a scheme in which individuals filed fraudulent tax returns with fictitious W-2 information, usually a name and social security number of a resident of Puerto Rico, whose residents are not required to file federal income tax returns.  Once the fraudulent returns were accepted by the IRS, refund checks were sent to designated addresses in Lawrence, East Boston, and New York controlled by Cohen’s co-conspirators. 

Beginning in October 2011, Cohen and his co-conspirators deposited over 100 fraudulently-obtained tax refund checks totaling over $1 million into banks to launder them through Cohen’s “Interest On Lawyer’s Trust Accounts” (IOLTA), as well as through bank accounts in the name of AD Professional Association, Inc.  When questioned by bank officials about the large amount of U.S. Treasury checks Cohen was depositing and negotiating through his IOLTA and personal accounts, Cohen falsely claimed that the payees were his clients.  When one bank requested proof concerning one of the IRS refund checks, Cohen provided a fake participation agreement and affidavit purporting to state that he had the client’s authority to deposit her IRS refund check into his IOLTA account.

United States Attorney Carmen M. Ortiz and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today.  The case was prosecuted by Assistant U.S. Attorneys S. Theodore Merritt and Ryan M. DiSantis of Ortiz’s Public Corruption Unit.

BOSTON – Two men pleaded guilty today in U.S. District Court in Boston to evading federal income taxes and defrauding the Commonwealth of Massachusetts of millions of dollars in connection with the sale of cigarettes and other tobacco products.

Raza Ali, 56, of Hopkinton, and Kaleem Ahmad, 47, of Sharon, both pleaded guilty to one count of conspiring to commit wire fraud and launder money and one count of making a false statement on a federal income tax return.  Ali and Ahmad were arrested and charged in a criminal complaint in December 2015.  A third co-conspirator, Muhammad Saleem Iqbal, 54, of Sharon, also pleaded guilty for his role in the same conspiracy in May 2016.  Ali is scheduled to be sentenced on Sept.14; Ahmad on Sept. 9; and Iqbal on Sept. 7, 2016.

Ali, Iqbal and Ahmad operated a wholesale business in Norwood, Mass. that sold tobacco products, including cigars, smoking tobacco and smokeless tobacco (such as snuff and chewing tobacco), to convenience stores, gas stations and other retail businesses.  The business was conducted in Massachusetts under the names “Pick N Dip” and, later, “MSI Distributors.” 

Wholesale businesses that distribute smoking tobacco, smokeless tobacco and cigars in the Commonwealth of Massachusetts must be licensed by the Massachusetts Department of Revenue.   Wholesalers of smokeless tobacco must file an excise tax form monthly and pay excise tax on smokeless tobacco brought into and sold in Massachusetts. Cigar and smoking tobacco wholesalers must file an excise tax form quarterly and pay excise tax on cigars and smoking tobacco brought into and sold in Massachusetts.

To supply their business, Ali and Iqbal repeatedly purchased tens, and sometimes hundreds of thousands, of dollars at a time of smoking tobacco, smokeless tobacco and cigars in Pennsylvania, where no taxes are imposed on these products.   Ali then arranged to have the products covertly transported to Massachusetts for resale. Ali and Iqbal did not file reports and records required by state and federal law, and did not pay excise taxes.

Ali, Iqbal and Ahmad accepted payments primarily in cash.   They made and directed multiple bank deposits of cash from the business in amounts less than $10,000 to create the false appearance that the total amount being deposited fell below the amount they knew the banks were required to report to the U.S. Treasury Department.  Ahmad and others repeatedly transported cash in excess of $50,000 at a time generated by the sale of untaxed cigars, smoking tobacco and smokeless tobacco products in Massachusetts to Pennsylvania, where the money was used to purchase additional untaxed tobacco products. 

The charge of conspiracy provides for a sentence of no greater than five years in prison, three years of supervised release, restitution to the Commonwealth, and a fine of twice the tax loss to the Commonwealth.  The charge of subscribing to a false income tax return provides for a sentence of no greater than three years in prison, one year of supervised release, restitution to the federal government and a fine of $100,000.  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.

United States Attorney Carmen M. Ortiz; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and David W. Hall, Special Agent in Charge of the Department of State, Diplomatic Security Service, Boston Field Office, made the announcement today.  The Norwood Police Department provided valuable assistance in the investigation.  The case is being prosecuted by Assistant U.S. Attorney Stephen P.  Heymann of Ortiz’s Economic Crimes Unit.

BOSTON – An Easthampton man was sentenced today in U.S. District Court in Worcester for distributing cocaine and marijuana.

David Dulchinos, 51, of Easthampton, was sentenced by U.S. District Court Judge Timothy S. Hillman to 18 months in prison and three years of supervised release.  In February 2016, Dulchinos pleaded guilty to one count each of distribution of cocaine and distribution of marijuana.

On Feb. 7, 2014, Dulchinos distributed cocaine and marijuana to an individual cooperating with federal agents.  The transaction was captured on video and audio recordings.  Dulchinos pleaded guilty to distributing nearly 400 grams of cocaine and 27 grams of marijuana in connection with that transaction. 

United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; and Easthampton Police Chief Bruce McMahon, made the announcement today.  The case was prosecuted by Assistant U.S. Attorney Deepika Bains Shukla of Ortiz’s Springfield Branch Office. 

BOSTON – Two men were sentenced today in U.S. District Court in Boston in connection with a fraudulent scheme to obtain and re-sell more than $330,000 in new cell phones. 

David Hul, 34 of North Arlington, NJ, was sentenced by U.S. District Court Senior Judge Mark L. Wolf to 21 months in prison.  Judge Wolf also sentenced Curtis Peebles, 26 of Boston and New York, NY to 18 months in prison.  In February 2016, they pleaded guilty to wire fraud conspiracy.  Co-defendants Jimmy Phan and Lee Tran previously pleaded guilty.  Tran is scheduled to be sentenced on Sept. 12, 2016, and Phen’s hearing has yet to be scheduled.

Hul, Peebles and their co-conspirators gained access to T-Mobile customer records, including customer names, phone numbers, and information regarding those customers’ eligibility for free phone upgrades.

From at least January 2014 through October 17, 2014, Phan, Hul, Peebles, and other co-conspirators called T-Mobile customer service centers and, impersonating T-Mobile employees, used dealer codes that enabled them to add any name as an authorized user on T-Mobile accounts.  They then recruited “runners”, including Tran and others, to go into T-Mobile stores and impersonate the customers.  Phan, Hul, and Peebles used the dealer codes, among other methods, to cause either the runners’ real names or false identities to be added the customer accounts, sometimes using false names that closely matched the runners’ real names to reduce the likelihood of T-Mobile detecting the fraud.

Runners then went to T-Mobile stores in Massachusetts, Nevada, New Hampshire, New York, Pennsylvania, Rhode Island, New Jersey, Florida, and elsewhere, presented identification in the real or assumed names, and acquired one or more new cell phones on accounts that were eligible for upgrades.  Runners then returned the new phones to Phan, Hul, Peebles, and others, who paid them a portion of the phone’s value.  Although T-Mobile regularly alerted its customers to changes to their accounts, the affected customers frequently did not learn of the fraudulent modifications in time to prevent the distribution of the phones.

Phan, Hul, and others re-sold the cell phones to other coconspirators for distribution in the United States and abroad.  In total, Phan, Hul, Peebles, Tran, and other co-conspirators obtained at least $330,000 worth of new cell phones by defrauding T-Mobile.

Co-defendants Kevin Johnson, 24, of New York, NY, and Khoa Doan, 32 of Manchester, NH, are currently scheduled to stand trial on a date to be set by the Court.

United States Attorney Carmen M. Ortiz; Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Stephen A. Marks, Special Agent in Charge of the U.S. Secret Service’s Boston Field Office, made the announcement today.  The U.S. Attorney’s Office acknowledges T-Mobile for its assistance with the investigation.  The case is being prosecuted by Assistant U.S. Attorney Seth B. Kosto of Ortiz’s Cybercrime Unit.

BOSTON – An inmate at Old Colony Correctional Center in Bridgewater, Mass. was charged today with threatening to kill the President of the United States.

Alex Hernandez, 31, of Worcester, was charged in U.S. District Court in Boston with two counts of threatening to kill and inflict bodily harm upon the President of the United States. 

According to the complaint, in March 2015, agents learned that Hernandez told another inmate who was working as a cooperating witness in the investigation, that he was upset about the way his people were being treated, wanted to become a mujahedeen, had the ability to obtain weapons upon release from prison, and wanted to kill the President in a lone-wolf style attack.  Hernandez also allegedly expressed an interest in obtaining false travel documents so he could flee the country after his attack. 

Based on these allegations, agents decided to introduce Hernandez to an undercover agent posing as an embassy contact who could assist Hernandez with obtaining false travel documents.  In November 2015, at the direction of federal agents, the cooperating witness provided Hernandez with a mailing address for his purported embassy contact.  In actuality, the mailing address was that of an undercover law enforcement post office box.  From that point on, Hernandez allegedly wrote two letters to the embassy contact.  In the second letter, Hernandez stated, “I am writing to you now to ask that you come see me.  I am a brother in faith, a martyr; and as a martyr I wish to fulfill Allah’s wishes and not to live among infidels.  The mujahedeen movement is hard but pure.  I need your help and I hope to meet you in person.”

According to the complaint, on Dec. 22 2015 and Feb. 12, 2016, the undercover agent posing as the embassy contact met with Hernandez at Old Colony Correctional Center.  During the first meeting, Hernandez allegedly stated he wanted to attack, “the house with the big people there.”  The agent inquired whether Hernandez meant the White House and Hernandez said he did.  When asked for additional details about his plan, Hernandez explained, “there is always a head.  He’s the one who’s always in charge.  So if you attack the head, everything will go down a little bit.”  Hernandez went on to say that he wanted to learn how to shoot “like a sniper,” and that he had a contact in Florida that had a firearm ready for him.  He also stated that he was studying how to make explosives that could be placed around government buildings to “create chaos.”  During the second meeting with the undercover agent, Hernandez allegedly discussed the motivation for his planned attacks – telling the agent that his brothers are “fighting to uphold the laws and structure of the caliphate in the Middle East” and that “this government . . . is painting it like they are the bad guys[.]”  Hernandez also allegedly explained that he wanted to target the President because “he’s the one that gives the orders[.]”   

Court documents also allege that over the course of the investigation, searches of Hernandez’s jail cell revealed several items of concern such as a document listing the former U.S. Presidents and containing the handwritten notation “kill” underneath all the U.S. Presidents that have been assassinated while in office, and images of the September 11, 2001 attacks, Osama Bin Laden, and members of the Islamic State of Iraq and the Levant (ISIL) holding assault weapons and the ISIL flag.

The charging statute provides a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Stephen A. Marks, Special Agent in Charge of the U.S. Secret Service; and Thomas Turco, Commissioner of the Massachusetts Department of Correction, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.

BOSTON – An Arizona man was sentenced today in U.S. District Court in Boston in connection with defrauding four people who invested in his foreign currency trading company.

David Prescott, 45, formerly of Boston, was sentenced by U.S. District Judge Allison D. Burroughs to 18 months in prison, three years of supervised release and restitution of $505,619.  In November 2016, Prescott pleaded guilty to four counts of wire fraud.  Prescott, who previously went by the name of David Weeks, was indicted on those charges in February 2015. 

Prescott was the owner and President of Cambridge Currency Partners, LLC (CCP), which was purportedly engaged in the business of buying and selling foreign currency.  Prescott falsely represented to investors that their funds would be invested in CCP and used for business purposes, and that the investors would receive a monthly return.  In fact, Prescott used the majority of the $500,000 he obtained from four individual investors, one of whom was located in Massachusetts, on his own personal expenses.

As part of the scheme, Prescott solicited investors by promising monthly returns, and made payments to them that purported to be interest, but, in fact, simply consisted of money from other investors.  Prescott promised investors guaranteed monthly returns in amounts ranging from three to nine percent with little to no risk to the underlying principal.  Prescott made false representations to the investors regarding the balances in their accounts.  As a result, Prescott was able to secure multiple investments from the same investors.  On one occasion, Prescott allegedly emailed an investor and promised to increase the interest paid on her previous investments if she were willing to invest additional funds, even though Prescott had already spent the majority of her previous investments on personal expenses and repayments to other investors.

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 Mark J. Balthazard of Ortiz’s Economic Crimes Unit.

BOSTON – Kenneth Finch, Jr., 29, of Springfield, was indicted by a federal grand jury in Springfield on one count of being a convicted felon in possession of a firearm.

According to court documents, in June 2015, law enforcement received information that Finch was a source for firearms in the Springfield area.  On June 3, 2015, Finch sold a Ruger Model P-90 .45 caliber pistol and six rounds of .45 caliber ammunition to two undercover officers in exchange for $1,200.  Finch had prior felony convictions in North Carolina for possession of a firearm by a convicted felon, breaking and entering, attempted burglary in the second degree, and possession with intent to distribute marijuana.

The charge 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 Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Katharine A. Wagner of Ortiz’s Springfield Branch Office.

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

BOSTON – Seven Brockton residents were indicted in U.S. District Court in Boston with trafficking fentanyl and with firearms-related charges. 

Luis DaCosta, 21, aka “Jesse” and “Slu;” Gilvan Monteiro, 25, aka “G;” Edson Gomes, 19, aka “E” and “Evil;” Seidica Monteiro, 27; Jeffrey Oliveira, 21, aka “Chubbs;” and Justin Marceline, 33, were charged with one count of conspiracy to possess with intent to distribute fentanyl.  Gomes and DaCosta are also charged with possession of a firearm in furtherance of a drug trafficking crime.  Gabriel Nieves, 24, is also charged with one count of being an unlawful user of controlled substance in possession of a firearm and ammunition.

DaCosta, Gomes and Monteiro were already in federal custody following their arrests on a criminal complaint on April 4, 2016.  Monteiro was arrested this morning and detained pending a detention hearing scheduled for May 24, 2016.  Marceline is scheduled to appear in U.S. District Court in Boston tomorrow.  Oliveira remains a fugitive and information on his whereabouts, should be directed to the Brockton Police Department.  Nieves was already in state custody on related state charges. 

According to charging documents, 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 officers from the defendants’ associates.  In addition, on Feb. 11, 2016, law enforcement officers seized a loaded Smith and Wesson .40 caliber handgun from an associate of Gomes’s during a vehicle stop, and seized a loaded Smith and Wesson 9mm handgun and more than 30 grams of fentanyl from the hotel room in which both Monteiro and DaCosta were staying when they were arrested on April 5, 2016.

According to the complaint affidavit, the defendants are alleged to 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. 

This case is 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 conspiracy charge provides a sentence of no greater than 20 years in prison, a minimum of three years of supervised release and a fine of $1 million.  The charge of firearm possession in furtherance of drug trafficking provides an additional five years in prison to the sentence.  The charge of unlawful user of a controlled substance in possession of a firearm and ammunition carries a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; 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 Federal Bureau of Investigation, 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 the Brockton and Randolph Police Departments.  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 charging documents are allegations.  The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

BOSTON – Two California men were sentenced on Tuesday, May 17, 2016 in U.S. District Court in Boston for trafficking cocaine from Mexico into the United States.

Armando Meras Chavez, 37, of Visalia, Calif., and Arturo Rodriguez Ornelaz, 39, of Sanger, Calif. were sentenced by U.S. District Court Judge Nathaniel M. Gorton to 15 years in prison and five years of supervised release.  In November 2015, Chavez and Ornelaz pleaded guilty to conspiracy to possess with intent to distribute and to distribution of five kilograms or more of cocaine and conspiracy to commit money laundering.

The charges resulted from a lengthy investigation that began in 2010 into the drug trafficking activities of the Chavez family, many of whom are Mexican nationals based in Washington and California.  Chavez and Ornelaz were the leaders within the organization, which imported kilograms of cocaine into the United States from Mexico, transported the cocaine across the country using tractor trailers, and sold it to a local cocaine distributor based in Dorchester.  During the course of the investigation, law enforcement seized approximately 50 kilograms of drugs and over $1 million in drug proceeds.

United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement.  The case was prosecuted by Assistant U.S. Attorneys Nathaniel R. Mendell and Katherine Ferguson of Ortiz’s Narcotics and Money Laundering Unit.

BOSTON – A former teller at Lenox National Bank pleaded guilty today in U.S. District Court in Springfield in connection with embezzling more than $375,000 from the bank and concealing the theft with false bank records.  

Melissa J. Scolforo, 47, of Lee, Mass., pleaded guilty to one count of conspiracy to embezzle bank funds and make false entries in bank records.  U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Sept. 15, 2016. 

Scolforo was a teller at Lenox National Bank for 24 years.  From 2009 to November 2013, Scolforo and co-defendant Bernadine Powers took cash from the bank’s teller drawers and bank vaults and used the money for personal expenses including traveling, shopping, dining at restaurants, and paying household bills.  In addition, Powers made false entries in bank records to conceal their theft of $378,000 from the bank.

Earlier this month, Bernadine Powers, 40, of Becket, Mass., was indicted on the same charge.

The maximum sentence under the statute is five years in prison, followed by three years of supervised release and a $250,000 fine.  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 in Boston made the announcement today.  The case is being prosecution by Assistant U.S. Attorney Karen L. Goodwin of Ortiz’s Springfield Branch Office.

BOSTON – A Dorchester man was sentenced today in U.S. District Court in Boston in connection with a long-running, cross-country teen sex trafficking operation and ordering a witness against him to be killed.  

Raymond Jeffreys, a/k/a “Skame Dollarz,” a/k/a “Frenchy,” 28, of Dorchester, was sentenced by U.S. District Court Judge Denise J. Casper to 30 years in prison and five years of supervised release.  In January 2016 he pleaded guilty sex trafficking,tampering with a witness by attempting to kill him, and making false statement to a federal agent.

“Raymond Jeffreys devastated the lives of his victims,” said United States Attorney Carmen M. Ortiz.  “He feigned affection, instilled fear and used violence to control these young women.  While no amount of jail time will undo the trauma he inflicted, his sentence demonstrates that those who violate the standards of human decency will face the force of justice.”

“With the identification and rescue of 20 victims in this case, and the lengthy prison sentence for one of those responsible, law enforcement has just dealt a serious blow to those who think they can sell a person in Boston for commercial gain,” said Special Agent in Charge Matthew Etre, of HSI Boston. “HSI and the Boston Police Department refuse to stand idly by, and will continue to aggressively pursue criminals who engage in sexual slavery at the cost of the victim’s lives.”

“This defendant preyed on the most vulnerable young women and girls and exploited them for his own selfish gain,” said Boston Police Commissioner William Evans. “I want to acknowledge the work of the Boston Police Department's Human Trafficking and Homicide Units and great collaboration and cooperation with our Federal law enforcement partners who investigated and prepared to prosecute this case.”

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

During today’s sentencing hearing, Judge Casper stated, “the labels of these crimes do not convey the true harm you have caused.”  After discussing the defendant’s criminal history, Jude Casper said, “I don’t accept that violence has to beget violence.  Particularly where the victims were selected for their vulnerability.  Judge Casper also stated that on other cases, she “struggled mightily” to impose sentences of this magnitude, but today, “I have not struggled so mightily.”    

In January 2016, co-defendant Norris was sentenced to 15 years in prison. 

The charge of tampering with a witness by attempting to kill him or conspiring to do so provides a sentence of no greater than 30 years in prison, five years of supervised release, a fine of $250,000, and restitution.  Each of the charges of sex trafficking by force, fraud or coercion, provides for a mandatory minimum sentence of 15 years in prison and a maximum sentence of a lifetime in prison,  a minimum of five years and a maximum of a lifetime of supervised release, a fine of $250,000, and restitution.  Each of the charges of sex trafficking of a minor provides for a mandatory minimum sentence of 10 years in prison and a maximum of a lifetime in prison, five years of supervised release, a fine of $250,000, and restitution.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

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

The U.S. Attorney’s Office also wishes to recognize and thank Shawn Meehan, Resident Agent in Charge of the Homeland Security Investigations’ Portland, Maine Office; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Aaron Steps, Supervisory Senior Resident Agent in Charge of the FBI Maine Office; the Suffolk County District Attorney’s Office; Cumberland County (Maine) District Attorney’s Office; the United States Attorney’s Office for the District of Maine; the Massachusetts State Police; the Portland (Maine), Old Town (Maine), Braintree, and South Portland (Maine) Police Departments; the Maine Drug Enforcement Agency; and the Cumberland County Sheriff’s Office.  This case was prosecuted by Assistant U.S. Attorneys Amy Harman Burkart and David D’Addio of Ortiz’s Civil Rights Enforcement Team and Special Assistant U.S. Attorney David S. Bradley from the Suffolk County D.A.’s Office. 

BOSTON – The City of Boston’s Director of the Office of Tourism, Sports and Entertainment was arrested this morning after a federal grand jury indicted him in connection with the extortion of a music festival production company. 

Kenneth Brissette, 52, was indicted for extorting a company, which had already contracted with a non-union company to provide workers for a September 2014 festival, to hire members of the International Alliance of Theatrical Stage Employees (“IATSE”), Local 11 (“Local 11”). 

According to the indictment, in order to stage its twice-yearly musical festivals, the company was required to apply for and receive permits from the City of Boston for each festival.  At the relevant time, Brissette was the Director of the Boston Office of Tourism, Sports and Entertainment, which assists companies seeking to stage events in Boston in securing permits to use at public areas in the city.    

It is alleged that between July and September 2014, while the company was awaiting the issuance of certain permits and approvals required for its music festival, Brissette, and at least one other city official, repeatedly advised the company that it would need to hire members of Local 11 to work at the music festival.  Local 11 had attempted to obtain work from the company since March 2013.  The company told Brissette that it had already entered into a contract with a non-union company and hired all of its labor.  Nevertheless, Brissette allegedly insisted that half of the company’s labor force consist of union members, although he ultimately agreed that eight members of Local 11 would suffice.  As a result of Brissette’s demands three days before the music festival the company entered into a contract with Local 11 for eight additional laborers and one foreman.  Shortly thereafter, the City of Boston issued the necessary permits.

In closely related activity in the summer of 2014, Brissette was involved in pressuring a non-union production company filming a reality television show in Boston to hire union workers.  When the Chief of Operations for the City of Boston and the Director of the Massachusetts State Film Office learned that Brissette had been pressuring a non-union film company to hire union workers, they separately told Brissette that it was not legal to withhold city permits based on a company’s union or non-union status and could not discriminate on the basis of whether or not a company was union or non-union.

The charging statute 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. 

U.S. Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigations, Boston Field Division; and Jonathan Mellone, Acting Special Agent in Charge of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, New York Region made the announcement today.  The case is being prosecuted by Assistant U.S. Attorneys Laura J. Kaplan and Kristina E. Barclay of Ortiz’s Organized Crime and Gang Unit and Public Corruption Unit, respectively. 

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.

BOSTON – A Woburn man was sentenced yesterday in U.S. District Court in Boston in connection with multiple charges of investment adviser fraud. 

Gregg D. Caplitz, 57, of Woburn, was sentenced to 42 months in prison, three years of supervised release and ordered to pay restitution of $1,899,203.  In April 2014, he pleaded guilty to conspiracy to commit investment adviser fraud, wire fraud, submitting false statements to the SEC, defrauding the United States by impeding the IRS, investment adviser fraud, submitting false statements to the SEC, four counts of wire fraud, and five counts of filing false tax returns.

From 2008 to March 2013, Caplitz and his business partner, Rosalind Herman, 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 April 2016, Herman was convicted of investment advisor fraud, tax fraud, wire fraud and conspiracy following a six-day trial.  Sentencing is scheduled for June 29, 2016.

United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement.  The case was prosecuted by Assistant U.S. Attorney Sara Miron Bloom of Ortiz's Economic Crimes Unit.

BOSTON – A Waltham man was arrested yesterday and charged in U.S. District Court in Boston in connection with receipt and possession of child pornography.

Christopher J. Sullivan, 20, was charged in a criminal complaint with one count of receipt of child pornography and one count of possession of child pornography. Sullivan is scheduled to appear before U.S. District Court Chief Magistrate Judge Jennifer C. Boal for a detention hearing on Friday May 20, 2016.

According to the complaint, law enforcement learned that Sullivan used Skype to engage in sexually explicit conversations with young boys and also to exchange sexually explicit pictures with them.  In December 2015, one victim, a 10-year-old boy from Oregon, forwarded pictures of his genitalia to Sullivan. During an interview with law enforcement yesterday, Sullivan admitted to speaking with over 50 boys and receiving over 200 sexually explicit pictures on web-based platforms including Omgele, Skype and Kik Messenger. Sullivan also admitted engaging in sexual acts with a boy.

The charging statute provides for a minimum mandatory sentence of five years and no greater than 20 years in prison, a lifetime of supervised release and a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors. 

United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division.  The Waltham Police Department assisted with the investigation.  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.

BOSTON – The former chief of the Lee Police Department was sentenced today in U.S. District Court in Springfield for extorting a $4,000 payment from a couple facing prostitution charges in Southern Berkshire District Court. 

“Mr. Buffis abused his position of authority by extorting cash for his own benefit and greed,” said United States Attorney Carmen M. Ortiz.  “This degrades the respect and trust that communities place in their law enforcement officials, and is contrary to the values promoted by those who uphold the law.”    

“Mr. Buffis turned his back on his law enforcement profession and his community, choosing instead to break the laws he was sworn to uphold,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division.  “The FBI hopes this sentence sends a clear message—corruption at all levels of government will not be tolerated.”

Joseph Buffis, 57, of Pittsfield, Mass., was sentenced by U.S. District Court Judge Mark G. Mastroianni to 27 months in prison, two years of supervised release and forfeiture of $4,000.  He was convicted following a three-week trial in June 2015 of extortion under color of official right. 

As the Lee Police Chief, Buffis solicited and controlled public donations to the Edward J. Laliberte Toy Fund, a children’s holiday toy fund.  On Feb. 21, 2012, Buffis extorted a $4,000 “donation” check to the toy fund from two individuals who were facing prostitution-related charges.  Buffis deposited the $4,000 check into the toy fund’s bank account and then quickly withdrew $3,990 of these funds in three checks that he wrote to “cash.”  Buffis did not cash these checks, but instead deposited them into a personal bank account, and then used the diverted funds to pay various personal expenses.  When law enforcement commenced an investigation into this activity, Buffis repeatedly lied about the funds.  

At today’s sentencing, Judge Mastroianni stated that, “Mr. Buffis used his position as the highest ranking police officer to essentially auction off his own concept of justice.”  He went on to say, “To impugn the integrity of a department like you did is a monumental, terrible, unfair thing, a selfish thing.” 

U.S. Attorney Ortiz; SAC Shaw; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today.  The case was prosecuted by Assistant U.S. Attorneys Steven H. Breslow and Deepika Shukla of Ortiz’s Springfield Branch Office. 

BOSTON – A Boston man was sentenced today in U.S. District Court in Boston in connection with sex trafficking a 16-year-old girl.

Jonathan White, 29, of Dorchester, was sentenced by U.S. District Court Judge Indira Talwani to 10 years in prison and five years of supervised release.  In December 2014, White pleaded guilty in U.S. District Court for the Eastern District of New York to recruiting and transporting a minor to engage in prostitution.  The matter was transferred to the District of Massachusetts for sentencing.

In June 2012, a 16 year-old girl from Georgia began chatting, over Tagged.com, a social networking site, with an individual who was working for White as a prostitute and recruited others to prostitute for White.  White paid for the victim’s bus ticket from Atlanta to Orlando, Fla.  Once there, the victim engaged in commercial sex acts with clients solicited through Backpage.com ads, with White ultimately receiving the money that customers paid.  White and the prostitute then drove the victim from Florida to Brooklyn, where she engaged in more commercial sex acts solicited over the Internet.  A few weeks later, the victim became involved with another pimp.  After that pimp was arrested, law enforcement discovered White’s role in the victim’s exploitation and he was charged.     

United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation in Boston, made the announcement today.  The case was prosecuted in Boston by Assistant U.S. Attorney Seth Kosto of Ortiz’s Civil Rights Enforcement Team, and in Brooklyn by Assistant U.S. Attorney Soumya Dayanana. 

BOSTON – A California-based securities attorney was convicted today by a federal jury in U.S. District Court in Boston in connection with his role in manipulating the stock of a series of publicly traded companies, including CitySide Tickets, Inc., a Boston-based ticket reseller. 

Richard Weed, 53, of Newport Beach, Calif., was convicted following a 10 day trial of conspiracy, securities fraud and wire fraud.  Senior U.S. District Court Judge Douglas P. Woodlock scheduled sentencing for Aug. 16, 2016.

Weed, along with at least two others, conspired to create the appearance that CitySide was a growing company when, in fact, it was in dire financial straits.  Weed, who served as CitySide’s Secretary and as one of two members of CitySide’s Board, was responsible for drafting false and misleading legal opinion letters so that his co-conspirators could obtain free trading stock.  Weed also helped his co-conspirators to conceal their control and ownership of CitySide by directing the stock to be distributed to different entities that they controlled.  This allowed the conspirators to manipulate CitySide’s stock and sell their shares at artificially high prices.  In addition to assisting with the manipulation itself, Weed was also responsible for responding to any inquiries from investors or securities regulators.

The conviction follows 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 Securities and Exchange Commission.

The charges of securities and wire fraud each provide for a sentence of no greater than 20 years in prison and three years of supervised release.  The maximum fine for securities fraud is $5 million and the maximum fine for wire fraud is $250,000, or twice the gross loss to the victim.  The conspiracy charge provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000, or twice the gross 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.

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

United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Sarah E. Walters, Chief of Ortiz’s Economic Crimes Unit and SEC Attorney Eric A. Forni, who was appointed as a Special Assistant U.S. Attorney. 

BOSTON – Two Chicago residents were arrested and charged on May 11, 2016, in connection with defrauding banks out of $1.5 million in an airplane and car loan scheme.

James Dusten Miller, 29, and Latoya Monique James, 35, were charged in a complaint with conspiracy to commit bank fraud and bank fraud, and conspiracy to commit money laundering and money laundering.  Miller and James were arrested yesterday in Chicago and detained pending a detention hearing tomorrow in U.S. District Court in Chicago.

According to the criminal complaint, beginning in January 2014 through January 2016, Miller and James, along with at least two other co-conspirators, obtained and attempted to obtain multiple fraudulent airplane and car loans from banks in multiple states, including Massachusetts.  In order to commit these frauds, Miller, James, and their co-conspirators allegedly used false and stolen identities.  In one instance, Miller, James, and their co-conspirators obtained a fraudulent airplane loan for $382,500 from Commerce Bank in Worcester by using at least one stolen identity.  Miller and James laundered the proceeds of the airplane loan through several bank accounts created in the name of a fictitious entity.  The proceeds were then allegedly distributed into financial accounts controlled by the defendants and their co-conspirators, and used to purchase items such as luxury cars and a watch.  In total, Miller, James and their co-conspirators obtained or attempted to obtain more than $1.5 million in fraudulent loan proceeds.

The charges of bank fraud and conspiracy to commit bank fraud each provide for a sentence of no greater than 30 years in prison, five years of supervised release and a fine of       $1 million or twice the gross gain or loss, whichever is greater.  The charges of money laundering and conspiracy to commit money laundering provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $500,000 or twice the value of the property involved in the transaction, 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; Michael J. Anderson, Special Agent in Charge of the Federal Bureau of Investigation, Chicago Field Division; Scott L. Cruse, Special Agent in Charge of the Federal Bureau of Investigation, Oklahoma City Division; and Todd Damiani, Special Agent in Charge of the U.S. Department of Transportation, Office of Inspector General, Office of Investigations, made the announcement.  The case is being prosecuted by Assistant U.S. Attorney Karin M. Bell, Chief of Ortiz’s Worcester Branch Office.

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

BOSTON – The former “enforcer” of the Massachusetts Latin Kings gang pleaded guilty today in U.S. District Court in Springfield to distributing cocaine and a federal firearm charge.

Bienvenido Nuñez, 38, of Springfield, Mass., pleaded guilty today to being a felon in possession of a firearm and distributing cocaine.  U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Aug. 19, 2016. 

In October 2014, an investigation was initiated in an effort to disrupt and dismantle the Latin Kings’ criminal activity in Springfield and Holyoke.  According to court documents, members and associates of the Latin Kings were engaged in the distribution of narcotics.  In addition, disputes with rival gangs over criminal activity and drug turf were on the rise and resulted in serious crimes of violence, including armed assaults with firearms and murder.  The investigation led to the arrest of 12 alleged Latin Kings members, including Nuñez, in connection with drug and firearms offenses in November 2015. 

As alleged in court documents, Nuñez held the position of “enforzador,” or “enforcer,” of the Massachusetts chapter of the Latin Kings gang at the time of his arrest on Nov. 9, 2015.  Nuñez pleaded guilty today to distributing seven grams of cocaine in Chicopee on Aug. 4, 2015, and to possessing a .40 caliber Beretta pistol on the day of his arrest.

The charge of distribution of cocaine provides for a sentence of no greater than 20 years in prison, five years of supervised release and a fine of $1 million.  The charge of being a felon in possession of a firearm provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz 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 Katharine A. Wagner of Ortiz’s Springfield Branch Office.

BOSTON – A Chelsea man was sentenced yesterday in U.S. District Court in Boston for sexually exploiting a child.

Elmer Reyes, 32, was sentenced in by U.S. District Judge George A. O’Toole, Jr. to 210 months in prison after pleading guilty in January 2016 producing and possessing child pornography. Reyes was previously convicted in Suffolk County Superior Court of eight counts of aggravated rape of a child with force, three counts of indecent assault and battery on a child under 14, one count of assault and battery, and one count of posing a child in a state of nudity.  Reyes was sentenced in December 2015 to 13 years in state prison.  The federal and state sentences will be served concurrently.

In 2007, Reyes, who was a long-time, trusted friend of the victim’s family, began abusing the victim.  Thereafter, he volunteered to drive the victim to school and regularly sexually assaulted her while alone with her.  He also photographed the sexual abuse.  On one occasion in October 2014, following the child’s late arrival at school and traumatized appearance, school officials questioned the victim who disclosed the sexual abuse.  The school immediately alerted law enforcement. 

United States Attorney Carmen M. Ortiz; Suffolk County District Attorney Daniel F. Conley; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Chelsea Police Chief  Brian Kyes, made the announcement.  The case was prosecuted by Assistant U.S. Attorneys David G. Tobin of Ortiz’s Major Crimes Unit.

BOSTON – Two brothers were arrested today and charged in connection with attempting to extort the co-owner of a suboxone clinic in Quincy and embezzling money from the clinic. 

David Tkhilaishvili, 36, and Jambulat Tkhilaishvili, 46, both of Taunton, were indicted on one count of conspiring to extort and one count of attempted extortion.  David Tkhilaishvili was also indicted on two counts of embezzlement.  Both men were arrested this morning and will appear this afternoon in U.S. District Court in Boston.

According to the indictment, in 2014, the brothers approached the co-owner of a Quincy suboxone clinic and asked him to invest in a new suboxone clinic.  The Tkhilaishvili brothers claimed to have many years of experience in running medical clinics, including suboxone clinics.  To convince the victim to invest, the Tkhilaishvilis allegedly promised to repay the victim 50% of his investment in the clinic within five years if the business failed, with 5% interest per year, in the event that the victim did not recover his investment in the clinic.  In December 2014, the victim agreed to invest in the clinic and, because of the size of his investment, insisted upon significant contractual protections including that he would have full decision making authority over matters involving the clinic.  The Tkhilaishvili brothers agreed, however, shortly thereafter, they began to demand that the victim surrender his ownership interest and threatened him and his family with physical injury.  One of the brothers allegedly told the victim that he had made nine people and their families, who had a problem with him in the past, disappear.  On multiple occasions, both brothers threatened to physically harm the victim and his family and to burn down the clinic if the victim did not comply with their demands.  In addition, one of the brothers embezzled approximately $3,500 from the clinic.

The charge of conspiracy to extort and attempted extortion provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000.  The charge of embezzlement provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000 on each count.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz 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 Laura J. Kaplan of Ortiz’s Organized Crime and Gang Unit. 

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

BOSTON – A New Jersey firefighter and a Puerto Rican man were arraigned in U.S. District Court in Worcester today in connection with selling heroin in Leominster, Mass.

Carlos Jimenez, 50, of Englishtown, NJ, and Ivan Cruz-Rivera, 47, of Dorado, PR, were charged in a complaint with one count of conspiracy to distribute heroin and one count of possession with intent to distribute and distribution of heroin.  Jimenez was arrested in New Jersey on May 2, 2016 and was arraigned in U.S. District Court in Worcester today.  Cruz-Rivera was arrested in Puerto Rico on May 3, 2016 and ordered released on conditions during a detention hearing in U.S. District Court in Puerto Rico. 

According to the criminal complaint, on Oct. 4, 2013, agents were surveilling garages on Union Street in Leominster where they believed drugs were being sold.  Agents observed a Lexus with two men and New Jersey registration entering the property, and leaving 30 minutes later.  After the Lexus left, the individual at the garage allegedly sold heroin to a cooperating source, who was accompanied by an undercover agent, for $7,500. 

As alleged in court documents, a state trooper followed the Lexus and stopped the vehicle in Sturbridge, Mass. after the driver exceeded the speed limit.  The trooper observed that the driver and passenger were visibly nervous – avoiding eye contact and fidgeting.  The driver provided the trooper with a New Jersey license and firefighter badge which identified him as Carlos Jimenez, and the passenger provided a Puerto Rican license identifying him as Cruz-Rivera.  When questioned about the purpose of the trip to Massachusetts, Jimenez allegedly gave conflicting answers, and said that they had just come from Lawrence.  Jimenez denied having weapons or drugs in the car, but said he was “not sure” if there were large sums of cash.  When Cruz-Rivera was questioned about transporting large sums of cash in the car, he gave evasive answers before finally stating that there was $1,000 in the car.  After Jimenez consented to a vehicle search, the trooper found $44,000 in a black bag in the back seat of the Lexus. 

According to court documents, the cash was seized, but Jimenez and Cruz-Rivera were released to maintain the ongoing drug investigation.  Subsequently, a cooperating witness provided law enforcement with information regarding Jimenez and Cruz-Rivera’s drug trafficking activity.  In approximately 2012, the cooperating witness began purchasing cocaine heroin from Cruz-Rivera.  On Oct. 4, 2013, Jimenez allegedly told the cooperator that he drove for the drug delivery because it was less likely that he would get in trouble if they were pulled over because he was a firefighter.

The charging statutes provide for 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; 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; Fitchburg Police Chief Ernest F. Martineau; Leominster Acting Police Chief Michael Goldman; and Lunenburg Police Chief James P. Marino, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Michelle L. Dineen Jerrett of Ortiz’s Worcester Branch Office.

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 the court of law. 

BOSTON – A sales representative for multiple healthcare companies pleaded guilty today in U.S. District Court in Boston ­­­­­­­­­­­­­­­in connection with obstruction of an investigation into kickbacks paid to medical professionals.

Terrence Kyle Tackett, 49, of Florence, Ky., pleaded guilty to one count of obstruction of a criminal investigation of health care offenses.  U.S. District Court Judge Allison D. Burroughs scheduled sentencing for Sept. 14, 2016. 

From 2012 to 2013, Tackett worked as a sale representative in Kentucky for a California-based healthcare company, and from August 2013 to February 2015, he worked for a Massachusetts pharmaceutical company.  During that period, Tackett gave medical professionals gift cards and personal checks in exchange for ordering or prescribing the products he promoted.  During a January 2015 meeting with investigators, Tackett falsely denied and attempted to conceal the kickbacks he paid to physicians and their staffs.

The charging statute provides a sentence of no greater than five years in prison, three years of supervised release, a fine of 250,000 and restitution.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Phillip Coyne, Special Agent in Charge of U.S. Health and Human Services, Office of Inspector General, Office of Investigations; Mark McCormack, Special Agent in Charge of U.S. Food and Drug Administration, Office of Criminal Investigations, Metro Washington Field Office; and Susan Hensley, Regional Director of U.S. Department of Labor, Employee Benefits Security Administration, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorneys Sara Miron Bloom, Young Paik, and Kriss Basil of Ortiz’s Office, with assistance from the Justice Department’s Consumer Protection Branch and the Food and Drug Administration.

BOSTON – A Florida woman was sentenced today in connection with an advance fee scheme involving 100 victims throughout the United States, including many in Massachusetts. 

Ann Elizabeth Ursiny, a/k/a Ann Stone, 51, was sentenced by U.S. District Court Judge Richard G. Stearns to 50 months in prison to be served consecutive to her current sentence, three years of supervised release and restitution of $933,456.  In September 2015, she pleaded guilty to 19 counts of mail fraud and 17 counts of wire fraud all in connection with a fraudulent scheme in which individuals were induced to pay up-front fees to Ursiny and her entity, Trace Financial Group, Inc., based on representations that those individuals would receive real estate loans, when in fact Ursiny never intended to make any such loans.  Ursiny’s co-defendant, Robert O’Connor, pleaded guilty in June 2015 to participating in the same scheme by recruiting victims to apply for loans and pay the advance fees.  O’Connor is scheduled to be sentenced on June 29, 2016.

From early 2010 to 2011, Ursiny recruited agents, including O’Connor, in several states to solicit individuals to apply for real estate loans through Trace and pay the advance fees.  In return, the agents were paid a portion of those advance fees.  Ursiny told prospective victims that Trace had successfully processed and disbursed many loans, when, in fact, none were ever disbursed.  Ursiny focused the scheme on prospective applicants who had poor credit or whose homes were underwater, and represented that Trace could replace their mortgage with a new, smaller mortgage with lower mortgage interest payments.   In fact, Trace never funded any of the loans, and failed to pay refunds as promised.  Victims’ funds were used for Ursiny’s personal and family expenses, and to pay “commissions” to agents. 

In 2012, Ursiny was sentenced in the District of Colorado to 71 months in prison in connection with a separate fraud 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 today.  The case was prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit. 

BOSTON – A Stoneham businessman pleaded guilty today in U.S. District Court in Boston to tax evasion in connection with under-reporting more than $800,000 in gross receipts.    

Robert Sinclair, 72, owner of Sinclair Trucking in Stoneham, Mass., pleaded guilty to attempting to evade taxes.  U.S. District Judge Richard G. Stearns scheduled sentencing Aug. 10, 2016. 

For many years, Sinclair owned and operated a waste management and trash hauling business in Stoneham.  Some of his larger customers reported the payments they made to Sinclair on tax return form 1099 which they submitted to the IRS and to Sinclair, while smaller customers did not report the payments they made to Sinclair on Forms 1099.   When Sinclair filed his tax returns, he generally reported only the amounts he had been paid by customers who provided Forms 1099, but not the payments from his customers who did not produce a Form 1099. 

During audits of his tax returns in 2005, 2007, 2008, and 2009, IRS agents questioned Sinclair about discrepancies between the amounts he reported on his tax returns and the amounts he deposited into his business bank account.  Sinclair falsely told the agents that the discrepancies were due to cash loans from a relative, when in fact, all of the deposits into the business bank account during these tax years were checks from customers.   As a result, Sinclair evaded $239,446 in taxes.

The charge of tax evasion provides a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000, or twice the gross gain or loss, 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 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 Sandra S. Bower of Ortiz’s Economic Crimes Unit. 

BOSTON – The co-owners and former owner of a payroll company in Worcester were sentenced today in U.S. District Court in Worcester for defrauding the IRS and tax evasion.  One of the co-owners was also sentenced for embezzling client and employee funds. 

William McCullough, 73, of Westborough, Mass., was sentenced by U.S. District Court Judge Timothy S. Hillman to one year and one day in prison, three years of supervised release and restitution of $1,825,933.  In September 2015, he pleaded guilty to two counts of conspiracy to defraud the IRS, four counts of making false statements in tax returns, four counts of tax evasion, and one count of wire fraud.  Robert McCullough, 43, also of Westborough, the son of William McCullough, was sentenced by Judge Hillman to eight months in prison and three years of supervised release.  He previously pleaded guilty to two counts of conspiracy to defraud the IRS and four counts of tax evasion.  Gary Davis, 74, of Jupiter, Fla., was sentenced to six months in prison and three years of supervised release.  He pleaded guilty to one count of conspiracy to defraud the IRS, and three counts of tax evasion. 

The McCulloughs are co-owners of Harpers Data Services, a payroll company in Worcester.  William McCullough was the treasurer and his son, Robert, is the president.  Gary Davis was a former owner and president of Harpers until his retirement in 2010. 

Beginning around 2006, William and Robert McCullough operated two corporate bank accounts at Webster Five Cents Savings Bank.  From 2007 to 2012, they funneled approximately $11 million of taxable income into these accounts.  The McCulloughs kept these accounts off of the corporation’s books and concealed their existence from the corporate accountant.  Thus, the income deposited into these accounts was not reported to the IRS on the corporation’s annual tax returns.  As a result, the corporation failed to pay approximately $3.78 million in taxes. 

Also during that time, William McCullough wrote checks totaling approximately $4.7 million from one of the Webster Five corporate accounts to himself, Robert McCullough, and Gary Davis.  In addition, from 2007 to 2011, William McCullough wrote bonus and dividend checks from Harpers totaling approximately $2.7 million to himself, Robert McCullough, and Gary Davis.  William McCullough ensured that none of this income appeared on the appropriate tax reporting forms, and as a result, the defendants failed to pay approximately $1.7 million in taxes from 2007 through 2011. 

In a separate case, William McCullough was sentenced for committing wire fraud.  From 2009 through 2011, Harpers maintained client trust accounts and a client tax account.  These accounts contained client funds, which were to be used to pay employees’ paychecks and employees’ federal and state taxes.  From 2009 through 2011, William McCullough took approximately $1 million from the client trust accounts and deposited it into a Harpers account.  In 2010, he took $750,000 from the client tax account and deposited it into a Harpers account.  At the time William McCullough took this money, the funds belonged solely to the clients of Harpers Data Services.  McCullough’s fraud resulted in a theft of approximately $1.8 million dollars. 

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 today.  The case was prosecuted by Assistant U.S. Attorney Karin M. Bell, Chief of Ortiz’s Worcester Branch Office.

BOSTON – Two former employees of Roxse Homes, a subsidized housing development in Boston, pleaded guilty in U.S. District Court in Boston in connection with a scheme to rent apartments at the housing development to individuals who were not qualified in exchange for cash bribes.

Mathis Lemons, 42, of Brockton, pleaded guilty today and Ismael Morales, 36, of Jamaica Plain, pleaded guilty on Monday, May 2, 2016 to one count each of conspiracy and seven counts each of corrupt receipt of payments by a federally funded organization.  Lemons is scheduled to be sentenced on Sept. 20, 2016 and Morales on Aug. 3, 2016.

Lemons was the assistant property manager and Morales worked as a maintenance technician for Roxse Homes, a subsidized housing development on Tremont Street in Roxbury.  At Roxse Homes, eligible low-income families and individuals can obtain rental housing for a subsidized rate with Section 8 housing benefits from the U.S. Department of Housing and Urban Development.  In 2014, there was a shortage of federally subsidized Section 8 housing in Massachusetts, and Roxse Homes maintained a long waitlist of applicants desiring apartments in the complex.  The Roxse Homes waitlist had been closed to external applicants since 2009. 

From September 2014 to February 2015, Lemons and Morales conspired to rent apartments to individuals who were not eligible for subsidized Roxse Homes apartments because they were not on the waitlist.  Morales solicited and accepted money from individuals, and provided those individuals with blank rental applications.  Morales also instructed some of the individuals not to date their applications, or to date their applications in 2006 or 2009, when in fact the applications were completed in 2014.  Lemons then added the unqualified individuals to the Roxse Homes computerized waitlist, and falsely inputted their application dates as 2006 or 2009. 

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.  The charge of bribery 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; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, New York Regional Office; Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Glenn A. Cunha, Inspector General of Massachusetts; and Boston Police Commissioner William B. Evans, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorneys Kristina E. Barclay and Eugenia M. Carris of Ortiz’s Public Corruption Unit. 

BOSTON – A West Hartford, Conn. man pleaded guilty in U.S. District Court in Springfield today in connection with evading taxes on the sale of tobacco products.

Sukhdev Singh, 63, pleaded guilty before U.S. District Court Judge Mark G. Mastroianni to one count of conspiracy, three counts of wire fraud and one count of money laundering.  The sentencing hearing has not yet been scheduled.

From 2008 to 2012, Singh worked with several co-conspirators to evade payment of tobacco excise tax by a wholesale business in Berlin, Conn. to the State of Connecticut.  To achieve this, co-conspirators sold smokeless tobacco and cigars to convenience stores and gas stations from a “no-tax” computer and a “tax” computer, and then filed false tobacco tax returns with Connecticut tax authorities.

The charge of conspiracy provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000.  The charges of wire fraud provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000.  The charge of money laundering provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; 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 Alex J. Grant of Ortiz’s Springfield Branch Office.

BOSTON – A former Amherst man was sentenced yesterday in U.S. District Court in Springfield for failing to register as a sex offender, his fifth conviction for violating his registration obligations. 

Jose Dones, 40, was sentenced by U.S. District Court Judge Mark G. Mastroianni to 30 months in prison and seven years of supervised release.  In January 2016, Dones pleaded guilty to one count of failing to register as a sex offender.

Dones was designated a Level Three sex offender in New York after being convicted of rape in 1994 and forcible touching in 2008.  Dones was aware of his obligations to register as a sex offender, but failed to do so leading to four convictions in New York.  In November 2014, Dones moved from New York to Amherst, Mass. to live with a woman he met on the Internet and her children, and failed to register as a sex offender for over two months.

United States Attorney Carmen M. Ortiz and John Gibbons, U.S. Marshal for the District of Massachusetts, made the announcement today.  The case was prosecuted by Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Branch Office.

The case is brought as part of Project Safe Childhood.  In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse.  Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.      

Boston – A Malden man pleaded guilty today in U.S. District Court in Boston to robbing the Hingham Institute for Savings Bank in October 2015.

Anthony Pantone, 56, pleaded guilty to one count of armed bank robbery.  U.S. District Court Judge Indira Talwani scheduled sentencing for Aug. 1, 2016.

On Oct.9, 2015, two individuals entered the Hingham Institute for Savings Bank in Boston’s Beacon Hill neighborhood.  While one individual, later identified as Russell Dinovo, jumped over the teller’s counter and stole money, the other individual, identified as Pantone, remained in the lobby holding what appeared to be a handgun.  During the robbery, Pantone repeatedly said to Dinovo, “hurry up, let’s go” and “get the drawer.”  Pantone also told the tellers not to look at the robbers.  After putting $16,320 in a duffel bag, the two individuals fled the bank on foot, and were captured with the duffel bag shortly thereafter in a cab.  In addition to the cash, an item that looked like a handgun, but was determined to be a fake gun was found in the duffle bag. 

Dinovo was charged in a separate indictment with one count of armed bank robbery.  His case is pending before U.S. District Court Judge Richard G. Stearns. 

The charging statute provides a sentence of no greater than 25 years in prison, five years of supervised release a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigations, Boston Field Office; and Boston Police Commissioner William Evans, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.

BOSTON – A previously convicted sex offender was arrested Friday, May 6, 2016 in Kansas in connection with distributing child pornography to a currently incarcerated federal inmate.

Christopher Saemisch, 58, was charged in a criminal complaint with one count of distribution of child pornography.  He was arrested on Friday while attending an event at a nudist retreat in McLouth, Kansas.  Saemisch was ordered detained during an initial hearing in U.S. District Court in Kansas yesterday afternoon.  He will appear in U.S. District Court in Massachusetts on May 31, 2016.

According to the complaint, on March 30, 2016, federal agents received information regarding Saemisch from an inmate at FMC-Devens who has been incarcerated since 1997 for child exploitation offenses.  The inmate told agents that he had communicated with Saemisch, a registered sex offender living in Kansas City, who admitted to looking at and storing child pornography as well as his expressed interested in traveling to Europe to have sex with children.  The inmate allegedly knew Saemisch from when they were previously incarcerated at the same federal prison facility.

Agents reviewed the inmate’s communications with Saemisch, which included special coded language to discuss the collection and distribution of child pornography.  The inmate confirmed that they used the code word “antiques,” when referring to child pornography and the code word “puppies,” to refer to children.  Agents then initiated an undercover operation using the inmate to communicate with Saemisch.  During their monitored conversations on various messaging apps and web platforms, Saemisch helped the inmate set-up accounts to receive and exchange child pornography, and allegedly sent him child pornography he had stored on various file storage sites.  Saemisch was arrested on May 6, 2016 at Gaea Retreat Center in Kansas.

The charging statute provides for a mandatory minimum sentence of 15 years and no greater than 40 years in prison, a minimum of five years and 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; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Joe Norwood, Northeast Regional Director of the Federal Bureau of Prisons, made the announcement today.  Assistance was also provided by the United States Attorney’s Office for the District of Kansas, as well as the Johnson County and Leavenworth County Sheriffs’ Departments in Kansas.  The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano 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.

The case is brought as part of Project Safe Childhood.  In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse.  Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.      

BOSTON – A Boston-area real estate developer was sentenced to two years in federal prison and ordered to pay a $1 million fine after he was convicted earlier this year of engaging in insider trading for buying – and later selling – shares of Wainwright Bank & Trust Company (“Wainwright”) based on a tip that Wainwright would be acquired.  Prior to the acquisition, shares of Wainwright traded on the Nasdaq Stock Market.

Robert H. Bray, 78, of Watertown, was sentenced today by U.S. District Court Judge William G. Young.  In January, Bray, the owner of R&B Construction, a construction and real estate development company, was convicted of one count of securities fraud following a four-day trial.  In June 2010, Bray was tipped by a friend who was an executive at Boston-based Eastern Bank Corp. that Wainwright would be acquired.  The tip – more than two weeks before the acquisition was publicly announced – was passed on a napkin slipped to Bray over drinks at the bar of a Watertown country club where both men are members.  Bray ultimately used the tip to trade Wainwright shares for a profit of approximately $300,000, an amount Bray must also forfeit as part of his sentence.

U.S. 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 also received valuable assistance from the U.S. Securities and Exchange Commission in the course of investigating this case.  The case was prosecuted by Stephen E. Frank and Eric P. Christofferson of Ortiz’s Economic Crimes Unit.

BOSTON – The owner of one of the largest commercial fishing businesses in the United States and a Bristol County Sheriff’s Deputy were charged in connection with a long-running scheme involving submitting falsified records to the federal government to evade federal fishing quotas and then smuggling the profits to Portugal. The federal indictment charging the two men was unsealed today after the arrest of the Sheriff’s Deputy.

Carlos Rafael, 64, of Dartmouth, the owner of Carlos Seafood, Inc., was indicted on one count of conspiring to falsify reports submitted to the federal government, 25 counts of submitting falsified records and one count of bulk cash smuggling. Rafael was previously arrested on a criminal complaint filed in February 2016.

Antonio Freitas, 46, of Taunton, a Sheriff’s Deputy with the Bristol County Sheriff’s Office, was indicted on one count of bulk cash smuggling and one count of structuring the export of U.S. currency. Freitas was arrested this morning and will appear today in U.S. District Court in Worcester. The charges arose out of an undercover investigation in which federal agents posed as organized crime figures interested in buying Carlos Seaford.  According to the indictment, from 2012 to January 2016, Rafael routinely lied to the National Oceanic and Atmospheric Administration (NOAA) about the quantity and species of fish his boats caught, in order to evade federal quotas designed to guarantee the sustainability of certain fish species.

As alleged in the indictment, during that period, Rafael misreported to NOAA approximately 815,812 pounds of fish, telling NOAA the fish was haddock, or some other abundant species subject to high quotas, when in fact the fish was cod, sole, or other species subject to strict quotas. After submitting false records to federal regulators, Rafael allegedly sold most of the fish to a wholesale business in New York City in exchange for bags of cash. During meetings with the undercover agents, Rafael allegedly said that in his most recent dealings with the New York buyer he received $668,000 in cash.

The indictment alleges that Rafael, with the assistance of Freitas – who was also a Department of Homeland Security Task Force Officer which gave him access to restricted areas of Logan Airport – smuggled at least some of that cash out of the United States to his native Portugal.  The indictment alleges that, on Feb. 5, 2016, with assistance of another individual, Freitas smuggled $17,500 through airport security and later deposited the money in a Portuguese bank account belonging to Rafael.

The charge of conspiracy provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000.  Twenty-three of the charges of falsifying records submitted to the federal government carry the same potential sentence, while two counts, brought under a different statute, provide for a sentence of no greater than 20 years in prison and a fine of $250,000.  The charges of bulk cash smuggling and monetary structuring provide 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; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Rear Admiral Linda L. Fagan, Commander of the First Coast Guard District; Timothy Donovan, Acting Assistant Director of the National Oceanic and Atmospheric Administration, Office of Law Enforcement; Gregory K. Null, Special Agent in Charge of the Department of Homeland Security, Office of Inspector General, Philadelphia Field Office; 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 Andrew E. Lelling, of Ortiz’s Economic Crimes Unit, and David G. Tobin, of Ortiz’s Major Crimes Unit.

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

BOSTON – Robert Fitzpatrick, former Assistant Special Agent in Charge (“ASAC”) of the FBI’s Boston Office, has pleaded guilty to 12 counts of an indictment charging him with perjury and obstruction of justice in connection with his testimony at the 2013 trial of James “Whitey” Bulger.  

Fitzpatrick, in his capacity as ASAC of the Boston Division, had overall supervisory responsibility of the organized crime program in Boston between 1981 and 1986—a time period in which Bulger, while an active FBI informant, was involved in eight murders.  

Fitzpatrick, 76, of Charlestown, R.I., who is the author of Betrayal, Whitey Bulger and the FBI Agent Who Fought To Bring Him Down, was called to testify at the Bulger trial on July 29 and July 30, 2013.  In pleading guilty, Fitzpatrick admitted that he lied when he testified at Bulger’s trial that he tried to end Bulger’s relationship with the FBI and target Bulger for prosecution but was overruled by higher authorities in the FBI.    

Specifically, Fitzpatrick admitted that contrary to his sworn testimony at the Bulger trial:

1. his assignment to Boston in 1980 as ASAC was not a special mission ordered by the Assistant Director of the FBI because there were problems in the office, but rather a routine reassignment;
2. Bulger never said, “I’m not an informant” or otherwise denied being an informant when he met with Fitzpatrick;
3. Fitzpatrick never tried to close Bulger as an FBI informant;
4. Fitzpatrick was demoted from ASAC because he falsified official FBI reports in connection with a shooting incident, not because he reported corruption;
5. Fitzpatrick did not arrest mob boss Gennaro Angiulo; and
6. Fitzpatrick did not find or recover the rifle James Earl Ray used to assassinate Dr. Martin Luther King, Jr. at the Lorraine Motel in Memphis, TN in 1968.

“Mr. Fitzpatrick’s plea of guilty on all counts makes clear that there are consequences to lying in federal court.  In this case, the fact that the defendant was a high-ranking former law enforcement official, who falsely held himself out as a whistleblower who tried to end the FBI’s corrupt relationship with Bulger, made his conduct even more egregious,”  U.S. Attorney Carmen M. Ortiz said.

“For a former senior FBI official to lie under oath while testifying in a prosecution related to the FBI’s corrupt relationship with a violent criminal is egregious and can erode the public’s trust in the judicial system,” said Ronald G. Gardella, Special Agent in Charge of the Department of Justice Office of Inspector General’s New York Field Office.  “When allegations of this kind arise, it is critical that they be fully investigated so the public and juries can have confidence that when witnesses take the stand, they are fully aware of the stakes for not telling the truth.”

U.S. District Judge F. Dennis Saylor IV took the plea agreement under advisement and set sentencing for August 5th.  If Judge Saylor accepts the plea agreement, he must sentence Fitzpatrick to 24 months’ probation, a fine of $12,500 and a special assessment of $1,200. 

U.S. Attorney Ortiz and Special Agent in Charge Gardella made the announcement today.  This case was investigated by the Department of Justice Office of the Inspector General and is being prosecuted by Assistant U.S. Attorneys Zachary R. Hafer and Fred M. Wyshak of Ortiz’s Public Corruption and Special Prosecutions Unit.

BOSTON – A Salem man was charged today in U.S. District Court in Boston with a scheme to defraud Home Depot of over $35,000.

Robert Dooley, 56, of Salem, Mass., was charged in a criminal complaint with one count of wire fraud.  He was arrested this morning and will appear before U.S. District Court Magistrate Judge Jennifer C. Boal at 2:15 p.m.

The complaint alleges that between January 2016 and February 2016, Dooley engaged in a scheme to defraud Home Depot by “returning” items he never purchased from the store to receive store credit.  On each occasion, Dooley, entered Home Depot stores empty handed and gathered merchandise totaling $500 to $900.  At the returns desk, Dooley falsely claimed that he previously purchased the items, but did not have a receipt.  When he provided this driver’s license number to the clerk, Dooley often varied the number so the “return” would not immediately be detected as fraudulent.  Dooley was then issued a Home Depot card for the fraudulent return.  According to the complaint, Dooley perpetrated the scam over forty times at Home Depots stores in Massachusetts, New Hampshire, Rhode Island, and Maine, racking up over $35,000 in fraudulent returns.

In 2007, Dooley was convicted of federal wire fraud charges arising out of a nearly identical scheme in which he defrauded Home Depot in excess of $330,000 from July 2004 through October 2005.  In that case, he was sentenced to five years in federal prison. 

The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Eugenia M. Carris of Ortiz’s Public Corruption Unit.

BOSTON – A Westfield resident who previously served in the Chinese People’s Liberation Army was sentenced today in U.S. District Court in Springfield for lying on his security clearance form and damaging U.S. Army computers.

Wei Chen, 62, was sentenced by U.S. District Court Judge Mark G. Mastroianni to six months of home confinement, five years of probation and a fine of $8,000.  In December 2015, he pleaded guilty to making a false statement and damaging a U.S. Army computer. 

Prior to immigrating to the United States and becoming a citizen in 2006, Chen served in the People’s Liberation Army.  In 2010, Chen applied for a job as a computer system administrator for a Department of Defense (DOD) contractor, which required him to have a Secret-level security clearance.  To obtain that clearance, Chen completed a questionnaire on which he certified that he understood that a false statement could be punished by imprisonment.  Nonetheless, in response to the form’s question about whether he had ever served in a foreign country’s military, Chen falsely answered, “no.”  Chen lied on this form because he believed that a truthful answer would reduce his chances of receiving the security clearance he needed to work as a DOD contractor.  After submitting the form with false information, Chen received a secret level security clearance and was assigned to work for the U.S. Army as a system administrator at Camp Buehring in Kuwait. 

On June 15 and 16, 2013, Chen connected one or more of his own thumb drives to computers at Camp Buehring that were connected to the Army’s unclassified network and the classified Secret-level network.  Chen then made an effort to cover his tracks and hide his security violation.  Specifically, he cleared network logs on the server that would have documented the connection of the thumb drive to the network server.  Chen also copied a computer file, containing saved e-mail and documents, from his Secret-level workstation onto his thumb drive.

United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Daniel Andrews, Director of the Computer Crime Investigative Unit of the U.S. Army Criminal Investigation Command, made the announcement.  The case was prosecuted by Assistant U.S. Attorneys Adam Bookbinder and B. Stephanie Siegmann of Ortiz’s Criminal Division.

BOSTON – The former “Inca” of the Springfield Latin Kings gang pleaded guilty today in U.S. District Court in Springfield to distributing heroin.

Jose Cartagena, 38, of Springfield, Mass., pleaded guilty today to distributing heroin.  U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Aug. 3, 2016. 

In October 2014, an investigation was initiated in an effort to disrupt and dismantle the Latin Kings’ criminal activity in Springfield and Holyoke.  According to court documents, members and associates of the Latin Kings were engaged in the distribution of narcotics, particularly heroin.  Furthermore, disputes with rival gangs over criminal activity and drug turf were on the rise and resulted in serious crimes of violence, including armed assaults with firearms and murder.  The investigation led to the arrest of 12 alleged Latin Kings members in connection with drug and firearms offenses in November 2015.

As alleged in court documents, Cartagena held the position of “Inca,” or chief, of the Springfield chapter of the Latin Kings gang at the time of his arrest on Nov. 9, 2015.  Cartagena pleaded guilty today to distributing 300 bags of heroin in Springfield on July 31, 2015.

The charge of distribution of heroin provides for a sentence of no greater than 20 years in prison, five 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 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 Katharine A. Wagner of Ortiz’s Springfield Branch Office.

BOSTON – Two Peabody men were sentenced today in U.S. District Court in Boston for trafficking in counterfeit iPhone components at Accessory Depot, a store in Square One Mall in Saugus. 

Mickey Punjabi, 36, was sentenced by U.S. District Court Judge Denise J. Casper to six months of home incarceration, two years of probation, 200 hours of community service and a fine of $7,500.  His brother, Hitesh Punjabi, 33, was sentenced by Judge Casper to three months of home confinement, two years of probation, 100 hours of community service and a fine of $7,500.  Both men were jointly ordered to pay restitution of $114,751 and forfeit assets seized from their home, which includes over $200,000 in cash and cash equivalents.  In January 2016, the men were charged with conspiring to traffick in counterfeit goods, specifically iPhone components that bore Apple trademarks but were not genuine Apple products.  Micky Punjabi, who owned the store, was also charged with trafficking in the counterfeit Apple components.     

From December 2010 to February 2015, the Punjabis sold counterfeit Apple merchandise at Accessory Depot.  Micky Punjabi also repaired genuine iPhones using counterfeit components purchased from sources outside the United States and from a supplier within the United States.  Micky Punjabi knew that the goods he was selling were counterfeit, but sold and attempted to sell thousands of pieces of counterfeit merchandise.     

At today’s sentencing, Judge Casper stated, “This is a serious crime…[T]here is harm not just to companies involved in terms of their reputation and the integrity of their products but also to the members of the public who bought those products.” 

United States Attorney Carmen M. Ortiz and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today.  The case was prosecuted by Assistant U.S. Attorney Amy Harman Burkart of Ortiz’s Cybercrime Unit.

BOSTON – Two alleged members of the New England Family of La Cosa Nostra were sentenced in U.S. District Court in Boston today in connection with extortion.

Anthony Spagnolo, 74, of Revere, was sentenced by U.S. District Court Chief Judge Patti B. Saris to 20 months in prison and ordered to pay a fine of $5,000.  On March 24, 2016, Pryce Quintina, 76, of Revere, was sentenced to15 months in prison.  In December 2015, both men pleaded guilty to conspiring to interfere with interstate commerce by extortion.

In November 2012, Moose Lodge, a social club in Revere, wanted to replace its existing video poker machines, supplied by Constitution Vending Company, with new video poker machines.  Constitution paid Spagnolo and Quintina to protect their video poker machines in social clubs, including the Moose Lodge.  Moose Lodge intended to replace Constitution’s aging machines with new ones – a move that would decrease Constitution’s profits and potentially cause Spagnolo and Quintina to receive less protection money.  In response, Spagnolo and Quintina met with the manager of Moose Lodge and told him that Constitution’s machines “were not going anywhere.”   As a result of this threat, the Moose Lodge did not replace those machines. 

The case is part of a multi-year investigation into La Cosa Nostra (LCN) operations in Eastern Massachusetts.  As a result of the investigation, five individuals have been convicted.   Louis DiNunzio, 29, of Medford, who the government alleges is also a member of the LCN, Joseph Spagnuolo-Kazonis, 30, of Boston, and John Woodman, 43, of Braintree, were convicted of conspiracy to possess with intent to distribute marijuana.  In addition, John Evans, 68, of Middleborough, and Joseph Petrucelli, 24, of Winthrop, were convicted of conducting an illegal gambling business. 

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 was also provided by the Internal Revenue Service’s Criminal Investigations, the Massachusetts Department of Correction, and the Boston, Braintree, Everett, Medford and Quincy Police Departments.  The case was prosecuted by Assistant U.S. Attorney Timothy E. Moran of Ortiz's Organized Crime and Gang Unit.

BOSTON – A previously convicted sex offender was sentenced in U.S. District Court in Boston today in connection with receiving thousands of child exploitation videos.

Derrick Jones, 45, of Arlington, was sentenced today by U.S. District Court William G. Young to 15 years in prison, 10 years of supervised release and will be required to register as a sex offender upon release from prison.  In January 2016, Jones pleaded guilty to receipt of child pornography and possession of child pornography.  

Jones used file sharing computer programs to trade and receive images of child pornography and also downloaded and viewed images and videos of children ranging in age from infants to minors under the age of 18, being sexually exploited.  Jones maintained a collection of 34,000 images and approximately 13,000 videos of child pornography.  In 2005, Jones was convicted of two counts of possession of child pornography.

United States Attorney Carmen M. Ortiz; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Arlington Police Chief Will Johnson, made the announcement today.  The case was prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.

The case is brought as part of Project Safe Childhood.  In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse.  Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.      

BOSTON – Three men who operated two Boston-area fried chicken restaurants have been charged with conspiring to file false tax returns as part of a long-running scheme to avoid paying payroll and income taxes.  

Hazrat Khan, 56, of Middletown, NY, and Khurshed Iqbal, 56, whose whereabouts are unknown, were charged in an indictment unsealed today with one count of conspiracy to defraud the United States and 13 counts of willful failure to account for and pay taxes.   Adalat Khan, 46, of Chelsea, Mass., was charged in an Information with one count of conspiracy and two counts of making and subscribing false tax returns. 

According to court documents, the defendants used a variety of means to avoid paying payroll and income taxes owed by their restaurant, Crown Fried Chicken, which has locations on Warren Street in Boston and Broadway in Chelsea.  As part of the conspiracy, Adalat Khan managed both restaurants and Hazrat Khan and Iqbal took steps to conceal their ownership interests.  Adalat Khan, at the direction of Hazrat Khan and Iqbal, allegedly provided tax preparers with false information about the restaurants’ payroll and income.  Federal law requires that employers withhold payroll taxes and pay it to the IRS.  As part of the scheme, the defendants falsely reported the number of employees, some of whom were undocumented workers, and wages paid to the IRS.  They also allegedly paid employees under the table and filed income tax returns that falsely described their sales, total income, compensation of officers, salaries and wages, and taxable income.

The charge of conspiracy provides for a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000 and restitution.  The charge of failure to account for a pay taxes provides for 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 costs of prosecution and restitution.  The charge of subscribing a false tax return provides for 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 costs of prosecution and restitution.  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.

United States Attorney Carmen M. Ortiz; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Boston Police Commissioner William Evans, made the announcement today.  The case was investigated with the cooperation of the Massachusetts Insurance Fraud Bureau.   The case is being prosecuted by Assistant U.S. Attorneys John A. Capin and Eric P. Christofferson of Ortiz’s Criminal Division.

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

BOSTON – United States Attorney Carmen M. Ortiz announced today that Hollister, Inc., a manufacturer of disposable health care products, and Byram Healthcare Centers, Inc., a supplier of medical products, have agreed to pay $11.44 million and $9.3 million, respectively, to resolve allegations that they engaged in a kickback scheme designed to increase sales and profits.

 “We are committed to rooting out commercial bribery, especially in the healthcare industry where the payment of kickbacks erodes patients’ trust in the quality of their medical care,” said U.S. Attorney Ortiz.  “These unlawful cash incentives also threaten the integrity of the health care system, and siphon taxpayer dollars from our nation’s health care programs.” 

“This settlement demonstrates the Justice Department’s continuing determination to prevent manufacturers and suppliers of medical devices covered by federal health care programs from paying or receiving kickbacks,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We will not permit such illegal payments to taint the decision-making of those who serve the beneficiaries of these important programs.”

“The FBI will aggressively investigate companies that engage in kickback schemes at the expense of both patients and taxpayers,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division.  “Those who seek to exploit the nation’s health care system through bribes or other fraudulent conduct will be held accountable for their actions.”

“Health care product manufacturers that financially reward suppliers in exchange for the referral of business can improperly direct patients to certain products over others,” said Special Agent in Charge Phillip M. Coyne, U.S. Department of Health and Human Services, Office of Inspector General.  “We will continue to investigate such wasteful business arrangements.”

The settlement with Hollister resolves allegations that, from 2007 through 2014, it paid kickbacks to Byram in return for marketing promotions, conversion campaigns, and other referrals of patients to Hollister’s ostomy and continence care products.  On seven occasions from 2007 to 2012, Hollister allegedly agreed to pay Byram the costs of its bonus commissions paid to sales personnel for each new patient order for a Hollister product.  In addition, from 2009 to 2014, Hollister allegedly agreed to pay Byram $200,000 annually, purportedly for “catalog funding,” to induce Byram’s recommendation of Hollister products to patients.  

The settlement with Byram resolves allegations that, in 2012 and 2013, Byram received numerous kickbacks from Hollister and three other manufacturers of ostomy and continence care products, namely Coloplast Corp., Montreal Ostomy, and Safe N’ Simple, in return for Byram’s agreement to conduct promotional campaigns and to refer patients to the manufacturers’ products.  The settlement also resolves allegations by the United States and the State of California that Byram submitted inflated claims to the California Medi-Cal program in violation of the state’s regulation which limits the amount a provider can bill for certain products.  The United States and California allege that, when Byram billed Medi-Cal for Coloplast urology products that Byram sold to Medi-Cal beneficiaries, it failed to account for substantial discounts that Byram knew, at the time it billed the Medi-Cal program, reduced the prices it paid for the products. 

In connection with the False Claims Act settlement, Byram has agreed to pay $127,117 to California and has entered into a corporate integrity agreement with the U.S. Department of Health and Human Services, Office of Inspector General.

The settlements resolve allegations in a whistleblower lawsuit filed by two former employees and one current employee of Coloplast under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery.  The whistleblowers’ share of the settlements has not been determined.  Claims against two other defendants in the lawsuit, Coloplast Corp., and Liberator Medical Supply, Inc., were resolved in December 2015 for a total of $3,660,000.  The settlements announced today bring the total recovery in the case to $24.6 million. 

The investigation was conducted by the Federal Bureau of Investigation and the U.S. Department of Health and Human Services, Office of Inspector General.  The case was handled by Assistant U.S. Attorneys George Henderson and Kriss Basil of the District of Massachusetts with assistance from the Justice Department’s Civil Division.

The claims resolved by the settlements are allegations only, and there has been no determination of liability.

BOSTON – A Watertown business owner pleaded guilty yesterday in U.S. District Court in Boston in connection with a scheme to evade taxes and workers’ compensation insurance premiums by paying employees under-the-table for their work. 

Richard Moxley, 67, pleaded guilty one count of tax evasion and one count of mail fraud.  U.S. District Court Senior Judge Mark L. Wolf scheduled sentencing for August 17, 2016.

Moxley owned and operated Sparkling Windows, a window and gutter cleaning company based in Watertown.  From 2008 to 2012, Moxley devised and executed a scheme to defraud the Internal Revenue Service and the insurance company providing workers’ compensation insurance for Sparkling’s employees, by filing false tax returns and paying workers “under the table.”  To do this, Moxley arranged to bring client checks to a check casher, and paid undocumented workers weekly wages in cash.  By doing so, he concealed a substantial portion of the company’s business revenues and payroll, and filed false tax returns, evading a significant portion of federal taxes, and fraudulently reducing the premiums for workers’ compensation insurance owed in connection with the business.

The charge of tax evasion provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater.  The charge of 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 or twice the gross gain or loss, 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.

United States Attorney Carmen M. Ortiz; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement.  The case was investigated with the cooperation of the Massachusetts Insurance Fraud Bureau.  The case is being prosecuted by Assistant U.S. Attorney Eve A. Piemonte.

BOSTON – A South Dartmouth man was arrested today and charged in U.S. District Court in Boston with child pornography offenses.

Jack L. Bean, Jr., 29, was charged in a criminal complaint with one count of receipt of child pornography and one count of possession of child pornography.  During an initial appearance today, Bean was detained pending a detention hearing on May 3, 2016.

According to the court documents, in September 2015, a law enforcement investigation identified an Internet-based bulletin board dedicated to the advertisement, distribution and production of child pornography with over 1,500 users who actively post new content and engage in online discussions involving the sexual exploitation of minors.  Bean was allegedly identified as a user on the bulletin board.  During a search executed by law enforcement officers today, Bean admitted that he downloaded and saved child pornography from the Internet, and that he had a sexual preference for girls approximately 14 years old.  During the execution of the search warrant, agents identified 40 images and 29 videos of children engaged in sexually explicit conduct on Bean’s laptop.

The charge of receipt of child pornography provides for a mandatory minimum sentence of five years and no greater than 20 years in prison, a mandatory minimum of five years and up to a lifetime of supervised release, and a fine of $250,000.  The charge of possession of child pornography provides for a sentence of no greater than 20 years in prison, a mandatory minimum of five years and 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;  Matthew Etre, Special Agent in Charge of the Homeland Security Investigations in Boston; and Dartmouth Police Chief Robert W. Szala, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz’s Major 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.

BOSTON – A Hyannis man was sentenced yesterday in U.S. District Court in Boston in connection with purchasing a firearm and silencer on a “Darknet Market” website, which provides anonymity to users to buy and sell illegal goods. 

Justin Moreira, 22, was sentenced by U.S. District Court Judge F. Dennis Saylor, IV to 42 months in prison and three years of supervised release.  In November 2015, Moreira pleaded guilty to three counts of being a felon in possession of ammunition and firearms.  Moreira had a 2013 felony conviction in Barnstable County for possession of a controlled substance with intent to distribute. 

A Darknet Market website is an online market that operates outside the parameters of the traditional Internet, allowing individuals anonymity to buy and sell illegal items, such as firearms and drugs.  Such transactions are often conducted for bitcoins, a form of digital currency.  Beginning in January 2015, Moreira engaged a federal undercover agent in a series of online messages during which Moreira inquired about the potential purchase of several different firearms.  Ultimately, Moreira ordered a Walther PPK/S .380 caliber pistol and silencer from the agent for which he paid the equivalent of $2,500 in bitcoins.  Moreira instructed the agent to ship the package to a post office box in Hyannis.  Federal agents monitoring the post office box immediately arrested Moreira after he retrieved the package.

United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; and Barnstable Police Chief Paul MacDonald, made the announcement today.  The case was prosecuted by Assistant U.S. Attorney Mary B. Murrane of Ortiz’s Criminal Division. 

BOSTON – Catherine Greig, the longtime companion of convicted killer James “Whitey” Bulger, was sentenced today in U.S. District Court in Boston in connection with her refusal to testify before a federal grand jury.  The investigation centered on whether others assisted her and Bulger during the 16 years they were fugitives from justice. 

“Ms. Greig had a choice – to either assist or defy a Court Order.  She had complete control over her own fate.  Her repeated defiance translated into criminal contempt and has ultimately cost her more time in prison,” said United States Attorney Carmen M. Ortiz.  “First, her role in harboring James Bulger, a murderer, resulted in the victims’ families being forced to lie in wait for justice.  Then Ms. Greig’s continued and deliberate effort to protect accomplices extended the injustice, and she will now face the consequences of that decision.”

“The FBI has never wavered in its pursuit to bring Catherine Greig to justice,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation.  “Today’s sentence shows that defying a court order and refusing to testify about who harbored, or otherwise assisted her life on the run with Mr. Bulger, is not without consequence.  Her actions adversely impacted the government’s efforts to seek answers for Bulger’s victims, and hold accountable anyone who may have helped them during their sixteen years as fugitives.”

Ms. Greig, 64, was sentenced by U.S. District Court Judge F. Dennis Saylor, IV to 21 months in prison to be served consecutively to her current sentence, and three years of supervised release to be served concurrent to the term imposed during her prior conviction.  In February 2016, she pleaded guilty to one count of criminal contempt.   

Greig is currently serving an eight year sentence for her 2012 conviction of identity fraud and harboring James J. Bulger.  The sentence imposed today will be served after she completes her initial eight year sentence.

U.S. Attorney Ortiz and FBI SAC Shaw made the announcement today.  The case was prosecuted by Assistant U.S. Attorney Mary B. Murrane of Ortiz’s Criminal Division. 

BOSTON – United States Attorney Carmen M. Ortiz announced today that drug companies Wyeth and Pfizer, Inc., have agreed to pay $784.6 million to resolve allegations that Wyeth failed to give the government the same discounts it provided to private purchasers of its drugs, as required by the Medicaid program.

“This significant settlement illustrates that the government will not permit drug companies to dodge their obligations to the Medicaid program or create elaborate pricing schemes to deceive Medicaid into paying more than it should for drugs,” said U.S. Attorney Ortiz.  “This settlement, after years of hard-fought litigation, shows our commitment to ensuring that healthcare businesses do not take advantage of the federal health insurance programs which serve those who need assistance most.”

“This settlement demonstrates our unwavering commitment to hold pharmaceutical companies responsible for pursuing pricing schemes that attempt to manipulate and overcharge federal health care programs – programs that protect the poor and disabled – for drugs sold to commercial customers at much lower prices,” said Principal Deputy Attorney General Benjamin Mizer, head of the Civil Division for the Department of Justice.

“When we make agreements with others we expect follow-through,” said Phillip Coyne, Special Agent in Charge with the Office of Inspector General of the U.S. Department of Health and Human Services.  “Similarly, taxpayers rightly expect large pharmaceutical companies will not falsely report prices to boost profits.  Any drug company shirking those responsibilities can expect to be held accountable for its deception.”   

According to the government’s complaint, Wyeth gave thousands of hospitals deep discounts on two of its proton pump inhibitor (PPI) drugs, Protonix Oral and Protonix IV, but failed to report those discounts to Medicaid.  The government alleged that Wyeth “bundled” discounts on Protonix Oral with discounts on Protonix IV in order to induce hospitals to use Protonix Oral, which hospitals otherwise would have had little incentive to use because other pre-existing oral PPI drugs were priced competitively and were considered to be at least as effective and safe.  Wyeth wanted to control the hospital market because patients discharged from the hospital on Protonix Oral were likely to stay on the drug for long periods of time, during which payers, including Medicaid, would pay nearly full price for the drug.

Under the Medicaid program, which is the nation’s provider of health insurance to the poor and disabled, drug companies must report to the government the best prices they offer other customers for their brand name drugs.  Based on these reported best prices, the drug companies pay rebates to the state Medicaid programs so that Medicaid receives the same discounts that drug companies offer to other large customers in the marketplace.

The government alleged that Wyeth hid from Medicaid the bundled discounts it gave to hospitals on Protonix Oral and Protonix IV.  As a result, Wyeth wrongfully avoided paying hundreds of millions of dollars in rebates to Medicaid from 2001 to 2006.

Under the terms of today’s settlement, Wyeth will pay $413,248,820 to the federal government and $371,351,180 to state Medicaid programs.  The settlement resolves allegations filed by two whistleblowers, Lauren Kieff and William St. John LaCorte.  See United States ex rel. Kieff and LaCorte v. Wyeth and Pfizer, Inc., Nos. 03-12366 and 06-11724-DPW (D. Mass.).  The False Claims Act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery.  Under the terms of the settlement agreement, the federal and state governments will pay a combined relator share of $98,058,190. 

As part of the settlement, Wyeth and Pfizer do not deny the government’s allegations.  Pfizer, which is headquartered in New York City, acquired Wyeth in 2009.  The conduct at issue occurred prior to the acquisition.

This settlement is part of the government’s ongoing initiative to combat health care fraud, and specifically to reduce and prevent Medicare and Medicaid fraud.  One of the most powerful tools in this effort is the False Claims Act.  Since the beginning of the 2016 fiscal year, the District of Massachusetts has recovered over $1 billion in health care fraud settlements on behalf of American taxpayers, and simultaneously has secured the payment of over $150 million to whistleblowers who initiated these matters.  For more information, see Warner Chilcott, Millennium Health, RehabCare, Coloplast Corp., and Boston Medical Center.

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. Attorneys Gregg Shapiro, Brian Pérez-Daple, and Kriss Basil of Ortiz’s Office and Justice Department Trial Attorneys Sanjay Bhambhani, Andy Mao, Zoila Hinson, and Christopher Terranova of the Civil Division’s Commercial Litigation Branch.

BOSTON – A Springfield man previously convicted of rape pleaded guilty in U.S. District Court in Springfield yesterday in connection with unlawfully selling a firearm.

Hector Nieves, 35, pleaded guilty to one count of possession of a firearm by a convicted felon.  U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for July 12, 2016.

On Sept. 2, 2015, Nieves negotiated the sale of a .22 caliber pistol and ammunition to a cooperating witness.  He received the cash from the cooperating witness, and arranged for his co-conspirator, Mark Alexander, to deliver the firearm and ammunition.  Following previous convictions of rape and failure to register as a sex offender, Nieves was prohibited from possessing a firearm and ammunition.

The charging statute provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.  

United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division, made the announcement.  The case was also investigated by the Western Massachusetts Gang Task Force.  The case is being prosecuted by Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Office.