District of Massachusetts
Press releases recorded for this federal judicial district.
Longmeadow Man Pleads Guilty to Tobacco Tax Fraud and Illegal Check-Cashing BusinessRead the Press Release
BOSTON – A Longmeadow, Mass. man pleaded guilty in two cases in U.S. District Court in Springfield in connection with evading payment of tobacco sales tax and operating an illegal check-cashing business.
Satish Kumar, 60, pleaded guilty in one case to one count of conspiracy, three counts of wire fraud and one count of money laundering. In the second case, Kumar pleaded guilty to one count of failure to register a money transmitting business. U.S. District Court Judge Mark. G. Mastroianni scheduled sentencing for April 13, 2016.
In 2006, Kumar purchased a wholesale warehouse business in Berlin, Conn. Kumar systematically evaded Connecticut state tobacco taxes, in selling cigars and smokeless tobacco to convenience stores and gas stations. Kumar consistently filed false tobacco tax returns with Connecticut state tax authorities, paying just two percent of the tax owed. In 2008, Kumar sold the business, but he continued to receive proceeds from the continuing tobacco tax fraud that occurred at the Berlin warehouse. In June 2012, the fraud ceased when federal agents executed a search warrant at the Berlin warehouse and 12 other locations in Massachusetts, Connecticut, and Pennsylvania. During the six-year scheme, Kumar and others helped to evade over $16 million in taxes owed to the state of Connecticut.
In the illegal check cashing case, Kumar owned a liquor store in Springfield, Mass. that also acted as an unregistered money transmitting business. Kumar cashed checks without the required registration despite warnings from his bank. Among the checks cashed were 195 United States Treasury tax refund checks worth approximately $1.2 million obtained through fraudulent returns filed with the IRS.
The charges of conspiracy and failure to register a money transmitting business provide for sentences of no greater than five years in prison, three years of supervised release and a $250,000 fine. The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. 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; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Commissioner Mark Nunnelly of the Massachusetts Department of Revenue; Commissioner Kevin B. Sullivan of the Connecticut Department of Revenue Services; and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The tobacco tax fraud case is being prosecuted by Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Branch Office. The illegal check-cashing case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz’s Springfield Branch Office and Sarah Devlin of the Justice Department’s Asset Forfeiture and Money Laundering Section.
Haydenville Woman Indicted for Stealing Social Security BenefitsRead the Press Release
BOSTON – Shirley Warner, 52, of Haydenville, was indicted in U.S. District Court in Springfield for stealing her deceased mother’s social security benefits for almost four years.
The indictment alleges that between August 2010 and March 2014, after her mother died, Warner stole over $45,000 worth of Social Security benefits intended for her mother.
The charge of theft of public money provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of the Inspector General, Office of Investigations, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Deepika Bains Shukla of Ortiz’s Springfield Branch Office.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Dorchester Real-Estate Broker Sentenced to Prison for Mortgage Fraud SchemeRead the Press Release
BOSTON – A real-estate broker was sentenced today for conspiracy to defraud mortgage lenders of $4 million relating to more than two-dozen properties in Dorchester.
Joan Ruggiero, 78, was sentenced by U.S. District Court Judge William G. Young to nine months in prison and nine months of home detention, and was ordered to pay a fine of $100,000 and restitution of $4.1 million to the lenders. In October 2013, Ruggiero pleaded guilty to one count of conspiracy.
Ruggiero, who owned a real-estate business in Dorchester, and her co-conspirator identified buildings for sale in Dorchester that they could purchase and then convert into individual condominium units. After this conversion, Ruggiero and the co-conspirator recruited individuals to pose as purchasers of the condominiums, promising them that they were making a good investment. Ruggiero, who held herself out as a broker, and her co-conspirator actually owned the units. After she recruited the “buyers,” Ruggiero arranged for the submission of mortgage applications to various lenders, which contained false information about the “buyers’” income, assets, and intentions to live in the properties. The scheme also involved creating entirely fictitious documents, such as phony leases, bank documents, and verifications of employment. Relying on the false information provided, the lenders approved the mortgages and provided the required funds at the property closings. Ruggiero and her co-conspirator took those funds – over $4 million – and deposited them into their own accounts.
United States Attorney Carmen M. Ortiz, William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Eric P. Christofferson of Ortiz’s Economic Crimes Unit.
Registered Sex Offender Pleads Guilty to Sexual Exploitation ChargesRead the Press Release
BOSTON – A registered sex offender pleaded guilty yesterday in U.S. District Court in Springfield in connection with persuading a 16-year-old boy to travel to New York to engage in sexual activity.
Ronald S. Brown, 52, of Williamstown, Mass., pleaded guilty to one count of interstate travel with intent to engage in illicit sexual conduct with a minor and one count of possession of material involving the sexual exploitation of minors. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Feb. 1, 2016.
Brown, a registered sex offender based upon a prior conviction for a sexual assault of a 14 year-old, engaged in thousands of online interactions with a 16-year-old boy from Dec. 27, 2012 to Jan. 19, 2013 to persuade him to run away from his Midwestern home to engage in sexual activity with Brown. On Jan. 7, 2013, Brown sent the boy a one-way ticket to fly to Newark International Airport in New Jersey, and on Jan. 19, 2013, Brown picked the boy up at the Newark airport, and then transported him to New York to engage in sex. On three separate dates thereafter, Brown further sexually exploited the teenager by producing one digital file and two live video transmissions of the minor either masturbating or urinating.
The boy was recovered in New York after his mother alerted police that her son was missing and believed to be meeting up with Brown. During an interview on Jan. 20, 2013, Brown falsely told a federal agent that he believed the child to be 18 years old.
The charge of interstate travel with intent to engage in illicit sexual conduct with a minor provides a mandatory minimum sentence of 10 years and no greater than 30 years in prison, a minimum mandatory term of five years and up to a lifetime of supervised release, and a fine of $250,000. The charge of possession of material involving the sexual exploitation of minors provides for a mandatory minimum sentence of 10 years and no greater than 20 years in prison, a minimum mandatory term 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 and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The case was investigated with assistance from the Massachusetts State Police, the Williamstown Police Department and the New York State Police. It is being prosecuted by Assistant U.S. Attorney Steven H. Breslow 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/.
Moving Company Owner Pleads Guilty to Bait-And-Switch SchemeRead the Press Release
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UPDATE
Following court rulings, the defendant's original conviction and sentence were vacated. Thereafter, Massaro pleaded guilty to conspiracy, money laundering and failure to return household goods in connection with defrauding 23 victims (instead of the original 52) of approximately $28,460. He was sentenced to two years of probation, with the first eight months to be served in home detention.
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BOSTON – The owner of a South Florida moving company pleaded guilty today in U.S. District Court in Boston in connection with a scheme that defrauded over $112,000 from 52 victims.
Louis Massaro, 34, of Scottsdale, Ariz. and Pompano Beach, Fla. pleaded guilty to an Information charging him with one count each of conspiracy to commit wire fraud, money laundering and failure to return household goods. U.S. District Judge Rya W. Zobel scheduled sentencing for Feb. 9, 2016.
Massaro owned and operated Moving and Storage Inc., which did business as Neighbors Moving and Storage (NM&S). Although Massaro advertised as a mover of household goods, he operated NM&S as a broker of such services – taking jobs that would later be passed on to other carriers without disclosing that fact to the clients. One of the companies to which Massaro passed on contracts was an interstate carrier of household goods based in Massachusetts.
From approximately August 2010 to October 2012, Massaro and his co-conspirators operated a “bait-and-switch” operation in which Massaro, through NM&S, would provide low-ball estimates for moving household goods and falsely tell customers that upon payment of a deposit and a “binding” fee, the price would be guaranteed. Customers that contracted with NM&S were never told that the actual move would be completed by another carrier.
After customers made the initial payments, Massaro and his co-conspirators (the actual carrier) would obtain additional money from them in several ways. For example, once the 7-day cancellation period had passed, employees of NM&S would call the customers for a so-called “Quality Assurance Check.” While discussing the items to be moved, NM&S employees, under Massaro’s direction, would indicate that there were more items being moved than originally quoted and raise the quoted price. Customers were forced to elect between cancelling the contract and losing their deposit fees, and paying the higher amount.
Once Massaro’s co-conspirators arrived to conduct the move, the drivers would inform customers that there was more weight to be moved than was included in the binding quote, even in those instances where the price had already been increased during the “Quality Assurance Check.” At that point, the price of the move would increase by thousands of dollars – sometimes even doubling or tripling from the quoted estimate, and drivers were directed not to deliver any goods unless and until all money was collected. When a customer refused to pay the inflated price, they were informed that their household goods would be placed in storage, that they would have to pay before their goods would be delivered, and that they would be billed an additional amount of money for storage fees and re-delivery, or, alternatively, that their goods would be sold at auction. As a result of Massaro’s criminal scheme, victims lost $112,650 over the 26-month period.
The charge of conspiracy to commit wire fraud provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. The charge of money laundering provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. The charge of failure to return household goods provides a sentence of no greater than two years in prison, a $250,000 fine, and one year of supervised release. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Theodore L. Doherty, III, Special Agent in Charge of the U.S. Department of Transportation, Office of Inspector General, Office of Investigations; and Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, New York Regional Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
Connecticut Man Pleads Guilty to Tobacco Tax FraudRead the Press Release
BOSTON – A Farmington, Conn. businessman pleaded guilty in U.S. District Court in Springfield yesterday in connection with trafficking untaxed tobacco products.
Harbhajan Singh, 57, pleaded guilty to three counts of contraband smokeless tobacco trafficking. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Feb. 1, 2016.
In January 2012, Singh purchased a wholesale tobacco product business operating from a warehouse on East Columbus Avenue in Springfield. After the sale, Singh obtained smokeless tobacco and cigars from a Scranton, Pa. warehouse. Singh subsequently distributed smokeless tobacco without a license and by failing to pay any of the required tax. In June 2012, law enforcement officers executed numerous search warrants on the Springfield warehouse and various other locations in Massachusetts, Connecticut, and Pennsylvania. From January to June 2012, Singh evaded nearly $200,000 in tobacco taxes owed to the state of Massachusetts.
Each count provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; William P. Offord, 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; and Commissioner Kevin B. Sullivan of the Connecticut Department of Revenue Services, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Branch Office.
Quincy Man Sentenced for $3.1 Million Forex Investment FraudRead the Press Release
BOSTON – A Quincy man was sentenced to more than four years in prison today in U.S. District Court in Boston in connection with his scheme in to defraud $3.1 million from sixty-five individuals.
Marcellus Lopes Lee, 47, was sentenced by U.S. District Court Judge Indira Talwani to 57 months in prison and three years of supervised release. Judge Talwani also ordered Lee to pay restitution in the amount of $3,159,632, and ordered that his Quincy home, which he purchased with fraud proceeds, be forfeited. In August 2015, Lee pleaded guilty to 16 counts of wire fraud and six counts of money laundering.
Lee owned and operated Taurus Global Markets, Ltd. (TGM), an entity which Lee held out as a company that engaged in foreign currency trading (forex) on behalf of investors. Lee defrauded investors by convincing them to wire funds to TGM’s Belize bank account for the purpose of trading in the highly-risky forex market. Lee, however, did not trade the investor money and instead used it for his personal expenses. Although TGM’s website represented that it had staff, management, and a computer network “distributed all across the world,” TGM, in fact, had no employees and Lee operated it by himself, primarily from his residence in Quincy. Lee also sent investors what purported to be account documents reflecting that their money was invested in the forex market. Eventually, most investors were told that most or all of their money had been lost in forex trading when, in reality, Lee had simply spent it.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
Worcester Semi-Pro Football Player Sentenced for Tax Refund Fraud SchemeRead the Press Release
BOSTON – A member of the Worcester Wildcats semi-professional football team was sentenced today in U.S. District Court in Worcester for his role in carrying out a stolen identity refund fraud scheme that resulted in an almost $1 million loss to the federal government.
Jose Manuel Abreu-Elicier, 24, was sentenced by U.S. District Judge Timothy S. Hillman to 12 months and a day in prison, 24 months of supervised release, and $993,158.43 in restitution. In June 2015, Abreu-Elicier pleaded guilty to one count of conspiracy to convert public money.
Between November 2011 and November 2012, Abreu-Elicier and other co-conspirators fraudulently obtained and cashed federal income tax refund checks issued in the names of unsuspecting identity theft victims. These checks were issued based on fraudulent federal income tax filings submitted to the IRS using the names, social security numbers, and other stolen personal information of victims. In order to cash the checks, Abreu-Elicier worked with Cynthia Mansfield, the manager of a Worcester-area bank, who, in exchange for a fee, cashed the checks, falsified bank records, and concealed the existence of the fraud. Over the course of the entire scheme, Abreu-Elicier and his co-conspirators cashed 138 fraudulently obtained U.S. Treasury checks worth $993,158.
This case was investigated and prosecuted as part of Operation Point Break, a three-year, multi-agency federal law enforcement initiative aimed at combatting stolen identity refund fraud across the country.
“Stolen identity refund fraud has become pervasive in the United States,” said United States Attorney Carmen M. Ortiz. “Not only does it damage the integrity of our tax system and defraud the government, but it also endangers the security of individuals’ personal information.”
"The sentence imposed today should serve as a clear warning – those who steal the IDs of innocent taxpayers and then cheat the Federal Government will pay a heavy price when they are caught," said Special Agent in Charge William Offord of IRS Criminal Investigation. “IRS will continue to enforce our nation’s tax laws and pursue criminals who prey on innocent victims through identity theft.”
Mansfield was charged separately for her role in the conspiracy, and sentenced in April 2015 to five years of probation, 11 months of which must be served in a residential re-entry center, and ordered to pay full restitution.
U.S. Attorney Ortiz and IRS-CI SAC Offord made the announcement today. The case was prosecuted by Assistant United States Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
Plymouth Man Sentenced in Child Exploitation ChargesRead the Press Release
BOSTON – A Plymouth man was sentenced today in U.S. District Court in Boston for possessing and distributing child pornography.
Brendan R. Kessler, 25, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 63 months in prison, five years of supervised release, and a $200 special assessment fee. In March 2015, he pleaded guilty to distribution and possession of child pornography.
On Sept. 2, 2014, after law enforcement became aware that Kessler had posted child pornography to a public file sharing program known as Lime Wire, federal agents executed a search warrant on Kessler’s residence in Plymouth and seized a computer and various digital storage devices containing multiple images and videos of child pornography. Federal agents also located multiple boxes of fireworks, detonator cords, remote firing switches, a hand-written journal titled “Mass Murder Book,” and lists of chemicals needed to create explosive powder. Additionally, in an upstairs bedroom, agents located 14 firearms (3 semi-automatic pistols, 3 shotguns, and 8 rifles) and multiple boxes of ammunition. Kessler was arrested following the execution of the search warrant and has been held in federal custody since.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; and Plymouth Police Chief Michael E. Botieri, made the announcement today. The case is being prosecuted by Kenneth G. Shine 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.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.
Newton Investment Adviser Pleads Guilty to FraudRead the Press Release
BOSTON – A Newton investment adviser pleaded guilty today in U.S. District Court in Boston to defrauding clients out of more than $1.3 million.
Paul J. Jackson, 59, of Wellesley, pleaded guilty to an Information charging him with one count of investment adviser fraud and one count of wire fraud. United States District Court Judge F. Dennis Saylor, IV scheduled sentencing for Feb. 12, 2016.Jackson owned and operated Paul J. Jackson & Associates, LLC in Newton, through which he managed retirement funds for clients. Beginning in 2010, Jackson started offering clients, mostly friends and family members, what appeared to be attractive investment opportunities. The investments Jackson offered typically involved initial public offerings (IPOs) of high-profile companies, but Jackson did not invest the money as promised. Instead, he took over $1 million dollars of investor money for his own use. For example, Jackson took $175,000 from one investor to whom he had pitched a lucrative investment in Alibaba’s IPO. Instead of investing the money, Jackson took $112,000 for himself, and gave $60,000 to another investor who had given Jackson more than $450,000 and was demanding his money. When investors requested their money back, Jackson offered excuses and never told them that he had simply taken their money.
The charge of investment adviser fraud provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,00 or twice the gross gain or loss, whichever is greater. The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,00 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.
The Massachusetts Securities Division previously filed a separate administrative action against Jackson, charging him with fraud and seeking to bar him from working in the securities industry.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The United States Attorney’s Office received valuable assistance from the Securities & Exchange Commission during the investigation of this matter. The case is being prosecuted by Assistant U.S. Attorney Eric P. Christofferson of Ortiz’s Economic Crimes Unit.
Warner Chilcott Agrees to Plead Guilty to Health Care Fraud Scheme and Pay $125 MillionRead the Press Release
BOSTON – Pharmaceutical company Warner Chilcott has agreed to plead guilty to health care fraud and pay $125 million to resolve criminal and civil liability arising from the illegal promotion of the drugs Actonel®, Asacol®, Atelvia®, Doryx®, Enablex®, Estrace®, and Loestrin®, and various formulations of these drugs.
In a related development, former Warner Chilcott President W. Carl Reichel was arrested this morning in Boston for conspiring to pay kickbacks to physicians. Reichel will make an initial appearance in U.S. District Court in Boston today at 2:30 p.m.
In addition, in recent weeks, three former Warner Chilcott district managers pleaded guilty or agreed to plead guilty to conspiracy to commit health care fraud and criminal HIPAA violations, and a Springfield, Mass. physician was indicted for taking kickbacks, criminal HIPAA violations and obstruction of justice.
“Doctors’ medical judgment should be based on what is best for the patient, and not clouded by expensive meals and other pharmaceutical company kickbacks,” said United States Attorney Carmen M. Ortiz. “Pharmaceutical company executives and employees should not be involved with treatment decisions or submissions to a patient’s insurance company. Today’s enforcement actions demonstrate that the government will seek not only to hold companies accountable, but will identify and charge corporate officials responsible for the fraud.”
“The Justice Department is committed to protecting the integrity of physician prescribing decisions and ensuring that financial arrangements in the healthcare marketplace comply with the law,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department will continue to hold companies and responsible individuals accountable when they use improper incentives, like those alleged here, to promote their products.”
“Pharmaceutical companies and their employees have a significant responsibility to sell and market drugs in an ethical and legal manner,” said Special Agent in Charge Harold H. Shaw of the FBI’s Boston Field Office. “This settlement and the related indictments reflect the commitment of the FBI and our government partners to aggressively investigate companies and individuals who fail that responsibility and seek to profit from fraudulent activities.”
“Placing financial gain above the legitimate needs of patients is deplorable,” said Inspector General Daniel R. Levinson of the U.S. Department of Health and Human Services. “Paying kickbacks and even providing instructions on how to defraud Medicare are practices that will not be tolerated.”
“These types of health care fraud investigations have great impact on VA operations because the settlement will return funds to VA for the continued care of our nation’s Veterans,” said Jeffrey G. Hughes, Special Agent in Charge, Department of Veterans Affairs, Office of Inspector General. “The VA OIG will continue to work with its law enforcement partners and the Boston U.S. Attorney’s Office to combat fraud in the health care arena.”
The Warner Chilcott Resolution
In a criminal Information filed today in U.S. District Court in Boston, the government charged that, between 2009 and 2013, Warner Chilcott employees, at the direction of members of the company’s management team, paid remuneration to physicians in order to induce those physicians to prescribe Warner Chilcott drugs. The Information alleges that Warner Chilcott employees provided payments, meals, and other remuneration associated with so-called “Medical Education Events.” These events, which were often held at expensive restaurants, frequently contained minimal or no educational component, and were instead used to pay prescribing physicians in an attempt to gain a competitive advantage over other pharmaceutical companies.
The Information also alleges that, from 2011 to 2013, Warner Chilcott employees submitted false, inaccurate, or misleading prior authorization requests to federal health care programs for the osteoporosis medications Atelvia® and Actonel®. A prior authorization request contains protected health information, including biographical data and information concerning a patient’s medical condition. The fraudulent requests were provided to certain insurance companies in order to overcome restrictions that favored less expensive osteoporosis drugs. In some instances, Warner Chilcott sales representatives submitted these prior authorizations directly to insurance companies, holding themselves out to be physicians.
In addition, the Information alleges that Warner Chilcott employees were instructed by members of the company’s management team to make unsubstantiated superiority claims when marketing the drug Actonel® even though the claim was not supported by clinical evidence. The management team instructed the sales representatives to tell physicians that Actonel® was superior to other bisphosphonates due to its supposedly unique “mechanism of action.”
Under the terms of the criminal plea agreement, Warner Chilcott will pay a fine of $22,940,000. Warner Chilcott also entered into a civil settlement agreement under which it agreed to pay $102,060,000 to the federal government and the states to resolve false claims it submitted to government health care programs. The federal share of the civil settlement is approximately $91.5 million, and the state Medicaid share of the civil settlement is approximately $10.6 million. The civil settlement was brought under the whistleblower provisions of the False Claims Act and the whistleblowers will receive approximately $22.9 million from the federal share of the civil recovery.
The civil case was investigated by the FDA’s Office of Chief Counsel, HHS Office of Counsel to the Inspector General, and the National Association of Medicaid Fraud Control Units. The civil settlement was handled by Assistant U.S. Attorneys Sonya Rao and Susan Poswistilo of Ortiz’s Civil Division and Trial Counsel Colin Huntley of the Commercial Litigation Branch of the Justice Department’s Civil Division.
The criminal case was investigated by the FBI, HHS-OIG, the Department of Defense’s Defense Criminal Investigative Service, the FDA’s Office of Criminal Investigations, the Department of Veterans Affairs and the Office of Personnel Management’s Office of Inspector General. The criminal case of the company was handled by Assistant U.S. Attorneys David Schumacher and Miranda Hooker of Ortiz’s Health Care Fraud Unit and AUSAs Rao and Poswistilo. The criminal cases of individuals are being prosecuted by AUSAs Schumacher and Hooker of Ortiz’s Health Care Fraud Unit.
Carl Reichel Indictment
The former President of Warner Chilcott, W. Carl Reichel, 57, of Chester, N.J., was indicted on one count of conspiracy to pay kickbacks. Reichel was arrested today in Boston and will make an appearance before U.S. District Court Chief Magistrate Judge Jennifer Boal at 2:30 p.m.
The indictment alleges that, between 2009 and 2012, Reichel, designed a sales and marketing strategy to provide physicians payment and other benefits, including free dinners and bogus “speaker” fees, in return for prescriptions of Warner Chilcott drugs. Reichel provided the sales force with virtually unlimited expense accounts to wine and dine physicians and other health care practitioners. These so-called “medical education programs,” in fact, contained little, if any, medical education, and a primary purpose of the program was to obtain prescriptions from the physicians.
Reichel also allegedly designed the strategy of signing up physicians who prescribed a high volume of their drugs as paid “speakers” for Warner Chilcott. According to the indictment, the “speakers” often did not speak at all, and instead enjoyed an expensive dinner with a sales representative. Reichel instructed the sales force that they should only continue to use the “speakers” if they were prescribing Warner Chilcott drugs at a high level, and that they should communicate to the “speaker” that he or she would not be used – paid – at subsequent events until their Warner Chilcott prescriptions increased.
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.
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.
The District Manager Pleas
1. Timothy Garcia
Timothy Garcia, 35, of Los Gatos, Calif., pleaded guilty on Oct. 16, 2015, to one count of conspiracy to commit health care fraud. U.S. District Court Chief Judge Patti B. Saris scheduled sentencing for April 14, 2016.
From 2008 to 2011, Garcia worked for Warner Chilcott and served as a district manager in the company’s osteoporosis division in 2011, managing approximately 12 sales representatives in the San Francisco Bay area. The same year, Warner Chilcott launched Atelvia®, an osteoporosis drug, which many insurance companies around the country did not cover primarily because a generic alternative was available. Many of these insurance companies would only pay for Atelvia® if a physician submitted a prior authorization but were often hesitant to do so. Recognizing this, Garcia aggressively pushed his sales representatives to manipulate Atelvia® prior authorizations. Garcia instructed his sales representatives that, if the physicians or staff were unwilling to prepare Atelvia® prior authorizations, the sales representatives should fill them out themselves. Futhermore, Garcia stressed the importance of concealing the misconduct of his sales representatives.
In 2011, Garcia received a bonus of more than $60,000, and was promoted to senior district manager in Warner Chilcott’s most prestigious sales division. As a result of the scheme, insurance companies, including Medicare, paid Warner Chilcott at least $100,000 for Atelvia® based on prior authorizations that were manipulated by Garcia’s sales representatives.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss resulting from the offense, and exclusion from the Medicare program. 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.
2. Landon Eckles
Landon Eckles, 30, of Huntersville, N.C., was charged in an Information on Oct. 16, 2015, with one count of wrongful disclosure of protected health information, in violation of the criminal provisions of the Health Insurance Portability and Accountability Act (HIPAA). A plea hearing is scheduled for Nov. 12, 2015, before U.S. District Court Judge George A. O’Toole, Jr.
According to the Information, from 2007 to 2012, Eckles worked for Warner Chilcott and served as a district manager in the company’s osteoporosis division in a mid-Atlantic district. Atelvia® had poor insurance coverage in Eckles’s district when it was launched in 2011, and many insurance companies required a prior authorization before covering Atelvia®. Eckles allegedly directed certain sales representatives that, if physicians refused to fill out Atelvia® prior authorizations, the sales representatives should fill them out themselves. By doing so, Eckles and his sales representatives accessed patients’ protected health information.
In addition, following directions from his supervisors, Eckles allegedly encouraged his sales representatives to ensure that patient medical charts in physicians’ offices were “flagged” with Atelvia® brochures, so that physicians would be reminded to prescribe Atelvia® for the patients. According to the Information, Eckles and a sales representative accessed a number of patients’ medical charts and placed Atelvia® brochures in the charts in a Philadelphia physician’s office. Eckles bragged about this tactic, stating, “I guarantee you that this is going to drive business,” and encouraged his sales representatives to follow suit. In part, as a result of his scheme, Eckles received a bonus of approximately $60,000 in 2011.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000, forfeiture, and exclusion from the Medicare program. 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.
3. Jeff Podolsky
Jeff Podolsky, 49, of East Meadow, N.Y., pleaded guilty on July 7, 2015, to one count of conspiracy to commit health care fraud. U.S. District Court Chief Judge Patti B. Saris scheduled sentencing for April 8, 2016.
From 2009 to 2013, Podolsky worked for Warner Chilcott. He served as a district manager in New York City and Long Island in 2010 and 2011, during which time Atelvia®, as well as its predecessor drug, Actonel®, had poor insurance coverage. Podolsky directed the sales representatives in his district to fill out prior authorizations for physicians who prescribed Actonel® and Atelvia®, using false clinical justifications as to why the patient needed the drugs and submitted them to health insurance companies.
As a result of the scheme, Podolsky’s district was the top-grossing district in Warner Chilcott’s osteoporosis division. In 2011, Podolsky received a bonus of more than $100,000, and was promoted to senior district manager in a more prestigious sales division. Insurance companies and Medicare paid at least $200,000 for Actonel® and Atelvia® prescriptions that were based on prior authorizations that were manipulated by Podolsky’s sales representatives.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss resulting from the offense, forfeiture and exclusion from the Medicare program. 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.
Rita Luthra Indictment
Rita Luthra, M.D., 64, of Longmeadow, Mass., was indicted on Oct. 21, 2015 with one count of accepting kickbacks, one count of wrongful disclosure of protected health information, and one count of obstructing a criminal investigation.
From October 2010 to November 2011, Warner Chilcott paid Luthra $23,500 to prescribe its osteoporosis drugs, Actonel® and Atelvia®. On at least 31 occasions during that period, a Warner Chilcott sales representative brought food into Luthra’s medical office for Luthra and her staff and paid Luthra $750 to talk with her for 25-30 minutes while she ate. It is alleged that Luthra’s prescriptions of Actonel® and Atelvia® increased during the time that she was paid by Warner Chilcott and precipitously declined once she stopped being paid. Luthra also allowed a Warner Chilcott sales representative to access protected health information in her patient’s medical files in order to submit prior authorizations for Atelvia®. Finally, Luthra allegedly lied to federal agents when interviewed about her relationship with Warner Chilcott, and allegedly directed one of her employees to do the same.
The charge of violating the Anti-Kickback Statute provides a sentence of no greater than five years in prison, three years of supervised release, a fine of $25,000, forfeiture and exclusion from the Medicare program. The charge of disclosure of individually identifiable health information provides a sentence of no greater than one year in prison and/or a fine of $50,000, one year of supervised release and exclusion from the Medicare program. The charge of obstructing a criminal health care investigation 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.
Leader of Multi-Million Dollar Heroin Trafficking Organization Sentenced to PrisonRead the Press Release
BOSTON – A leader of a Lawrence heroin trafficking organization that operated in Massachusetts and New York was sentenced today to 13 years in federal prison.
Ygoa Almonte-Baez, 48, of Dorchester, Mass., and the Bronx, N.Y., was sentenced by U.S. District Court Judge Rya W. Zobel to 13 years in prison, five years of supervised release and ordered to forfeit $2 million. In June 2015, Almonte-Baez was convicted by a federal jury for one count of conspiracy to possess with intent to distribute and to distribute heroin and one count of possession with intent to distribute heroin.
On July 26, 2013, federal agents raided Almonte-Baez’s stash house in Lawrence and seized over 21 kilograms of highly pure heroin. Agents also found digital scales, grinders, cutting agents and other tools used for processing and packaging heroin for distribution. Almonte-Baez recorded the sales and related payments for his heroin business in ledgers that showed millions of dollars in heroin sales in 2013 alone. The same day that agents arrested Almonte-Baez, they also seized over $372,000 in drug proceeds from a courier who testified at trial that he worked for Almonte-Baez picking up tens of thousands of dollars at a time from wholesale heroin customers.
According to the charging statutes, the judge was legally required to impose a mandatory minimum sentence of 10 years in prison. Prosecutors sought a lengthier sentence arguing that the 21 kilograms of heroin agents seized from Almonte-Baez was only a small portion of what his organization distributed. Furthermore, it was of such high purity that it likely would have been diluted by a factor of three before begin distributed in street-level transactions, amounting to approximately 120,000 dosage units.
This case was prosecuted as part of the federal response to New England’s opioid crisis. A substantial increase in the purity of heroin in recent years, as well as a reduction in its price, has persuaded many individuals addicted to prescription medication to switch to heroin. Overdoses from heroin have climbed substantially as a result.
United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Essex County Sheriff Frank G. Cousins, Jr.; and Lawrence Police Chief James X. Fitzpatrick, made the announcement today. The case was investigated by the DEA’s Cross Borders Initiative and prosecuted by Assistant U.S. Attorneys David D’Addio and Susan Winkler.
Dunstable Real Estate Attorney Convicted in Mortgage Fraud ConspiracyRead the Press Release
BOSTON – A real estate attorney pleaded guilty today to participating in a far-reaching scheme to defraud banks and mortgage companies as part of a conspiracy involving sham “short” sales of numerous residential properties in the Merrimack Valley of Massachusetts.
Hyacinth Bellerose, 50, of Dunstable, Mass., pleaded guilty to one count of conspiracy to commit bank fraud. U.S. District Court Judge Rya W. Zobel scheduled sentencing for Feb. 4, 2016.
Bellerose colluded with others – including a Methuen loan officer and a Haverhill real estate agent who were not identified in the charging document – to defraud various banks through the use of bogus short sales of homes in Haverhill, Lawrence and Methuen. A short sale is a sale of real estate for less than the value of any mortgage debt on the property. Short sales are an alternative to foreclosure that typically occur only with the consent of the mortgage lender, and that generally result in the lender absorbing a loss on the loan and releasing the borrower from the unpaid balance. By nature, short sales are intended to be arms-length transactions in which the buyers and sellers are unrelated, and in which the sellers cede their control of the subject properties in exchange for the short-selling bank’s agreement to release them from their unpaid debt. In this case, Bellerose colluded with others to feign a short sale and thereby defraud banks of the full value of the mortgage.
The conspiracy began in approximately August 2007 and continued through June 2010, a period that included the height of the financial crisis and its aftermath. Home values in Massachusetts and across the nation declined precipitously, and many homeowners found themselves suddenly “underwater,” with their homes worth less than the mortgage debt they owed. As part of the scheme, Bellerose and her co-conspirators submitted materially false and misleading documents to numerous banks in an effort to induce them to permit the short-sales – and thereby to release the purported sellers from their unpaid mortgage debts – while simultaneously inducing the purported buyers’ banks to provide financing for the deals. In fact, the purported sellers simply stayed in the homes with their debt substantially reduced while Bellerose and others made money from the transactions fees associated with the fake sales. In some cases, the conspirators then re-sold the properties in genuine arms-length transactions for a profit.
As part of the conspiracy:
- The conspirators falsely led banks to believe that the sales were arms-length transactions between unrelated parties, when in fact, the transactions were not arms-length, and the sellers retained control of (and frequently continued to live in) the properties after the sale. In some cases, the purported third-party buyers were actually the spouses, parents or children of the purported sellers.
- The conspirators submitted phony earnings statements in support of numerous loan applications that they submitted to banks on behalf of purported buyers, in order to obtain financing for the purported sales.
- The conspirators submitted phony HUD-1 Settlement Statements to banks, as well as to the Federal Housing Administration, that did not accurately reflect the disbursement of funds in the transactions. (A HUD-1 Settlement Statement is a standard form, developed by the U.S. Department of Housing and Urban Development, that is used to document the flow of funds in real estate transactions. HUD-1 Settlement Statements are required for all transactions involving federally related mortgage loans, including all mortgages insured by the Federal Housing Administration.)
For example, in one transaction, the unnamed loan officer and the loan officer’s spouse signed two purchase and sale agreements, dated five days apart, in which they purported to agree to the sale of their Methuen home to a third party. In the first agreement, they purported to sell the property for $299,000. In the second, they purported to sell the property for $289,000.
The first agreement was provided to Chase Home Finance LLC, a subsidiary of J.P. Morgan Chase Bank, N.A., which held the first mortgage on the home, and also affirmed that they were unrelated and that there was no agreement that would allow the sellers to remain in the property after the sale. In fact, the purported buyer was the mother of one of the purported sellers, who intended to remain in the property after the purported sale.
To facilitate the transaction, the conspirators submitted to Bank of America a loan application on behalf of the purported buyer that falsely represented her employment status, and was accompanied by phony earnings statements. The conspirators also submitted to Bank of America the second purchase and sale agreement, reflecting the higher purported sale price of $299,000.
In connection with the purported sale, Bellerose prepared two HUD-1 Settlement Statements. One Settlement Statement was provided to Chase as the short-selling bank, and reflected a purported sale price of $289,000, and a purported buyer deposit of $15,216. The other Settlement Statement, which was provided to Bank of America and the FHA, reflected a purported sale price of $299,000, and a purported buyer deposit of $14,916. In fact, the purported buyer did not make any down payment toward the sale, which was financed entirely by the mortgage loan from Bank of America.
The charge of conspiracy to commit bank fraud provides for a sentence of no greater than 30 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; Christina Scaringi, Special Agent in Charge of the Department of Housing and Urban Development , Office of Inspector General, New York Field Office; and Christy Goldsmith Romero, the Special Inspector General for the Troubled Asset Relief Program, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Stephen E. Frank, Deputy Chief of Ortiz’s Economic Crimes Unit.
Chelsea Man Sentenced for Fraud and Aggravated Identity TheftRead the Press Release
BOSTON – A Chelsea resident was sentenced today in U.S. District Court in Boston in connection with stealing the identity of an American armed services veteran.
Noe Arturo Castillo, 43, of Chelsea, was sentenced today by U.S. District Court Judge William G. Young to 24 months in prison and ordered to pay $21,082 to the federal government. In July 2015, Castillo pleaded guilty to aggravated identity theft, wire fraud, passport fraud, theft of public money, and misuse of a Social Security number.
Castillo, who is presently a legal permanent resident of the United States but originally from Guatemala, unlawfully entered the United States in 1994, at which time he obtained a driver’s license and Social Security card in the identity of an American citizen who served in the armed forces. In 2005, Castillo applied for a U.S. passport in the victim’s identity. Castillo then secured a job using the victim’s identity and had his paycheck directly deposited into a bank account using the victim’s identity. Castillo was later terminated from the job and began collecting unemployment benefits in the victim’s identity, to which he was not entitled.
United States Attorney Carmen M. Ortiz; David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office; Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, New York Regional Office; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. The case was investigated by the Homeland Security Investigations Document and Benefit Fraud Task Force. The case was prosecuted by Assistant U.S. Attorney Carlos A. López and Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Criminal Division.
Brockton Armed Career Criminal Receives 15 Years in Federal Firearms CaseRead the Press Release
BOSTON – A Brockton man was sentenced in U.S. District Court in Boston yesterday in connection with his possession of a firearm and ammunition.
Foster L. Starks, Jr., 54, was sentenced by U.S. District Court Judge Leo T. Sorokin to 15 years in prison and three years of supervised release. The sentence imposed was largely a product of Starks’s lengthy criminal history. Beginning in 1989, Starks has been convicted of nine armed robberies, two unarmed robberies, one armed robbery while masked, and two armed robberies with intent to rob. Based on this history, Starks qualified as an armed career criminal and therefore is subject to a minimum mandatory sentence of 15 years in prison.
In September 2015, Starks was convicted of being a felon in possession of a firearm and ammunition following a week-long jury trial. Trial evidence revealed that on May 24, 2009, at 11:05 p.m., Starks was stopped by a Massachusetts State Police Trooper for a marked lanes violation while driving on Route 24 North in Raynham. Starks was arrested after the Trooper discovered that he was driving with a suspended license. While performing a search of the car, the Trooper found a shopping bag on the front passenger seat containing a .45 caliber handgun loaded with seven bullets. The shopping bag also contained two boxes of additional ammunition and four bottles containing prescription medications. Starks’s prior convictions prohibited him from possessing a firearm or ammunition.
United States Attorney Carmen M. Ortiz and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement. The case was prosecuted by Assistant United States Attorneys David G. Tobin and Jordi de Llano of Ortiz’s Major Crimes Unit.
Natick Man Pleads Guilty to Federal Heroin and Fentanyl ChargesRead the Press Release
BOSTON – A Natick man pleaded guilty yesterday in U.S. District Court in Boston in connection with selling heroin and white heroin – heroin laced with fentanyl and/or straight fentanyl – to addicts, one of whom ultimately died after overdosing.
Nicholas Ferraro, 25, of Natick, pleaded guilty yesterday to one count of conspiracy to distribute and possess with the intent to distribute fentanyl and 100 grams or more of heroin, one count of distribution of fentanyl and two counts of distribution of heroin. U.S. District Court Judge William G. Young scheduled sentencing for Jan. 21, 2016 at 2:00 p.m.
Beginning in January 2013 and continuing until March 2014, Ferraro conspired with others to distribute both heroin and fentanyl to addicts in the Framingham and Natick areas. Ferraro pleaded guilty to distributing 400 to 600 grams of heroin and 10 to 15 grams of fentanyl. In addition, Ferraro distributed fentanyl to an individual on Feb. 8, 2014, who later died of an overdose after injecting himself with the fentanyl. Ferraro also sold heroin on two occasions in March 2014 to an undercover officer.
This case was brought as part of the federal response to the growing opioid abuse epidemic in Massachusetts and other New England states. A recent surge in overdose deaths has been attributed in part to the addition of fentanyl to heroin, creating a toxic mixture substantially more potent, and more dangerous, than heroin alone.
The charge of conspiracy to distribute and possess with the intent to distribute fentanyl and 100 grams or more of heroin provides for a sentence of no greater than 40 years in prison, a mandatory minimum of four years and up to a lifetime supervised release and a fine of $5 million. The charges of distribution of fentanyl and heroin provide for a sentence of no greater than 20 years in prison, a minimum of three years and up to a lifetime of supervised release and a fine of $1 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Natick Police Chief James Hicks; and Framingham Police Chief Kenneth Ferguson made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Eric Rosen and Katherine Ferguson of Ortiz’s Narcotics and Money Laundering Unit and Neil Gallagher of Ortiz’s Economic Crimes Unit.
Dominican Woman Pleads Guilty to Drug Smuggling at Logan AirportRead the Press Release
BOSTON – A Dominican woman pleaded guilty yesterday to smuggling nearly five kilograms of cocaine concealed in a wheelchair into the United States at Boston’s Logan International Airport. The cocaine had a street value of more than $250,000.
Ireline Aponte Melende, 30, pleaded guilty to one count of unlawful importation of a controlled substance. U.S. District Court Judge Denise L. Casper scheduled sentencing for March 2, 2016.
On May 10, 2015, Melende was stopped at Logan International Airport after she arrived on a flight from the Dominican Republic using a motorized wheelchair that was inoperable. Customs and Border Protection officers x-rayed the wheelchair, and noticed abnormalities in the wheelchair batteries. The batteries were opened, revealing four packages containing a white powdery substance. Testing revealed that the packages contained 4.965 kilograms of cocaine.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $1 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz 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 Seth B. Orkand of Ortiz’s Major Crimes Unit.
Former Owner of Malden Chiropractic Practice Pleads Guilty to Federal Tax FraudRead the Press Release
BOSTON – A former owner of a Malden chiropractic practice pleaded guilty in U.S. District Court in Boston today to filing fraudulent personal federal tax returns and attempting to obstruct the IRS.
Paul E. Jondle, 61, of Salem, N.H., pleaded guilty to an indictment charging him with three counts of tax evasion and one count of obstructing the IRS. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for Jan. 29, 2016.
Jondle operated a Malden chiropractic practice called Future Health. Jondle, who was barred from working as a chiropractor, used the names and tax identification numbers of licensed chiropractors working at Future Health for billing purposes, causing the insurance company payors to report the payments to the Internal Revenue Service as income to Jondle’s subcontractors. In fact, the payments, mailed to Jondle and deposited into bank accounts that he controlled, were income to Jondle. From 2003 through 2007, Jondle deposited approximately $3 million into his bank accounts, yet he reported no taxable income for those years, and paid no federal income taxes. During those years, Jondle spent hundreds of thousands of dollars on personal expenses including mortgage payments on his home, landscaping, tuition payments and pet spas.
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. The charge of obstructing the IRS provides for a sentence of no greater than three years in prison, one year of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistance was provided by the Massachusetts Insurance Fraud Bureau; U.S. Postal Inspection Service; and the U.S. Social Security Administration, Office of the Inspector General. The case is being prosecuted by Assistant U.S. Attorneys Lori J. Holik and Rachel Y. Hemani of Ortiz’s Major Crimes Unit and Trial Attorney Jason M. Scheff of the Department of Justice’s Tax Division.
Springfield Doctor Indicted in Anti-Kickback CaseRead the Press Release
BOSTON – A Springfield gynecologist was arrested today in connection with allegedly accepting free meals and speaker fees from a pharmaceutical company in return for prescribing its osteoporosis drugs, allowing pharmaceutical sales representatives to access patient records and lying to federal investigators.
Rita Luthra, M.D., 64, of Longmeadow, was indicted on one count of violating the Anti-Kickback Statute, one count of wrongful disclosure of individually identifiable health information and one count of obstructing a criminal health care investigation by lying to federal agents and directing an employee to do the same. The indictment also seeks $23,500 in criminal forfeiture.
According to court documents, from October 2010 through November 2011, Warner Chilcott, a pharmaceutical company based in Rockaway, N.J., allegedly paid Luthra $23,500 to prescribe its osteoporosis drugs, Actonel® and Atelvia®. On 31 occasions, a Warner Chilcott sales representative allegedly brought food to Luthra’s medical office for her and her staff, and paid Luthra $750 to talk with her for 25-30 minutes while she ate. On another occasion, Warner Chilcott paid to cater a barbeque that Luthra hosted at her home for her friends. Warner Chilcott also paid Luthra $250 for speaker training, despite the fact that she never spoke to any other physicians. It is alleged that Luthra’s prescriptions of Warner Chilcott's osteoporosis drugs increased during the time that she was paid by the company, and precipitously declined once she stopped being paid. Luthra also allowed a Warner Chilcott sales representative to access protected health information in her patients’ medical files. She further provided false information to federal agents when interviewed about her relationship with Warner Chilcott, and allegedly directed one of her employees to also lie.
The charge of violating the Anti-Kickback Statute provides a sentence of no greater than five years in prison, three years of supervised release and a fine of $25,000. The charge of disclosure of individually identifiable health information provides a sentence of no greater than one year in prison and/or a fine of $50,000 and one year of supervised release. The charge of obstructing a criminal health care investigation provides a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations, made the announcement today. The case is being prosecuted by Assistant United States Attorneys Miranda Hooker and David S. Schumacher of Ortiz’s Health Care Fraud Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Peabody Man Pleads Guilty to Trafficking Heroin and FentanylRead the Press Release
BOSTON – Jorge Delgado, a/k/a Antonio Martinez, a/k/a Elisaul Martinez Santana, 28, pleaded guilty to one count of conspiracy to distribute heroin and fentanyl and three counts of distribution of heroin. U.S. District Court Judge F. Dennis Saylor IV scheduled sentencing for Jan. 13, 2016.
Delgado was the leader of a drug ring responsible for distributing heroin and fentanyl in the Salem and Peabody area. Delgado received orders for heroin from customers via cellphone and often sent couriers, two of whom were charged as co-defendants, to distribute drugs for him. Delgado’s drug ring not only distributed heroin but also distributed fentanyl in place of heroin on numerous occasions.
Delgado’s co-defendants, Juanel Pena and Thomas Martinez-Ortiz, previously pleaded guilty. This case was brought as part of the federal response to the growing opioid abuse epidemic in Massachusetts and other New England states. A recent surge in overdose deaths has been attributed in part to the addition of Fentanyl to heroin, creating a toxic mixture substantially more potent, and more dangerous, than heroin alone.
The charging statute provides a sentence of no greater than 20 years in prison, a minimum of three years and up to a lifetime of supervised release and a fine of $1 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Chief Mary Butler of the Salem Police Department; and Chief Thomas M. Griffin of the Peabody Police Department, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Young Paik.
Massachusetts Probation Officer Pleads Guilty to Making False StatementRead the Press Release
BOSTON – A long-serving Massachusetts Department of Probation officer pleaded guilty yesterday to making a false statement to the FBI in connection with an investigation the FBI was conducting into allegations by probationers that he was engaging in a deprivation of their rights under color of law.
Lawrence Plumer, 46, of Brockton, pleaded guilty to one count of making a false statement to the FBI. It was alleged at the plea hearing that Plumer mistreated two female probationers by, among other things, showing them pornography videos and making suggestive comments. When confront with the allegations by the FBI, Plumber falsely denied them. U.S. District Court Judge Richard G. Stearns scheduled sentencing for Jan. 13, 2016. Pursuant to the plea agreement, Plumer will resign from his position as a Massachusetts Probation Officer at Suffolk Superior Court where he has worked since 2000.
The charging statute provides a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The U.S. Attorney’s Office also wishes to acknowledge the cooperation of the Massachusetts Attorney General’s Office. The case is being prosecuted by Assistant U.S. Attorney Robert A. Fisher of Ortiz’s Public Corruption Unit & Special Prosecutions Unit.
Former Belmont Man Sentenced for Fraudulent BusinessRead the Press Release
BOSTON – A former Belmont man who fled to Columbia in the early 1990s pleaded guilty and was sentenced yesterday in U.S. District Court in Boston in connection with the fraudulent sales of non-existent rare scholarly books to universities, seminaries and churches.
Richard Stanley Haugh, 73, pleaded guilty and was sentenced by U.S. District Court Judge Richard G. Stearns to time served of 20 months in prison and ordered to pay restitution of $167,883. In 1995, Haugh was indicted on 30 counts mail fraud in connection with purported sales of rare and scholarly texts.
From November 1989 to November 1990, Haugh claimed to be a scholar in theology and the history of Eastern Christianity. He operated a business, Notable and Academic Books, from his home, and claimed to be the exclusive U.S. marketing representative for Buecher Vertriebs Anstalt (BVA), a Liechtenstein entity specializing in the rare and scholarly book business.
Haugh also used the aliases Heinz Reuchlin and Paul Briel to operate Editions Briel, a company that fraudulently claimed to possess for immediate shipment translations of early Christian works, multi-volume encyclopedic scholarly works and an Encyclopedia of Eastern Christianity that Haugh claimed to have authored, which did not, in fact, exist. Haugh mailed marketing brochures advertising the books to universities, schools of theology and individuals around the U.S. and in foreign countries. Although he required advance payment for the books, neither Haugh nor Editions Briel possessed the books or had any means of obtaining them. The scheme defrauded more than 150 universities, seminaries, churches and individuals around the country as well as in Canada, England, Australia and Japan. Among those defrauded were Smith College in Massachusetts, Cornell University, Bates College, University of Michigan and others.
By 1992, Haugh had become a fugitive, in part because he was awaiting trial in Middlesex County on child sexual assault charges. Haugh was located in Colombia in 2014 and was extradited to the U.S. in April 2014 on the federal charges. Immediately following his sentencing in federal court yesterday, Haugh was turned over to the custody of the Belmont Police for prosecution on the pending sexual assault charges in Middlesex County.
United States Attorney Carmen M. Ortiz and James V. Buthorn, Acting Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Victor A. Wild and Ryan M. DiSantis of Ortiz's Criminal Division.
Jury Convicts Arlington Career Criminal on Drug and Firearms ChargesRead the Press Release
BOSTON – After a week-long trial, a federal jury in U.S. District Court in Boston convicted an Arlington man on drug and firearm charges on Friday, Oct. 16, 2015.
Yrvens Bain, 42, was convicted of distribution of heroin, possession with the intent to distribute heroin and being a felon in possession of a firearm and ammunition. U.S. District Court Judge Indira Talwani scheduled sentencing for Jan. 12, 2016.
In February 2014, an investigation of Bain began after it was suspected that he sold the heroin involved in two suspected overdose deaths in Arlington. Federal agents identified Bain as a long-time drug dealer who had been convicted of drug trafficking and firearm offenses on several occasions.
Bain was on probation for a state drug dealing and firearm conviction when federal agents recorded him selling heroin mixed with fentanyl to a cooperating witness on Feb. 26, 2014 and March 21, 2014, in Waltham and Malden, respectively.
On April 1, 2014, agents arrested Bain as he left his residence on Laurel Street in Malden. They had to take him to a nearby hospital after he swallowed heroin during the arrest. A search warrant subsequently executed at the Laurel Street residence led to the seizure of a HiPoint .45 caliber firearm with an obliterated serial number, over 26 grams of heroin mixed with fentanyl and thousands of dollars, including $100 of money used by a cooperating witness to purchase heroin from Bain in March, 2014. Agents also seized drug paraphernalia including plastic baggies, plastic gloves and a digital scale used to weigh and package drugs for street-level sales.
The charge of being a felon in possession of a firearm and ammunition provides a mandatory minimum sentence of 15 years and up to a lifetimes in prison, five years of supervised release and a fine of $250,000. The charge of distribution and possession with the intent to distribute heroin provides a sentence of no greater than 30 years in prison, a minimum of six years and up to a lifetime of supervised release and a fine of $2 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
This case was investigated by a Task Force comprised of the Drug Enforcement Administration, New England Field Division; the Massachusetts State Police; the Arlington, Boston, Ipswich, and Somerville Police Departments; and the Essex County Sheriff’s Department. Significant assistance was also provided the Malden Police Department and the Suburban Middlesex County Drug Task Force.
United States Attorney Carmen M. Ortiz and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Christopher Pohl and Eugenia M. Carris of Ortiz’s Criminal Division.
Government Seizes Crab ProductsRead the Press Release
BOSTON – The United States seized approximately 5,000 cases of frozen, processed crab products manufactured by Rome Packing Company, Inc. (Rome), because the crab meat is suspected to be contaminated with harmful bacteria.
In a complaint unsealed today, the government alleged that Rome, formerly based in East Providence, R.I., prepared, packed, and processed Jonah crab products in a facility contaminated with Listeria monocytogenes, a pathogenic bacterium that, once it contaminates foods, can cause serious, sometimes life-threatening, illness. According to court documents, the Food and Drug Administration (FDA) inspected Rome’s facility on six occasions and observed that Rome’s cooking process for crabs did not adequately control temperatures to prevent the growth of pathogens. Environmental swab samples collected from three areas of Rome’s facility allegedly tested positive for Listeria monocytogenes. The inspection also allegedly revealed poor sanitary practices and conditions in Rome’s facility that may cause cross-contamination between finished and raw food products.
The U.S. Marshal’s Service seized the crab products today from cold storage warehouses in Lakeville, Mass., which were being monitored by FDA officials. Rome is now in receivership, according to the court documents.
The Food, Drug, and Cosmetic Act authorizes the government to seize and condemn food products if they are prepared, packed, or held under insanitary conditions that may have caused the products to become contaminated with filth or to pose a threat to consumer health.
“In partnership with the FDA, we are working to ensure food safety,” said United States Attorney Carmen M. Ortiz. “Lax sanitary practices in the preparation and storage of food products endanger public health. Where necessary we will intervene to prevent contaminated food from reaching consumers.”
“The FDA is committed to working with its federal partners to prevent contaminated food from reaching consumers. Thanks to the collaboration between the FDA and the Department of Justice, we have ensured that the adulterated crab produced by Rome Packing doesn’t make its way to consumers,” said Melinda K. Plaisier, the FDA’s Associate Commissioner for Regulatory Affairs. “We will continue to work together to protect the public health.”
"The duties of the United States Marshals Service vary in scope and nature and include enforcing all federal court orders such as the one executed today with our partners from the Food and Drug Administration and the U.S. Attorney’s Office" said United States Marshal John Gibbons of the District of Massachusetts. "Preparing and processing tainted food products for sale to consumers is unacceptable and the United States Marshals Service will do its part in protecting our nation's consumers. I would like to thank the USAO and the FDA for our close partnership on this case.”
U.S. Attorney Ortiz, FDA Associate Commissioner Plaisier and U.S. Marshal Gibbons, made the announcement today. The case is being handled by Assistant U.S. Attorney Deana El-Mallawany of Ortiz’s Civil Division.
Millennium Laboratories to Pay $256 Million to Resolve False Billing and Kickback ClaimsRead the Press Release
BOSTON – Millennium Health, formerly Millennium Laboratories, has agreed to pay $256 million to resolve allegations that it billed Medicare, Medicaid, and other federal health care programs for medically unnecessary drug testing and genetic testing, and provided kickbacks to physicians to induce business. Today’s announcement reflects two False Claims Act settlements between Millennium and the Department of Justice and an administrative settlement agreement between Millennium and the Department of Health and Human Services. Millennium, headquartered in San Diego, Calif., is one of the largest urine drug testing laboratories in the United States.
As part of today’s announced settlements, Millennium has agreed to pay $227 million to resolve False Claims Act allegations that it systematically billed federal health care programs for excessive and unnecessary drug testing from Jan. 1, 2008 through May 20, 2015. (A copy of the United States’ complaint, with exhibits, is available here.) The United States alleged that Millennium caused physicians to order excessive numbers of urine drug tests, in part through the promotion of “custom profiles,” which, instead of being customized for individual patients, were in effect standing orders that caused physicians to order large number of tests without an individualized assessment of each patient’s needs. Millennium’s use of the so-called “custom profile” led to the over-billing of federal health care programs which limit payment to services that are reasonable and medically necessary for the treatment and diagnosis of an individual patient’s illness or injury. The United States also alleged that Millennium violated the Stark Law and Anti-Kickback Statute by providing physicians with free drug test cups on the express condition that the physicians return the specimens to Millennium for hundreds of dollars’ worth of additional testing.
Millennium has also agreed to pay $10 million to resolve allegations that it submitted false claims to federal health care programs for medically unnecessary genetic testing that was performed on a routine and preemptive basis, without an individualized assessment of need, from Jan. 1, 2012 through May 20, 2015. Routine genetic testing is not medically reasonable and necessary, and therefore does not qualify for Medicare reimbursement.
“Millennium promoted indiscriminate and unnecessary testing that increased medical costs without serving patients’ real medical needs,” said Carmen M. Ortiz, United States Attorney for the District of Massachusetts. “A laboratory which knowingly conducts medically unnecessary testing operates unlawfully and squanders our precious federal health care resources.”
“The Department of Justice is committed to ensuring that laboratory testing, including drug testing, is ordered based on each patient’s medical needs and not for physician or laboratory profit,” said Benjamin Mizer, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “Millennium’s promotion of excessive, non-patient specific test ordering—and its test cup giveaways to physicians to increase that ordering—resulted in significant unnecessary costs being imposed upon our nation’s health care programs.”
“When corporations, such as Millennium, bill Medicare for medically unnecessary tests, they threaten the financial integrity of public healthcare programs,” said Special Agent in Charge Harold H. Shaw of the Boston Division of the Federal Bureau of Investigation. “The FBI hopes this settlement will send a strong message that fraudulent practices by medical labs will not be tolerated.”
In connection with False Claims Act settlements, Millennium has entered into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General.
“This company has taken the first step toward demonstrating a commitment to compliance by agreeing to make significant changes to its board of directors,” said Inspector General Daniel R. Levinson of HHS-OIG. “Most of the board will be comprised of new independent members. Under the five-year CIA, OIG will monitor the company’s compliance efforts under this new leadership.”
Today’s announcement also includes a $19 million settlement between Millennium and the Centers for Medicare and Medicaid Services (CMS) to resolve administrative actions regarding Millennium’s claims to Medicare for certain drug test billing codes. These claims were the subject of claim denials and an overpayment action initiated by CMS and its contractors.
The False Claims Act settlements resolve allegations originally brought in lawsuits filed by whistleblowers 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 United States filed its False Claims Act complaint on the urine drug testing allegations after intervening in consolidated complaints filed under the qui tam, or whistleblower provisions of the False Claims Act by Mark McGuire, Ryan Uehling, and Omni Healthcare Inc. The genetic testing allegations were also filed in a qui tam complaint filed by Omni Healthcare Inc. In connection with today’s announced settlements, whistleblowers will receive fifteen percent of the federal recovery from the urine drug testing False Claims Act settlement and sixteen and one half percent of the federal recovery from the genetic testing False Claims Act settlement.
The investigation was conducted by the Federal Bureau of Investigation; the Department of Health and Human Services, Office of Inspector General; CMS; the Department of Veterans Affairs, Office of Inspector General; the Office of Personnel and Management, Office of Inspector General; and the United States Postal Inspection Service. The cases were handled by Assistant U.S. Attorneys George Henderson, Abraham George, and Sonya Rao of Ortiz’s Civil Division and Trial Attorneys Douglas Rosenthal and Augustine Ripa of the Justice Department’s Civil Division, Commercial Litigation Branch.
Northampton Man Sentenced to Prison for Second Child Pornography OffenseRead the Press Release
BOSTON – Robert Sokolowski, 42, was sentenced by U.S. District Court Judge Mark G. Mastroianni to 150 months in prison and 10 years of supervised release for possessing child pornography.
On July 3, 2013, Sokolowski uploaded a child pornography file to a Facebook account in the fictitious name of “Amy Addams.” During a search executed by local law enforcement officers at Sokolowski’s apartment, a laptop was seized that revealed 14 fictitious Facebook accounts, including the “Amy Addams” account. Also found on the laptop were 400 images of child pornography, including a copy of the file that had been uploaded to the “Amy Addams” account, as well as four video files of child pornography, one of which depicted the rape of a female toddler.
In 2005, Sokolowski pleaded guilty to one count of possessing child pornography in U.S. District Court and was sentenced to 46 months in prison. Sokolowski committed the 2013 offenses four months after concluding his term of three years supervised release on the prior offense.
United States Attorney Carmen M. Ortiz; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Northampton Police Chief Jody Kasper, made the announcement today. The case by prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Former Worcester Day Care Provider Sentenced for Lying in Connection with Child Exploitation InvestigationRead the Press Release
BOSTON – A Worcester woman was sentenced today in U.S. District Court in Worcester for making false statements to federal agents investigating federal child exploitation offenses.
Donna Belanger, 50, was sentenced by U.S. District Court Judge Timothy S. Hillman to one year of probation and a fine of $1,000. In May 2015, Belanger pleaded guilty to making materially false, fictitious, or fraudulent statements or representations to federal agents.
On Feb. 7, 2014, Belanger was interviewed by federal agents in connection with the arrest of her son, Brian Belanger, on federal charges that he had, through online communications, enticed a minor to produce child pornography. Specifically, during the course of the execution of a federal search warrant which uncovered evidence of her son's crimes, federal agents interviewed Donna Belanger about her knowledge of her son’s prior sexual assaults against children and whether her son had been allowed unsupervised contact with the children attending her in-home day care center.
In response to questions concerning prior allegations of sexual assault, Donna Belanger informed agents that the in-home day care business had closed in June 2012 after allegations arose that her son had sexually assaulted a child attending the day care. Donna Belanger failed to disclose to agents, however, that Brian had sexually assaulted a six-year-old neighbor in 2005. Further investigation would reveal that Donna was well aware of that incident, that she and the mother of the six-year-old child had spoken about the incident, and that the two had agreed that the matter would not be reported to police if Donna secured mental health counselling for her son.
In response to questioning about whether Brian had ever had unsupervised contact with the children in the day care before it closed in 2012, Donna Belanger adamantly denied that her son had ever had such access to the children. Donna Belanger ultimately admitted in a third interview that the children would sometimes be allowed to play video games with Brian in his bedroom without supervision.
In interviews of former day care employees and acquaintances, federal agents developed additional evidence that Brian had been allowed to have unsupervised contact with the children attending the day care until its closure in 2012.
Donna’s son, Brian Belanger, recently pleaded guilty to five counts of producing child pornography in U.S. District Court for the Northern District of New York.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; and Worcester Police Chief Gary J. Gemme, made the announcement today. The case was prosecuted by Mark Grady of Ortiz’s Worcester Branch Office.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Washington D.C. Man Indicted for Transporting Teenage Boy to Engage in Sexual ActivityRead the Press Release
BOSTON – Jason Michael Wolf, 30, of Washington, D.C., was indicted today in U.S. District Court in Boston on one count of transporting a minor in interstate commerce to engage in illegal sexual activity.
According to court documents, on Aug. 17, 2015, the Massachusetts Bay Transportation Authority (MBTA) Police received information that an adult man and a minor were acting inappropriately at the South Station Bus Terminal. Law enforcement arrived on scene and interviewed the two individuals who were identified as Wolf and a 14-year-old boy from Maryland. The two admitted that they had met on a mobile dating app in July, had traveled to Boston from Maryland, and had engaged in sexual activity in Maryland, Washington D.C., New York, and Boston.
Wolf was arrested by the Boston Police in August and charged with aggravated statutory rape of a child under state law. He is currently being held by local authorities.
The charge of transportation of a minor in interstate commerce to engage in illegal sexual activity provides for a minimum mandatory term of 10 years and up to a lifetime in prison, a minimum of five years and up to a lifetime of supervised release, and a fine of up to $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; James V. Buthorn, Acting Inspector in Charge of the U.S. Postal Inspection Service; Boston Police Commissioner William Evans; and Acting Chief Kenneth Green of the MBTA Transit Police Department, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Boston Man Indicted for Armed Bank RobberyRead the Press Release
BOSTON – A Boston man was charged today in U.S. District Court in Boston in connection with robbing a Citizens Bank in Brighton.
Kenneth E. Denny, 60, was indicted on one count of armed bank robbery.
According to court documents, on July 24, 2015, a man, dressed in a tan hat, gray wig, blue sports coat, shirt and tie, entered a Citizens Bank on Washington Street in Brighton. Once inside the bank, the man allegedly handed the teller a demand note, removed an item which appeared to be a bomb from a newspaper he was carrying, placed it on the teller’s counter, and demanded money. The man was given $4,040, but was confronted by the bank’s manager when he attempted to leave. The man dropped the bag containing the money removed a white cell phone from his pocket and stated “I am going to blow it up.” The individual then exited the bank and was seen heading down Washington Street.
The Boston Police Bomb squad arrived and determined that the bomb was a hoax. Inside the bank, law enforcement officers allegedly found that the robber had left his wallet on the teller’s counter with a picture ID inside in the name of Kenneth E. Denny. Law enforcement officers recalled that they had observed a man who resembled Denny on Washington Street as they were approaching the bank. A few minutes later, officers located the man and confirmed that his name was Kenneth Denny. Denny was asked to produce identification and stated he must have lost his wallet.
Denny was detained and returned to the bank for a live line-up. Court documents allege that bank employees identified Denny as the man who had robbed them earlier in the day.
The charging statute provides for a sentence of no greater than 25 years in prison, five years of supervised release, and a fine of up to $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Boston Police Commissioner William Evans, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Worcester Man Sentenced to Prison for Marijuana Trafficking and Money LaunderingRead the Press Release
BOSTON – A Worcester man was sentenced today in U.S. District Court in Worcester for participating in a four-year narcotics trafficking and money laundering scheme.
Huy Anh “Henry” Lam, 38, of Worcester, was sentenced by U.S. District Court Judge Timothy S. Hillman to seven years in prison and four years of supervised release. Judge Hillman also forfeited Lam’s interest in a house on Whisper Drive in Worcester, three cars, a boat, bank accounts, and other property, and ordered Lam to pay a money judgment of $500,000. In February 2015, Lam pleaded guilty to a conspiracy to possess with intent to distribute 100 kilograms or more of marijuana, a money laundering conspiracy, a structuring conspiracy, structuring transactions to evade reporting requirements, money laundering, and unlawful monetary transactions.
From 2010 to 2014, Lam trafficked at least 1,000 kilograms of marijuana, which generated millions of dollars in proceeds. He then used the laundered drug proceeds to purchase two pieces of property in Worcester and luxury vehicles, including a 2012 Range Rover Sport SUV, a 2013 Cadillac Escalade, and a 2013 Nissan GT-R custom-built sports car.
Judge Hillman previously sentenced co-defendants Nhi Ai Thi Lam to 18 months in prison and three years of supervised release, and Diemphuc Thi Lam to one year and one day in prison and three years of supervised release.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; James V. Buthorn, Inspector in Charge of the U.S. Postal Inspection Service; and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Timothy E. Moran of Ortiz’s Organized Crime and Gang Unit, Rachel Hemani of Ortiz’s Major Crimes Unit, and Doreen Rachal of Ortiz’s Asset Forfeiture Unit.
Florida CPA Indicted for Tax FraudRead the Press Release
BOSTON – A Florida man was charged in U.S. District Court in Boston and arrested today in Miami in connection with failing to report more than $800,000 in income to the Internal Revenue Service (IRS).
Greg Takesian, 52, of Miami, Fla., was indicted on Oct. 7, 2015, on four counts of filing false tax returns and arrested today in Miami. Takesian was ordered to report to Boston to face these charges during an initial appearance in U.S. District Court in Miami this afternoon.
According to the indictment, from 2008 to 2011, Takesian failed to report more than $800,000 of income and owes more than $200,000 in income taxes to the IRS. Takesian, a certified public accountant (CPA), worked for Takesian & Company, a tax consulting firm owned by his father. Although Takesian ran the day-to-day business of Takesian & Company, he did not have an ownership stake. Between 2008 and 2011, Takesian & Company received more than $1 million for tax and consulting services from At Home VNA, a home health company located in Waltham.
In accordance with his duties, Takesian had check-writing authority, and took out several Takesian & Company credit cards in his name. During that time period, however, Takesian used several hundred thousand dollars of Takesian & Company funds for his personal use, without reporting this income on his tax disclosures. Furthermore, Takesian gave his wife more than $500,000 and another woman $200,000 of Takesian & Company funds through checks and cash deposits. Takesian allowed his wife and others to use Takesian & Company credit cards to make more than $50,000 of purchases for non-business expenses, such as cruises, jewelry, intimate women’s apparel, makeup, iTunes, and Home Shopping Network purchases. Takesian used Takesian & Company funds to pay the rent on his personal residence, but did not report any of this income on his tax returns.
Takesian also allegedly failed to file tax returns for Takesian & Company between 2008 and 2011. While his father reported some Takesian & Company earnings on his personal tax returns, the figures he reported were based on information provided by Takesian, which represented a fraction of Takesian & Company’s actual income.
The charging statute provides a sentence of no greater than three years in prison, one year of supervised release, and a fine of $100,000 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 William P. Offord, 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 David S. Schumacher of Ortiz’s Health Care Fraud Unit.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Springfield Man Sentenced to Prison for Distributing Crack CocaineRead the Press Release
BOSTON –Dmitri Major, 38, of Springfield, was sentenced today by U.S. District Judge Mark G. Mastroianni to 21 months in prison and five years of supervised release.
In May 2015, Major pleaded guilty to distributing crack cocaine to an undercover law enforcement officer in a parking lot near known drug dealing and street gang territory on Oct. 9 and 17, 2013.
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 Kevin O’Regan, Chief of Ortiz’s Springfield Branch Office.
Lynn Tax Preparer Pleads Guilty to Federal Tax FraudRead the Press Release
BOSTON – A Lynn tax preparer pleaded guilty in U.S. District Court in Boston yesterday to filing fraudulent personal federal tax returns and attempting to obstruct the Internal Revenue Service (IRS).
Arismendy Ramos, a/k/a Arismendi Ramos, a/k/a Aris Almonte, 42, pleaded guilty to an Information charging him with four counts of filing false tax returns and two counts of obstructing the IRS. U.S. District Court Judge Denise J. Casper scheduled sentencing for Feb. 3, 2016.
Ramos owned and operated Almonte Tax, a tax preparation service in Lynn, and personally prepared tax returns for numerous clients. From 2008 through 2013, Ramos allegedly filed false forms with the IRS claiming that he paid clients to work for him when in fact they had never been employed or paid by him. Ramos then claimed the bogus wages as business expenses on his own tax returns, thereby reducing his personal tax liabilities. Furthermore, Ramos instructed two clients that they should lie if they were asked about the false wages.
The charging statutes provide a sentence of no greater than three years in prison, one year 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 William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Victor A. Wild of Ortiz’s Economic Crimes Unit.
Wellesley Executive Arrested for Million-Dollar EmbezzlementRead the Press Release
BOSTON – The former controller of a Cambridge-based technology company was arrested today for embezzling $1 million from the company.
Andy Kim, 43, of Wellesley, was arrested this morning and charged in a criminal complaint with one count of wire fraud. Kim had an initial appearance this afternoon before U.S. District Court Magistrate Judge M. Page Kelley.
According to the complaint, Kim worked at the company from 2004 until he was fired in July 2015 after the discovery of the theft. Kim allegedly stole $500,000 from the company on two separate occasions, once in July 2014 and again in June 2015. On both occasions, Kim, who as the company’s controller, had access to its checking account. He allegedly disguised the transactions as transfers of capital to the company’s owner, fabricated records that purported to document legitimate capital transfers, and then planted those records in the company’s files.
On both occasions, Kim allegedly wired the money to a bank account belonging to a Massachusetts real-estate investment company. After the fraudulent transfer in July 2014, the president of the real-estate company wrote Kim ten consecutively numbered checks, each for $50,000. Kim periodically deposited those checks into his personal checking account, and then transferred the money, in installments, to another bank account he controlled.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. This case is being prosecuted by Assistant U.S. Attorney Brian A. Pérez-Daple of Ortiz’s Economic Crimes Unit.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Stoughton Man Charged for Sending Bomb Threats to SchoolsRead the Press Release
BOSTON – A Stoughton man was arrested and will appear in U.S. District Court in Boston today to face federal charges for sending multiple false bomb threats to schools in Illinois, Massachusetts, Rhode Island, and North Carolina.
Anthony Rae, 24, was charged via criminal complaint with bomb threats. Rae had previously been charged in Dedham District Court; however, those charges were dismissed today and he was taken into federal custody. Rae is scheduled to appear before U.S. Magistrate Judge David H. Hennessy in Boston at 2:15.
According to the complaint, Rae used three different email accounts to send bomb threats to educational institutions in four different states over the past year. Rae allegedly began in October 2014 when he sent two emails from a Gmail account he created threatening to bomb an elementary school in Chicago, Ill., and several public schools in Norwood, Mass. After that, Rae allegedly hacked his mother’s Hotmail account and used it to send two separate bomb threats to his own school – ITT Technical Institute in Norwood.
A search warrant was obtained for Rae’s residence and numerous electronic devices were seized. The following day, Rae allegedly used a public computer available to tenants of his apartment complex to continue his bomb threat spree – sending a bomb threat to Rhode Island College in Providence, R.I. Massachusetts authorities arrested Rae on June 19, 2015, and charged him with the three Massachusetts threats. Rae was released on conditions, which included prohibitions on the use of electronic devices and GPS monitoring. Despite the strict conditions of release, in September 2015, Rae created another Gmail account and threatened to bomb North Carolina State University in Raleigh, N.C.
The charging statute provides a sentence of no greater than 10 years in prison, three years supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. This case was also investigated the Chicago Police Department – Arson Section, Norwood, and Stoughton Police Departments, Rhode Island State Police Computer Crimes Unit, and the Rhode Island College and North Carolina State University Campus Police Departments. Significant assistance was also provided by the Massachusetts MetroLEC Cyber Crimes Unit and the Norfolk District Attorney’s Office. The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
Seekonk Man Charged with Possession of Child PornographyRead the Press Release
BOSTON – A Seekonk man was arrested today and charged in U.S. District Court in Boston with possession of child pornography.
Sean J. Trahan, 38, was charged in a criminal complaint with one count of possession of child pornography. Trahan was held today pending a probable cause and detention hearing on Oct. 16, 2015, before U.S. District Court Magistrate Judge Donald L. Cabell.
According to the complaint, on Oct. 7, 2015, a search warrant was executed at Trahan’s residence in Seekonk. During the search, a personal computer that contained images of child pornography was seized. During an interview with law enforcement, Trahan stated that he had accessed sites containing child pornography, and that he had been previously convicted of possessing child pornography.
The charge of possessing child pornography provides for a mandatory minimum sentence of 10 years and no greater than 20 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; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Seekonk Police Chief Craig A. Mace, made the announcement today. This case is being prosecuted by Assistant U.S. Attorney Kenneth G. Shine 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/.
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.
Nanny Charged with Forging Dozens of Checks from Employers’ Bank AccountRead the Press Release
BOSTON – A Randolph woman who was employed as a nanny was arrested today and charged in U.S. District Court in Boston with forging 65 checks totaling over $280,000 from her employers’ bank account.
Stephanie L. Fox, 30, was arrested today and charged in a criminal complaint with three counts of bank fraud. Fox will have an initial appearance before U.S. District Court Magistrate Judge Donald L. Cabell this afternoon.
According to the complaint affidavit, Fox was employed as a nanny from about February 2013 until August 2015 when her employers discovered that for more than a year, Fox had been writing checks on one of their bank accounts and forging one of their signatures on the checks. Fox avoided detection by destroying the bank account statements when they arrived at her employers’ home. In total, it is alleged that Fox forged 65 checks totaling $281,917, using the money to purchase jewelry, including a diamond pendant necklace and three Movado watches, as well as for travel to places such as the Bahamas, Aruba, Hawaii, Newport, Disney, and Cape Cod.
The charging statute provides for a sentence of no greater than 30 years in prison, five years of supervised release, a fine of $1 million, and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Commissioner William Evans of the Boston Police Department, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
The details contained in the criminal complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Two Worcester Men Charged and Eight Firearms SeizedRead the Press Release
BOSTON – Two men were detained following initial appearances in U.S. District Court in Worcester today after being charged last week with illegal firearms possession.
Antwone Bennett, 21, and Darilton Matias, 21, both of Worcester, were charged in separate indictments with each being a felon in possession of a firearm or ammunition. Both defendants were detained following initial appearances before U.S. District Court Magistrate Judge David H. Hennessy.
According to the indictment, Bennett, a convicted felon, possessed four rounds of Winchester 357 MAG ammunition and two rounds of Hornady 357 MAG ammunition. On Oct. 1, 2015, Bennett was arrested on a Worcester street at which time officers recovered a loaded firearm that he was carrying. Matias, also a convicted felon, allegedly possessed a K.B.I. brand .380 caliber semi-automatic handgun. He was arrested on state charges in August 2015.
Although Bennett and Matias are not charged in relation to all of the firearms seized, in total, eight firearms were recovered during this joint operation which was initiated to combat gang violence in the Worcester area.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. If the defendants are determined to be armed career criminals, the statutes provides a mandatory minimum sentence of 15 years in prison and up to a lifetime, 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; Worcester Police Chief Gary J. Gemme; and Worcester County District Attorney Joseph D. Early, Jr., made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Cory Flashner of Ortiz’s Worcester Branch Office.
The details contained in the indictments are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Rhode Island Man Charged with Trafficking in Counterfeit Erectile Dysfunction MedicationRead the Press Release
BOSTON – A Pawtucket, R.I. man was charged today in U.S. District Court in Boston with trafficking in counterfeit drugs.
Ricky Lugo, 48, was charged in an Information with four counts of trafficking in counterfeit versions of erectile dysfunction medications, including Pfizer Inc.’s Viagra, Eli Lilly’s Cialis, and Bayer’s Levitra.
“The trafficking of counterfeit goods generates billions of dollars in the wallets of copycats and thieves,” said United States Attorney Carmen M. Ortiz. “Not only does it violate the trademarks that are intended to protect our nation’s intellectual property, but it also endangers people’s health and has the potential to inflict lasting harm.”
“Importing, selling or purchasing counterfeit products is not a victimless crime,” said Matthew Etre, Special Agent in Charge of HSI Boston. “Counterfeit pharmaceuticals present an even greater concern to businesses and consumers alike. Americans need to be able to trust the medications they ingest and Homeland Security Investigations will continue to work with our law enforcement partners to ensure the safety and security of the products consumers buy.”
“Counterfeit drugs are illegal. As with any other illegal drug, Postal Inspectors are committed to keeping them out of the U.S. Mail,” stated Acting Postal Inspector in Charge James V. Buthorn. “Counterfeit medications pose a serious threat to the American public ranging from grave health consequences to lack of efficacy. The men and women of the Postal Inspection Service work relentlessly to remove illegal drugs from the mail while bringing criminals who use the Postal Service to facilitate their crimes to justice.”
According to court documents, from June 2013 to March 2014, Lugo sold counterfeit Viagra, Cialis, and Levitra on Craigslist and in person. Lugo purchased the counterfeit pharmaceuticals from sources outside the United States, including from China. Lugo knew that the goods he was selling were counterfeit, but nonetheless sold and attempted to sell thousands of the tablets.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of up to $5 million on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Ortiz, HSI SAC Etre and Acting Postal Inspector Buthorn, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Amy Harman Burkart of Ortiz’s Cybercrime Unit.
The details contained in the Information are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Project Safe Childhood Initiative to Visit Frontier Regional SchoolRead the Press Release
BOSTON – On Wednesday, October 7th, students in the Frontier Regional School District will be participating in an assembly titled: Project Safe Childhood, presented by the Department of Justice.
The presentation will include a variety of Internet safety topics including: digital footprints; cyberbullying; sextortion; Internet predators; and being safe and secure online. Presenters include members of the United States Attorney’s Office as well as federal agents from the Department of Homeland Security and the Federal Bureau of Investigation.
A special presentation about keeping kids safe and secure online will be held for parents and educators at 6:00 p.m. on Wednesday evening in the Frontier Regional School auditorium.
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/
New Bedford Gang Member Sentenced to Prison for Gun and Drug TraffickingRead the Press Release
BOSTON – A member of the Gangster Disciples was sentenced on Wednesday, Sept. 30, 2015, for his role in a conspiracy to transport drugs and guns between Massachusetts and Maine.
Michael Knott, 29, of New Bedford, was sentenced by U.S. District Court Judge Leo T. Sorokin to six years in prison and four years of supervised release, during which time he is prohibited from associating with other gang members. In June 2015, Knott pleaded guilty to conspiracy to possess with intent to distribute cocaine, cocaine base and heroin, being a felon in possession of a firearm, and distribution of cocaine base.
Knott, and several persons that later cooperated with the government, where involved in a conspiracy to transport a gun to the New Bedford area from Gray, Maine, and transport drugs to Maine. In June 2013, Knott used a straw purchaser to acquire two firearms in Maine, and then the guns were transported to New Bedford. In addition, between May and July 2013, Knott traveled to Gray, Maine up to four times each week, bringing heroin and cocaine.
In August 2013, during an undercover meeting with a cooperating witness monitored by federal agents, Knott bragged about his successful drug business in Maine, claimed that he could get any kind of firearm from his source in Maine, and listed several different handguns that he could obtain.
Knott, a convicted felon, has numerous drug convictions and is also a member of the Gangster Disciples, a street gang operating in New Bedford. During the sentencing hearing, Judge Sorokin noted the seriousness of the offenses and the need to protect the public from those, like Knott, that have a history of violence and drug dealing and participate in the trafficking in guns into Massachusetts.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; New Bedford Police Chief David A. Provencher; Cumberland County, Maine Sheriff Kevin J. Joyce; and Maine Drug Enforcement Agency Director Roy E. McKinney, made the announcement. The case was prosecuted by Assistant U.S. Attorney Glenn A. MacKinlay of Ortiz’s Organized Crime and Gang Unit and Eve Piemonte of Ortiz’s Major Crimes Unit.
Attorney Sentenced to Prison for Role in Massive Mortgage Fraud ScamRead the Press Release
BOSTON – An attorney was sentenced on Oct. 1, 2015, to prison in connection with a multi-year, multi-property mortgage fraud scheme in Dorchester and Roxbury.
Michael R. Anderson, 46, of Framingham, was sentenced by U.S. District Court Judge Douglas P. Woodlock to two years in prison, two years of supervised release, and ordered to pay $11,048,212 in restitution and forfeit $7,413,712. In January 2011, Anderson pleaded guilty to sixteen counts of wire fraud, nine counts of bank fraud, and two counts of engaging in unlawful monetary transactions.
From September 2006 through April 2008, Anderson assisted Michael David Scott, a developer, with perpetrating a fraud scheme in connection with the purported sale of more than 27 condominium units in Boston. Scott, who was charged separately, pleaded guilty in May 2015.
Scott and his associates bought multi-family dwellings promising to convert them into condominiums, and then resold the individual units to various straw buyers. The developer, Anderson, and others arranged for the straw buyers to obtain mortgage financing by falsifying key information, including the buyers’ intent to reside in the properties, assets, down payments, and funds paid at closing. Anderson and others arranged to prepare loan closing documents, and Anderson then closed the mortgage loans associated with these purchases. As the closing attorney, Anderson also was responsible for disbursing the fraudulently obtained mortgage loan proceeds.
United States Attorney Carmen M. Ortiz; Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, 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. Attorneys Ryan M. DiSantis of Ortiz’s Public Corruption Unit and Victor A. Wild of Ortiz’s Economic Crimes Unit.
Pennsylvania Man Charged with “Sextorting” Massachusetts College StudentRead the Press Release
BOSTON – A Pennsylvania man who threatened to publicly disseminate sexually explicit images of a Boston-area college student unless she provided him with additional images was arrested yesterday and charged with extortion.
James F. Connor V, 19, of West Chester, Pa., was charged with one count of extortion. He was ordered detained during an initial appearance yesterday in U.S. District Court in Philadelphia.
According to the criminal complaint, Connor engaged in a version of blackmail, called “sextortion,” which involves threats to publicly release revealing images of a person in order to extort sexual favors. Connor and the victim, a student at a Boston-area university, met through social media and developed a relationship in 2012. In the course of that relationship, the victim sent Connor naked pictures through Snapchat, a video messaging app, and engaged in sexually explicit video chats with Connor using FaceTime. Connor allegedly preserved these images without her consent. After the relationship ended, Connor began blackmailing the victim by threatening to release the sexually explicit images to her parents and Twitter followers if she did not continue sending naked pictures and engaging in sexually explicit video chats with him. Connor also insisted that she break up with her current boyfriend.
The charging statute provides a sentence of no greater than two years in prison, one year 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 Joseph R. Bonavolonta, Acting 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 Jordi de Llano of Ortiz’s Major Crimes Unit.
Holyoke Man Pleads Guilty to Federal Firearms ChargesRead the Press Release
BOSTON – Joshua Marrero, 28, of Holyoke, Mass., pleaded guilty today to being a convicted felon in possession of a firearm and ammunition and to possessing a firearm with an obliterated serial number. U.S. District Judge Timothy S. Hillman scheduled sentencing for Jan. 22, 2016.
At his plea hearing, Marrero admitted that on April 19, 2014, he possessed a Lorcin Model L 380 .380 caliber firearm with an obliterated serial number and seven rounds of .380 caliber ammunition. After being spotted with the firearm by law enforcement officers, Marrero ran into an alley in South Holyoke and was caught after he tripped.
The charge of being a felon in possession of a firearm provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. The charge of possessing a firearm with an obliterated serial number 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; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Holyoke Police Chief James M. Neiswanger, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Deepika Bains Shukla of Ortiz’s Springfield Branch Office.
U.S. Attorney Ortiz Hosts Roundtable to Commemorate 25th Anniversary of the Americans with Disabilities ActRead the Press Release
BOSTON – U.S. Attorney Carmen M. Ortiz hosted a roundtable discussion yesterday with local disability rights activists to commemorate the 25th anniversary of the Americans with Disabilities Act (ADA).
“The ADA remains one of the most important tools we have to advance the cause of civil rights in the United States and to eradicate discrimination for people with disabilities,” said U.S. Attorney Carmen M. Ortiz. “My office is committed to ADA compliance -- through cooperative efforts and enforcement actions -- to ensure equal access in schools, employment, in places of public accommodation, and in the programs and services offered by state and local governments.”
To commemorate this important anniversary, U.S. Attorney Ortiz invited a dozen local disability rights advocates, including the National Alliance on Mental Illness, the Boston Center for Independent Living, the Institute for Human Centered Design, Greater Boston Legal Services, and several state and local offices on disability, to participate in a discussion about the most pressing ADA issues facing citizens of the Commonwealth today. This includes equal access for adults and children with mental health issues, physical disabilities, and vision and hearing impairments.
The ADA was signed into law on July 26, 1990, by President George H.W. Bush. It is one of America’s most comprehensive pieces of civil rights legislation that prohibits discrimination and guarantees that people with disabilities have the same opportunities as everyone else to participate in the mainstream of American life -- to enjoy employment opportunities, to purchase goods and services, and to participate in state and local government programs and services. Modeled after the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, religion, sex, or national origin, the ADA is an “equal opportunity” law for people with disabilities.
The U.S. Attorney’s Office wishes to thank the U.S. Department of Health and Human Services, Office for Civil Rights for co-hosting the roundtable discussion.
Twenty-Five Individuals Charged in Southeastern Massachusetts Heroin RingRead the Press Release
BOSTON – Twenty-five individuals were indicted on federal drug trafficking charges in connection with a southeastern Massachusetts heroin trafficking ring. Arrests were made this morning in Fall River, Lawrence, Taunton, Marshfield, New Bedford, Berkley and Providence.
This indictment follows four other recent federal indictments charging 17 individuals in connection with a Taunton heroin distribution network. All five indictments are part of an ongoing federal effort to stem the tide of heroin and fentanyl in southeastern Massachusetts.
In a related development, Attorney General Loretta Lynch will be addressing Massachusetts doctors and public health officials at a forum on Friday in Waltham on how the misuse of prescription opioids is driving demand for narcotics such as heroin and fentanyl.
The following people were charged in an indictment unsealed today with conspiracy to distribute controlled substances, including heroin and fentanyl: Dedwin Cruz-Rivera, 39, and Christian Sostre, 21, both of Fall River; Eric Matos, 37, and Miguelina Mejia Ruiz, 41, both of Lawrence; Manuel Romero-Gonsalez, 37, Luz Gonzalez, 33, Francis Gonsalez-Romero, 39, and Maria Elena Ocasio, 55, all of Providence, R.I.; Julio C. Ocasio, 24, Xavier Ramos, 25, Maria Rodriguez, 38, William M. Rodriguez, 22, Lindsay Ann Belisle, 29, Jose O. Perez, 28, Kelly Patterson, 36, Jorge Vega, 40, Jose A. Rodriguez, 40, Oniel Rivera, 28, Christopher Perez, 36, Kelly Jean Gagnon, 39, Joseph W. Parsons, 23, and Philip Malaguti, 31, all of Taunton; Cory S. Nickerson, 31, of New Bedford; Steven M. Enos, 28, of Berkley; and John A. Gray, Jr., 40, of Marshfield.
The investigation revealed that Dedwin Cruz-Rivera was obtaining heroin and fentanyl from multiple wholesale suppliers, including Eric Matos and Manuel Romero-Gonsalez, and was distributing the drugs to Taunton-based dealers, including Maria Rodriguez, her son William Rodriguez, Oniel Rivera, and Xavier Ramos. Doris Mejia Ruiz delivered fentanyl to Cruz-Rivera at the direction of Matos.
The investigation also revealed that Romero-Gonsalez worked with his associate, Luz Gonzalez, and his brother, Francis Gonsalez-Romero, to distribute narcotics. Agents repeatedly observed William Rodriguez selling heroin to customers in and around Taunton, including Jose Perez, Kelly Patterson, Jorge Vega, Jose Rodriguez, Christopher Perez, Kelly Jean Gagnon, Joseph Parsons, Philip Malaguti, and John Gray, Jr. Lyndsay Belisle helped William Rodriguez distribute the drugs.
The investigation led to seizures of heroin and fentanyl. Fentanyl is an extremely potent synthetic opioid, which, by weight, is 30-40 times deadlier than heroin.
The indictment was the result of a 15-month investigation that included court-authorized wiretaps and the execution of six search warrants. The investigation was launched as part of the federal response to the heroin epidemic plaguing Massachusetts, and Taunton in particular, which has seen a steep increase in heroin overdose deaths since 2013.
The charge in today’s case provides for a sentence of no greater than 20 years in prison, a minimum of three year and up to a lifetime of supervised release, and a fine of $1 million. Cruz-Rivera faces a mandatory minimum 10 years and up to a lifetime in prison, a minimum of five years and up to a lifetime of supervised release, and a fine of up to $10 million. Gray faces a mandatory minimum sentence of five years and no greater than 40 years in prison, a minimum of four years and up to a lifetime of supervised release, and a fine of up to $5 million.
United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; and Taunton Police Chief Edward J. Walsh, made the announcement today. The investigation was a joint effort by the DEA’s Cape Cod Task Force; the Massachusetts State Police; the Bristol County Sherriff’s Department; the Barnstable, Fall River, Haverhill, Marshfield, Attleboro, Fairhaven, New Bedford, Bridgewater, Norwood, Lawrence, Plymouth, Berkley, Raynham and Providence Police Departments; the Rhode Island State Police; the Bristol, Essex and Plymouth County District Attorney’s Offices; and the United States Attorney’s Office for the District of Rhode Island. The case is being prosecuted by Assistant U.S. Attorneys Katherine Ferguson and Ann Taylor of Ortiz’s Narcotics and Money Laundering Unit.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Strata Pathology to Resolve Allegations Regarding Kickback PaymentsRead the Press Release
BOSTON – Lexington-based Strata Pathology Laboratory, Inc. (known as StrataDx), has agreed to pay $558,793 to resolve allegations that it violated the False Claims Act by inducing physicians to refer Medicare and Medicaid patients to Strata by paying kickbacks in the form of sham consulting fees and providing unlawful discounts to physicians.
“Billing arrangements like Strata’s, which provide a financial incentive to physicians to refer Medicare and Medicaid patients to a particular lab are unlawful,” said United States Attorney Carmen M. Ortiz. “When a company prioritizes profit, it disregards laws that are intended to protect patient health and the integrity of the healthcare system. Settlements like this serve to deter illicit kickback schemes.”
“When laboratory referrals are made based on the amount of kickback money physicians can make from a lab, both patients and the healthcare system suffer,” said Acting Special Agent in Charge Joseph Bonavolonta of the Federal Bureau of Investigation’s Boston Division. “Patients expect their physicians to choose laboratories based on their competent medical practices, not how much money they can pocket. The FBI will continue to aggressively investigate illegal kickback schemes designed to put profits over patient care.”
“Companies that financially reward physicians in exchange for the referral of business -- as the government contended in this case -- corrupt the physicians’ impartial medical judgment and drive up health care costs for everyone,” 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.”
According to the settlement agreement, Strata acknowledged paying consulting fees to two referring physician practices that did not provide consulting services in exchange. Strata also acknowledged entering into “account billing” arrangements with seven referring physician practices that facilitated fee-splitting between the parties. The government alleges that, under these arrangements, Strata allowed the physician practices to bill patients’ private insurers directly for pathology services that Strata performed. Strata then charged the physician practices for its services at deeply discounted rates, allowing the physician practices to pocket the difference between Strata’s discounted price and the amount of the private insurers’ full reimbursement. All of the physician practices allegedly referred specimens of federal health care program beneficiaries to Strata, and Strata billed those programs at its full price.
The United States alleges that Strata’s claims to Medicare and Medicaid were false because they resulted from kickbacks that Strata provided the referring physicians in violation of the federal Anti-Kickback Statute. The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. Although Strata’s account billing arrangements did not explicitly condition the discounted prices upon the physicians’ referrals of Medicare and Medicaid business to Strata, the United States alleges that Strata offered the discounts with the understanding that physicians who entered into account billing arrangements with Strata would refer virtually all of their patients, including Medicare and Medicaid patients, to Strata.
The settlement announced today stems from a complaint filed by a former Strata employee under the whistleblower provisions of the False Claims Act, which authorize private parties to sue on behalf of the United States and to receive a portion of any recovery. The settlement amount will be shared between the United States, the whistleblower, and the Commonwealth of Massachusetts.
U.S. Attorney Ortiz, Acting FBI SAC Bonavolonta, and HHS-OIG SAC Coyne, made the announcement today. The matter was handled by Assistant U.S. Attorneys Abraham George and Deana El-Mallawany in Oritz’s Civil Division, Special Assistant U.S. Attorney Joshua H. Orr, and Assistant Attorney General Angela Neal of the Medicaid Fraud Division of Massachusetts Attorney General Healey’s Office.
Lynn Tax Preparer Charged with Federal Tax FraudRead the Press Release
BOSTON – A Lynn tax preparer was charged yesterday in U.S. District Court in Boston for filing fraudulent personal federal tax returns and attempting to obstruct the Internal Revenue Service (IRS).
Arismendy Ramos, a/k/a Arismendi Ramos, a/k/a Aris Almonte, was charged in an Information with four counts of filing false tax returns and two counts of obstructing the IRS.
According to the Information, Ramos owned and operated Almonte Tax, a tax preparation service in Lynn, and personally prepared tax returns for numerous clients. From 2008 through 2013, Ramos allegedly filed false forms with the IRS claiming that he paid clients to work for him when in fact they had never been employed or paid by him. Ramos then claimed the bogus wages as business expenses on his own tax returns, thereby reducing his personal tax liabilities. Furthermore, Ramos instructed two clients that they should lie if they were asked about the false wages.
The charging statutes provide a sentence of no greater than three years in prison, one year 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 William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Victor A. Wild of Ortiz’s Economic Crimes Unit.
The details contained in the Information are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Ecuadorian National Charged with Tax Refund FraudRead the Press Release
BOSTON – An Ecuadorian national residing in New York City was arrested and charged on Tuesday, Sept. 29th in connection with his role in a stolen identity tax refund fraud scheme.
Ricardo E. Candelo, 58, was charged with one count of theft of public money. He was arrested at his home in Queens, New York and had an initial appearance in U.S. District Court in Brooklyn, New York. Candelo was released on conditions and ordered to appear in U.S. District Court in Boston on Oct. 6, 2015, before Magistrate Judge David H. Hennessy.
According to the criminal complaint, in 2012, federal agents learned that a New York criminal organization was searching for a way to cash fraudulently obtained federal income tax refund checks. Thereafter, with the assistance of a cooperating witness, agents arranged a series of undercover meetings with members of the New York organization. During these meetings, which took place in South Attleboro, Mass. between July and September 2012, Candelo and his associates delivered federal income tax refund checks totaling over $75,000. As part of the undercover operation, agents cashed these checks and returned the proceeds to the New York organization as instructed. All of the refund checks involved in the scheme trace back to fraudulent federal income tax filings submitted without the authorization of the tax payer.
The charging statute provides a sentence of no greater than 10 years in prison, three years supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations Boston; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Lisa A. Quinn, Special Agent in Charge of U.S. Secret Service, made the announcement today. The case is being prosecuted by Assistant United States Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
Upton Woman Sentenced for Defrauding Federal Benefits ProgramsRead the Press Release
BOSTON – An Upton, Mass. woman was sentenced today in U.S. District Court in Worcester for stealing more than $128,000 in Social Security benefits and providing false information in applications for subsidized housing.
Patricia Kwiatkowski, 64, was sentenced by U.S. District Court Judge Timothy S. Hillman to two years of probation, including three months of home or community confinement, and ordered to pay restitution of $128,101 to the Social Security Administration and $2,391 to the U.S. Department of Housing and Urban Development. In June 2015, Kwiatkowski pleaded guilty to stealing public money.
Kwiatkowski’s father died in 2006, but the father’s monthly Social Security benefits continued to be directly deposited into his bank account. Although she was not entitled to this money, Kwiatkowski signed her late father’s name on more than 100 checks written from his account to pay her own bills. She also made more than 150 ATM withdrawals from the account, and spent money from the account at retail stores. In total, from 2006 to 2014, Kwiatkowski received and spent $128,101 in Social Security funds to which she was not entitled.
During the entire time that she was removing Social Security benefits from her late father’s account, Kwiatkowski was also receiving her own Social Security benefits of about $1,000 per month. In addition, she began receiving food stamps in 2009, MassHealth benefits in 2011, and subsidized housing in 2013. In 2013 and 2014, she provided false information on her applications for subsidized housing.
This case was brought as part of an ongoing effort by the U.S. Attorney’s Office in partnership with the Social Security Administration to investigate and prosecute the posthumous fraud of Social Security benefits. In many of these cases, family members, knowing they are not entitled to government benefits, continue to withdraw and spend the funds after a relative has died. In the past year, the U.S. Attorney’s Office has prosecuted several similar cases involving a total of more than $1 million in stolen government money:
In April 2015, Graeme Griffith, of Andover, was sentenced for stealing $149,285 from Social Security from 2003 to 2014.
Also in April 2015, Frances Kenney Moseley, of Boston, was sentenced for stealing $222,172 from Social Security from 2003 to 2010.
In February 2015, Charles Gerbutavich, of Manchester, was sentenced for stealing $161,587 from Social Security from 1993 to 2014.
In October 2014, Mary Murphy, of Dorchester, was sentenced for stealing $206,679 from Social Security and $143,098 from the Civil Service Retirement System from 1977 to 2013.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; and Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Regional Office, made the announcement today. The Kwiatkowski case was prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.