District of Massachusetts

BOSTON – An attorney was sentenced on Oct. 1, 2015, to prison in connection with a multi-year, multi-property mortgage fraud scheme in Dorchester and Roxbury.

Michael R. Anderson, 46, of Framingham, was sentenced by U.S. District Court Judge Douglas P. Woodlock to two years in prison, two years of supervised release, and ordered to pay $11,048,212 in restitution and forfeit $7,413,712.  In January 2011, Anderson pleaded guilty to sixteen counts of wire fraud, nine counts of bank fraud, and two counts of engaging in unlawful monetary transactions.

From September 2006 through April 2008, Anderson assisted Michael David Scott, a developer, with perpetrating a fraud scheme in connection with the purported sale of more than 27 condominium units in Boston.  Scott, who was charged separately, pleaded guilty in May 2015. 

Scott and his associates bought multi-family dwellings promising to convert them into condominiums, and then resold the individual units to various straw buyers.  The developer, Anderson, and others arranged for the straw buyers to obtain mortgage financing by falsifying key information, including the buyers’ intent to reside in the properties, assets, down payments, and funds paid at closing.  Anderson and others arranged to prepare loan closing documents, and Anderson then closed the mortgage loans associated with these purchases.  As the closing attorney, Anderson also was responsible for disbursing the fraudulently obtained mortgage loan proceeds.

United States Attorney Carmen M. Ortiz; Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement.  The case was prosecuted by Assistant U.S. Attorneys Ryan M. DiSantis of Ortiz’s Public Corruption Unit and Victor A. Wild of Ortiz’s Economic Crimes Unit.

BOSTON – A Pennsylvania man who threatened to publicly disseminate sexually explicit images of a Boston-area college student unless she provided him with additional images was arrested yesterday and charged with extortion.

James F. Connor V, 19, of West Chester, Pa., was charged with one count of extortion.  He was ordered detained during an initial appearance yesterday in U.S. District Court in Philadelphia.

According to the criminal complaint, Connor engaged in a version of blackmail, called “sextortion,” which involves threats to publicly release revealing images of a person in order to extort sexual favors.  Connor and the victim, a student at a Boston-area university, met through social media and developed a relationship in 2012.  In the course of that relationship, the victim sent Connor naked pictures through Snapchat, a video messaging app, and engaged in sexually explicit video chats with Connor using FaceTime.  Connor allegedly preserved these images without her consent.  After the relationship ended, Connor began blackmailing the victim by threatening to release the sexually explicit images to her parents and Twitter followers if she did not continue sending naked pictures and engaging in sexually explicit video chats with him.  Connor also insisted that she break up with her current boyfriend.

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

United States Attorney Carmen M. Ortiz and Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.

BOSTON – Joshua Marrero, 28, of Holyoke, Mass., pleaded guilty today to being a convicted felon in possession of a firearm and ammunition and to possessing a firearm with an obliterated serial number.  U.S. District Judge Timothy S. Hillman scheduled sentencing for Jan. 22, 2016.

At his plea hearing, Marrero admitted that on April 19, 2014, he possessed a Lorcin Model L 380 .380 caliber firearm with an obliterated serial number and seven rounds of .380 caliber ammunition.  After being spotted with the firearm by law enforcement officers, Marrero ran into an alley in South Holyoke and was caught after he tripped.

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

United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Holyoke Police Chief James M. Neiswanger, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Deepika Bains Shukla of Ortiz’s Springfield Branch Office.

BOSTON – U.S. Attorney Carmen M. Ortiz hosted a roundtable discussion yesterday with local disability rights activists to commemorate the 25th anniversary of the Americans with Disabilities Act (ADA).

“The ADA remains one of the most important tools we have to advance the cause of civil rights in the United States and to eradicate discrimination for people with disabilities,” said U.S. Attorney Carmen M. Ortiz.  “My office is committed to ADA compliance -- through cooperative efforts and enforcement actions -- to ensure equal access in schools, employment, in places of public accommodation, and in the programs and services offered by state and local governments.”

To commemorate this important anniversary, U.S. Attorney Ortiz invited a dozen local disability rights advocates, including the National Alliance on Mental Illness, the Boston Center for Independent Living, the Institute for Human Centered Design, Greater Boston Legal Services, and several state and local offices on disability, to participate in a discussion about the most pressing ADA issues facing citizens of the Commonwealth today.  This includes equal access for adults and children with mental health issues, physical disabilities, and vision and hearing impairments. 

The ADA was signed into law on July 26, 1990, by President George H.W. Bush.  It is one of America’s most comprehensive pieces of civil rights legislation that prohibits discrimination and guarantees that people with disabilities have the same opportunities as everyone else to participate in the mainstream of American life -- to enjoy employment opportunities, to purchase goods and services, and to participate in state and local government programs and services.  Modeled after the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, religion, sex, or national origin, the ADA is an “equal opportunity” law for people with disabilities.

The U.S. Attorney’s Office wishes to thank the U.S. Department of Health and Human Services, Office for Civil Rights for co-hosting the roundtable discussion.

BOSTON – Twenty-five individuals were indicted on federal drug trafficking charges in connection with a southeastern Massachusetts heroin trafficking ring.  Arrests were made this morning in Fall River, Lawrence, Taunton, Marshfield, New Bedford, Berkley and Providence.

This indictment follows four other recent federal indictments charging 17 individuals in connection with a Taunton heroin distribution network.  All five indictments are part of an ongoing federal effort to stem the tide of heroin and fentanyl in southeastern Massachusetts.

In a related development, Attorney General Loretta Lynch will be addressing Massachusetts doctors and public health officials at a forum on Friday in Waltham on how the misuse of prescription opioids is driving demand for narcotics such as heroin and fentanyl.

The following people were charged in an indictment unsealed today with conspiracy to distribute controlled substances, including heroin and fentanyl: Dedwin Cruz-Rivera, 39, and Christian Sostre, 21, both of Fall River; Eric Matos, 37, and Miguelina Mejia Ruiz, 41, both of Lawrence; Manuel Romero-Gonsalez, 37, Luz Gonzalez, 33, Francis Gonsalez-Romero, 39, and Maria Elena Ocasio, 55, all of Providence, R.I.; Julio C. Ocasio, 24, Xavier Ramos, 25, Maria Rodriguez, 38, William M. Rodriguez, 22, Lindsay Ann Belisle, 29, Jose O. Perez, 28, Kelly Patterson, 36, Jorge Vega, 40, Jose A. Rodriguez, 40, Oniel Rivera, 28, Christopher Perez, 36, Kelly Jean Gagnon, 39, Joseph W. Parsons, 23, and Philip Malaguti, 31, all of Taunton; Cory S. Nickerson, 31, of New Bedford; Steven M. Enos, 28, of Berkley; and John A. Gray, Jr., 40, of Marshfield.

The investigation revealed that Dedwin Cruz-Rivera was obtaining heroin and fentanyl from multiple wholesale suppliers, including Eric Matos and Manuel Romero-Gonsalez, and was distributing the drugs to Taunton-based dealers, including Maria Rodriguez, her son William Rodriguez, Oniel Rivera, and Xavier Ramos.  Doris Mejia Ruiz delivered fentanyl to Cruz-Rivera at the direction of Matos.

The investigation also revealed that Romero-Gonsalez worked with his associate, Luz Gonzalez, and his brother, Francis Gonsalez-Romero, to distribute narcotics.  Agents repeatedly observed William Rodriguez selling heroin to customers in and around Taunton, including Jose Perez, Kelly Patterson, Jorge Vega, Jose Rodriguez, Christopher Perez, Kelly Jean Gagnon, Joseph Parsons, Philip Malaguti, and John Gray, Jr.  Lyndsay Belisle helped William Rodriguez distribute the drugs.

The investigation led to seizures of heroin and fentanyl.  Fentanyl is an extremely potent synthetic opioid, which, by weight, is 30-40 times deadlier than heroin.

The indictment was the result of a 15-month investigation that included court-authorized wiretaps and the execution of six search warrants.  The investigation was launched as part of the federal response to the heroin epidemic plaguing Massachusetts, and Taunton in particular, which has seen a steep increase in heroin overdose deaths since 2013.

The charge in today’s case provides for a sentence of no greater than 20 years in prison, a minimum of three year and up to a lifetime of supervised release, and a fine of $1 million.  Cruz-Rivera faces a mandatory minimum 10 years and up to a lifetime in prison, a minimum of five years and up to a lifetime of supervised release, and a fine of up to $10 million.  Gray faces a mandatory minimum sentence of five years and no greater than 40 years in prison, a minimum of four years and up to a lifetime of supervised release, and a fine of up to $5 million.

United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; and Taunton Police Chief Edward J. Walsh, made the announcement today.  The investigation was a joint effort by the DEA’s Cape Cod Task Force; the Massachusetts State Police; the Bristol County Sherriff’s Department; the Barnstable, Fall River, Haverhill, Marshfield, Attleboro, Fairhaven, New Bedford, Bridgewater, Norwood, Lawrence, Plymouth, Berkley, Raynham and Providence Police Departments; the Rhode Island State Police; the Bristol, Essex and Plymouth County District Attorney’s Offices; and the United States Attorney’s Office for the District of Rhode Island.  The case is being prosecuted by Assistant U.S. Attorneys Katherine Ferguson and Ann Taylor of Ortiz’s Narcotics and Money Laundering Unit.

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

BOSTON – Lexington-based Strata Pathology Laboratory, Inc. (known as StrataDx), has agreed to pay $558,793 to resolve allegations that it violated the False Claims Act by inducing physicians to refer Medicare and Medicaid patients to Strata by paying kickbacks in the form of sham consulting fees and providing unlawful discounts to physicians.

“Billing arrangements like Strata’s, which provide a financial incentive to physicians to refer Medicare and Medicaid patients to a particular lab are unlawful,” said United States Attorney Carmen M. Ortiz.  “When a company prioritizes profit, it disregards laws that are intended to protect patient health and the integrity of the healthcare system.  Settlements like this serve to deter illicit kickback schemes.”

“When laboratory referrals are made based on the amount of kickback money physicians can make from a lab, both patients and the healthcare system suffer,” said Acting Special Agent in Charge Joseph Bonavolonta of the Federal Bureau of Investigation’s Boston Division.  “Patients expect their physicians to choose laboratories based on their competent medical practices, not how much money they can pocket.  The FBI will continue to aggressively investigate illegal kickback schemes designed to put profits over patient care.”

“Companies that financially reward physicians in exchange for the referral of business -- as the government contended in this case -- corrupt the physicians’ impartial medical judgment and drive up health care costs for everyone,” said Special Agent in Charge Phillip M. Coyne, U.S. Department of Health and Human Services Office of Inspector General.  “We will continue to investigate such wasteful business arrangements.”

According to the settlement agreement, Strata acknowledged paying consulting fees to two referring physician practices that did not provide consulting services in exchange.  Strata also acknowledged entering into “account billing” arrangements with seven referring physician practices that facilitated fee-splitting between the parties.  The government alleges that, under these arrangements, Strata allowed the physician practices to bill patients’ private insurers directly for pathology services that Strata performed.  Strata then charged the physician practices for its services at deeply discounted rates, allowing the physician practices to pocket the difference between Strata’s discounted price and the amount of the private insurers’ full reimbursement.  All of the physician practices allegedly referred specimens of federal health care program beneficiaries to Strata, and Strata billed those programs at its full price.

The United States alleges that Strata’s claims to Medicare and Medicaid were false because they resulted from kickbacks that Strata provided the referring physicians in violation of the federal Anti-Kickback Statute.  The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.  Although Strata’s account billing arrangements did not explicitly condition the discounted prices upon the physicians’ referrals of Medicare and Medicaid business to Strata, the United States alleges that Strata offered the discounts with the understanding that physicians who entered into account billing arrangements with Strata would refer virtually all of their patients, including Medicare and Medicaid patients, to Strata.

The settlement announced today stems from a complaint filed by a former Strata employee under the whistleblower provisions of the False Claims Act, which authorize private parties to sue on behalf of the United States and to receive a portion of any recovery.  The settlement amount will be shared between the United States, the whistleblower, and the Commonwealth of Massachusetts.

U.S. Attorney Ortiz, Acting FBI SAC Bonavolonta, and HHS-OIG SAC Coyne, made the announcement today.  The matter was handled by Assistant U.S. Attorneys Abraham George and Deana El-Mallawany in Oritz’s Civil Division, Special Assistant U.S. Attorney Joshua H. Orr, and Assistant Attorney General Angela Neal of the Medicaid Fraud Division of Massachusetts Attorney General Healey’s Office.

BOSTON – A Lynn tax preparer was charged yesterday in U.S. District Court in Boston for filing fraudulent personal federal tax returns and attempting to obstruct the Internal Revenue Service (IRS).

Arismendy Ramos, a/k/a Arismendi Ramos, a/k/a Aris Almonte, was charged in an Information with four counts of filing false tax returns and two counts of obstructing the IRS.

According to the Information, Ramos owned and operated Almonte Tax, a tax preparation service in Lynn, and personally prepared tax returns for numerous clients.  From 2008 through 2013, Ramos allegedly filed false forms with the IRS claiming that he paid clients to work for him when in fact they had never been employed or paid by him.  Ramos then claimed the bogus wages as business expenses on his own tax returns, thereby reducing his personal tax liabilities.  Furthermore, Ramos instructed two clients that they should lie if they were asked about the false wages.

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

United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Victor A. Wild of Ortiz’s Economic Crimes Unit.

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

BOSTON – An Ecuadorian national residing in New York City was arrested and charged on Tuesday, Sept. 29th in connection with his role in a stolen identity tax refund fraud scheme.

Ricardo E. Candelo, 58, was charged with one count of theft of public money.  He was arrested at his home in Queens, New York and had an initial appearance in U.S. District Court in Brooklyn, New York.  Candelo was released on conditions and ordered to appear in U.S. District Court in Boston on Oct. 6, 2015, before Magistrate Judge David H. Hennessy.

According to the criminal complaint, in 2012, federal agents learned that a New York criminal organization was searching for a way to cash fraudulently obtained federal income tax refund checks.  Thereafter, with the assistance of a cooperating witness, agents arranged a series of undercover meetings with members of the New York organization.  During these meetings, which took place in South Attleboro, Mass. between July and September 2012, Candelo and his associates delivered federal income tax refund checks totaling over $75,000.  As part of the undercover operation, agents cashed these checks and returned the proceeds to the New York organization as instructed.  All of the refund checks involved in the scheme trace back to fraudulent federal income tax filings submitted without the authorization of the tax payer.

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

United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations Boston; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Lisa A. Quinn, Special Agent in Charge of U.S. Secret Service, made the announcement today.  The case is being prosecuted by Assistant United States Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.

BOSTON – An Upton, Mass. woman was sentenced today in U.S. District Court in Worcester for stealing more than $128,000 in Social Security benefits and providing false information in applications for subsidized housing.

Patricia Kwiatkowski, 64, was sentenced by U.S. District Court Judge Timothy S. Hillman to two years of probation, including three months of home or community confinement, and ordered to pay restitution of $128,101 to the Social Security Administration and $2,391 to the U.S. Department of Housing and Urban Development.  In June 2015, Kwiatkowski pleaded guilty to stealing public money.

Kwiatkowski’s father died in 2006, but the father’s monthly Social Security benefits continued to be directly deposited into his bank account.  Although she was not entitled to this money, Kwiatkowski signed her late father’s name on more than 100 checks written from his account to pay her own bills.  She also made more than 150 ATM withdrawals from the account, and spent money from the account at retail stores.  In total, from 2006 to 2014, Kwiatkowski received and spent $128,101 in Social Security funds to which she was not entitled.

During the entire time that she was removing Social Security benefits from her late father’s account, Kwiatkowski was also receiving her own Social Security benefits of about $1,000 per month.  In addition, she began receiving food stamps in 2009, MassHealth benefits in 2011, and subsidized housing in 2013.  In 2013 and 2014, she provided false information on her applications for subsidized housing.

This case was brought as part of an ongoing effort by the U.S. Attorney’s Office in partnership with the Social Security Administration to investigate and prosecute the posthumous fraud of Social Security benefits.  In many of these cases, family members, knowing they are not entitled to government benefits, continue to withdraw and spend the funds after a relative has died.  In the past year, the U.S. Attorney’s Office has prosecuted several similar cases involving a total of more than $1 million in stolen government money:

In April 2015, Graeme Griffith, of Andover, was sentenced for stealing $149,285 from Social Security from 2003 to 2014.

Also in April 2015, Frances Kenney Moseley, of Boston, was sentenced for stealing $222,172 from Social Security from 2003 to 2010.

In February 2015, Charles Gerbutavich, of Manchester, was sentenced for stealing $161,587 from Social Security from 1993 to 2014.

In October 2014, Mary Murphy, of Dorchester, was sentenced for stealing $206,679 from Social Security and $143,098 from the Civil Service Retirement System from 1977 to 2013.

United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; and Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Regional Office, made the announcement today.  The Kwiatkowski case was prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.

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.

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.

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.

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.

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 – 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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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. 

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.

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.

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.

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.

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.

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.

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.

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.

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/.

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 – 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/.

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.

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.

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.

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.

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.

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.

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.

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.

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.