District of Massachusetts
Press releases recorded for this federal judicial district.
Teamsters Indicted for Attempted Extortion of Reality Television Production CompanyRead the Press Release
BOSTON – Four members of Teamsters Local 25 were arrested today in connection with attempting to extort a television production company that was filming a reality show in the Boston area in spring 2014.
“The indictment alleges that a group of rogue Teamsters employed old school thug tactics to get no-work jobs from an out of town production company,” said United States Attorney Carmen M. Ortiz. “In the course of this alleged conspiracy, they managed to chase a legitimate business out of the City of Boston and then harassed the cast and crew when they set up shop in Milton. This kind of conduct reflects poorly on our city and must be addressed for what it is – not union organizing, but criminal extortion.”
“While unions have the right to advocate on behalf of their members, they do not have the right to use violence and intimidation,” said Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The strong-arm tactics the FBI has seen in this case are egregious and our investigation is far from over. Today’s arrests should send a message to those who think they can get away with manipulating the system that they better think twice.”
Mark Harrington, 61, of Andover; John Fidler, 51, of Holbrook; Daniel Redmond, 47, of Medford; and Robert Cafarelli, 45, of Middleton, were indicted on conspiracy to extort and attempted extortion of a television production company in order to obtain no-work jobs for fellow Teamsters.
According to the indictment, beginning in spring 2014, a non-union production company began filming a reality television show in and around Boston. The company hired its own employees, including drivers, for the filming of the show and did not need work performed by union members. Beginning on June 5, 2014, the defendants conspired to force the production company to pay Local 25 members for unnecessary work by threatening physical and economic harm to the company.
Among other things, the indictment alleges that on June 10, 2014, the defendants showed up at a restaurant in Milton where the production company was filming. The defendants entered the production area and began walking in lockstep toward the doors of the restaurant where they accosted film crew members and attempted to forcibly enter the restaurant. Throughout the morning, the defendants yelled racial and homophobic slurs at the film crew and others, threatened crew and cast members, and shouted profanities. The defendants also blocked vehicles from the entryway to the set, and used physical violence and threats of physical violence to try and prevent people from entering the set.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Ortiz; FBI Acting SAC Bonavolonta; Cheryl Garcia, Special Agent in Charge of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, New York Region; and Milton Police Chief Richard G. Wells, Jr., made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Laura J. Kaplan and Kristina E. Barclay of Ortiz’s Organized Crime and Gang Unit and Public Corruption Unit, respectively.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
CORRECTION: This press release has been revised to reflect the dismissal of charges against Richard Jeffrey due to misidentification. A fifth defendant, Michael Ross, was arrested and charged on Oct. 1, 2015.
Hingham Woman Charged with Mortgage FraudRead the Press Release
BOSTON – A Hingham woman was charged in U.S. District Court in Boston today with defrauding mortgage companies in connection with multiple mortgages she obtained on a single residence.
Denise Bruce, 56, was indicted on five counts of bank fraud.
According to the indictment, between 2004 and 2008, Bruce fraudulently obtained five mortgage loans from different banks in amounts ranging from $325,000 to $487,500 on her Hingham property by submitting false information regarding her employment history, income, assets, and debt. The indictment also alleges that Bruce filed fraudulent discharges of mortgages with the Plymouth County Registry of Deeds to create the appearance that earlier loans had been paid in full, when in fact, none of the loans had been paid.
The charging statute provides a sentence of no greater than 30 years in prison, five years of supervised release, and a fine of $1 million on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other sentencing factors.
United States Attorney Carmen M. Ortiz; Steven Perez, Special Agent in Charge of the Federal Housing Finance Agency, Office of Inspector General, Northeast Region; and Christy Goldsmith Romero, Special Inspector General for the Office of the Special Inspector General for the Troubled Asset Relief Program, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Victor A. Wild of Ortiz’s Economic Crimes Unit.
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 Tax Preparer Sentenced to Prison for FraudRead the Press Release
BOSTON – A Peabody tax preparer was sentenced yesterday to federal prison for defrauding small-business clients out of nearly $900,000 that his clients had given him to pay their federal payroll taxes.
Barry Ginsberg, 63, was sentenced by U.S. District Court Judge Leo T. Sorokin to 21 months in prison, six months of home confinement following release from prison, and ordered to pay restitution. In June 2015, Ginsberg pleaded guilty to multiple counts of mail and wire fraud, preparing false tax returns, and obstructing the IRS.
Ginsberg owned and operated a payroll tax business that had a number of so-called “escrow” clients. Ginsberg not only prepared their payroll tax returns, but these clients also sent him money on a regular basis for the purpose of paying their payroll taxes to the IRS. Instead of doing so, however, Ginsberg took the money and used it for other business or personal reasons. As a result, the defendant’s clients—some of whom had trusted him for years—became significantly indebted to the IRS over time.
To cover up his scheme, Ginsberg falsified his clients’ tax returns, which he was hired to prepare, indicating that the clients’ payroll taxes had been paid in full, when they had not. When asked by clients about their mysterious IRS debts, Ginsberg gave them a litany of false excuses, including blaming the IRS and his own staff.
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 was prosecuted by Assistant U.S. Attorneys Eric P. Christofferson and Vassili Thomadakis of Ortiz’s Economic Crimes Unit.
Mattapan Man Pleads Guilty to Heroin Distribution and Firearms OffensesRead the Press Release
BOSTON – A Mattapan man pleaded guilty today to drug distribution and firearms violations.
Manuel Pereyra, 27, pleaded guilty to one count of distribution of heroin, one count of possession of a firearm in furtherance of a drug crime, and one count of receipt of a firearm by a person under indictment. U.S. District Judge Rya W. Zobel scheduled sentencing for Jan. 6, 2016.
In March 2015, a cooperating witness told federal agents that Pereyra was a heroin dealer, and that Pereyra had previously traded heroin to obtain a firearm. As a result, on April 2, 2015, at the direction of law enforcement officers, the cooperating witness purchased heroin from Pereyra at the Old Colony Public Housing Development in South Boston. During that meeting, Pereyra asked the cooperating witness to obtain a firearm for him. On April 14, 2015, the cooperating witness and an undercover federal agent met with Pereyra in a hotel room in Dorchester. There, Pereyra gave the undercover federal agent 11 grams of heroin in exchange for a .380 caliber semi-automatic pistol. Pereyra was immediately arrested.
At the time of the incident, Pereyra was also under felony indictment in connection with unrelated state drug offenses in Salem, N.H., which prohibited him from possessing a firearm.
The charge of distribution of heroin provides for a sentence of no greater than 20 years in prison, a lifetime of supervised release, and a fine of $1 million. The charge of possession of a firearm in furtherance of a drug trafficking crime provides for a mandatory minimum sentence of five years (consecutive to any other sentence) and up to a lifetime in prison, five years of supervised release, and a fine of $250,000. The charge of receipt of a firearm by a person under indictment provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, 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.
Dorchester Man Pleads Guilty to Sex Trafficking of MinorsRead the Press Release
BOSTON – A Dorchester man pleaded guilty today in U.S. District Court in Boston in connection with a long-running, cross-country teen sex trafficking operation.
Corey Norris, a/k/a “Case,” a/k/a “Jacorey Johnson,” 26, of Dorchester, pleaded guilty today to a five count indictment charging him with various sex trafficking crimes including crimes related to sex trafficking of minors. U.S. District Court Judge Denise J. Casper scheduled sentencing for Jan. 11, 2016.
Norris, along with co-defendant Raymond Jeffreys, 27, and others, engaged in a sex trafficking conspiracy from approximately August 2008 to May 2014 in Massachusetts, Maine, New Hampshire, Vermont, Rhode Island, Connecticut, Pennsylvania, New Jersey, New York, Maryland, Nevada, Georgia, Florida, and California. Norris was charged for both his involvement in the conspiracy, and for specific counts involving the sex trafficking of two 17-year-old girls. One of the girls was trafficked from approximately Oct. 8, 2011 to Nov. 10, 2011 in Massachusetts, Maine, Nevada, and California. The other girl was trafficked in Massachusetts and Rhode Island in December 2012.
The individual sex trafficking charges carry a range of mandatory minimum terms of 10 to 15 years and up to a lifetime in prison. Each count has a mandatory minimum term of five years of supervised release and a fine of $250,000, or twice the gross gain/loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Boston Police Commissioner William Evans, made the announcement today. The case was investigated by Homeland Security Investigations, the Boston Police Department’s Human Trafficking and Homicide Units, and the Federal Bureau of Investigation.
The U.S. Attorney’s Office also wishes to recognize and thank Shawn Meehan, Resident Agent in Charge of the Homeland Security Investigations’ Portland Office; Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Aaron Steps, Supervisory Senior Resident Agent in Charge of the FBI Maine Office; the Suffolk County District Attorney’s Office; Cumberland County (Maine) District Attorney’s Office; the United States Attorney’s Office for the District of Maine; the Massachusetts State Police; the Portland (Maine), Old Town (Maine), Braintree, and South Portland (Maine) Police Departments; the Maine Drug Enforcement Agency; and the Cumberland County Sheriff’s Office. This case is being prosecuted by Assistant U.S. Attorneys Amy Harman Burkart and Christopher Pohl of Ortiz’s Civil Rights Enforcement Team and Special Assistant U.S. Attorney from the Suffolk County D.A.’s Office.
Boston Police Detective Pleads Guilty to Conspiracy to Obstruct a Federal InvestigationRead the Press Release
BOSTON – A Boston Police detective pleaded guilty today to conspiracy to obstruct a FBI investigation related to the Academy Homes Street Gang (AHSG), a violent narcotics trafficking gang that operated out of the Academy Homes housing development in Roxbury.
Brian Smigielski, 43, of Norton, pleaded guilty before U.S. District Court Judge Denise J. Casper to one count of conspiracy to defraud the United States during the course of a federal investigation. U.S. District Court Judge Denise J. Casper scheduled sentencing for Jan. 28, 2016.
From early 2009 to 2011, the FBI and Boston Police Department (BPD) were conducting a joint investigation into AHSG, during the initial stages of which Smigielski was the lead investigator. In late 2009, Smigielski, became upset after being ordered to turn over the investigation to the FBI and other BPD units, and thereafter, in 2010 and 2011, conspired with a fellow BPD officer and AHSG gang members to impede the FBI in its investigation of AHSG. Smigielski assisted the AHSG gang members by, among other things, informing the gang members of the FBI’s pending investigation and warning them that their arrests were imminent.
The charging statute provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. 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 Ortiz; Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Superintendent Frank Mancini of the Boston Police Department’s Anti-Corruption Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Dustin Chao of Ortiz’s Public Corruption and Special Prosecutions Unit.
Worcester Woman Charged in $3.6 Million Food Stamp FraudRead the Press Release
BOSTON – A Worcester woman was charged today in U.S. District Court in Worcester in connection with a $3.6 million food stamp fraud scheme that she operated out of her Worcester convenience store.
Vida Ofori Causey, 45, was charged in an Information with one count of conspiracy to commit SNAP benefits fraud, one count of SNAP fraud, and one count of money laundering in connection with a four year fraud scheme.
The Supplemental Nutritional Assistance Program (SNAP), formerly known as the Food Stamp Program, administered by the U.S. Department of Agriculture (USDA), provides eligible households with government subsidies for certain foodstuffs, and allows holders to exchange their SNAP benefits for food at authorized retail food stores.
Causey was the owner and operator of J&W Aseda Plaza, a convenience store on Main Street in Worcester. From April 2010 to October 2014, Causey conspired with others to commit SNAP fraud by purchasing SNAP benefits from recipients rather than exchanging them for food. Causey purchased the benefits at a discounted value of approximately fifty cents for every SNAP dollar. By so doing, Causey caused the USDA to electronically deposit into a bank account controlled by her the full face value of the SNAP benefits fraudulently obtained.
During the course of the conspiracy, Causey defrauded the USDA of approximately $3,638,900 in SNAP funds.
The charge of conspiracy provides for a sentence of no greater than five years in prison and three years of supervised release. The charge of SNAP fraud provides for a sentence of no greater than 20 years in prison and three years of supervised release. The charge of money laundering provides for a sentence of no greater than 10 years in prison and three years of supervised release. Each charge also provides for a fine of $250,000 or twice the gross gain or loss, whichever is greater, and forfeiture 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; William G. Squires, Special Agent in Charge of the United States Department of Agriculture, Office of Inspector General, Office of Investigations, Northeast Region; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Michelle L. Dineen Jerrett of Ortiz’s Worcester Branch Office.
MGH to Pay $2.3 Million to Resolve Drug Diversion AllegationsRead the Press Release
BOSTON – In the largest settlement of its kind involving allegations of drug diversion at a hospital, Massachusetts General Hospital (MGH) has agreed to pay the United States $2.3 million to resolve allegations that lax controls enabled MGH employees to divert controlled substances for personal use. In conjunction with this record monetary settlement, MGH has agreed to implement a comprehensive corrective action plan to prevent, identify, and address future diversions.
“Under the law, hospitals like MGH have a special responsibility to ensure that controlled substances are used for patient care and are not diverted for non-medical uses,” said U.S. Attorney Carmen M. Ortiz. “Diversion of these drugs feeds addiction, contributes to potential illegal drug sales, and fuels the opioid epidemic that has had a devastating effect on the Commonwealth. We commend MGH for disclosing and addressing its diversion problems and for taking steps to ameliorate future diversion by hospital personnel.”
“The DEA is committed to investigating hospitals that are not in compliance with the Controlled Substances Act (CSA),” said Special Agent in Charge Michael J. Ferguson. “Failure to do so increases the potential for diversion and jeopardizes the public health and safety. The diversion of prescription pain killers, in this case oxycodone, contributes to the widespread abuse of opiates, is the gateway to heroin addiction, and is devastating our communities. DEA pledges to work with our law enforcement and regulatory partners throughout the Commonwealth and nationwide to ensure that these rules and regulations are followed.”
In 2013, an investigation was launched after MGH disclosed to the Drug Enforcement Administration (DEA) that two of its nurses had stolen large volumes of controlled substances (prescription medications) from the hospital. Altogether, the two nurses stole nearly 16,000 pills, mostly oxycodone, an addictive painkiller. Both nurses stole from automated dispensing machines that MGH used to store and dispense prescription medications. DEA’s ensuing audit of MGH’s controlled substances revealed pill count discrepancies totaling over 20,000, missing or incomplete medication inventories, and hundreds of missing drug records, all in violation of the hospital’s responsibilities under the Controlled Substances Act (CSA).
MGH cooperated with the DEA’s investigation and subsequently disclosed additional violations of the CSA. Specifically, MGH disclosed that a pediatric nurse with a 12-year substance abuse problem had injected himself with Dilaudid at work; a physician had prescribed controlled substances for patients without seeing them and without maintaining medical records; several nurses were able to divert prescription drugs for many years without being detected; and medical staff had failed to properly secure controlled substances, even, on occasion, bringing them to lunch.
Since the investigation began, MGH has worked cooperatively with the DEA and the U.S. Attorney’s Office to develop a detailed corrective action plan to address the identified deficiencies in MGH’s handling of controlled substances. Components of the plan include the establishment of an internal drug diversion team; the creation of a full-time drug diversion compliance officer position; mandatory training of all staff with access to controlled substances, including on how to identify the signs and symptoms of substance abuse; enhanced diversion monitoring by supervisors and management; annual external audits to ensure compliance with the CSA; and increased physical controls of controlled substances, including limiting and monitoring access to automated dispensing machines through fingerprint identification.
U.S. Attorney Ortiz and DEA SAC Ferguson made the announcement today. The case was handled by Assistant U.S. Attorneys Jessica Driscoll and Christine Wichers of Ortiz’s Civil Division.
A copy of the settlement agreement, which includes a detailed addendum with the United States’ statement of relevant conduct and MGH’s corrective action plan, is attached below.
Dorchester Gang Member Sentenced to 15 Years in Prison for Sex Trafficking of MinorsRead the Press Release
BOSTON – A Dorchester man was sentenced today in U.S. District Court in Boston for sex trafficking of minors.
“Sex traffickers recruit young women from families across the economic spectrum,” said Carmen M. Ortiz, United States Attorney for the District of Massachusetts. “No family, no matter how well educated or well off is immune. Traffickers prey upon the vulnerabilities of impressionable young people, and while it is the job of law enforcement to bring traffickers to justice, it is the duty of all to shield young people from predators such as this defendant.”
“A recent trend among sex predators and traffickers is the evolving use of modern communications tools to ‘groom’ a potential victim,” said Special Agent in Charge Matthew Etre, of HSI Boston. “Mr. Pledger’s use of these tools to attempt to lure his child victims into sexual slavery tears at the very fabric of our community. Homeland Security Investigations will continue to work aggressively in cooperation with our federal, state and local partners to attack, disrupt and dismantle criminal organizations that harm the vulnerable members of society through such despicable means.”
Anthony Pledger, a/k/a “Polo,” “Polo B,” and “Jaden,” 27, was sentenced by U.S. District Court Judge William G. Young to 15 years in prison and five years of supervised release. In February 2015, Pledger pleaded guilty to two counts of sex trafficking of two minor women after being indicted in February 2014.
In October 2013, Pledger brought 16 and 15-year-old girls from Massachusetts to Providence, R.I. intending to have them engage in prostitution. The minors were rescued by Rhode Island and Massachusetts police officers before any prostitution occurred.
Judge Young described Pledger’s convictions as “horrific crimes … that have so changed the lives of the victims that it’s impossible to predict.”
The indictment also charged Miriam Kizzie, 21, with sex trafficking of two other minors (identified as Minors 3 and 4) in July 2013. In May 2015, Kizzie was sentenced to 153 months in prison for causing a 14-year-old girl and a 15-year-old girl, to be advertised online for prostitution and to engage in prostitution.
Court documents alleged that both Pledger and Kizzie were members of the Thetford Avenue Buffalos, a local Boston street gang. As part of Pledger’s sentence, Judge Young ordered that Pledger may not have contact with other alleged members of the gang during the five years of Pledger’s supervised release.
U.S. Attorney Ortiz, HSI SAC Etre, and Boston Police Commissioner William Evans made the announcement today. The case was also investigated by the Rhode Island State Police, Massachusetts State Police, and the Brookline, Providence, Brockton, and Dedham Police Departments. Significant assistance was provided by the Rhode Island Attorney General’s Office, and Plymouth, Middlesex and Suffolk County District Attorney’s Offices. The case is being prosecuted by Assistant U.S. Attorneys Amy Harman Burkart and Timothy E. Moran of Ortiz’s Civil Rights Enforcement Team.
Massachusetts Probation Officer Charged with Making False StatementsRead the Press Release
BOSTON – A Massachusetts Department of Probation officer was charged today with making a false statement to the FBI in connection with a public corruption investigation.
Lawrence Plumer, 46, of Brockton, was charged in an Information with one count of making a false statement to the FBI. Plumer has been a Massachusetts probation officer 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. The plea agreement also filed today states that Plumer has agreed to resign his position as a probation officer. 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; Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The U.S. Attorney’s Office also acknowledges 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 and Special Prosecutions 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.
Massachusetts Probation Officer Charged with Making False StatementRead the Press Release
BOSTON – A Massachusetts Department of Probation officer was charged today with making a false statement to the FBI in connection with a public corruption investigation.
Lawrence Plumer, 46, of Brockton, was charged in an Information with one count of making a false statement to the FBI. Plumer has been a Massachusetts probation officer 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. The plea agreement also filed today states that Plumer has agreed to resign his position as a probation officer. 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; Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The U.S. Attorney’s Office also acknowledges 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 and Special Prosecutions 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.
Washington D.C. Man Charged with Transporting Teenage Boy to Engage in Sexual ActivityRead the Press Release
BOSTON – Jason Michael Wolf, 29, was arrested and charged today in U.S. District Court in Boston with one count of transportation of a minor in interstate commerce to engage in illegal sexual activity. Wolf was ordered detained during an initial appearance today before U.S. Magistrate Judge Marianne B. Bowler.
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; Joseph R. Bonavolonta, Acting 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 complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Teamster Sentenced for Stealing Unemployment BenefitsRead the Press Release
BOSTON – A member of the Boston Teamsters Local 82 was sentenced today in U.S. District Court in Boston in connection with stealing unemployment insurance benefits.
Thomas Flaherty, 52, of Braintree, was sentenced by U.S. District Court Judge Denise J. Casper to two years of probation, a fine of $1,000, and restitution of $21,011. In July 2015, Flaherty pleaded guilty to three counts of mail fraud for defrauding the Massachusetts Department of Workforce Development, Division of Unemployment Assistance of unemployment insurance benefits.
From March 2010 to December 2011, while working for Local 82, Flaherty’s gross earnings were $49,890; however, Flaherty made several misrepresentations so that he could collect unemployment insurance benefits. Specifically, Flaherty falsely reported to the Department of Unemployment Insurance that during the same time period he earned only $10,102. Flaherty failed to report his weekly earnings or significantly under-reported his earnings so that it appeared to the Department of Unemployment Insurance that he was eligible to receive full or at least partial unemployment insurance when, in fact, he was employed nearly full time and was not eligible. In total, Flaherty collected $21,093 in unemployment insurance benefits.
United States Attorney Carmen M. Ortiz; Scott S. Dahl, Inspector General of the U.S. Department of Labor, Office of Inspector General; Jonathan Russo, District Director of the U.S. Department of Labor, Office of Labor-Management Standards; Susan A. Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration; and Boston Police Commissioner William Evans, made the announcement. The case is being prosecuted by Assistant U.S. Attorneys Laura J. Kaplan of Ortiz’s Organized Crime and Gang Unit and Susan G. Winkler of Ortiz’s Narcotics and Money Laundering Unit.
Former Hanover Post Office Employee Sentenced for Mail TheftRead the Press Release
BOSTON – Amber Lopresti, 28, of Taunton, was sentenced today by U.S. District Court Judge George A. O’Toole, Jr., to two years of probation and restitution of $2,410.
In June 2015, Lopresti, a former employee of the United States Postal Service in Hanover, pleaded guilty to embezzling the U.S. mail and stealing the contents of the mail over a five month period while she was an employee. Lopresti has since been terminated.
On Oct. 8, 2014, while working as a Post Office employee, Lopresti was observed on a security camera rifling through the mail, removing unopened letters and greeting cards, and concealing them beneath her waistband. When her shift was over, she left the Post Office and removed the letters from her waistband once she was in her vehicle. She was stopped by police a short time later and the unopened letters and money were observed on her lap. Lopresti admitted to law enforcement officers that she took money from one of the stolen letters. She further admitted that in June 2014 she began stealing letters and contents from the letters from the Hanover Post Office, and had taken approximately $2,000 in cash, cards, and scratch tickets.
United States Attorney Carmen M. Ortiz; Eileen Neff, Special Agent in Charge of the U.S. Postal Service, Office of Inspector General, Northeast Area Field Office; and Hanover Police Chief Walter Sweeney, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz’s Major Crimes Unit.
Chicopee Man Charged with Child PornographyRead the Press Release
BOSTON – A Chicopee man was charged today in U.S. District Court in Springfield with receiving and possessing child pornography.
Victor Stepus, 47, was indicted on three counts of receipt of material involving the sexual exploitation of children and one count of possessing material involving the sexual exploitation of children.
According to court documents, on Aug. 21, 2015, federal agents executed a search warrant at Stepus’s residence. During the search, agents seized a personal computer that contained over 8,000 images and 33 videos of child pornography. These included image files that depicted the sexual abuse, including bondage, of girls as young as eight years old. During an interview with federal agents, Stepus admitted that, for the past several years, he used his home computer to access and download child pornography two to three times per week.
On each count of receipt of child pornography, the statute provides a minimum mandatory sentence of five years and no greater than 20 years in prison, a minimum of five years and up to a lifetime of supervised release, a fine of $250,000, forfeiture and restitution. The charge of possession of child pornography provides a sentence of no greater than 20 years in prison, a minimum of five years and up to a lifetime of supervised release, a fine of $250,000, forfeiture and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and 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 Steven H. Breslow of Ortiz’s Springfield Branch Office.
Members of the public who have questions, concerns, or information regarding this case should call (617) 748-3274.
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 charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Lowell Man Arrested for $440,000 Embezzlement SchemeRead the Press Release
BOSTON – A Lowell man was arrested yesterday on bank fraud charges in connection with his theft of more than $440,000 from the Spain-based seafood and fish distributor for which he served as the United States representative.
Jorge Manuel Silva, 58, was indicted on 23 counts of bank fraud. He was released on conditions during his initial appearance today before U.S. District Court Magistrate Judge Donald L. Cabell.
The indictment alleges that Silva was an independent contractor for Seaport Fish Co., a corporation established to distribute fish and seafood in the United States by Freiremar Group, headquartered in Spain. Silva was responsible for coordinating sales to Seaport customers, collecting customer payments, and depositing those payments into Seaport’s account at Bank of America. The indictment alleges that, from July 2008 through June 2010, Silva instead diverted more than $903,000 in Seaport customer checks to two accounts he held at Enterprise Bank in Lowell.
On occasion, Silva reimbursed Seaport with checks drawn on his Enterprise accounts several weeks or months after he had deposited the customer checks into those accounts. On other occasions, he used Seaport funds to pay personal expenses and the expenses for his other businesses. In this fashion, Silva diverted about $440,000 of Seaport funds to his own uses.
The charge of bank fraud provides a sentence of no greater than 30 years in prison, five years of supervised release, and a fine of $1 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement. The case is being prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Catherine Greig Indicted on Criminal ContemptRead the Press Release
BOSTON – Catherine Greig, longtime companion of convicted killer James “Whitey” Bulger, was indicted today in U.S. District Court in Boston in connection with her refusal to testify before a grand jury.
“Ms. Greig was ordered by the Court to testify before a grand jury about whether others assisted Mr. Bulger while he lived on the lam for 16 years,” said United States Attorney Carmen M. Ortiz. “By refusing to comply with that order, Ms. Greig has committed a new crime and this indictment seeks to hold her accountable. The grand jury is entitled to her testimony and flouting a federal court’s order has substantial consequences.”
"Catherine Greig has yet again failed to do the right thing,” said Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “Her refusal to testify has hindered the FBI's efforts to seek justice for the victims of his crimes. Our efforts to find those who assisted them during their lives as fugitives will not stop despite the fact that Ms. Greig has refused to testify."
Catherine E. Greig, 64, was indicted on one count of criminal contempt. The indictment alleges that on Dec. 9, 2014, and continuing through Sept. 22, 2015, Greig refused to testify before a federal grand jury regarding an investigation into whether other individuals assisted Bulger while he was a fugitive from 1995 through 2011. In 2012, Greig was convicted of identity fraud and harboring James J. Bulger, and was sentenced to eight years in federal prison.
The charge of criminal contempt provides for a prison sentence to be served subsequent to her current eight-year prison sentence and a fine. There is no fixed maximum penalty for criminal contempt, so courts may impose any sentence. 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 Mary B. Murrane of Ortiz’s Major Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Woburn Promoter Charged in Stock Price Manipulation SchemeRead the Press Release
BOSTON – A stock promoter from Woburn was charged today in U.S. District Court in Boston with securities fraud in connection with his participation in a scheme to manipulate the market for the publicly traded stock of a microcap company.
Louis Buonocore, 60, was charged with conspiracy and securities fraud based on his involvement in the manipulation of the stock of YaFarm Technologies, Inc. (YaFarm), a penny stock company that claimed to be entering the stem cell therapy business.
In a parallel action, the Securities and Exchange Commission (SEC) announced securities fraud charges today against Buonocore and another individual, Frank Morelli, in connection with the scheme.
According to the Information, in late 2012, Buonocore and his co-conspirators secretly acquired majority control of YaFarm’s free-trading shares, using nominees to conceal their ownership from the SEC and others. In early 2013, with millions of shares at their disposal, Buonocore and his co-conspirators launched a misleading promotional campaign to persuade investors that YaFarm was acquiring a successful stem cell therapy business and the new laboratory it was building in Cancun, Mexico. In reality, YaFarm had no meaningful operations, the institution being acquired was still in development, and it lacked the funds needed to build the laboratory. As a result of the hype created by the misleading press releases, Buonocore and his co-conspirators were able to sell their YaFarm stock to unwitting investors at artificially high prices.
These charges arise out of a multi-year investigation focusing on preventing fraud in the microcap stock markets. Microcap companies are small publicly traded companies whose stock often trades at pennies per share. Fraud in the microcap markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the SEC.
Today’s charges follow a series of cases filed by the SEC and the U.S. Attorney for the District of Massachusetts in which more than 20 individuals have been criminally charged and convicted for using kickbacks and other schemes to trigger investment in, or manipulate the stock of, thinly-traded stocks.
The charge of securities fraud provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $5 million. The conspiracy charge provides a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000, or twice the gross loss to the victim. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Ortiz and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The criminal case is being prosecuted by Assistant U.S. Attorney Eric Christofferson of Ortiz’s Economic Crimes Unit and SEC Attorney Andrew Palid, who was appointed as a Special Assistant U.S. Attorney.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Biotech Company and CEO Agree to Resolve Allegations of Grant FraudRead the Press Release
BOSTON – Sterling Biomedical LCC (Sterling), a biotechnology company in Lynnfield, and its president and CEO, Dr. Michael Szycher, have agreed to pay $200,000 to resolve allegations that they violated the False Claims Act by submitting false claims for National Science Foundation (NSF) grants. In addition, Sterling and Szycher have agreed not to apply for National Science Foundation funding for five years.
“There are many deserving researchers who apply for government grants in order to perform novel and groundbreaking research,” said United States Attorney Carmen M. Ortiz. “It is both unacceptable and unethical for scientists to submit falsified information in order to gain a competitive edge among applicants for government grants.”
Allison Lerner, Inspector General at the National Science Foundation, said, “This fraudulent scheme illegally diverted valuable and scarce federal research dollars from advancing new technologies. I commend the U.S. Attorney’s Office for its strong support in this case.”
Between 2009 and 2011, Sterling received $539,000 in grant funding from the National Science Foundation. This settlement resolves allegations that in proposals submitted to the National Science Foundation, Szycher misrepresented the size and assets of Sterling and its ability to perform the proposed research. The government further alleges that Szycher failed to perform the funded research as described for one of the grants received, and then fraudulently represented to NSF that he had completed the research.
U.S. Attorney Ortiz and NSF IG Lerner, made the announcement today. The matter was handled by Assistant U.S. Attorney Giselle J. Joffre and former Assistant U.S. Attorney Veronica Lei of Ortiz’s Civil Division.
Golfer Sentenced for Insider Trading SchemeRead the Press Release
BOSTON – A Waltham man was sentenced today for conspiracy and insider trading in connection with tipping friends and fellow golfers with inside information about the business activities of American Superconductor Corporation (AMSC).
Eric McPhail, 41, was sentenced by U.S. District Court Judge Denise J. Casper to 18 months in prison and two years of supervised release. In June 2015, McPhail was convicted, following a seven-day jury trial, of conspiring to commit securities fraud and securities fraud. McPhail had been indicted in July 2014.
According the evidence presented at trial, starting around July 2009, McPhail, who is a competitive amateur golfer, began giving his friends inside information about AMSC’s business activities and upcoming earnings announcements. McPhail obtained this information during golf games at the Oakley Country Club in Watertown and other social outings with a close friend who was a senior executive at AMSC. The executive, however, trusted McPhail to keep the information to himself and was unaware that McPhail was using it to tip his friends.
Over a two-year period spanning July 2009 to April 2011, several of McPhail’s friends repeatedly traded on the inside information. According to evidence presented at trial, McPhail’s tippees successfully traded on material, nonpublic information about AMSC on at least five occasions, making a total of over $500,000 in illicit gains. One of McPhail’s tippees, Douglas Parigian, who is also a competitive amateur golfer, previously pleaded guilty to securities fraud charges in May 2015.
United States Attorney Carmen M. Ortiz; Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Paul Levenson, Regional Director of the Securities and Exchange Commission, Boston Regional Office, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Andrew E. Lelling and Seth B. Kosto of Ortiz’s Economic Crimes Unit.
Federal Penalty for Swampscott Water PollutionRead the Press Release
BOSTON – The Town of Swampscott entered into a Consent Decree today agreeing to pay a $65,000 civil penalty and to take critical remedial measures to address pollution the Town discharged into the ocean near local beaches.
The Consent Decree is the result of a federal enforcement action brought by the U.S. Department of Justice, on behalf of the U.S. Environmental Protection Agency (EPA). The complaint filed simultaneously with the Consent Decree alleges that Swampscott discharged pollutants into its storm water drainage system in violation of its permits.
“By entering this Consent Decree, Swampscott will take the steps necessary to stop pollutants from entering Massachusetts and Nahant Bays,” said United States Attorney Carmen M. Ortiz. “Swampscott is required to locate the source of all unauthorized discharges that enter its storm drains and eliminate them. Successful implementation of the Consent Decree will result in cleaner storm water system discharges and a healthier environmental for all.”
“Under this settlement, the Town will continue to work cooperatively toward controlling contaminated storm water reaching beaches,” said Curt Spalding, Regional Administrator of the EPA’s New England office. “The Town has made improvements in recent years, and we expect that progress to continue.”
Between 2010 and 2012, the EPA tested multiple water samples from the Town’s storm water outfalls and found that the Town was discharging multiple pollutants into waters of the Massachusetts and Nahant Bays. These pollutants included e. coli, enterococcus bacteria, ammonia, and pharmaceutical and personal care products. The Town continues to discharge untreated wastewater containing sewage and other pollutants from its systems into these waters.
The Consent Decree imposes a schedule for the Town to screen and monitor its storm water outfalls during dry and wet weather. Where pollutants are found, the Town must eliminate the flows conveying the pollutants. In addition, the Town must take action to control runoff from land redevelopment projects.
The Consent Decree also assesses a $65,000 civil penalty against the Town for its Clean Water Act violations. Swampscott is subject to vigorous reporting requirements to ensure compliance with the terms of the Consent Decree. If it fails to comply, it may be subject to additional penalties as high as $2,500 per each day of violation.
Preventing pollutants from contaminating surface waters of the United States is one of the EPA’s National Enforcement Initiatives. Municipal wastewater presents significant health threats to those using contaminated waters for recreational use.
The Consent Decree is subject to a 30-day public comment period and approval by the federal court. Once it is published in the Federal Register, a copy of the Consent Decree will be available on the Justice Department website at http://www.justice.gov/enrd/Consent_Decrees.html.
U.S. Attorney Ortiz and EPA Regional Administrator Spalding, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Susan M. Poswistilo of Ortiz’s Civil Division, Senior Attorney Michael Wagner of the EPA, and the Department of Justice’s Environmental and Natural Resources Division.
Former Cambridge Resident Sentenced to Prison for Swindling Money through Prep School Admissions BusinessRead the Press Release
BOSTON – The owner and operator of a prep school admissions business was sentenced yesterday in U.S. District Court in Boston in connection with his role in embezzling funds.
Mark J. Zimny, 43, was sentenced by U.S. District Court Judge Rya W. Zobel to 63 months in prison, three years of supervised release, forfeiture of $852,564, and restitution of $839,470. On April 8, 2015, Zimny was convicted by a federal jury of five counts of wire fraud, five counts of unlawful money laundering, two counts of filing false federal tax returns, and one count of bank fraud. The jury acquitted Zimny on an additional count of bank fraud.
Zimny owned and operated a business called IvyAdmit Consulting Associates that claimed to assist students in obtaining admission to elite American prep schools, colleges, and universities. In 2008, Zimny defrauded a wealthy couple from Hong Kong of more than $650,000 by promising that if they provided him large funds to give to prep schools in New England for “development contributions,” he could influence admissions decisions to the schools on behalf of the couple’s two children. Rather than delivering the funds to the schools as he promised, however, Zimny embezzled the funds for his own purposes.
Furthermore, Zimny defrauded Mt. Washington Bank (now part of East Boston Savings Bank) by providing the bank with false information, including fictitious tax returns that over reported his receipts from IvyAdmit, to support his application for a mortgage loan.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Victor A. Wild of Ortiz’s Economic Crimes Unit and Giselle J. Joffre of Ortiz’s Civil Division.
Topsfield Man Pleads Guilty to Tax and Bankruptcy Fraud ChargesRead the Press Release
BOSTON – A Topsfield man pleaded guilty today in connection with evading nearly $400,000 in federal income taxes and false statements he made in bankruptcy filings.
Robert P. Bonefant, Jr., 57, pleaded guilty to two counts of tax evasion, three counts of filing a false tax return, and three counts of bankruptcy fraud for making false statements. U.S. District Chief Judge Patti B. Saris scheduled sentencing for Dec. 18, 2015.
In late 2008, the IRS assessed Bonefant for $194,430 in taxes owed for tax years 2004 and 2005. Thereafter, Bonefant took steps to prevent the IRS from learning of his true income and determining his actual tax liabilities. He did so by, among other things, depositing $1 million into his father’s bank accounts, including both taxable income and non-taxable business expense reimbursements. Bonefant also filed three federal income tax returns that failed to report significant income he had received for tax years 2009, 2011, and 2012. Additionally, he failed to file taxes for 2010. In total, including the amounts assessed for 2004 and 2005 and the amounts owed for 2009 through 2012, Bonefant failed to pay approximately $386,984 in taxes.
In 2012, Bonefant filed a chapter 7 bankruptcy case in Massachusetts seeking to discharge various debts, including the outstanding 2004 and 2005 federal tax liability. In documents filed with the Bankruptcy Court, and which he signed under the penalty of perjury, Bonefant made false statements concerning his income and assets, as well as his use of his father’s bank accounts.
The charge of tax evasion provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. The charge of filing a false tax return provides a sentence of no greater than three years in prison, one year of supervised release, and a fine of $250,000. The charge of bankruptcy fraud 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; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The U.S. Trustee’s Office in Boston also provided assistance with this case. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
Former COO Sentenced to Prison for Selling Confidential InformationRead the Press Release
BOSTON – A Connecticut executive was sentenced today in U.S. District Court in Boston on charges that he sold confidential business information regarding the wireless industry to an analyst at a Boston-based financial services firm.
James Dunham, 60, of Glastonbury, Conn., was sentenced by U.S. District Court Judge Douglas P. Woodlock to five months in prison and five months of home confinement, three years of supervised release, a fine of $15,000, and forfeiture of $61,000. In June 2015, Dunham pleaded guilty to wire fraud after being arrested and charged in February.
Dunham, formerly the Chief Operating Officer of a retailer for a major provider of wireless services, had access to confidential information regarding sales, compensation, and product launches at the retailer’s 400 locations. For more than two years, and unbeknownst to his employer, Dunham had a secret consulting agreement with a financial services firm to provide confidential information in return for which he was paid $2,000 per month.
The charging document to which Dunham pleaded guilty identifies seven research notes prepared and distributed by the financial services firm that include information supplied by Dunham, including information regarding the status of certain product launches, the number of new subscribers to a specific wireless provider, and sales and return information for specific smartphones. In particular, Dunham was the source for an April 11, 2013, research note in which the firm reported that sales for a specific smartphone were running below customers’ returns of the same smartphone.
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 United States Attorney’s Office also received valuable assistance from the Securities and Exchange Commission. The case was prosecuted by Assistant U.S. Attorney Sarah E. Walters, Chief of Ortiz’s Economic Crimes Unit.
Brockton Man Convicted by Federal Jury of Illegal Firearm PossessionRead the Press Release
BOSTON – A Brockton man was convicted in U.S. District Court in Boston on Friday, Sept. 11, 2015, for being a felon in possession of a firearm and ammunition.
Foster L. Starks, Jr., 54, of Brockton, was convicted following a week-long jury trial of being a felon in possession of a firearm and ammunition. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Oct. 28, 2015.
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. The vehicle needed to be towed, and prior to towing, the Trooper was required to conduct a search of the contents of the vehicle. While performing the search, 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 has numerous prior convictions for various violent crimes, including armed robbery, and therefore was prohibited from possessing firearms or ammunition.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys David G. Tobin and Jordi de Llano of Ortiz’s Major Crimes Unit.
Pastor Sentenced for Filing False Tax ReturnsRead the Press Release
BOSTON – A former Worcester tax preparer was sentenced today for filing false tax returns with the IRS.
Nydia Elicier, 56, owner of Cox Elicier Tax, was sentenced by U.S. District Court Judge Timothy Hillman to two years of probation, the first three months of which she is restricted by location monitoring, and 100 hours of community service. Elicier is also prohibited from working as a tax preparer. In April 2015, Elicier was convicted following a four-day jury trial of four counts of aiding or assisting in the preparation of false tax returns.
In 2008, Elicier, who also served as a pastor in a Worcester congregation, inflated client refunds by falsifying deductions in filings with the IRS. Specifically, Elicier generated illegal refunds for clients by claiming deductions typically reserved for educators, false gifts to charity, overinflated medical expenses, and fraudulent unreimbursed employee expenses.
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 Jordi de Llano of Ortiz’s Major Crimes Unit.
Former Somerville and Cambridge Teacher Sentenced for Child PornographyRead the Press Release
BOSTON – Josh Wairi, 28, of Somerville, was sentenced today by U.S. District Court Judge William G. Young to 12 years in prison and eight years of supervised release. In May 2015, Wairi was convicted following a jury trial of transportation of child pornography and possession of child pornography. When released from prison, Wairi will be required to register as a sex offender.
Wairi, a former fifth and sixth grade teacher in the Somerville and the Cambridge Public Schools, used his email account to trade and receive images and videos of child pornography, and also uploaded images and videos of children being sexually exploited. Wairi possessed more than 27,000 images and over 530 videos of children engaged in sexually explicit conduct. Wairi admitted to viewing the images for sexual self-gratification.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Somerville Police Chief David Fallon; and Cambridge Police Commissioner Robert Haas, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Suzanne Sullivan Jacobus and Seth B. Orkand 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.
Chairman of Boston-Based Biomedical Company Arrested in Stock-Fraud SchemeRead the Press Release
BOSTON – The chairman of a Boston-based biomedical company was arrested this morning on charges arising out of his participation in a scheme to defraud the market for the publicly traded stock of the company.
Edward Withrow, III, 51, of Malibu, Calif., was charged in U.S. District Court in Boston with one count of conspiracy, one count of securities fraud, two counts of wire fraud, and two counts of making false statements. Withrow’s co-conspirator, Marco Babini, 54, was charged with one count of conspiracy, one count of securities fraud, and two counts of wire fraud. Babini, who is believed to reside in Vancouver, Canada, remains at large.
In a parallel action, the Securities and Exchange Commission (SEC) announced securities fraud charges today against Withrow, Babini, and a third individual, Samuel Brown, in connection with the scheme. In addition, the SEC charged Withrow with failing to disclose his stock holdings in accordance with federal rules and regulations.
According to the indictment, in November 2012, Withrow became the chairman of Endeavor Power Corporation (Endeavor), a Boston-based biomedical company focused on infectious diseases, and became a significant owner of Endeavor’s stock. Around that time, Withrow, Babini and at least one other individual, allegedly orchestrated a promotional campaign and engaged in manipulative trading designed to inflate investor interest in Endeavor’s publicly traded stock. At that time, Withrow and Babini concealed their significant control over Endeavor’s publicly traded stock from potential investors. In March 2013, the SEC suspended trading in the securities of Endeavor, which stopped the scheme in progress. Thereafter, when Withrow was questioned under oath by SEC attorneys about the Endeavor scheme, he lied about his and others’ involvement.
The charges follow a multi-year investigation focusing on preventing fraud in the microcap stock markets. Microcap companies are small publicly traded companies whose stock often trades at pennies per share. Fraud in the microcap markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the SEC.
Today’s charges follow a series of cases filed by the SEC and the U.S. Attorney for the District of Massachusetts in which more than 20 individuals have been criminally charged and convicted for using kickbacks and other schemes to trigger investment in, or manipulate the stock of, thinly-traded stocks.
The charge of conspiracy and securities fraud provides a sentence of no greater than 25 years in prison, three years of supervised release, and a fine of $250,000, or twice the gross gain or loss. The charge of wire fraud provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000, or twice the gross gain or loss. The charge of making false statements provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000, or twice the gross gain or loss. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Ortiz and Acting SAC Bonavolonta made the announcement today. The criminal case is being prosecuted by Assistant U.S. Attorney Eric Christofferson of Ortiz’s Economic Crimes Unit and SEC Attorney Eric A. Forni, who was appointed as a Special Assistant U.S. Attorney.
The details contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Violent South Coast Drug Dealer Sentenced to over 20 Years in PrisonRead the Press Release
BOSTON – A violent South Coast drug dealer was sentenced yesterday in U.S. District Court in Boston for the robbery of two large-scale oxycodone dealers and related narcotics crimes.
“The communities of the South Shore can rest assured knowing that this violent, high-level narcotics dealer will remain behind bars for an extended period,” said United States Attorney Carmen M. Ortiz. “This case reflects our commitment to investigations and prosecutions of drug traffickers who flood our state with opiates and use violence to further their operations.”
“DEA is committed to investigating and dismantling violent Drug Trafficking Organizations (DTO) like this one headed by Monteiro,” said Special Agent in Charge Michael J. Ferguson of the Drug Enforcement Administration, New England Field Division. “The Monteiro DTO has been in operation for many years, poisoning the streets of the South Coast and Cape Cod with heroin. These are not low level incidents related to the throws of addiction. These were calculated, criminal acts committed by violent drug offenders. This investigation would not have been a success without the continued commitment of our state and local law enforcement partners.”
Francisco Monteiro, a/k/a “Cisco,” 34, of Bourne, Mass., was sentenced today by U.S. District Court Judge Denise J. Casper to 250 months in prison. Following a two-week jury trial, Monteiro was convicted in April 2014 of conspiracy to distribute 100 grams or more of heroin, distribution of heroin, possession with intent to distribute heroin, and interference with commerce by threat or violence (a drug robbery).
Monteiro, a long-time South Coast drug trafficker, acquired drugs to sell through violent drug robberies. At trial, federal agents testified how, in February 2013, Monteiro was recorded agreeing to provide large quantities of heroin to a cooperating witness and then recorded Monteiro as he and two associates sold nearly 100 grams of heroin to a cooperating witness. When agents attempted to set up a second heroin purchase, Monteiro robbed the cooperating witness of the “buy money.” Monteiro was arrested three days later, at which time agents seized heroin, much of the stolen money, other drug trafficking materials, handcuffs, and brass knuckles from his home.
The jury also heard testimony concerning a 2011 robbery committed by Monteiro and several other men. In May 2011, Monteiro was confined to his home and monitored by a GPS device because of a pending state prosecution. Nevertheless, Monteiro and others lured Stanley Gonsalves and Joshua Gonsalves, two large-scale Cape Cod OxyContin dealers, to a meeting where the Gonsalves brothers believed they were purchasing 15,000 OxyContin pills. Instead, Monteiro and his crew robbed the Gonsalves brothers of the $225,000 they brought to purchase the pills.
Judge Casper previously sentenced Monteiro’s heroin trafficking co-defendants. In May 2015, Manuel Lopes was sentenced to 188 months in prison. In April 2015, Judge Casper sentenced Henry Parsons, the middle man in the sale, to 66 months in prison.
After a separate federal investigation, Stanley and Joshua Gonsalves were convicted of conspiracy to distribute oxycodone and money laundering. Joshua Gonsalves was sentenced to 20 years in prison in January 2015. In June 2015, Stanley Gonsalves was sentenced to 25 years in prison.
United States Attorney Carmen M. Ortiz; Drug Enforcement Administration Special Agent in Charge Michael J. Ferguson; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Attleboro Police Chief Kyle Heagney; and Taunton Police Chief Edward James Walsh, made the announcement. Significant assistance was also provided by the Barnstable and Bristol County Sheriffs’ Offices and the Barnstable, Bourne, Fairhaven, Fall River, New Bedford, and Wareham Police Departments. The case was prosecuted by Assistant U.S. Attorneys Christopher Pohl and Timothy E. Moran of Ortiz’s Organized Crime and Gang Unit.
Merrimack College Professor Pleads Guilty to Possession of Child PornographyRead the Press Release
BOSTON – The former chairman of Merrimack College’s Civil Engineering Department pleaded guilty yesterday to possession of child pornography.
Gary S. Spring, 61, of Danvers, pleaded guilty to one count of possession of child pornography after being charged in September 2014. U.S. District Court Judge Richard G. Stearns scheduled sentencing for December 9, 2015. Spring was also the administrator of the college’s residential summer camp for middle and high school aged children.
In June 2014, Merrimack College in North Andover uncovered suspicious activity associated with one of the college’s loaner computers through virus threat detection alerts. An internal investigation determined that the computer had been loaned out to Spring, and that Spring had been logged on when the alerts were triggered. Further investigation determined that the computer was used to access child pornography.
Search warrants were executed at Spring’s office at Merrimack College and his residence in Danvers. During an interview with law enforcement officers, Spring admitted to viewing and saving child pornography on various electronic media devices, destroying evidence of his child pornography collection by throwing away two thumb drives, and by wiping and recycling his personal computer. Forensic examination revealed that over 300 images of child pornography were viewed on the computer.
The charging statute provides a sentence of no greater than 20 years in prison, five years 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; Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; North Andover Police Chief Paul J. Gallagher; and Merrimack College Police Chief Michael DelGreco, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Eve A. Piemonte of Ortiz’s Major Crimes Unit.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.
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/.
Gardner Woman Pleads Guilty to Fraudulently Receiving Disability Benefits and Food StampsRead the Press Release
BOSTON – A Gardner, Mass. woman pleaded guilty today in U.S. District Court in Worcester to fraudulently receiving over $100,000 in public benefits.
Heidi Narcisse, 45, pleaded guilty to two counts of theft of public money. Narcisse was charged in a felony Information in August 2015. Sentencing is scheduled for Dec. 9, 2015.
Narcisse began collecting Social Security Supplemental Security Income (SSI) disability benefits in 1999 and Supplemental Nutrition Assistance Program (SNAP) benefits in 2011. To be eligible for these benefits, a person must have very limited income and financial resources, and a person’s spouse’s income can make a person financially ineligible for benefits. In order to receive these benefits, Narcisse repeatedly and falsely stated that she was separated from her husband, lived alone with her children, and had no outside support. In reality, in July 2006, Narcisse and her husband bought a house together in Gardner, listed that house as their residential address on their respective driver’s licenses, and filed joint tax returns listing the same address. In addition, Narcisse’s husband, who had income from his job, regularly gave Narcisse money for household expenses. If Narcisse had truthfully reported her living situation and her husband’s financial support, she would not have been eligible to receive the SSI and SNAP benefits. From 2006 to 2014, Narcisse illegally received $100,512 in SSI benefits, and from 2011 to 2015 she received $17,012 in SNAP benefits.
The charge of theft of public money provides a sentence of no greater than 10 years in prison, three years of supervised release, a fine of $250,000 and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; and Suzanne M. Bump, State Auditor of the Commonwealth of Massachusetts, made the announcement today. The case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Boston Sex Offender Sentenced for Failing to RegisterRead the Press Release
BOSTON – James Edward Mercer, 49, was sentenced yesterday by U.S. District Court Judge Denise J. Casper to 21 months in prison and five years of supervised release. In May 2015, Mercer pleaded guilty to failing to register as a convicted sex offender.
Mercer was previously convicted in Massachusetts in 1992 and again in 1996 of indecent assault and battery on a person above the age of 14. As a result of these convictions, Mercer was classified as a sex offender and is required to register as such in each state in which he resides through December 2018. Mercer first registered as a sex offender in 2005 in Massachusetts. Thereafter he moved to Florida where he failed to register and was convicted, serving a 12 month probation sentence. Following that, Mercer moved to California where he registered; however, in December 2014, Mercer returned to Massachusetts and failed to register as a sex offender here.
United States Attorney Carmen M. Ortiz and John Gibbons, U.S. Marshal for the District of Massachusetts, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Seth B. Orkand 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/.
Former Roxse Homes Workers Charged with Taking BribesRead the Press Release
BOSTON – Two former Roxse Homes employees were arrested today on charges that they conspired to rent apartments at the housing development in Roxbury to individuals who were not qualified for those apartments, in exchange for cash bribes.
Mathis Lemons, 41, of Brockton, and Ismael Morales, 35, of Jamaica Plain, were indicted on one count of conspiracy and seven counts of bribery.
The Indictment alleges that Lemons was the assistant property manager and that Morales was a maintenance technician for Roxse Homes, a subsidized housing development on Tremont Street in Roxbury. At Roxse Homes, eligible low-income families and individuals can obtain rental housing for a subsidized rate with Section 8 housing benefits from the U.S. Department of Housing and Urban Development. In 2014, there was a shortage of federally subsidized Section 8 housing in Massachusetts, and Roxse Homes maintained a long waitlist of applicants desiring apartments in the complex. The Roxse Homes waitlist had been closed to external applicants since 2009.
The Indictment alleges that, between approximately September 2014 and February 2015, Lemons and Morales conspired to rent apartments to individuals who were not eligible for subsidized Roxse Homes apartments because they were not on the waitlist. Morales solicited and accepted money from individuals, and in return provided them with blank rental applications. Morales also instructed some of the individuals not to date their applications, or to date their applications in 2006 or 2009, when in fact the applications were completed in 2014. Lemons then added the unqualified individuals to the Roxse Homes computerized waitlist, and falsely wrote that their application dates were 2006 or 2009.
The charge of conspiracy provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. The charge of bribery provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, New York Regional Office; Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Glenn A. Cunha, Inspector General of Massachusetts; and Boston Police Commissioner William B. Evans, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kristina E. Barclay of Ortiz’s Public Corruption 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.
Former Insurance Salesman Arrested for Tax EvasionRead the Press Release
BOSTON – A former insurance salesman was arrested this morning in connection with the theft of more than $500,000 he stole from three clients.
Paul Disidoro, 64, of Georgetown, Mass., was charged in a criminal complaint with attempting to evade income taxes. He is scheduled to appear in U.S. District Court in Boston at 3:30 p.m. today before U.S. District Court Magistrate Judge M. Page Kelley.
The complaint alleges that for many years Disidoro operated an insurance business from his home, and that he sold fixed annuities for Sun Life Financial. From 2007 through 2010, Disidoro stole $515,597 from three of his clients and used the money for his personal benefit, including spending more than $100,000 for online horse race betting. Disidoro did not report any of the stolen funds as income on his federal income tax returns and did not pay any taxes on the funds. Instead, Disidoro filed tax returns reporting only the commissions he had received from various insurance companies, which the insurance companies also had reported, as required, to the IRS.
The charge of tax evasion provides a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000, or twice the gross gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Anthony DiPaolo, Chief of Investigations of the Insurance Fraud Bureau of Massachusetts, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Sandra S. Bower 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.
Florida Woman Pleads Guilty to Bogus Loan SchemeRead the Press Release
BOSTON – A Florida woman pleaded guilty today in connection with an advance fee scheme involving approximately 100 victims throughout the United States, including many in Massachusetts.
Ann Elizabeth Ursiny, a/k/a Ann Stone, 51, pleaded guilty to 19 counts of mail fraud and 17 counts of wire fraud all in connection with a fraudulent advance fee scheme in which individuals were induced to pay up-front fees to Ursiny and her entity Trace Financial Group, Inc. (“Trace”) based on representations that those individuals would receive real estate loans, when in fact Ursiny never intended to make any such loans. Ursiny was indicted in May 2014. U.S. District Court Judge Richard G. Stearns scheduled sentencing for Dec. 9, 2015. Ursiny’s codefendant, Robert O’Connor, pleaded guilty in June 2015 to participating in the same scheme by recruiting victims to apply for loans and pay the advance fees. O’Connor is scheduled to be sentenced on March 23, 2016.
From early 2010 to 2011, Ursiny recruited agents, including O’Connor, in several states to solicit individuals to apply for real estate loans through Trace and pay the advance fees. In return, the agents were paid a portion of those advance fees. Ursiny told prospective victims that Trace had successfully processed and disbursed many loans, when, in fact, none were ever disbursed. Ursiny focused the scheme on prospective applicants who had poor credit or whose homes were underwater, and represented that Trace could replace their mortgage with a new, smaller mortgage with lower mortgage interest payments. In fact, Trace never funded any of the loans, and failed to pay refunds as promised. Victims’ funds were used for Ursiny’s personal and family expenses, and to pay “commissions” to agents.
The charging statutes each provide a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; 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 Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
Stock Promoter Indicted for Conspiring to Commit Securities FraudRead the Press Release
BOSTON – A Colorado stock promoter was charged today in U.S. District Court in Boston with conspiring to commit securities fraud by promoting shares of a company and then secretly selling them, without disclosing that he and his co-conspirators controlled almost all of the available shares.
Scott F. Gelbard, 39, a former resident of Lone Tree, Colo., who has since moved to Canada’s Pacific Northwest, was indicted on one count of conspiracy to commit securities fraud and one count of securities fraud.
According to the indictment, Gelbard and his business partners owned and operated Regency Group, LLC, a stock-promotion company in Colorado. Gelbard allegedly hired a disbarred attorney to set up brokerage accounts in the name of phony Panamanian entities that the former attorney controlled so that Gelbard and his partners could secretly accumulate, and then sell, stock in companies that they were promoting. One of those companies was Greenchek Technology, Inc., a firm that purportedly made gasoline-emission-reduction products. Beginning in 2008, Gelbard and his partners allegedly began transferring Greenchek shares they had acquired to the entities controlled by the former attorney. They then intentionally failed to file required disclosures that they had accumulated over 85% of Greenchek’s available shares, despite U.S. Securities and Exchange Commission requirements that such disclosures be made when ownership of a company’s stock exceeds five percent.
As alleged in the indictment, Gelbard then hired a company to distribute certain promotional materials concerning Greenchek, including a series of press releases issued between February and June 2009. Beginning in February 2009, Gelbard and his partners began selling the stock held in the names of the phony Panamanian entities, generating more than $4 million in proceeds by June 2009. At Gelbard’s direction, the former attorney then laundered the proceeds through accounts in Panama and transmitted the money to accounts that Gelbard and his partners controlled or to pay debts that they owed. A federal grand jury in Massachusetts returned the indictment here because a number of victims lived in the Commonwealth.
The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of the greater of $250,000 or twice the gross gain or loss. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Steven Osborne, Special Agent in Charge of the Internal Revenue Service Criminal Investigations, Denver Field Office; 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 Eric P. Christofferson of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Owners of Worcester Payroll Company Plead Guilty to Tax Evasion and FraudRead the Press Release
BOSTON – The co-owners and former owner of a payroll company in Worcester pleaded guilty in U.S. District Court in Worcester to defrauding the Internal Revenue Service (IRS) and tax evasion. One of the co-owners also pleaded guilty to embezzling client and employee funds.
William McCullough, 72, of Westborough, Mass., pleaded guilty to two counts of conspiracy to defraud the IRS, four counts of false statements, four counts of tax evasion, and one count of wire fraud. Robert McCullough, 43, also of Westborough, the son of William McCullough, pleaded guilty to two counts of conspiracy to defraud the IRS and four counts of tax evasion. Gary Davis, 74, of Jupiter, Fla., pleaded guilty to one count of conspiracy to defraud the IRS, and three counts of tax evasion. On Aug. 31, 2015, William McCullough was charged in two Informations, and today, Robert McCullough and Davis were charged in one Information. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for William McCullough on Dec. 1, 2015, for Gary Davis on Dec. 8, 2015, and for Robert McCullough on Jan. 14, 2016.
The McCulloughs are co-owners of Harpers Data Services, a payroll company in Worcester. William McCullough is also the treasurer and his son, Robert, is the president. Gary Davis was a former owner and president of Harpers until his retirement in 2010.
Beginning around 2006, William and Robert McCullough opened and operated two corporate bank accounts at Webster Five Cents Savings Bank. From 2007 to 2012, they funneled approximately $11 million of taxable income into these accounts. The McCulloughs kept these accounts off of the corporation’s books and concealed their existence from the corporate accountant. Thus, the income deposited into these accounts was not reported to the IRS on the corporation’s annual tax returns. As a result, the corporation failed to pay approximately $3.78 million in taxes.
Also during that time, William McCullough wrote checks totaling approximately $4.7 million from one of the Webster Five corporate accounts to himself, Robert McCullough, and Gary Davis. In addition, from 2007 to 2011, William McCullough wrote bonus and dividend checks from Harpers totaling approximately $2.7 million to himself, Robert McCullough, and Gary Davis. William McCullough ensured that none of this income appeared on the appropriate tax reporting forms, and as a result, the defendants failed to pay approximately $1.7 million in taxes from 2007 through 2011.
In a separate Information, William McCullough pleaded guilty to one count of wire fraud. From 2009 through 2011, Harpers maintained client trust accounts and a client tax account. These accounts contained client funds, which were to be used to pay employees’ paychecks and employees’ federal and state taxes. From 2009 through 2011, William McCullough took approximately $1 million from the client trust accounts and deposited it into a Harpers account. In 2010, he took $750,000 from the client tax account and deposited it into a Harpers account. At the time William McCullough took this money, the funds belonged solely to the clients of Harpers Data Services. McCullough’s fraud resulted in a theft of approximately $1.8 million dollars.
The charge of conspiracy to defraud provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of false statements in a tax return provides a sentence of no greater than three years in prison, one year of supervised release, and a fine of $100,000. The charge of tax evasion provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of $100,000. The charge of wire fraud provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. 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 Investigation in Boston; 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 Karin M. Bell, Chief of Ortiz’s Worcester Branch Office.
Federal Detainee Pleads Guilty to Importing “Molly” and Smuggling Designer Drug into Essex County Correctional FacilityRead the Press Release
BOSTON – A federal detainee being held at the Essex County Correctional Facility pleaded guilty today in U.S. District Court in Boston in connection with importing several kilograms of methylone, also known as “molly,” from China and distributing it in Massachusetts. He also admitted to smuggling a small quantity of the designer drug alpha-PVP, also known as “flakka,” into the Essex County Correctional Facility.
Harold Bates, 32, of Rockland, pleaded guilty to one count each of conspiracy to import methylone, importation of methylone, possession with intent to distribute methylone, and possession of a controlled substance by an inmate. U.S. District Court Chief Judge Patti B. Saris scheduled sentencing for Dec. 10, 2015.
In October 2013, Bates began ordering substantial quantities of methylone over the Internet from his supplier based in China. Bates and the supplier discussed methods of concealing the drugs to avoid detection. When the methylone packages were shipped to Bates, the Chinese supplier included documents that falsely described the packages as containing samples of household items such as cosmetics with a value of $10 to $20 when, in fact, the drugs were worth considerably more.
Federal agents discovered Bates’ scheme and, in December 2013, obtained search warrants for two international packages. Both packages contained half a kilogram of methylone, which is a synthetic cathinone or “designer drug,” that is often referred to as “molly.”
In March 2014, Bates’s was arrested and charged with importing and distributing methylone. He was ordered detained and held at Essex County Correctional Facility. Shortly after Bates’s arrival, law enforcement officers learned that Bates had smuggled 4.70 grams of alpha-PVP, another synthetic cathinone (also known as “flakka”), into the facility by inserting the drugs into his rectum.
The charging statutes for methylone provide for a sentence of no greater than 20 years in prison per count, a lifetime of supervised release, and a fine of $1 million. The charge of possessing a controlled substance while being a federal detainee 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; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Plymouth County District Attorney Timothy J. Cruz; Rockland Police Chief John R. Llewellyn; and Essex County Sheriff Frank G. Cousins, Jr., made the announcement today. The case is being prosecuted by Assistant U.S. Attorney James E. Arnold of Ortiz’s Narcotics and Money Laundering Unit.
Medway Man Pleads Guilty to Extortion ActivitiesRead the Press Release
BOSTON – Baljit Singh Rehal, a/k/a Joel Rehal, pleaded guilty today in U.S. District Court in Worcester to an extortion charge.
Rehal, 31, pleaded guilty to one count of collection of extension of credit by extortionate means. In October 2014, Rehal and another man were arrested after the issuance of a criminal complaint against them on the same charges. Sentencing is scheduled for Nov. 20, 2015.
Between Dec. 21, 2012 and Jan. 10, 2014, Rehal and others perpetrated a scheme whereby they convinced a victim that he owed money to the FBI for an alleged whistleblower investigation, and proceeded to collect $180,000 from the victim for payment of this alleged investigation. When the victim could not come up with the money, Rehal and others would purportedly loan the victim money and have him sign promissory notes to repay the money to them.
The maximum sentence under the statute is 20 years in prison, followed by 3 years of supervised release and a $250,000 fine, or twice the amount of the loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and 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 Michelle L. Dineen Jerrett of Ortiz’s Worcester Branch Office.
Springfield Man Sentenced to Seven Years in Prison for Distributing CocaineRead the Press Release
BOSTON – A Springfield man was sentenced today in U.S. District Court in Worcester for distributing cocaine.
Stephen Tavernier, 28, was sentenced by U.S. District Judge Timothy S. Hillman to six years in prison and three years of supervised release. In March 2015, Tavernier pleaded guilty to engaging in a conspiracy to possess with intent to distribute and to distribute cocaine, and distribution of cocaine.
On August 6, 2013, Tavernier sold cocaine to an undercover federal agent on Main Street in Springfield, just yards from the state courthouse. The drug purchase was captured on video.
U.S. Attorney Carmen M. Ortiz and Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Deepika Bains Shukla of Ortiz’s Springfield Branch Office.
Milton Man Charged with Wire Fraud in Real Estate Investment Fraud SchemeRead the Press Release
BOSTON – Daniel J. Flynn, III, 52, of Milton, was arrested and charged in U.S. District in Boston with wire fraud. According to the criminal complaint, Flynn defrauded investors of millions in a real estate investment scheme that began in at least 2007.
The complaint details several aspects of the alleged scheme, including that Flynn falsified the value of his real estate investment fund by creating fraudulent promissory notes purportedly worth millions and representing to investors that they were legitimate debts that were owed to Flynn’s real estate investment fund. Second, the complaint alleges that Flynn repeatedly induced investors to loan him money to purchase specific pieces of property that, in some cases, Flynn already owned. It is further alleged that Flynn often used investor’s money to pay his personal debts and to repay prior investors. Once investors uncovered Flynn’s fraudulent activities, Flynn changed the name of his business and created similar entities through the names of third parties in an effort to conceal his fraudulent activities.
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 $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Neil J. Gallagher, Jr. of Ortiz’s Economic Crimes Unit.
The details contained in the criminal complaint are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Federal Court Says Long Wharf Pavilion May Not Be Converted into a RestaurantRead the Press Release
BOSTON – A federal court in Boston has rejected efforts by the Boston Redevelopment Authority (BRA) to convert an open-air pavilion on the end of Long Wharf into a restaurant. Siding with the National Park Service (Park Service), the court held that the end of Long Wharf is protected by a federal law requiring the land to be used for public outdoor recreation.
The case concerned the federal Land and Water Conservation Fund (LWCF) program, which is administered by the National Park Service. Since Congress enacted the LWCF Act in 1965, the Park Service has awarded over 42,000 grants totaling over $3.7 billion. A LWCF-assisted park is located in over 98 percent of counties in the United States.
Under the LWCF program, a municipality, state, or county can apply for federal money to acquire or develop a piece of land, but, in exchange, it must agree to use all or part of that land for public outdoor recreation forever. The land subject to that perpetual restriction is called the “6(f) area.” The entity applying for an LWCF grant must enclose with its application a boundary map showing the 6(f) area, and the Park Service must agree on that boundary before it awards the grant. After the boundary is agreed upon, the grant recipient may not convert the 6(f) area into something other than public outdoor recreation use unless it offers, and the Park Service accepts, substitute property of at least equal fair market value and reasonably equivalent recreation usefulness and location.
In 1980 the BRA, which owns Long Wharf, applied for a LWCF grant to help develop Long Wharf, which was then a dilapidated pier. The Park Service awarded the grant in 1981, and the BRA used the money for construction work on the wharf. Long Wharf Pavilion was later built on the northern half of the seaward tip of Long Wharf. It is an open-sided structure made of granite, brick, copper, and slate. Construction ended in 1988.
Decades later, the BRA sought to convert the pavilion into a restaurant called Doc’s Long Wharf. BRA argued that such a conversion would be permissible because, it said, the pavilion was located outside the 6(f) boundary on Long Wharf. The Park Service disagreed based upon its decision in the documents in its grant file, including a 6(f) boundary map dated 1980, which the Park Service said the BRA had enclosed with its application. The BRA denied enclosing the 1980 map with its application and claimed it had never seen that map.
The BRA sued the Park Service, challenging the Park Service’s reliance on the 1980 map. The BRA argued that a different map, dated 1983, was the 6(f) boundary map for Long Wharf.
The federal court sided with the Park Service, finding that the BRA indeed had submitted the 1980 map with its application. Because Long Wharf Pavilion is within the 6(f) boundary on Long Wharf, the BRA may not convert the pavilion into a restaurant unless it offers, and the Park Service accepts, substitute property of at least equal fair market value and reasonably equivalent recreation usefulness and location.
United States Attorney Carmen Ortiz and Michael Caldwell, Regional Director of the National Park Service made the announcement today. The case was handled by Assistant U.S. Attorney Christine Wichers of Ortiz’s Civil Division.
Holyoke Man Sentenced to 11 Years in Prison for Distributing HeroinRead the Press Release
BOSTON – A Holyoke man was sentenced today in U.S. District Court in Springfield for distributing heroin at a strip mall in Holyoke and outside a bank in Springfield.
Luzander Montoya, 29, was sentenced by U.S. District Judge Timothy S. Hillman to 11 years in prison and four years of supervised release. In April 2015, Montoya was convicted following a four-day jury trial of possession with intent to distribute and distribution of heroin on three separate occasions in 2012.
Montoya was caught on video selling heroin three times to a cooperating witness in August and September 2012. During the third deal, Montoya exchanged 200 bags of heroin for $750 in cash. Montoya did the deal in his car as his young child sat in a car seat behind him.
U.S. Attorney Carmen M. Ortiz and Vincent B. Lisi, 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. Attorneys Deepika Bains Shukla and Kevin O’Regan of Ortiz’s Springfield Branch Office.
Former Medical Office Manager Sentenced to Prison for Embezzling $1.5 Million from EmployerRead the Press Release
BOSTON – A former office manager of Northampton Internal Medical Associates (NIMA) was sentenced yesterday in U.S. District Court in Springfield for embezzling more than $1.5 million.
Roxanne Tubolino, 56, of Belchertown, Mass., was sentenced by U.S. District Court Judge Mark G. Mastroianni to 39 months in prison, 36 months of supervised release, and was ordered to pay restitution of $1,342,256 to NIMA, $25,000 to NIMA’s insurance company, and $506,447 to the IRS. In January 2015, Tubolino pleaded guilty to one count of wire fraud and six counts of tax evasion.
From 2008 through Sept. 11, 2013, Tubolino was employed as an office manager for NIMA, a medical practice in Northampton. During this period, Tubolino embezzled $1,562,206 by writing numerous checks from NIMA’s corporate account to pay her personal credit card bills. Tubolino concealed this theft by entering these checks into NIMA’s Quickbooks records as business expenses, such as “Oncology Supplies.” Tubolino used the stolen funds to obtain cash advances and for charges relating to her competitive horse showing and at clothing stores, restaurants, and entertainment venues. Furthermore, Tubolino filed income tax returns from 2008 to 2013 in which she did not report any of the income that she received from her embezzlement at NIMA.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement. The case was prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz’s Springfield Branch Office.
Chicopee Man Charged with Receiving Child PornographyRead the Press Release
BOSTON – Victor Stepus, 47, of Chicopee, was charged on Friday, Aug. 21, 2015 in U.S. District Court in Springfield with one count of receipt of material involving the sexual exploitation of children.
On the morning of Aug. 21, 2015, federal agents executed a search warrant at Stepus’s residence where they seized a personal computer that contained over 8,000 images and 33 videos of child pornography. These included images that depicted the sexual abuse, including bondage, of girls as young as eight years old.
During an interview with federal agents, Stepus stated that for the past several years he used his home computer to access and download child pornography two to three times per week while his wife was at work. Stepus admitted that he is sexually attracted to 12 to 15 year old girls.
The charging statute provides a minimum mandatory sentence of five 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 and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.
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 charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Springfield Man Indicted on Federal Firearms and Drug ChargesRead the Press Release
BOSTON – Robert Crichlow, 37, was indicted in U.S. District Court in Springfield on one count of being a convicted felon in possession of a firearm and ammunition and one count of possession with intent to distribute crack cocaine.
The indictment alleges that, on June 4, 2015, Crichlow possessed a Taurus Model PT 145 .45 caliber pistol and seven rounds of .45 caliber ammunition. He also possessed eight rocks of crack cocaine packaged for sale.
For those who qualify as armed career criminals, the charge of being a felon in possession of a firearm provides a mandatory minimum sentence of 15 years and a maximum of a lifetime in prison, five years of supervised release, and a fine of $250,000. The charge of possessing crack cocaine with intent to distribute provides a sentence of no greater than 20 years in prison, up to life 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 Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Katharine A. Wagner of Ortiz’s Springfield Branch Office.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Five North Shore Individuals Charged with Oxycodone DistributionRead the Press Release
BOSTON – Five individuals were charged in U.S. District Court in Boston with distributing oxycodone throughout the North Shore.
Joseph Romano, 38, of Peabody; Anthony Panarese, 35 of Peabody; Paul Williams, 51, of Malden; David Turner, Sr., 55, of Peabody; and Ashley Turner, 26, of Peabody, where arrested this morning and charged with one count of conspiracy to possess with intent to distribute and distribution of oxycodone, a highly-addictive controlled substance used to treat severe pain.
According to the criminal complaint, since March 2014, the defendants conspired to distribute oxycodone. Physical and court-authorized electronic surveillance (i.e., wiretaps and GPS tracking devices) were used to establish that Panarese and Williams were supplying Romano with oxycodone nearly every week. David Turner, Sr. and Ashley Turner were oxycodone pill customers of Romano who also redistributed oxycodone pills supplied by Romano or one of Ramono’s suppliers, such as Williams, to “street” oxycodone users. During the investigation, law enforcement officers completed controlled purchases and seized approximately 950 oxycodone pills from the defendants.
The charging statute provides for a sentence of no greater than 20 years in prison, a lifetime of supervised release, and a fine of $1 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Office; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Peabody Police Chief Thomas M. Griffin; and Danvers Police Chief Patrick Ambrose, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Carlos A. López and James E. Arnold of Ortiz’s Narcotics and Money Laundering Unit.
The details contained in the charging document are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Northeastern University to Pay $2.7 Million for Failing to Account for Federal Research FundsRead the Press Release
BOSTON – The United States reached a settlement today with Northeastern University resolving allegations that, over a period of nine years, Northeastern failed to properly account for federal research funds that it received from the National Science Foundation (NSF). NSF awarded the funds to support high-energy particle physics research under the direction of Stephen Reucroft, formerly a Northeastern physics professor, at the European Organization for Nuclear Research (CERN) in Geneva, Switzerland.
According to the settlement agreement, Northeastern University agreed to pay $2.7 million and to submit to a five-year compliance agreement to ensure that proper oversight and safeguards are in place for future research awards.
“Universities that receive federal research funds have a duty to ensure that their researchers use those funds only for their intended purposes,” said United States Attorney Carmen M. Ortiz. “In this matter, Northeastern failed to adequately safeguard National Science Foundation grant money that had been awarded for the sole purpose of supporting important scientific research.”
Allison Lerner, Inspector General of the National Science Foundation, said, “Recipients of government funds to support scientific research have both a financial responsibility and a public trust responsibility. In this case, Northeastern failed to protect the government’s interest and lacked adequate control over a researcher’s ability to spend millions of taxpayer dollars. I commend the U.S. Attorney’s Office for this settlement agreement, which will recover $2.7 million for the U.S. Treasury.”
The federal government’s grant regulations require universities to exercise control and oversight over the NSF award funds they receive. Among other things, a recipient of NSF award funds must have documentation of salary payments, purchases of equipment, travel, expenses, and all other items charged to the awards. The regulations limit cash advances to the recipient’s immediate cash needs. Additionally, the regulations require universities to notify NSF of any significant problems relating to financial management of the awards.
The United States alleged that, from 2001 to 2010, Northeastern repeatedly violated these requirements by approving and disbursing numerous advances and other payments of NSF award funds to accounts that Professor Reucroft controlled at CERN without proper justification or requisite verification. Northeastern also failed, for more than two years, to notify NSF when it discovered significant problems with the accounting for award funds paid and knew that at least some of the funds were used to pay Professor Reucroft’s personal expenses.
U.S. Attorney Ortiz and Inspector General Lerner, made the announcement today. This matter was handled by Assistant U.S. Attorney Anita Johnson of Ortiz’s Civil Division.
North Attleboro Woman Sentenced for Stealing Benefits from Disabled ManRead the Press Release
BOSTON – A North Attleboro woman was sentenced today for stealing $32,439 in government benefits from a disabled man whose financial affairs she was managing.
Wendy Mairle, 49, was sentenced by U.S. District Court Senior Judge Mark L. Wolf to 24 months of probation, with the first six months to be served in home confinement, and ordered to pay restitution of $32,439. In April 2015, Mairle pleaded guilty to converting Social Security payments.
In 2012, Mairle became the representative payee for the monthly Social Security disability payments of a man who was in full-time residential treatment at a local hospital. As a representative payee, Mairle was required to spend the Social Security payments on the man’s behalf. From May 2012 to May 2014, Mairle received $45,255 from the Social Security Administration, but she only spent $12,816 on the disabled man’s behalf and spent the remaining $32,439 on herself, including a vacation to Myrtle Beach, S.C., retail and restaurant purchases, and more than $17,000 in cash withdrawals. Meanwhile, she failed to pay most of the victim’s hospital bills, leaving him more than $20,000 in debt to the hospital.
United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. The case was prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Chelsea Man Sentenced in Fraudulent Driver’s License SchemeRead the Press Release
BOSTON – A Chelsea man was sentenced today in connection with a scheme to produce fraudulent identification documents.
Edwin Amaurys Parra Suarez, 38, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to seven months in custody (time served) and two years of supervised release. In June, Parra pleaded guilty to one count of conspiracy to produce false identification documents.
From December 2012 through December 2013, Parra bribed a corrupt Massachusetts Registry of Motor Vehicles (RMV) clerk to issue Massachusetts driver’s licenses to individuals who were not eligible to receive them. Acting as a broker, Parra sent his purported clients to the Revere RMV to submit their application materials to the corrupt clerk. In exchange for payment ranging from $100 to $1,000 from Parra, the clerk agreed to overlook the fact that the clients lacked the necessary immigration documents to qualify for a Massachusetts driver’s license. During the course of the scheme, Parra and his co-conspirators produced more than two dozen Massachusetts driver’s licenses in this way.
This case is the most recent development in a series of investigations involving identity theft and public corruption at the Massachusestts RMV. An RMV clerk, Alexander Brewer, was sentenced in April 2014 to two years of probation, and he voluntarily forfeited the $60,000 he fraudulently obtained to produce fake licenses. Another co-conspirator of Brewer’s, Leonel Sanchez, was sentenced in January 2015 to 26 months in prison after pleading guilty to aggravated identity theft.
United States Attorney Carmen M. Ortiz; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Richard D. McKeon, Superintendent of the Massachusetts States Police; David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office; 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 was prosecuted by Assistant U.S. Attorney Eugenia M. Carris of Ortiz’s Public Corruption Unit.