District of Massachusetts
Press releases recorded for this federal judicial district.
Boston Career Criminal Sentenced to 17 Years for Drug Trafficking and Firearm PossessionRead the Press Release
BOSTON – A Boston man was sentenced today to 17 years in prison after a jury found him guilty of drug trafficking and illegal firearm possession.
Kenneth Whigham Jr., 33, of Boston, was sentenced before U.S. District Court Chief Judge Patti B. Saris to 17 years in prison. In October 2014, Whigham was convicted following a three-day jury trial of being a felon in possession of a firearm n and possession with intent to distribute cocaine base.
Shortly before midnight on Feb. 28, 2013, two Massachusetts State Police troopers stopped Whigham for erratic driving in the O’Neil Tunnel in Boston. A video recording of the traffic stop showed one of the troopers attempting to enter Whigham’s car as Whigham slid a loaded handgun under the front passenger seat. The troopers entered the car, found the gun – a .25 caliber Raven Arms handgun with an obliterated serial number loaded with six rounds of ammunition – and arrested Whigham. The troopers seized individually-wrapped pieces of crack cocaine packaged for sale and $666 on Whigham when they arrested him.
At today’s sentencing hearing, the prosecutor recommended that the Court sentence Whigham to 21 years in prison. The prosecutor’s recommended sentence was based in large part on Whigham’s lengthy criminal record, which included two previous federal crack cocaine distribution convictions and state convictions for unlawful possession of a firearm and assault and battery with a dangerous weapon. Due to his criminal history, Whigham faced a fifteen year mandatory minimum sentence for possessing the firearm.
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 Timothy P. Alben of the Massachusetts State Police, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Christopher Pohl of Ortiz’s Organized Crime Strike Force Unit.
Connecticut Man Pleads Guilty to Tobacco TraffickingRead the Press Release
BOSTON – A Connecticut man pleaded guilty in U.S. District Court in Springfield today in a conspiracy to traffic in contraband tobacco.
Jugjeev Kharbanda, 29, of Seymour, Conn. pleaded guilty to conspiracy and three counts of contraband smokeless tobacco trafficking. In October 2014, Kharbanda and two others were charged in an Information. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for June 25, 2015.
Kharbanda, two co-defendants, and others, worked together to avoid paying large amounts of tobacco excise taxes on smokeless tobacco and cigars sold from warehouses in Springfield, Mass. and Danbury, Conn. Co-defendant Jaspal Singh pleaded guilty in October 2014 and is scheduled to be sentenced on April 21, 2015.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Alex J. Grant and Veronica M. Lei of Ortiz’s Springfield Branch Unit.
Hopedale Man Pleads Guilty to Filing a False Tax ReturnRead the Press Release
BOSTON – John Faherty, 56, of Hopedale, Mass. pleaded guilty to an information charging him with filing a false federal income tax return. U.S. District Judge F. Dennis Saylor, IV scheduled sentencing for April 17, 2015.
Faherty’s wife received substantial commissions as a manufacturers’ representative, promoting products from various factories to retailers. Faherty, who compiled the income and expenses for his wife’s business, repeatedly withheld a portion of the commissions his wife received from their return preparer. As a result, the returns prepared, and filed with the Internal Revenue Service were false in that they failed to report a significant portion of his wife’s income. In total, the couple owed an additional $100, 678 on the income Faherty failed to report between 2007 and 2009.
The charging statute provides a maximum statutory sentence of no greater than three years in prison, one year of supervised release, and a $250,000 fine. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and 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 Stephen Heymann of Ortiz’s Economic Crimes Unit.
Former Office Manager Pleads Guilty to Wire Fraud and Tax EvasionRead the Press Release
BOSTON – A former office manager of a medical practice in Northampton pleaded guilty today in U.S. District Court in Springfield to wire fraud and tax evasion.
Roxanne Tubolino, 56, of Belchertown, Mass., pleaded guilty to wire fraud and six counts of tax evasion. In November 2014, Tubolino was charged in an Information. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for April 16, 2015.
From 2008 through September 11, 2013, Tubolino was employed as an office manager for Northampton Internal Medical Associates (NIMA), a medical practice with offices in Northampton, Mass. During this period, Tubolino embezzled approximately $1,562,206 by writing numerous checks from NIMA’s corporate account to pay her personal credit card bills for accounts that she held at American Express, Bank of America, Chase, and Barclays. Tubolino concealed this theft by falsely and fraudulently entering these checks into NIMA’s Quickbooks records as business expenses, such as “Clint Pharmaceuticals,” “Oncology Supplies,” and “Abbot Laboratories.” Tubolino also filed tax returns for 2008 through 2013 in which she did not report any of the income that she received from her embezzlement at NIMA.
The charge of wire fraud provides a sentence of no greater than 20 years in prison, five years of supervised release, and a fine of $250,000. The charge of tax evasion provides a sentence of no greater than five years in prison, three years of supervised release, and fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
First of Cape Cod Brothers Sentenced to Twenty Years for Oxycodone Trafficking SchemeRead the Press Release
BOSTON – After a month-long federal trial, Joshua M. Gonsalves was sentenced on multiple charges arising from a three-year conspiracy involving hundreds of thousands of 30-milligram oxycodone pills which he and his brother distributed on Cape Cod and generated over $5 million in proceeds.
Joshua M. Gonsalves, 34, of Dennisport, Mass., was sentenced by U.S. District Court Chief Judge Patti B. Saris to 20 years in prison, five years of supervised release, forfeiture of $1,522,372 and property, including seized currency, a house in West Yarmouth, a Cadillac, and a Nissan Altima.
In October 2014, Joshua Gonsalves was convicted of oxycodone conspiracy, money laundering conspiracy and money laundering. Joshua Gonsalves’s brother, Stanley D. Gonsalves, 36, also of Sandwich, Mass., was convicted of an oxycodone trafficking conspiracy, a money laundering conspiracy, and 17 substantive money laundering charges. Stanley Gonsalves is scheduled to be sentenced on Feb. 24, 2015.
During the trial, witnesses testified that the conspiracy’s couriers transported multi-thousand-pill loads of 30-milligram oxycodone pills from South Florida up to New England, first by plane and later by car. Once the pills were brought to numerous area hotels or conspirators’ homes and apartments in Dorchester, Quincy, and Onset, Mass., the conspirators would divide them into 100-pill packs and then take the pills to Cape Cod for sale to the dealer-level customers.
The primary object of the related money laundering conspiracy was to use the millions of dollars in drug proceeds to purchase additional oxycodone pills and to pay the ongoing expenses of the oxycodone conspiracy. During the trial, witnesses testified about seizures from the Gonsalves Brothers’ co-conspirators of two south-bound cash shipments totaling $140,000, and a north-bound pill shipment of 5,700 pills. Other large pill seizures occurred in Fort Lauderdale (8,000 pills), in Volusia County, Fla. (900 pills), along Route 6 in Barnstable, Mass. (280 pills), and along Route 3 Southbound in Kingston, Mass (4,000 pills). Other related cash seizures from co-conspirators totaled $167,000.
The trial evidence also included extensive testimony about a car chase and rollover incident which occurred on Route 3 Northbound on May 13, 2011, in which the Gonsalves Brothers allegedly rammed their Mercedes SUV into a Volvo station wagon which they mistakenly believed contained the $225,000 in cash drug proceeds which had just been taken from them in a Bourne robbery. The men in the Volvo, who allegedly were only assisting the primary robbers (who were watching these events unfolding from a different car) managed to survive the rollover crash and then fled into the woods. In a recorded call a few days later, which was played at the trial, Stanley Gonsalves told a criminal associate about the robbery, boasting that the robbers “didn’t expect us to do what we did” in retaliation.
At today’s hearing, the prosecutor noted that newly-inaugurated Massachusetts Governor Baker and Attorney General Healey have both named the Massachusetts opiate epidemic as among their top priorities. U.S. Attorney Ortiz has been working for many months with federal state and local officials to combat opiate addiction in Massachusetts. Chief Judge Saris found the defendant responsible for over 89,000 oxycodone pills and described his criminal record as “shocking.”
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police, made the announcement today. Significant assistance was also provided by the DEA Cape Cod Drug Task Force; the Barnstable County and Cape and Islands District Attorneys Offices; the Barnstable, Boston, Bourne, Chatham, Dennis, Franklin, Harwich, Plymouth, Sandwich, Quincy, Yarmouth, and Wareham Police Departments; the Barnstable and Bristol County Sheriff’s Departments; the Florence County (South Carolina), Broward County (Florida) and Volusia County (Florida) Sheriff’s Offices; and the Dillon and Ridgeland (South Carolina) Police Departments.
The case was prosecuted by Assistant U.S. Attorney Timothy E. Moran and recently retired Assistant U.S. Attorney Richard L. Hoffman of Ortiz’s Organized Crime Strike Force Unit.
Esmond Street Career Criminal Sentenced to 16 Years for Drug TraffickingRead the Press Release
BOSTON – A Boston man was sentenced yesterday to 16 years in federal prison for drug trafficking and firearm charges.
Gerald Smith, a/k/a “G-Man,” 38, of Boston, was sentenced yesterday to 16 years in prison and five years of supervised release. In October 2014, Smith pleaded guilty before U.S. District Court Judge Richard G. Stearns to two counts of distribution of cocaine base, possession with intent to distribute 280 grams or more of cocaine base, and being a felon in possession of a firearm and ammunition.
Smith was a long-time Boston-based crack cocaine trafficker who regularly sold crack cocaine in the Esmond Street neighborhood of Boston, an area plagued by drug, gun, and gang violence. During their investigation, federal agents used a cooperating witness and an undercover police officer to purchase crack cocaine from Smith over a dozen times. When agents executed a search warrant at an apartment in Revere used by Smith, they seized nearly a kilogram of cooked crack cocaine ready for street-level sale and a loaded firearm.
Due to his criminal history, Smith faced a 15-year mandatory minimum sentence for possessing a firearm and a 10-year mandatory minimum sentence for possessing more than 280 grams of crack cocaine with intent to distribute.
At the sentencing hearing, the government recommended that the Court sentence Smith to 16 years in prison based, in large part, on Smith’s criminal record. This is Smith’s fourth drug trafficking conviction and he has previously been sentenced to state prison twice before for drug trafficking.
United States Attorney Carmen M. Ortiz and Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement. The case was prosecuted by Assistant U.S. Attorney Christopher Pohl of Ortiz’s Organized Crime Strike Force Unit.
Andover Man Pleads Guilty to Social Security FraudRead the Press Release
BOSTON – An Andover man pleaded guilty today to stealing more than $149,000 in government benefits.
Graeme Griffith, 60, pleaded guilty to theft of public money. U.S. District Court Senior Judge Mark L. Wolf scheduled sentencing for April 16, 2015. In January 2015, Griffith was charged in a felony Information.
In 2003, Griffith’s father died, but his monthly Social Security benefits continued to be directly deposited into a joint bank account in his and Griffith’s names. From 2003 to 2014, Griffith continued to receive his deceased father’s benefits totaling $149,285.
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.
One of the ways the Social Security Administration detects this kind of fraud is through the Medicare Non-Utilization Project, in which the agency investigates people receiving benefits who are at least 90 years old and who have not used their Medicare Part B benefits for three or more years. In some instances, the agency learns that such a person is actually deceased, but a surviving child has continued to take the deceased person’s benefits.
Since October 2013, the U.S. Attorney’s Office has prosecuted several such cases involving a total of more than $1 million in stolen government money:
In October 2014, Charles Gerbutavich, of Manchester, pleaded guilty to taking his deceased father’s Social Security benefits totaling $161,587, which were directly deposited into a joint bank account after the father’s death in 1993. Gerbutavich is scheduled to be sentenced on Feb. 3, 2015.
Also in October 2014, Mary Murphy, of Dorchester, was sentenced to 18 months of home confinement, 10 hours per week of community service, and was ordered to pay a fine of $40,000 and $331,630 in restitution – which she paid in full in October. Murphy pleaded guilty in connection with taking her deceased mother’s Social Security and Civil Service retirement benefits, which were directly deposited into a joint bank account after her death in 1977.
Also in October 2014, Richard Oldham, of Old Orchard Beach, Maine, was sentenced to four months in prison, six months of home confinement, and was ordered to pay $195,862 in restitution for endorsing Social Security checks in his deceased mother’s name following her death in 1993.
In September 2014, Frances Kenney Moseley, of Boston, pleaded guilty to stealing over $220,000 in Social Security benefits, which were directly deposited into her father’s bank account after his death in 2003. Moseley is scheduled to be sentenced on March 23, 2015.
In August 2014, George Bergstrom, of Shrewsbury, was sentenced to one year of probation and was ordered to pay $57,948 in restitution – which he paid in full in August – for taking his deceased mother’s Social Security benefits, which were directly deposited into a joint bank account after her death in 2009.
In October 2013, John Flaherty, of Newburyport, was sentenced to 10 months in prison and was ordered to pay $168,830 in restitution for taking his deceased mother’s Social Security benefits, which were directly deposited into a joint bank account after her death in 1993.
United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. The case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Martha’s Vineyard CPA Pleads Guilty to Tax FraudRead the Press Release
BOSTON – A Vineyard Haven CPA pleaded guilty today to filing false tax returns in which he underreported more than $800,000 in income for three years.
Roger A. Armstrong, 61, pleaded guilty to an Information charging him with three counts of filing false tax returns. U.S. District Court Judge Indira Talwani scheduled sentencing for April 28, 2015.
Armstrong, a CPA and tax preparer who lived and worked on Martha's Vineyard, owned rental property in Massachusetts and Florida. As a sole proprietor, Armstrong was required to accurately report his gross receipts and his business profit or loss on his individual income tax returns and also was to report any rental income he received. For tax years 2009 through 2011, Armstrong filed tax returns in which he significantly underreported both his business gross receipts and his rental income. For these three tax years, Armstrong did not report a total of approximately $790,000 in gross receipts and approximately $47,000 in rental income. As a result of the underreporting, Armstrong did not pay $200,000 in taxes.
The charging statute provides a sentence of no greater than three years in prison, one year of supervised release, and a fine of $250,000, or twice the gain or loss, whichever is greater for 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 Sandra S. Bower of Ortiz’s Economic Crimes Unit.
Former Dorchester Resident Sentenced for Failure to Register as a Sex OffenderRead the Press Release
BOSTON – A twice convicted sex offender who was residing in Ohio was sentenced yesterday in U.S. District Court in Boston for failing to register as a sex offender.
Jonathan Fey, 45, formerly of Dorchester, was sentenced by U.S. District Court Judge Rya W. Zobel to 18 months in prison and five years of supervised release. In October 2014, Fey pleaded guilty to a one-count indictment charging him with failure to register as a sex offender. In May 2014, Fey was apprehended in Ohio and returned to Massachusetts.
In March 2001, Fey was convicted in Bristol County Superior Court of rape and indecent assault and battery on a person over the age of 14 and received a 9-11 year sentence of incarceration and 10 years of probation. In June 2010, Fey was released from prison and registered as a level II sex offender as required by the court. At some point in July 2011, without permission from or notification to the probation department, Fey left Massachusetts and moved to Kentucky, Arkansas, and most recently in Ohio, but never registered as a sex offender in any of those states.
Additionally, in 1989, Fey was charged with a sex offense in Rhode Island, but given the date of this conviction was not required to register as a sex offender for that offense.
U.S. Attorney Carmen M. Ortiz and John Gibbons, U.S. Marshal for District of Massachusetts, made the announcement. The case was prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.
South Shore Physicians Hospital Organization to Pay $1.775 Million for Alleged Kickbacks for Patient ReferralsRead the Press Release
State-Federal Agreement Alleges Defendants Operated Unlawful Grant Program
BOSTON – The South Shore Physician Hospital Organization (SSPHO) in South Weymouth has agreed to pay $1.775 million to settle allegations of operating a recruitment grant program through which it paid kickbacks to its physician members in exchange for patient referrals. The United States and the Commonwealth will share in this recovery.
Today, in a consent judgment, the South Shore Physician Hospital Organization, Inc. (SSPHO) and its member organizations, South Shore Hospital, Inc. and Physicians Organization of the South Shore, Inc., acknowledged that the SSPHO paid kickbacks in the form of cash grants to doctors who agreed to make referrals to SSPHO providers. From 2001 to 2010, SSPHO allegedly approved 103 separate recruitment grants to 33 different physician groups as part of this scheme. The recruitment grant program requested that grant recipients refer patients to participating providers, which included the South Shore Hospital.
“Unlawful patient referral schemes not only limit patient provider choices, but ultimately lead to higher health care costs,” said United States Attorney Carmen Ortiz. “Our close working relationship with the Commonwealth’s Attorney General’s Office on heathcare fraud matters including this one is a law enforcement partnership which puts patients care first and foremost.”
“Instead of giving patients lower cost options and flexibility in health care services, we allege these defendants looked to increase their referrals through an unlawful kickback operation,” Massachusetts Attorney General Coakley said. “We are pleased to have worked with our partners in federal law enforcement to ensure that improper incentives do not undermine the integrity of our healthcare system.”
According to the settlement, the defendants made disclosures about the recruitment grant program in 2012 to the Massachusetts Attorney General’s Office, the U.S. Department of Justice and the Office of Inspector General for the U.S. Department of Health and Human Services. The defendants cooperated fully with this investigation.
As a result of this conduct, SSPHO and its member organizations allegedly caused participating providers who received referrals from grant recipients to submit false claims for payment to the Medicare Program and the Massachusetts Medicaid program (MassHealth), because those claims were made in violation of the federal Anti-Kickback statute, and violated the Massachusetts Consumer Protection Act.
Under the terms of the settlement, SSPHO will pay a total of $1.775 million, including more than $620,000 to the Commonwealth, $310,625 of which will go directly to MassHealth. The remainder will be paid to the federal government.
This matter was jointly investigated by the U.S. Attorney’s Office for the District of Massachusetts, the U.S. Department of Health and Human Services, Office of Inspector General, and the Massachusetts Attorney General’s Office. This case was handled by Assistant U.S. Attorney George Henderson III and Assistant Attorneys General Courtney Aladro and Eric Gold of the Health Care Division and Assistant Attorney General Angela Neal of the Medicaid Fraud Division.
Chelsea Man Sentenced for Role in Fraudulent Drivers License SchemeRead the Press Release
BOSTON – A Chelsea man was sentenced today for his role in a scheme to produce fraudulent identification documents.
Leonel Sanchez, 52, was sentenced to a total of 26 months in prison and three years of supervised release. In October 2014, Sanchez pleaded guilty before U.S. District Court Judge Douglas P. Woodlock to conspiracy to produce false identification documents and aggravated identity theft. From December 2012 through January 2013, Sanchez bribed an employee of the Massachusetts Registry of Motor Vehicles in connection with a scheme to issue Massachusetts driver’s licenses to individuals who presented fraudulently obtained Puerto Rican identification documents.
This sentencing is the most recent development in the ongoing investigations involving identity theft and public corruption relating to the Massachusetts Registry of Motor Vehicles.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; Celia J. Blue, Registrar of the Massachusetts Registry of Motor Vehicles; Colonel Timothy P. Alben, Superintendent of the Massachusetts States Police; David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office; and Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, New York Regional Office, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Eugenia M. Carris of Ortiz’s Public Corruption Unit.
Peabody Man Indicted on Child Pornography ChargesRead the Press Release
BOSTON – A Peabody man was indicted yesterday on child pornography charges.
Patrick Lynch, 22, of Peabody, was indicted on receipt and possession of child pornography. The indictment alleges that beginning in May 2013, Lynch began receiving emails containing child pornography. A federal investigation revealed that Lynch was affiliated with the Boy Scouts, including a position at the Philmont Training Center for Boy Scouts of America. Lynch had also been employed at the Greater Beverly YMCA, and had recently begun employment with Beanstalk Adventure Ropes Course in Reading, Mass.
The charge of receipt of child pornography provides for a mandatory minimum term of five years and no greater than 20 years in prison. The charge of possession of child pornography provides for no greater than 20 years in prison. Both statutes provide for a mandatory minimum of five years and up to a lifetime of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston made the announcement today. Assistance was also provided by the Massachusetts State Police and the Peabody Police Department. The case is prosecuted by Assistant U.S. Attorney Eve A. Piemonte Stacey 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/.
South Florida Man Sentenced for Oxycodone Distribution and Identity TheftRead the Press Release
BOSTON – A Miami man operating throughout South Florida was sentenced on Jan. 9, 2015, for his role in an oxycodone distribution conspiracy involving thousands of oxycodone pills and stolen identities of Puerto Rican residents.
Jose Perez, 40, was sentenced by U.S. District Court Judge Richard G. Stearns to 46 months in prison and three years of supervised release. In April 2014, Perez pleaded guilty to conspiracy to possess with intent to distribute and to distribute oxycodone, distribution of oxycodone, and identity theft.
In February 2011, a federal investigation into the oxycodone distribution organization operated by Perez in Florida and several co-conspirators in the Boston area revealed that from at least 2011 through January 2013, Perez sold large quantities of oxycodone pills to co-conspirators in Massachusetts and Rhode Island who distributed the oxycodone pills in Massachusetts. Beginning in November 2011, Perez initiated an identity theft and tax refund scheme where he sold hundreds of legitimate names, dates of birth, and Social Security numbers of Puerto Rican residents to an undercover federal agent, intending that the identities be used to fraudulently obtain tax refunds. Over the last several years, increasing numbers of drug dealers have diversified their operations to include lucrative identity theft and tax fraud schemes.
United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement. The case was prosecuted by Assistant U.S. Attorney Christophe F. Bator of Ortiz’s Drug Task Force Unit.
Physical Therapy Clinic Owner and Employee Sentenced for FraudRead the Press Release
BOSTON – The owner and operator of a Brockton physical therapy company and her employee were sentenced today for defrauding insurance companies in connection with physical therapy services purportedly provided to patients involved in car accidents.
Walkyrie Massie, a/k/a Vicky Lopes, 39, and Edward Rossi, 65, of Rochester, were sentenced by U.S. District Court Judge Richard G. Stearns to 30 months and 18 months, respectively, two years of supervised release, and ordered to pay $174,597 in restitution to the defrauded insurance companies. Massie and Rossi pleaded guilty to conspiracy to commit mail fraud and two counts of mail fraud in September and August 2014, respectively.
“The scam perpetrated by Massie and her employees defrauded insurance companies and deprived injured patients of proper care,” said U.S. Attorney Carmen M. Ortiz. “Patients deserve quality care and insurance providers need honest care-givers. This kind of fraud is corrosive to our healthcare system.”
“Westgate Physical Therapy was solely motivated by profit rather than patient care when it forged patient records and billed for medical care never provided scamming private insurance companies out of hundreds of thousands of dollars,” said Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The FBI is dedicated to aggressively investigating this type of criminal activity because it has a great impact not only on private insurance companies but on the economy as a whole as well.”
Massie, the owner and operator of Westgate Physical Therapy in Brockton, and her employees submitted fraudulent medical progress notes to insurance companies, in connection with physical therapy the company purportedly provided to patients involved in car accidents. Specifically, Rossi, a licensed physical therapy assistant, was supposed to provide physical therapy to patients several times a week until the physical therapist, Deidre Chouinard, re evaluated the patient and signed off that the treatment was complete. Westgate would then send a bill to the responsible insurance company. The progress notes contained in the patients’ chart would also be used to determine personal injury protection payments, as well as any bodily injury settlements with other insurance companies.
In reality, for the majority of patients, Rossi simply filled in cookie-cutter treatment notes for patients who either never showed up that day, came into the clinic for mere minutes, or were not seen at all by Rossi because he was not present. Furthermore, Rossi signed notes for treatments that Massie performed, even though she was not licensed to do so. Based on these fraudulent submissions, from 2009 to 2011, Westgate billed insurance companies more than $400,000 and received more than $174,000 in payments.
During the investigation into Westgate’s activities, federal law enforcement used a cooperating witness, who claimed to have been in a car accident and sought treatment at Westgate. From March through June 2011, recordings made of this individual’s visits to Westgate captured how Massie boasted about forging the individual’s name to the sign-in sheets to falsely show that he had come in for treatment when he had not. In one recorded conversation, Rossi can be heard demonstrating how the therapy exercise equipment worked so that the individual would be able to describe the physical therapy if he were called in to give a statement to the insurance company about his injuries and treatment at Westgate.
In December 2014, Chouinard, Westgate’s physical therapist, was sentenced to three years of probation. A fourth defendant is awaiting trial.
U.S. Attorney Ortiz and SAC Lisi made the announcement today. The Massachusetts Insurance Fraud Bureau also assisted in this investigation. The case was prosecuted by Assistant U.S. Attorney Shelbey Wright.
Two New Bedford Men Plead Guilty to Heroin TraffickingRead the Press Release
BOSTON – Two New Bedford men pleaded yesterday in U.S. District Court in Boston to selling heroin.
Manuel Lopes, a/k/a “Junior” Lopes, 36, and Harry Parsons, 27, pleaded guilty before U.S. District Judge Denise J. Casper. Lopes pleaded guilty to conspiracy to distribute 100 grams or more of heroin, distribution of heroin, and possession with intent to distribute 100 grams or more of heroin. Parsons pleaded guilty to conspiracy to distribute heroin and distribution of heroin. Sentencing is scheduled for April 14 and 15, 2015 for Parsons and Lopes, respectively.
Lopes and Parsons conspired with each other and another individual to sell heroin in New Bedford. In particular, on Feb.15, 2013, Lopes, Parsons, and a co-conspirator sold almost 100 grams of heroin to a cooperating witness. Lopes drove with the cooperating witness to Parson’s home where the heroin sale was completed. Lopes and another individual planned and arranged for the sale of an additional 50 grams of heroin to the cooperating witness that was to take place on Feb. 25, 2013, although the sale was not completed.
On March 1, 2013, agents arrested Lopes and another individual. Pursuant to a search warrant executed at Lopes’ home, agents seized approximately 7,500 packages of heroin, several large packages of marijuana, brass knuckles, and a bullet-proof vest.
At the time of this offense, Lopes was on federal probation from a previous drug and gun trafficking conviction in U.S. District Court in Boston.
For Lopes, the charging statutes provide for a minimum sentence of ten years in prison and a maximum penalty of life in prison; eight years of supervised release, and a maximum fine of $8 million. Pursuant to a written plea agreement, the government and Lopes agreed to recommend to Judge Casper that he serve a sentence of 188 months in prison. For Parsons, the charging statutes provide a sentence of no greater than 30 years in prison, six years of supervised release, and a fine of $2 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; and Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement today. The case was investigated by a DEA Task Force comprised of agents and officers from the Massachusetts State Police, the New Bedford and Fairhaven Police Departments, the Bristol County Sheriff’s Department, and other federal, state, and local law enforcement agencies. The case is being prosecuted by Assistant U.S. Attorney Christopher Pohl of Ortiz’s Organized Crime Strike Force Unit.
Melrose Man Pleads Guilty to Impersonating FBI AgentRead the Press Release
BOSTON – A Melrose man pleaded guilty in U.S. District Court in Boston on Monday to impersonating a federal agent.
Gjerji Pelushi, a/k/a “George Pelushi,” 28, pleaded guilty on Jan. 12 to two counts of impersonation of an officer of the United States. U.S. District Judge Denise J. Casper scheduled sentencing for April 8, 2015.
In 2014, the FBI received information about Pelushi from two victims who, like Pelushi, are originally from Albania. In separate interviews, both victims told agents that they had each paid thousands of dollars to Pelushi to assist them in obtaining a law enforcement job or in dealing with a law enforcement-related problem. One of the victims had a pending state court case which Pelushi promised to get dismissed. The victims paid for Pelushi’s help because he repeatedly told them he worked for the FBI.
During an undercover operation, agents recorded several telephone calls and meetings between Pelushi and the victims. On the recordings, Pelushi referred to himself as an FBI agent, confirmed he had taken thousands of dollars from both victims, and promised to use his connections as an agent to help them. In one meeting, Pelushi claimed to have patrolled this year’s Boston Marathon in plain clothes while armed and that “the Director” had told him and his fellow agents that if they “tell someone to stop and they reach for the bag, shoot them in the head!”
When Pelushi was arrested in August 2014, agents seized, among other items, a fake Harvard diploma and a private investigator manual. Pelushi ultimately admitted to agents that he had taken money from both victims and that he was not in fact an FBI agent.
The charging statute provides a sentence of no greater than three years in prison, one year of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The case was prosecuted by Assistant U.S. Attorney Christopher Pohl of Ortiz’s Organized Crime Strike Force Unit.
Disbarred Attorney Pleads Guilty to Bank FraudRead the Press Release
BOSTON – A Marblehead man pleaded guilty today to tax and bank fraud violations, primarily for recording fraudulent federal tax lien releases on properties he owned in Marblehead and Edgartown.
John C. McBride, 65, pleaded guilty before U.S. District Chief Judge Patti B. Saris to endeavoring to obstruct and impede the due administrations of the Internal Revenue laws and bank fraud. McBride, who was indicted in June 2013, is scheduled to be sentenced on April 28, 2015.
In early 2008, McBride, a now-disbarred criminal defense lawyer, recorded six fraudulent federal tax lien releases against his Marblehead home, in order to obtain a $288,000 loan secured by that property and deprive the IRS of its nearly $700,000 secured interest. McBride prepared the releases himself, without the knowledge or authorization of the IRS, and forged the signatures of IRS officials on them. In March 2008, McBride attempted, unsuccessfully, to record two similar fraudulent tax lien releases against a second home he owned in Edgartown, on Martha’s Vineyard. In 2011, McBride attempted to obtain a $387,000 reverse mortgage loan from Bank of America, which was to have been secured by his Edgartown property. In connection with that loan application, McBride falsely told the bank that there were no liens on the Edgartown property and that he was not then in bankruptcy. In fact, there were substantial liens on the property and McBride’s bankruptcy case, which he had filed in 2009, was still ongoing. In furtherance of his effort to obtain the bank loan, McBride prepared and recorded a fraudulent and unauthorized discharge of mortgage which purported to discharge a more than $700,000 existing mortgage on his Edgartown property. Bank of America discovered that the discharge was fraudulent before the loan closed, and no funds were disbursed to McBride.
The charge of bank fraud provides a sentence of no greater than 30 years in prison and three years of supervised release. The charge of endeavoring to obstruct and impede the due administrations of the Internal Revenue laws is three years in prison and one year of supervised release. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Robert E. O’Malley, Special Agent in Charge of the U.S. Treasury Inspector General for Tax Administration, Office of Investigations, New York Field Office (TIGTA); Vincent B. Lisi, Special Agent Charge of Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
Chiropractor Sentenced for Bribing IRS AuditorRead the Press Release
BOSTON – A Lowell chiropractor was sentenced today to nine months in prison for bribing an IRS agent.
Stephen Jacobs, 56, of Lowell, was sentenced to nine months in prison, two years of supervised release, and ordered to pay a $10,000 fine. Jacobs must report to the custody of the Bureau of Prisons by Feb. 24, 2015. In October 2014, Jacobs pleaded guilty before U.S. District Court Judge William G. Young to bribery of a public official.
In August 2013, an IRS auditor met with Jacobs, a chiropractor, to examine numerous issues with his federal income tax forms for 2011. During the initial interview, the auditor advised Jacobs that two $5,000 payments were not allowable deductions after Jacobs admitted that each was a payment to two different women after they accused him of touching them inappropriately during medical treatments. Jacobs told the auditor that he paid the women because he was concerned that they would report him to the police or to the chiropractic board. Jacobs admitted that he had begun kissing one woman’s feet while he was treating her. He also admitted to other inappropriate contact when he was giving the second woman a massage.
Jacobs asked the IRS auditor if there was anything he could do to “just deal with this…” When the agent said he could not “just deal with this,” Jacobs became agitated and combative, ultimately threatening the agent that he would “ruin [his] career.”
The following month, after several electronically monitored discussions regarding his non-deductible expenses, Jacobs offered to bribe the auditor in exchange for terminating the examination, saying, “. . . you want a bribe? You want me to pay you?...” The auditor, acting under the direction of law enforcement, then accepted Jacobs’s offer of $5,000 to give Jacobs a favorable audit letter showing no additional tax for one year and a small refund for the next year. Jacobs paid the auditor $5,000 in cash for the favorable treatment.
United States Attorney Carmen M. Ortiz and Robert O’Malley, Special Agent in Charge of the Treasury Inspector General for Tax Administration, made the announcement today. The case was prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit.
Career Criminal Sentenced to 15 Years for Illegal Gun SalesRead the Press Release
BOSTON – An armed career criminal was sentenced today in connection with the illegal sale of three guns and ammunition.
James Dawn, 48, of Brockton, was sentenced to 15 years in prison and three years of supervised release. In Sept. 2014, Dawn pleaded guilty before U.S. District Judge Douglas P. Woodlock to being an armed career criminal, possessing a firearm and ammunition, and dealing in firearms without a license.
In March 2014, Dawn was arrested after he sold three guns – two pistols and one shotgun, along with ammunition for each weapon, to a cooperating witness on three separate occasions. Dawn also offered other types of weapons for sale and discussed future “business.” At the time, Dawn was a lifelong violent criminal. He had numerous felony convictions, including two jail sentences for cocaine trafficking convictions, and numerous other convictions for violent crimes.
During the sentencing hearing, Judge Woodlock noted the seriousness of the offense and the need to protect the public from those, like Dawn, who sell guns illegally on the street. Judge Woodlock also described Dawn’s extensive criminal record as a factor in his sentence.
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 was prosecuted by Assistant U.S. Attorney Glenn A. MacKinlay of Ortiz’s Strike Force Unit.Attorney Indicted in Nearly $1 Million Tax Refund Check ScamRead the Press Release
BOSTON – An attorney specializing in real estate closings and a co-conspirator were charged today with depositing almost $1 million in fraudulently obtained IRS refund checks into several different bank accounts, including the attorney's trust account, in an effort to launder the proceeds.
R. David Cohen, 63, and Francisco Oscar “Frank” Grullon, 48, both of Andover at the time of the alleged crime, were indicted on charges of conspiracy, conversion and receipt of stolen United States property, and conspiracy to commit money laundering. Cohen was previously arrested by complaint on Dec. 17, 2014. Grullon is believed to be outside of the United States.
According the indictment and an affidavit filed in the case, the investigation identified a scheme in which individuals filed fraudulent tax returns with fictitious W-2 information, usually a name and social security number of a resident of Puerto Rico, whose residents are not required to file federal income tax returns. Once the fraudulent returns were accepted by the IRS, refund checks were sent to designated addresses in Lawrence, East Boston and New York controlled by his co-conspirators.
Beginning in October 2011, Cohen, Grullon and another co-conspirator deposited 152 fraudulently deposited tax refund checks totaling $993,677 into various local banks to launder them through Cohen’s “Interest On Lawyer’s Trust Accounts” (IOLTA), as well as through bank accounts in the name of AD Professional Association, Inc. When questioned by bank officials about the large amount of third-party U.S. Treasury checks Cohen was depositing and negotiating through his IOLTA and personal accounts, Cohen falsely claimed that the payees were his clients.
The charge of conspiracy provides a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000 or twice the loss or gain from the offense. The charge of conversion and receipt of stolen U.S. property provides a sentence of no greater than 10 years in prison, three years of supervised release, a fine of $250,000 or twice the loss or gain from the offense. The charge of money laundering provides a sentence of no greater than 20 years in prison, five years of supervised release, a fine of $500,000 or twice the value of the property involved in the transaction. 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 was also investigated by the Department of Homeland Security and U.S. Secret Service. The case is being prosecuted by S. Theodore Merritt of Ortiz’s Public Corruption and Special Prosecutions Unit.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Insider iPad Thief ChargedRead the Press Release
BOSTON – The Director of Technical and Development Operations at a South Boston-based media technology company was charged today in connection with his alleged theft of nearly one million dollars’ worth of iPads and other Apple products from his employer.
Michael S. Denning, 33, of Peabody, was charged in an Information with mail fraud and filing false tax returns.
The Information alleges that in late 2010, Denning began working at a South Boston-based media technology company where his job responsibilities included purchasing computer equipment, software, and other technology-based products for use by employees. Shortly after he was hired, Denning began ordering extra Apple computer equipment, primarily iPads, from a wholesale computer vendor. Denning then intercepted these packages and sold them for cash, initially on eBay and Craigslist, and later to eBay resellers. Denning generated and submitted fraudulent invoices so that his company would pay the wholesale vendor. In doing so, Denning changed the description on the invoices so that they appeared to be for other items that he had legitimately purchased, such as software licenses, toner cartridges, computer monitors and other items. He also took measures to conceal the theft with the wholesale vendor, for instance by falsely noting that the iPads ordered were for “new hires.” By the end of 2013, Denning, who was promoted to Director of Technical and Development Operations, had ordered almost one million dollars of Apple computer equipment in this manner when only a handful of these products were legitimate purchases. Denning filed individual income tax returns that falsely listed his salary from as his employer as his only source of income.
The charge of mail fraud provides a statutory maximum sentence of 20 years in prison, three years of supervised release, and a fine of $250,000 or twice the gain or loss, whichever is greater. The charge of filing false tax returns provides a sentence of no greater than three years in prison, one year of supervised release, a fine of $250,000 or twice the gain or loss. 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 United States Postal Inspection Service; 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 Amy Harman Burkart of Ortiz’s Cybercrime Unit.
The details in the Information are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Pharmaceutical Manufacturer Daiichi-Sankyo to Pay $39 Million to Resolve Allegations that It Paid Kickbacks to PhysiciansRead the Press Release
Boston – Daiichi Sankyo, Inc., a global pharmaceutical company with its U.S. headquarters in New Jersey, has agreed to pay the United States and state Medicaid programs $39 million to resolve allegations that it violated the False Claims Act by using lavish meals and speaker program honoraria as kickback vehicles to induce physicians to prescribe the drugs Azor, Benicar, Tribenzor, and Welchol.
“Drug companies are prohibited from using lavish entertainment and padded speaker program payments to induce physicians to prescribe their drugs for beneficiaries of federal health care programs,” said Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts. “Settlements like this one show that the government will continue to pursue health care companies that use kickbacks to promote their products.”
The settlement resolves allegations that Daiichi caused the submission of false claims for Azor, Benicar, Tribenzor, and Welchol. The claims were false because they resulted from kickbacks that Daiichi provided to physicians who prescribed the drugs. Specifically, it is alleged that Daiichi’s kickbacks took the form of honoraria payments, meals and other remuneration to physicians who participated, or supposedly participated, in Physician Opinion & Discussion programs (PODs) from Jan. 1, 2005, through March 31, 2011, and other speaker programs from Jan. 1, 2004, through Feb. 4, 2011. The United States contends that the honoraria, meals and other remuneration were kickbacks because Daiichi paid physicians who participated in the speaker programs even if, among other things: (1) the honoraria recipient spoke only to members of his or her own staff in his or her own office; (2) the physician participants in PODs took turns accepting a “speaker” honoraria for duplicative discussions; (3) the audience included the honoraria recipient’s spouse; (4) the honoraria recipient did not speak at all because the event was cancelled beforehand; and/or (5) the associated dinners were lavish and at times even exceeded Daiichi’s own internal cost limitations of $140 per person.
“The Anti-Kickback Statute prohibits payments intended to influence a physician’s ordering or prescribing decisions,” said Acting Assistant Attorney General Joyce R. Branda for the Department of Justice’s Civil Division. “The Department of Justice is committed to preserving the independence and objectivity of those decisions, which is a cornerstone of our public health programs.”
"This settlement is evidence of the continuing efforts of the Defense Criminal Investigative Service and our law enforcement partners to protect medical beneficiaries and assure integrity within the pharmaceutical industry," said Craig W. Rupert, Special Agent in Charge of the DCIS Northeast Field Office, the investigative arm of the Office of the Inspector General, Department of Defense. "The Department of Defense purchases substantial quantities of pharmaceuticals and is affected by fraud schemes within this industry. DCIS will continue to aggressively pursue allegations of fraud and corruption harmful to U.S. taxpayers and the Department."
"It is vital to veterans receiving care at the VA that they are prescribed safe and effective medications for the sole purpose of healing their ailments,” said Special Agent in Charge Jeffrey Hughes. “The VA Office of Inspector General will continue to work with our partners in the law enforcement community to ensure that is the case.”
“Schemes such as this are particularly abhorrent,” said Inspector General Daniel R. Levinson for the U.S. Department of Health and Human Services. “Manufacturers and physicians who engage in them are cheating Medicare and Medicaid out of millions of dollars and threatening programs upon which many elderly and disabled Americans rely. My office will take whatever steps necessary to guard against improper alliances between manufacturers of drugs and those who prescribe them. Through our Corporate Integrity Agreement we will be closely monitoring Daiichi.”
“This settlement is another example of the FBI’s commitment to ensure those who refuse to play by the rules and provide illegal incentives to influence the decision-making of health care providers are held accountable,” said Vincent B. Lisi, Special Agent in Charge of the FBI’s Boston Division.”
The Anti-Kickback Statute was enacted to ensure that physicians’ medical judgment is not compromised by improper payments or gifts. The statute generally prohibits anyone from offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare and Medicaid.
As part of the settlement, Daiichi has agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General (HHS-OIG), which obligates Daiichi to undertake substantial internal compliance reforms for the next five years.
The settlement announced today stems from a complaint filed by Kathy Fragoules, a former Daiichi sales representative, 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. Ms. Fragoules will receive $6.1 million of the federal recovery.
This matter was investigated by the Department of Defense Criminal Investigative Service; the Department of Veterans Affairs, Office of the Inspector General; HHS-OIG; and the Federal Bureau of Investigation. The matter was handled by Assistant U.S. Attorneys Gregg Shapiro, Lisa Asiaf, and Giselle Joffre of Ortiz’ office; Department of Justice Trial Attorney Douglas Rosenthal; Zachary Cunha, currently an Assistant U.S. Attorney in the District of Rhode Island; and Kimberly Friday, currently an Assistant U.S. Attorney in the Northern District of California.
The case is captioned U.S. ex rel. Fragoules v. Daiichi Sankyo, Inc., Civil Action No. 10-10420 (D. Mass.).
Lowell Felon Pleads Guilty in Illegal Firearm SalesRead the Press Release
BOSTON – A previously convicted felon pleaded guilty yesterday in connection with the sale of multiple firearms, including handguns with obliterated serial numbers.
Shayne Sullivan, 25, of Lowell, pleaded guilty to being a felon in possession of firearms and ammunition. U.S. District Judge Richard G. Stearns scheduled sentencing for April 2, 2015.
On March 5, 2014, Sullivan, sold a .357 caliber revolver with an obliterated serial number as well as ammunition to an undercover agent for $600. Eleven days later, Sullivan arranged for another convicted felon to sell several other firearms, including two revolvers with obliterated serial numbers and a rifle, to another criminal for $1,300. Sullivan’s prior convictions include, among other offenses, armed robbery with a gun and assault and battery on a disabled person over the age of 65.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. 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; Daniel J. Kumor, Special Agent in Charge of Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Lowell Police Superintendent William Taylor, made the announcement. The case is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.
Former Charter School Principal Sentenced in Connection with MCAS Cheating SchemeRead the Press Release
BOSTON – A former Springfield charter school principal was sentenced yesterday in U.S. District Court in Springfield for a federal felony in connection with assisting students to cheat on the MCAS.
Janet Henry, 42, was sentenced by U.S. District Judge Mark G. Mastroianni to one year of probation and a $500 fine. In October 2014, Henry pleaded guilty to an Information charging her with mail fraud.
According to the Information, in 2009 Henry became Principal of the Robert M. Hughes Academy Charter School in Springfield. In March and April 2009, the Massachusetts Comprehensive Assessment System (MCAS) tests were administered to the student body during which time Henry instructed teachers to give clues and other tips to students. For example, if teachers saw students entering nonsense answers, then they were to tell students to review their answers again. During preparation meetings, Henry stated to teachers that “this is where we earn our money,” and warned that the school could close or everyone would lose their jobs, if the test scores were not satisfactory. On April 16, 2009, upon the completion of the MCAS examinations, Henry falsely certified that the tests had been administered honestly.
United States Attorney Carmen M. Ortiz; Brian M. Hickey, Special Agent in Charge of the U.S. Department of Education, Office of Inspector General, Northeast Region; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Kevin O'Regan of Ortiz’s Springfield Branch Office.
Chicopee Man Sentenced for Failing to Register as a Sex OffenderRead the Press Release
BOSTON – A Chicopee man was sentenced in U.S. District Court in Springfield yesterday for failing to register as a sex offender.
Joseph Trombley, 35, was sentenced by U.S. District Court Judge Michael A. Ponsor to 30 months in prison, and five years of supervised release. In September 2014, Trombley pleaded guilty to failure to register as a sex offender.
From February 2013 to August 2013, Trombley traveled from Massachusetts to numerous other states and eventually settled in Colorado. During that period, Trombley had outstanding arrest warrants for probation violations in a number of criminal cases from Massachusetts state court. Following a 2006 conviction for unnatural acts with a child under the age of 16 in Northampton District Court, Trombley was required to register as a sex offender; however, he failed to do so in any of the states in which he resided between May 2013 and August 2013.
United States Attorney Carmen M. Ortiz and John Gibbons, U.S. Marshal of the U.S. Marshals Service, District of Massachusetts, made the announcement. The case was prosecuted by Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Branch Office.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Boston Woman Convicted of Stealing $135,000 in Public Housing BenefitsRead the Press Release
BOSTON – A Boston woman pleaded guilty yesterday to stealing over $135,000 in public housing benefits, which she obtained by lying about her living situation and employment.
Astride Dubuisson, 42, waived indictment and pleaded guilty to an Information charging her with stealing public money. U.S. District Judge Nathaniel M. Gorton scheduled sentencing for April 9, 2015.
In 2006, Dubuisson applied to the Department of Housing and Urban Development (HUD) for housing benefits, claiming that she needed help paying rent for an apartment on Vernon Street in Hyde Park. In fact, Dubuisson owned the entire Vernon Street building, which would disqualify her from receiving benefits. Based on her falsehoods, HUD approved her application and began sending benefits checks to a fabricated landlord. From 2006 to 2013, Dubuisson cashed those government checks, which totaled more than $135,000, and repeatedly lied about her ownership of the property and her income.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000, or twice the gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Cary Rubenstein, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, New York Regional Office, made the announcement today. The case is being prosecuted by Eric P. Christofferson of Ortiz’s Economic Crimes Unit.
Former Jetblue Employee Sentenced for Smuggling Contraband Through Security at LoganRead the Press Release
BOSTON – A former JetBlue Airways employee was sentenced today for smuggling thousands of dollars of what he believed to be drug money past security checkpoints at Logan International Airport.
Rupert Crossley, 26, of Lynn, was sentenced by U.S. District Court Judge William G. Young to two years in prison, one year of supervised release, and ordered to pay $4,000 in criminal forfeiture. In October 2014, Crossley waived indictment and pleaded guilty to a four-count Information charging conspiracy to commit money laundering, conspiracy to defraud the United States, and two counts of illegally entering an airport area with intent to commit a felony.
In August 2012 and March 2013, a federal undercover operation revealed that Crossley used airport security credentials to evade TSA security and smuggle $85,000, which was represented to be drug proceeds, from non-secure airport areas such as curbside passenger drop-off/pick-up or public restrooms near baggage claim to secure areas of the airport such as passenger departure gates. In return, Crossley received a total of $4,000 as compensation from a cooperating witness involved in the investigation.
Four co-defendants are alleged to have also used their airport credentials to evade security as part of the scheme. Alvin Leacock, Eric Vick and Dino Dunkley were indicted in September 2014 on money laundering conspiracy, conspiracy to defraud the United States, money laundering, and illegally entering an airport area with intent to commit a felony.
Co-defendant Anthony Trotman pleaded guilty in October 2014 to a five-count Information charging money laundering conspiracy, conspiracy to defraud the United States, and three counts of illegally entering an airport area with intent to commit a felony. Trotman is scheduled to be sentenced on Jan. 29, 2015 before U.S. District Court Judge Dennis Saylor.
United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The case was investigated with the assistance of Bob Allison, Federal Security Director, Transportation Security Administration; Dwain Troutt, Special Agent in Charge, Federal Air Marshal Service; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police. The U.S. Attorney’s Office would also like to acknowledge the assistance and cooperation of the Massachusetts Port Authority, JetBlue Airways Corporate Security and Delta Airlines. The case was prosecuted by Assistant U.S. Attorneys Carlos A. Lpez of Ortiz’s Organized Crime Drug Enforcement Task Force Unit and Dustin Chao of Ortiz’s Public Corruption Unit.
$18 Million Seized from Owners of New England Compounding CenterRead the Press Release
BOSTON – More than $18,000,000 was seized from accounts connected to the owners of New England Compounding Center (NECC). The funds were seized from 13 different financial institutions, pursuant to 26 seizure warrants issued by the federal court in Boston. The seizure warrants were unsealed today.
Approximately $1,500,000 was seized from three accounts held by Barry J. Cadden, a shareholder and the head pharmacist of NECC. Cadden was recently charged in a 131-count criminal indictment along with 13 other individuals, in connection with the 2012 fungal meningitis outbreak caused by contaminated medications made by NECC. Among the charges that Cadden faces are 25 acts of second degree murder as well as mail fraud, conspiracy and violations of the Food, Drug and Cosmetic Act.
In addition, approximately $16,800,000 was frozen in accounts held by or connected to Carla Conigliaro, 51, and Douglas A. Conigliaro, 53, of Dedham, Mass. Carla Conigliaro is the majority shareholder of NECC, and Douglas A. Conigliaro is her husband. Both were recently charged with transferring assets following the 2012 fungal meningitis outbreak.
According to the allegations in the application for the seizure warrants unsealed today, the Conigliaros transferred millions the same month that NECC surrendered its pharmacy license and shortly before NECC’s petition for bankruptcy. Carla and Douglas A. Conigliaro also allegedly transferred millions more after the bankruptcy court issued two orders prohibiting them from transferring any assets.
United States Attorney Carmen M. Ortiz; Jeffrey Ebersol, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations; and Shelly Binkowski, Postal Inspector in Charge of the U.S. Postal Inspection Service, Boston Division, made the announcement today. The asset forfeiture seizures are being handled by Assistant U.S. Attorney Veronica M. Lei of Ortiz’s Asset Forfeiture Unit. The case is being prosecuted by Assistant U.S. Attorneys George P. Varghese and Amanda P.M. Strachan of the Health Care Fraud Unit for the U.S. Attorney’s Office in the District of Massachusetts, and Trial Attorney John W.M. Claud of the Civil Division’s Consumer Protection Branch.
Former Daycare Provider Arrested for Making False Statements During Child Exploitation InvestigationRead the Press Release
BOSTON - A Worcester woman was charged in federal court in Worcester today with lying to federal agents investigating child exploitation offenses which occurred at her home daycare.
Donna Belanger, 49, was charged with making false statements to the FBI about her son’s prior sexual assaults against children and about whether her son had been allowed unsupervised contact with the children in her home daycare center.
According to the criminal complaint affidavit, in February of this year FBI and Worcester Police executed a federal search warrant at the home of Donna Belanger, in connection with the arrest of her son, Brian Belanger, on charges of producing child pornography. During the execution of that warrant, the FBI interviewed Donna Belanger about her knowledge of her son’s prior sexual assaults against children and whether her son had been allowed unsupervised contact with the children in her home day care.
While Donna admitted that her daycare had been shut down in June 2012 after an investigation of claims that her son Brian had sexually assaulted a child attending the daycare, Donna allegedly denied any other knowledge of her son sexually assaulting a child. It further alleges that Donna repeatedly denied that Brian had ever been allowed unsupervised contact with the children in her day care.
According to the affidavit, a subsequent investigation, including interviews of Brian and other witnesses, revealed that Donna knew that her son Brian had previously sexually assaulted a six-year-old neighbor in 2005 and that she had allowed her son to have unsupervised access to the children in her home daycare.
According to the affidavit, Brian Belanger has admitted to sexually assaulting multiple children, both male and female, who had attended his mother’s home daycare center.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.
The charging statute provides for a sentence of no more than eight years in prison, to be followed by three years of supervised release and a $250,000 fine. Actual sentences for federal crimes are typically less than the statutory 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; Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division; and Chief Gary J. Gemme of the Worcester Police Department; made the announcement today. The case is being prosecuted by Mark J. Grady and Karin M. Bell of Ortiz’s Worcester Branch Office.
The details contained in the complaint and its supporting affidavit are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Dominican Man Arrested on Conspiracy ChargesRead the Press Release
BOSTON – An illegal alien residing in Chelsea was arrested last night on a complaint charging conspiracy to fraudulently issue identification documents.
Edwin Amaurys Parra Suarez (Parra), 37, was arrested in connection with a scheme to produce false identification documents. The complaint affidavit alleges that from December 2012 through January 2013, Parra bribed an employee of the Revere office of the Massachusetts Registry of Motor Vehicles (RMV) in connection with a scheme to issue Massachusetts driver’s licenses to individuals who were not eligible to obtain such documentation.
According to the affidavit, Parra conspired with a RMV clerk to produce at least 29 Massachusetts drivers’ licenses for individuals who are not entitled to them. Parra allegedly paid the clerk between $100 and $1,000 in cash for each of the fraudulent licenses.
This arrest is the most recent development in investigations involving identity theft and public corruption relating to the Massachusetts Registry of Motor Vehicles.
A probable cause hearing will be held on Jan. 7, 2015 at 2:15. The charging statutes provide for a sentence of no more than five years in prison, three years of supervised release and a $250,000 fine. Actual sentences for federal crimes are typically less than the statutory 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; Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston; Colonel Timothy P. Alben, Superintendent of the Massachusetts States Police; David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office; and Cheryl Garcia, Acting Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, New York Regional Office, made the announcement today. The case is being prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit.
Springfield Landlord Convicted of Fraud and Forgery ChargesRead the Press Release
SPRINGFIELD - A Springfield landlord was convicted in federal court today of fraud and related charged in connection with fires at two of his Springfield properties.
Wilkenson Knaggs, 43, was convicted by a jury following a five-day trial of three counts of mail fraud, two counts of negotiating checks with forged endorsements, and two counts of spending the mail fraud proceeds. U.S. District Judge Mark Mastroianni scheduled sentencing for March 20, 2015.
Following a Nov. 16, 2008 fire at 376-378 Franklin Street in Springfield, Knaggs submitted a fraudulent contract for rehabilitating the three-family house in order to obtain a payout on his homeowner’s policy. He also forged the endorsement of the City of Springfield on a second check, cashing the check at a Boston check cashing company, and using the proceeds to buy a two-family house at 99 Central Street. In addition, Knaggs recorded the title to 99 Central Street in the name of a relative and used the relative to make a claim on the insurance policy after a March 7, 2010, fire at the Central Street property.
The charging statutes provide for a sentence of no more than 20 years in prison, three years of supervised release and a $250,000 fine on each mail fraud count with lower maximum sentences on the other charges. Actual sentences for federal crimes are typically less than the statutory 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; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Shelley Binkowski , Postal Inspector in Charge, United States Postal Inspection Service; and Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Karen Goodwin and Deepika Shukla of Ortiz’s Springfield Branch Office.
Owner of Financial Services Company Sentenced to Four Years for Securities and Tax Fraud SchemesRead the Press Release
BOSTON – The former owner of a Lawrence-based financial services company was sentenced today for defrauding investors, filing false tax returns on behalf of certain clients, and filing his own false tax returns.
Robert Burton, 37, the former Managing Director of Pinnacle Financial Consulting LLC, Pinnacle Strategic Investments LLC, and the Pinnacle Asset and Capital Management Group LLC, was sentenced by U.S. District Court Senior Judge Mark L. Wolf to four years in prison, three years of supervised release, and ordered to pay $159,500 in restitution to the fraud victims, as well as $271,640 to the Internal Revenue Service. In August 2014, he pleaded guilty to three counts of securities fraud, two counts of procuring false tax returns, and three counts of subscribing false tax returns.
Burton acted as an investment advisor to at least some of his clients and promised to invest their money in various securities, including stocks, mutual funds, and in a debt portfolio allegedly managed by Pinnacle. In some instances, he promised to return the principal invested within approximately 30 days, along with an interest payment equal to 100% of the amount invested. Burton did not invest the money as promised, did not make the promised payments and, in some instances, provided investors with checks that ultimately bounced.
Through Pinnacle, Burton also provided tax preparation services and, in at least two instances, prepared, and filed, false tax returns on behalf of his clients. Finally, although Burton derived substantial income through the operation of Pinnacle, he failed to identify that income on his own tax returns and admitted to filing false tax returns for the 2008 through 2011 tax years.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the U.S. Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The Massachusetts Attorney General’s Office, which has a civil case pending against Burton, cooperated with the investigation. The case was prosecuted by Assistant U.S. Attorney Sarah E. Walters, Chief of Ortiz’s Economic Crimes Unit.###
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.
Jury Convicts Dominican Drug Trafficker Following Seven-Day TrialRead the Press Release
BOSTON – A Dominican man, who most recently resided in Salem, was convicted yesterday of participating in a North Shore drug trafficking conspiracy.
Jaime Aristy, a/k/a Junito, 29, was convicted following a seven-day jury trial for conspiracy to possess with intent to distribute and distribution of cocaine, a Schedule II controlled substance. In November 2012, Aristy was indicted. U.S. District Court Judge Denise J. Casper scheduled sentencing for March 25, 2015.
Aristy was one of eleven defendants charged with participation in a large-scale cocaine trafficking conspiracy between 2009 and 2012. The conspiracy included several members of the same family, including Jaime Aristy, who were involved in the distribution of multi-kilogram quantities of cocaine in Lynn, Salem, and Peabody. The investigation included court-authorized wiretaps as well as the seizure of kilograms of cocaine, more than $100,000 in currency, and drug paraphernalia used by the criminal organization. On Sept. 1, 2011, Aristy was arrested following a motor vehicle stop in Salem during which law enforcement officers recovered more than $93,000 in cash that was stashed in a shoe box on the back seat of the car, two cell phones used by the drug organization, and a drug ledger that reflected a series of drug transactions involving multiple kilograms of cocaine and tens of thousands of dollars.
The charging statute provides a sentence of no greater than 20 years in prison and a minimum of three years of supervised release. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
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 Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement today. The Salem Police Department and the Massachusetts State Police also assisted with the investigation. The case was tried by Linda M. Ricci and David J. D'Addio of Ortiz’s Drug Task Force Unit.
Former Hanover Post Office Employee Charged for Mail TheftRead the Press Release
BOSTON – Amber Lopresti, 28, of Taunton, was indicted for embezzling the U.S. mail and stealing the contents of the U.S. mail while she was an employee of the United States Postal Service in Hanover.
The charging statutes provide a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Rafael Medina, 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 is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.
Dominican Doctor and Assistant Sentenced for Conspiring to Alter Fingerprints of Criminal AliensRead the Press Release
BOSTON – A Dominican doctor and his assistant were sentenced today for their roles in altering the fingerprints of illegal aliens through a surgical process.
Danilo Ramon Martinez, 61, was sentenced by U.S. District Court Judge Richard G. Stearns to 27 months in prison, three years of supervised release, and a fine of $5,000. Martinez’s assistant, Teresa Araujo Ramirez, 40, was sentenced to 18 months in prison, and three years of supervised release. It is anticipated that, upon completion of their sentences, Martinez and Ramirez will be deported to the Dominican Republic. In December 2013, Ramon Martinez and Araujo Ramirez were indicted for conspiring to harbor illegal aliens by altering their fingerprints and to distribute controlled substances.
Martinez, a licensed medical doctor in the Dominican Republic, performed surgery that altered the fingerprints of aliens illegally in the United States, thereby assisting in the concealment of their true identities and criminal histories. Ramirez charged $4,000 for this service. Araujo Ramirez assisted and supplied pain medications, including Oxycodone and other controlled substances, to the patients following the procedures.
United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The case was prosecuted prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.Baltimore Man Sentenced to Eleven Years in Prison for Child Sex TraffickingRead the Press Release
BOSTON – A Baltimore man was sentenced today to 138 months in prison in connection with the sex trafficking of a 15-year-old girl.
Justin Richardson, 22, of Baltimore, Maryland was sentenced by U.S. District Judge Nathaniel M. Gorton to 138 months in prison and five years of supervised release. In August 2014, Richardson pleaded guilty to recruiting and transporting a minor to engage in prostitution. On Dec. 15, 2014, codefendant, Mark Pinnock, of Boston, was sentenced to eight years in prison, and a second codefendant, Martin Pinkney, also of Baltimore, will be sentenced on Dec. 22, 2014.
In late December 2013, officers responded to an emergency call from a Cambridge hotel, where they found the 15-year old victim and Pinnock. The minor stated that Richardson and Pinkney had arranged for her to travel by bus from Baltimore to Boston. Pictures were taken of her in both Baltimore and Boston and used to post ads soliciting prostitution on the websites backpage.com and Craigslist. While in Boston, the minor victim engaged in sex for a fee at the direction of Pinnock at two local hotels.United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; and Cambridge Police Commissioner Robert C. Haas, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Seth Kosto and Carlos López, both members of Ortiz’s Civil Rights Enforcement Team. The U.S. Attorney’s Office also wishes to thank the Middlesex County District Attorney Marian C. Ryan’s Office for its participation in the investigation.
The enforcement of federal civil rights laws is a high priority of the U.S. Attorney’s Office for the District of Massachusetts. Since U.S. Attorney Ortiz created the Civil Rights Enforcement Team in 2010, the Office has substantially increased its efforts in civil and criminal civil rights enforcement actions. In the last four years, the Office has charged an increasing number of defendants with sex trafficking and other criminal civil rights violations.
Three Indicted in Conspiracy to Distribute Oxycodone Through Fraudulent PrescriptionsRead the Press Release
BOSTON – Three individuals were charged today in U.S. District Court in Boston with distributing oxycodone via false prescriptions.
Leslie Credle, a/k/a Chanel, 48, of Jamaica Plain; William Ford, a/k/a Billy, 33, of Winthrop; and Lisette Carrasquillo, a/k/a Jacqueline, 37, of Allston were indicted on conspiracy to possess oxycodone with intent to distribute and conspiracy to obtain possession of oxycodone by misrepresentation, fraud, forgery, deception, or subterfuge. On June 30, 2014, the defendants were originally charged by criminal complaint at which time Credle and Ford were arrested and have since been held in custody. Carrasquillo was arrested on July 1, 2014 and was released on bond and pre-trial conditions.
According to court documents, beginning in November 2013, DEA investigators detected the diversion of a large amount of Oxycodone pills through fraudulent prescriptions filled at various pharmacies in eastern Massachusetts. Through the investigation, law enforcement discovered that Credle forged multiple prescriptions, after which Ford, Carrasquillo, and others passed the created prescriptions for Oxycodone at Boston-area pharmacies.
For Credle, the charging statute provides a sentence of no greater than 30 years in prison, a lifetime of supervised release, and a fine $2 million. For Ford and Carrasquillo, the charging statute provides a sentence of no greater than 20 years in prison, a lifetime of supervised release, and a fine of $1 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division made the announcement today. The case was investigated by the DEA, Massachusetts State Police, Billerica Police Department, Boston Police Department, Dedham Police Department, Quincy Police Department, and Waltham Police Department; and in coordination with the Norfolk County District Attorney’s Office and the Suffolk County District Attorney’s Office. The case is being prosecuted by Michael I. Yoon of Ortiz’s Organized Crime Drug Enforcement Task Force.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.
Investment Adviser Convicted of Stealing Client FundsRead the Press Release
BOSTON – A Pennsylvania woman pleaded guilty yesterday in U.S. District Court in Boston to orchestrating a multi-million dollar investment fraud scheme that harmed scores of victims.
Patricia S. Miller, 68, pleaded guilty to five counts of wire fraud after being indicted in June 2014. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for March 10, 2015.
Miller used her position as a trusted financial adviser, as well as her association with a Massachusetts-based broker dealer, to obtain money from clients for purported investments that she never made on behalf of clients. Specifically, Miller promised high returns if clients put their money into “investment clubs” called, among other things, “KS Investments” and “Buckharbor.” Miller represented, among other things, that funds put into her “investment clubs” would be placed in fixed-income notes and other investments. Miller was able to obtain over $2.5 million from more than 50 clients for these purported investment clubs. Instead of investing the money as promised, she misappropriated client funds for her own use.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. U.S. Attorney Ortiz also expressed appreciation for the help and cooperation her office received from the U.S. Attorney’s Office for the Western District of Pennsylvania and the Federal Bureau of Investigation, Pittsburgh Field Division. The case is being prosecuted by Assistant U.S. Attorney Ryan M. DiSantis of Ortiz’s Public Corruption Unit.
If you believe you are a victim of the crimes alleged against Patricia Miller, you may contact the United States Attorney’s Office for the District of Massachusetts at [email protected]. Identified victims will receive notification through the automated victim notification system. If you have not received notification, and believe you should be included as a victim in this case, please contact the U.S. Attorney’s Office for the District of Massachusetts at [email protected].Pittsburgh-Area Victims:
If you are a victim from the Pittsburgh, Pa. area, please contact the Victim Witness Unit at the U.S. Attorney’s Office for the Western District of Pennsylvania at (412) 644-3500. Pittsburgh victims may also find information online at http://www.justice.gov/usao/paw.
Today’s announcement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s Securities and Commodities Fraud Working Group. The interagency FFETF was created to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force, chaired by Attorney General Eric Holder, 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.
Holden Woman Sentenced to 18 Months for Stealing Nearly $1 Million from Elderly In-LawsRead the Press Release
BOSTON – A Holden woman was sentenced today in U.S. District Court in Worcester in connection with a scheme to steal nearly $1 million from her elderly in-laws.
Chiao Fang Ku, 45, was sentenced by U.S. District Court Judge Timothy S. Hillman to 18 months in prison, one year of supervised release, and ordered to pay $954,571 in restitution. In August 2014, Ku pleaded guilty to one count of wire fraud.
After Ku’s father-in-law became ill in 2008, Ku offered to help her mother-in-law manage the couple’s finances. Ku was given access to her in-laws’ savings and investment accounts. She thereafter began siphoning funds from those accounts through online transfers, forged checks, and cash withdrawals. Ku used the money for on-line gambling activities and other personal uses. She also obtained credit cards in her mother-in-law’s name without authorization, and then used those cards for personal expenses. In total, Ku stole over $950,000 from her in-laws over a five-year period.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Eric P. Christofferson of Ortiz’s Economic Crimes Unit.
Former Marine Pleads Guilty to Wrongful Receipt of Benefits Based on Falsified Military RecordsRead the Press Release
BOSTON – A Wakefield veteran pleaded guilty today to stealing $174,000 in benefits paid to him based upon falsified Vietnam War service records.
Albert L. Seely, 67, pleaded guilty today before Senior U.S. District Court Judge Rya W. Zobel. Seely admitted to theft of government funds from October 1, 1999 through July 1, 2014. Sentencing is scheduled for March 18, 2015.
Seely, a former U.S. Marine, was deployed to Vietnam and served there from 1966 to 1967. In December 1970, Seely filed his discharge papers with the Veterans Benefit Administration (VBA) and misrepresented the dates and places of his deployment in Vietnam. He also falsely listed numerous decorations, including two Purple Hearts, a Vietnam Cross of Gallantry, a Bronze Star, and a Silver Star. In March 1999, Seely applied for and received VBA disability payments based upon his false claims of combat and valor. He ultimately fraudulently obtained $174,656 in government benefits. In February 2014, the VBA terminated his benefits after his fraud was revealed.
The charging statute provides for 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, and Jeffrey G. Hughes, Special Agent in Charge of the Department of Veterans Affairs, Office of Inspector General, Northeast Field Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crime Unit.
Billerica Woman Sentenced to 30 Months in Loan ScamRead the Press Release
BOSTON – A Billerica woman was sentenced yesterday for wire fraud charges in connection with a bogus bank guaranty program.
Diane Glatfelter, 48, was sentenced by U.S. District Judge Douglas P. Woodlock to 30 months in prison, three years of supervised release, and ordered to pay $1,575,000 in restitution. In September 2014, Glatfelter was found guilty following a five-day jury trial of four counts of wire fraud.
In 2007 and 2008, Glatfelter engaged in a scheme to defraud a young real estate businessman from California who was seeking funding for a development project. Glatfelter promised to secure a $20 million loan for him, but required him to pay $125,000 in up-front fees. The loan never materialized. Glatfelter used the money for various purposes other than to secure any funding. As part of her scam, Glatfelter set up two bogus front companies and used her unsuspecting sister to make these fronts appear legitimate.
At sentencing, Glatfelter was also held accountable for an additional $1,450,000 in fraud against four other victims in connection with three transactions during the same time period. Glatfelter promised all of the victims that through the efforts of K2 Unlimited and 211 Ventures, she could procure huge sums of money for their projects (up to $100 million), but they would need to pay a percentage of the amount sought up-front in order for her to procure the bank guarantee or the loan, or to participate in the trade program. The victims wired their payments to Glatfelter’s 211 Ventures and K2 bank accounts, in one instance to her lawyer’s bank account, and thereafter, Glatfelter disbursed the funds to her business partner and to her own temporary staffing agency. She never procured the funding. Glatfelter also provided false reasons for the delays in funding.United States Attorney Carmen M. Ortiz; Lisa A. Quinn, Special Agent in Charge of the U.S. Secret Service; Vincent B. Lisi, 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 Sandra S. Bower and Christine J. Wichers of Ortiz’s Economic Crimes Unit and Civil Division, respectively.
14 Indicted in Connection with New England Compounding Center and Nationwide Fungal Meningitis OutbreakRead the Press Release
WASHINGTON – A 131-count criminal indictment was unsealed today in Boston in connection with the 2012 nationwide fungal meningitis outbreak, the Justice Department announced. Barry J. Cadden, owner and head pharmacist of New England Compounding Center (NECC) and NECC’s supervisory pharmacist Glenn A. Chin were charged with 25 acts of second-degree murder in Florida, Indiana, Maryland, Michigan, North Carolina, Tennessee and Virginia.
The outbreak was caused by contaminated vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC, located in Framingham, Massachusetts. The U.S. Centers for Disease Control and Prevention (CDC) reported that 751 patients in 20 states were diagnosed with a fungal infection after receiving injections of NECC’s MPA. Of those 751 patients, the CDC reported that 64 patients in nine states died.
Twelve other individuals, all associated with NECC, including six other pharmacists, the director of operations, the national sales director, an unlicensed pharmacy technician, two of NECC’s owners, and one other individual were charged with additional crimes including racketeering, mail fraud, conspiracy, contempt, structuring, and violations of the Food, Drug and Cosmetic Act.
“As alleged in the indictment, these employees knew they were producing their medication in an unsafe manner and in insanitary conditions, and authorized it to be shipped out anyway, with fatal results,” said Attorney General Eric Holder. “With the indictment and these arrests, the Department of Justice is taking decisive action to hold these individuals accountable for their alleged participation in grievous wrongdoing. Actions like the ones alleged in this case display not only a reckless disregard for health and safety regulations, but also an extreme and appalling indifference to human life. American consumers have a right to know that their medications are safe to use, and this case proves that the Department of Justice will always stand resolute to ensure that right, to protect the American people, and to hold wrongdoers accountable to the fullest extent of the law.”
“Every patient receiving treatment deserves the peace of mind and knowledge that the medicine they are receiving is safe,” said Acting Associate Attorney General Stuart Delery. “When people and companies violate that trust and break the law, the consequences to patients and their families can be catastrophic. That’s why it remains a priority of the Department to use every tool at our disposal to protect patients’ safety and hold bad actors accountable.”
“Those who produce and sell the drugs that we take have a special responsibility to make sure that they prepare those drugs under suitable conditions, and that what leaves their facilities is safe,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The indictment charges that the defendants’ conduct in this case was corrupt and carried out with a complete disregard to the public’s health. The department‘s Consumer Protection Branch along with our law enforcement partners is steadfast in our commitment to use every criminal and civil tool at our disposal to hold accountable those who are willing to put our lives at risk in the reckless pursuit of their profits.”“Ever since the outbreak occurred, we have been committed to bringing to justice the individuals responsible for the deaths and suffering of so many innocent victims,” said U.S. Attorney Carmen Ortiz for the District of Massachusetts. “The indictment announced today is the first step in that process which addresses alleged criminal wrongdoing at NECC, a business that prioritized production and profit over safety. We will make every effort to ensure that licensed pharmacists, and those working with them, are held to a standard of care that protects the public from unsafe and dangerous medications.”
“Two years after the fungal meningitis outbreak, our hearts continue to go out to the victims of this tragedy and to their families,” said FDA Commissioner Margaret A. Hamburg M.D. “Our work on behalf of all patients who want and deserve medicines that do not subject them to undue risk is far from done. The FDA will continue to work aggressively on many fronts with the states, the Department of Justice, and others to protect the American public from unsafe compounded drug products.”
“Threats to public health, as alleged in today's indictment, are a priority for the FBI,” said Assistant Director Joseph S. Campbell of the FBI’s Criminal Division. “Together with our law enforcement and regulatory agency partners, we are determined to stop practices that jeopardize patients' health and violate the public trust. These types of investigations are complex and resource intensive. We greatly appreciate the efforts of our partners in this case and look forward to working with them to effectively identify criminal activities and combat fraudulent and abusive health practices in the future.”
The 14 individuals charged in the indictment are Barry J. Cadden, 48, of Wrentham, Massachusetts; Glenn A. Chin, 46, of Canton, Massachusetts; Gene Svirskiy, 33, of Ashland, Massachusetts; Christopher M. Leary, 30, of Shrewsbury, Massachusetts; Joseph M. Evanosky, 42, of Westford, Massachusetts; Scott M. Connolly, 42, of East Greenwich, Rhode Island; Sharon P. Carter, 50, of Hopkinton, Massachusetts; Alla V. Stepanets, 34, of Framingham, Massachusetts; Gregory A. Conigliaro, 49 of Southborough, Massachusetts; Robert A. Ronzio, 40, of North Providence, Rhode Island; Kathy Chin, 42, of Canton, Massachusetts; Michelle Thomas, 31 of Cumberland, Rhode Island; Carla Conigliaro, 51, of Dedham, Massachusetts and Douglas A. Conigliaro, 53, of Dedham, Massachusetts.
The 25 second-degree murders are included in the indictment as predicate racketeering acts under the Racketeer Influenced and Corrupt Organizations Act (RICO). These charges relate to patients who received NECC MPA and died in Florida, Indiana, Maryland, Michigan, North Carolina, Tennessee and Virginia. As a general matter, and depending on particular state law, second-degree murder does not require the government to prove Cadden and Chin had specific intent to kill the 25 patients, but rather that Cadden and Chin acted with extreme indifference to human life. According to the indictment, Cadden and Chin knew that NECC was making MPA in a manner and in an environment in which they could not assure that the drug was sterile as it was identified to be. Despite knowing that they were making the MPA in an unsafe manner and in insanitary conditions, Cadden and Chin nonetheless allegedly directed and authorized the shipping of MPA to NECC customers nationwide. It is alleged that Cadden and Chin were aware that doctors would inject MPA into their patients’ bodies, and that if the MPA was not in fact sterile, it could kill them.
The 25 murder racketeering acts comprise only a portion of the broad racketeering scheme charged in the indictment. The indictment also alleges that NECC’s other pharmacists knowingly made and sold numerous drugs in a similar unsafe manner and in insanitary conditions. The unsafe manner alleged in the indictment includes, among other things, the pharmacists’ failure to properly sterilize NECC’s drugs, failure to properly test NECC’s drugs for sterility, and failure to wait for test results before sending the drugs to customers. The insanitary conditions alleged in the indictment include, among other things, NECC’s lack of proper cleaning and NECC’s failure to take any action when its own environmental monitoring repeatedly detected mold and bacteria within NECC’s clean room suite of rooms throughout 2012.
It is further alleged that NECC repeatedly took steps to shield its operations from regulatory oversight by the FDA by claiming to be a pharmacy dispensing drugs pursuant to valid, patient-specific prescriptions. In fact, NECC routinely dispensed drugs in bulk without valid prescriptions. The indictment alleges that NECC even used fictional and celebrity names on fake prescriptions to dispense drugs.
Finally, the indictment charges Carla Conigliaro, the majority shareholder of NECC, and her husband Douglas Conigliaro with transferring assets following the fungal meningitis outbreak. Specifically, the indictment charges that after NECC declared bankruptcy, and the bankruptcy court ordered the shareholders not to transfer assets, Carla and Doug Conigliaro transferred approximately $33.3 million to eight different bank accounts opened after the NECC bankruptcy.
Cadden and Chin face a maximum of up to life in prison if convicted on all counts.
“Although no VA patients were affected by the fungal meningitis outbreak, VA unknowingly purchased a variety of pharmaceutical products over a three year period from NECC that were intentionally produced in an unsafe manner under insanitary conditions,” said Assistant Inspector General for Investigations James J. O’Neill for the Office of Inspector General, Department of Veterans Affairs. “We are pleased to have contributed to this outstanding multi-agency criminal investigation.”
“Today's results are part of an ongoing effort by the Defense Criminal Investigative Service and its law enforcement partners to protect the integrity of the Department of Defense's health care program and the quality of care our service members receive,” said Deputy Inspector General for Investigations James B. Burch for the U.S. Department of Defense Office of the Inspector General. “The Defense Criminal Investigative Service will continue to pursue allegations of health care fraud that put the Warfighter at risk.”
“The U.S. Postal Inspection Service is pleased to join our federal partners in this announcement” said Postal Inspector in Charge Shelly A. Binkowski of the Boston Division. “What's particularly disturbing about this case is that through their alleged misrepresentation and greed, these defendants put the health and well-being of others at a high level of risk. This criminal action today demonstrates the commitment and vigilance of postal inspectors and other federal agents to pursue criminals who prey on the public in such an egregious way.”
In announcing the indictment today, Attorney General Holder and U.S. Attorney Ortiz acknowledged the assistance and cooperation of Michigan State Attorney General Bill Schuette. The state of Michigan had the most deaths during the outbreak.
The investigation was conducted by the FDA Office of Criminal Investigations and the FBI with assistance by the Defense Criminal Investigative Service, U.S. Department of Defense, Office of Inspector General; Department of Veterans Affairs Office of Inspector General and U.S. Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorneys George P. Varghese and Amanda P.M. Strachan of the Health Care Fraud Unit for the U.S. Attorney’s Office in the District of Massachusetts, and Trial Attorney John W.M. Claud of the Civil Division’s Consumer Protection Branch.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
Victims with questions about today’s charges may call 1-888-221-6023 or email [email protected].
Iowan Sentenced on Internet Enticement ChargesRead the Press Release
BOSTON – An Iowan man pretending to be a professional photographer was sentenced today in U.S. District Court in Boston for engaging in sexually explicit conduct via webcam.
Joshua Dunfee, 32, of Oxford Junction, Iowa, was sentenced by U.S. District Court Chief Judge Patti B. Saris to 20 years in prison and 10 years of supervised release. In March 2014, Dunfee pleaded guilty to coercion and enticement of a child to engage in illicit sexual activity and production of child pornography.
Dunfee posed as a professional photographer from “Hunt Photography” who was seeking models online. He communicated with a Massachusetts mother and convinced her that he had a client willing to pay $20,000 for a mother-daughter bikini modeling contract. Over time, as part of his ruse, Dunfee directed the mother to “audition” her daughter via webcam for him to view, first in underwear and then naked. In November 2011, following the execution of a federal search warrant, a forensic examination of Dunfee’s seized computers recovered evidence of his exploitation of a second child in California.
United States Attorney Carmen M. Ortiz, Assistant Attorney General Leslie R. Caldwell of the Department of Justice’s Criminal Division, and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. The case was investigated by the U.S. Postal Inspection Service, the Jones County (IA) Sheriff=s Office, the Massachusetts State Police, the Attleboro Police Department, and the Department of Justice’s High Technology Investigative Unit. Substantial assistance was provided by the U.S. Attorney=s Office for the District of Iowa. The case is being prosecuted by Assistant U.S. Attorneys Stacy Dawson Belf and David Tobin of Ortiz=s Major Crimes Unit and Trial Attorney Herbrina Sanders of the Department of Justice Child Exploitation & Obscenity Section.
This 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 online exploitation and abuse. Led by the U.S. Attorneys= Offices, 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.
Two Barnstable County Men Arrested on Drug ChargesRead the Press Release
BOSTON – Two Cape Cod men with extensive criminal histories were arrested and charged today with conspiring to violate federal drug laws.
Duane Gomez, a/k/a “Go-Go” or “G,” 39, of Falmouth, and Antone Andrade, a/k/a “Tank,” 34, of Bourne, were charged in criminal complaints with conspiracy to distribute, and to possess with intent to distribute, over 100 grams of heroin. In addition, Andrade is charged with conspiring to distribute cocaine.
As alleged in the complaint, the federal investigation leading to the two arrests began in fall 2013 and involved audio- and video-recorded drug transactions with both Gomez and Andrade. Over the course of the investigation, Gomez and Andrade allegedly sold cocaine and heroin worth thousands of dollars, and stashed drugs and money in locations in Falmouth, Bourne, and Mashpee. One of the heroin samples from Gomez tested positive for traces of fentanyl, a synthetic opiate that has been linked to overdoses when mixed with heroin.
The charging statute provides a sentence of no greater than 40 years in prison, a lifetime of supervised release, and a fine of up to $5 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; Michael D. O’Keefe, Cape and Islands District Attorney; Falmouth Police Chief Edward A. Dunne; Bourne Police Chief Dennis R. Woodside; Mashpee Police Chief Rodney Collins; and Barnstable County Sheriff James M. Cummings, made the announcement today. The case was investigated by the DEA Cape Cod Drug Task Force and the Massachusetts State Police Cape Cod Drug Unit. The case is being prosecuted by William F. Bloomer and Brian A. Pérez-Daple of Ortiz’s Major Crimes Unit.
The details contained in the complaint are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Boy Scout Leader Charged with Child PornographyRead the Press Release
BOSTON – A Boy Scout leader and YMCA employee was charged today with possessing child pornography.
Patrick Lynch, 22, of Peabody, was arrested on Dec. 12, 2014, and made his initial appearance today in U.S. District Court in Boston on charges that he received and possessed child pornography.
The criminal complaint alleges that Lynch received emails containing child pornography beginning in May 2013. An investigation by Homeland Security Investigations revealed that Lynch was affiliated with the Boy Scouts, including a position as a Scout leader at the Philmont Training Center for the Boy Scouts of America. Lynch had also been employed at the Greater Beverly YMCA and had recently begun employment with Beanstalk Adventure Ropes Course in Reading.
The charge of receipt of child pornography provides for a mandatory minimum term of five years and no greater than 20 years in prison. The charge of possession of child pornography provides for no greater than 20 years in prison. Both statutes provide for a mandatory minimum of five years and up to a lifetime of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistance was also provided by the Massachusetts State Police and the Peabody Police Department. The case was prosecuted by Eve A. Piemonte Stacey 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.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Boston Man Sentenced to Eight Years in PrisonRead the Press Release
BOSTON – A Boston man was sentenced today in connection with the sex trafficking of a 15-year-old girl.
Mark Pinnock, 23, was sentenced by U.S. District Judge Nathaniel M. Gorton to eight years in prison and five years of supervised release. In August 2014, Pinnock pleaded guilty to recruiting and transporting a minor to engage in prostitution. Two co-defendants, Justin Richardson and Martin Pinkney, both of Baltimore, will be sentenced on Dec.19 and 22, respectively.
In late December 2013, officers responded to an emergency call from a Cambridge hotel, where they found the 15-year old victim and Pinnock. The minor stated that Richardson and Pinkney had arranged for her to travel by bus from Baltimore to Boston. Pictures were taken of her in both Baltimore and Boston and used to post ads soliciting prostitution customers on the websites backpage.com and Craigslist. While in Boston, the minor victim engaged in sex for a fee at the direction of Pinnock at two local hotels.United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; and Cambridge Police Commissioner Robert C. Haas, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Seth Kosto and Carlos Lopez, both members of Ortiz’s Civil Rights Enforcement Team. The U.S. Attorney’s Office also wishes to thank the Middlesex County District Attorney Marian C. Ryan’s Office for its participation in the investigation.
The enforcement of federal civil rights laws is a high priority of the U.S. Attorney’s Office for the District of Massachusetts. Since U.S. Attorney Ortiz created the Civil Rights Enforcement Team in 2010, the Office has substantially increased its efforts in civil and criminal civil rights enforcement actions. In the last four years, the office has charged an increasing number of defendants with sex trafficking and other criminal civil rights violations.
Harvard-Trained Mutual Fund Manager Charged with Securities FraudRead the Press Release
BOSTON – A Boston-area mutual fund manager was arrested last night on securities fraud charges in connection with an alleged scheme to use the fund’s money to issue fictitious loans.
Daniel Thibeault, 40, of Framingham, was charged in a criminal complaint with a single count of securities fraud. Thibeault was held overnight and had an initial appearance today before U.S. Magistrate Judge M. Page Kelley.
As set forth in the complaint, Thibeault is the founder and principal owner of Graduate Leverage, LLC, an asset management and financial advisory firm he founded while a student at Harvard Business School, from which he graduated in 2004. Thibeault is also the co-portfolio manager of the GL Beyond Income Fund, a mutual fund launched in March 2012 that purports to invest in consumer loans to individuals “it believes are less susceptible to economic downturns, such as medical doctors, dentists, veterinarians, attorneys and business owners.” As of Jan.31, 2014, the Fund reported net assets of approximately $31 million – a number that the complaint alleges has increased since that time.
The complaint alleges that, although the Fund is marketed as consisting of a diversified pool of hundreds of consumer loans to young professionals, Thibeault caused the Fund to issue, or acquire, a number of fictitious loans to individuals who never requested and did not, in fact, receive such loans. Thibeault allegedly falsified or caused to be falsified the documentation related to those loans.
The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $5 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The United States Attorney’s Office received valuable assistance from the Securities & Exchange Commission in the course of investigating this case. The case is being prosecuted by Stephen E. Frank, Deputy Chief 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.
Two Chinese Nationals Sentenced for Trafficking Counterfeit Cell Phone CasesRead the Press Release
Boston – Two Chinese nationals, living in Massachusetts, were sentenced today in federal court for importing and reselling counterfeit cases for cell phones.
U.S. District Court Judge F. Dennis Saylor, IV, sentenced Zexiong Chen, 28, to 18 months in prison, one year of supervised release, a fine of $6,000 and restitution in the amount of $4,820. Haotian Chen, 26, was sentenced to time served which was one day in prison, one year of supervised release, a fine of $4,000 and restitution in the amount of $4,829. In September 2014, the defendants pleaded guilty to trafficking in counterfeit goods. In February 2014, Zexiong Chen was arrested at JFK International Airport as he prepared to board a plane to China. He has been in custody since then. Haotian Chen was also arrested in February 2014 and was released by the Court on conditions.
In February 2013, the defendants incorporated Max Wireless Group, Inc. as a vehicle for importing and reselling cell phone cases, many of which were counterfeit. Through Max Wireless, the defendants imported counterfeit cell phone cases from China, sold a small percentage of them through their Wakefield store, and sold the vast majority of them to individuals and companies who resold them at retail locations. Many of these retail locations were kiosks in shopping malls, some of which were in Massachusetts.
On 12 occasions from November 2012 through August 2013, U.S. Customs and Border Patrol officials inspected shipments the defendants imported from China to the United States and determined that these shipments contained counterfeit items. These 12 seizures included more than 10,000 counterfeit cell phone cases, bearing marks of manufacturers including: OtterBox, Speck, Kate Spade, Hello Kitty, Ferrari and LifeProof. On Sept. 4, 2013, federal agents searched the Max Wireless store and found more than 2,500 counterfeit cell phone cases and accessories.
The total of the retail price for the authentic versions of all of the products seized totaled more than $350,000. The defendants paid far less for the counterfeit cases and typically resold the cases for substantially less than the suggested retail price.
United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The case was investigated by Homeland Security Investigations and prosecuted by Assistant U.S. Attorney Adam Bookbinder, Chief of Ortiz’s Cyber Crime Unit.
Former Associate Dean of MIT Sloan School and His Harvard MBA Son Plead Guilty in Hedge Fund ScamRead the Press Release
BOSTON – Two Boston-area hedge fund managers pleaded guilty today to conspiring to mislead investors into investing more than $500 million in their fraudulent hedge fund business.
Gabriel Bitran, 69, of Newton, a former professor and associate dean of the Massachusetts Institute of Technology (MIT) Sloan School of Business, and his son Marco Bitran, 39, of Brookline, a Harvard Business School graduate and money manager, pleaded guilty to conspiracy to commit securities fraud, wire fraud and obstruction of justice in connection with their hedge fund businesses, GMB Capital Management and GMB Capital Partners. U.S. Senior District Judge Mark L. Wolf deferred a determination as to whether he will accept the plea until the time of sentencing which is scheduled for March 27, 2015.
“This office continues to pursue complex white-collar crimes no matter who the perpetrator,” said United States Attorney Carmen M. Ortiz. “No one is above the law. Here, a highly respected MIT professor and his well-educated son used their connections to lure investors into a scam which ultimately lost more than $140 million.”
“Gabriel and Marco Bitran cheated their victims out of hundreds of millions of dollars of their retirement money and savings by lying to them over and over again and claiming false returns and profits. Today’s guilty plea is a significant step in our ongoing effort to bring justice to victims of investment fraud. The FBI and our law enforcement partners will keep exposing those responsible for these crimes as long as innocent people are cheated out of their hard earned money,” said Vincent B. Lisi, Special Agent in Charge of the Boston Division of the FBI.
“Investment returns that seem too good to be true – such as those offered by the Bitrans –should be a signal to investors to stay clear” said Special Agent in Charge William P. Offord of IRS Criminal Investigation. “Today's guilty pleas demonstrate our collective efforts to ensure that the financial services industry will not be used for unlawful personal gain, but will be operated in a fair and honest manner to promote the public interest.”
As set forth in the Information to which the they pleaded guilty, from 2005 through 2011, Gabriel and Marco Bitran solicited and maintained investors in their hedge fund and investment advisory businesses through false claims that, for eight or more years, they had managed friends and family funds, delivering average annual returns between 16 and 23%, with no down years. The Bitrans falsely told investors that the money in GMB hedge funds would be invested according to a complex mathematical trading model developed by Gabriel Bitran and based upon his MIT research on optimal pricing theory. The Bitrans also routinely concealed from investors that certain of their hedge funds were simply “funds of funds,” that is, hedge funds in which values of investments are determined by the value of investments in other independently managed hedge funds, some of which were themselves broad-based funds of funds.
By means of their fraudulent representations, the Bitrans induced investors to entrust over $500 million to their businesses. From this money, the Bitrans paid themselves millions of dollars in management fees.
In the fall of 2008, several of the Bitrans’ hedge funds had disastrous losses, resulting in investors losing 50–75% of their principal in many instances. Nonetheless, in the fall of 2008, as their funds were experiencing these losses, Gabriel and Marco Bitran redeemed approximately $12 million of their own money from these hedge funds, while deferring other investors’ requests for redemption. The Bitrans thereby extracted much of the value of their own investments while leaving other investors to suffer more losses as the funds’ values declined precipitously.
In January 2009, while investigating potential victims of the Madoff fraud, examiners from the United States Securities and Exchange Commission (SEC) learned of the Bitrans’ performance claims and asked for supporting documentation. In response, the Bitrans made false statements to the SEC examiners and provided fabricated records purporting to support their claimed trading performance.
As they did so, Gabriel and Marco Bitran acknowledged to each other that they had made false statements to investors and owed them restitution. For example, in July 2009, Gabriel Bitran emailed Marco Bitran and discussed the fact that they had misled investors:
“We have mislead [sic] a lot of people with a range of statements that were incorrect simply to increase our income. . . . A person with the experience and knowledge of the financial sector and a veteran professor of MIT should not have engaged in this type of behavior. . . . I certainly do not blame you for everything that happened; we both share responsibility. . . . With [several named individuals] and probably a few others . . . we told them a story that was not true! . . . In my view you are discarding their anger as bad losers. This is not the whole story. They are not idiots, they know that they were mislead [sic]. The penalty for this type of action is Full [sic] restitution, which obviously we cannot afford.”
Similarly, in a September 1, 2009 email, Marco Bitran acknowledged to his father that he had not acted honestly. He stated:
“We are certainly sharing equally in this dad. . . . Lots of our problems were caused by my good intentions but very poor actions when it came to true honesty.”
Still, from early 2009 through 2010, the Bitrans took steps to shield their assets by transferring them out of GMB businesses and into entities with less obvious affiliations to Gabriel and Marco Bitran. To effect some of these transfers, they used the identity of a family member without that person’s knowledge, obtaining falsely notarized signatures in that person’s name, to shield millions of dollars that they had preferentially transferred out of the GMB hedge funds.
In total, the Bitrans lost more than $140 million of GMB investors’ principal.
If the plea agreements are accepted by the Court, the Bitrans will be sentenced to no less than two years and no more than five years in jail, as well as three years of supervised release, and forfeiture in the amount of $10 million.
U.S. Attorney Ortiz, SAC Lisi, and SAC Offord made the announcement today. The United States Attorney’s Office received valuable assistance from the Securities and Exchange Commission in the course of investigating this case. The case is being prosecuted by Assistant United States Attorneys Sara Miron Bloom of Ortiz’s Economic Crimes Unit, Brian Pérez-Daple of the Major Crimes Unit and Mary Murrane, Chief of the Asset Forfeiture Unit.
If you believe that you are victim or have any information regarding this case you may contact us at [email protected].
The details contained in the information are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law or the Court accepts their guilty pleas.
Chelsea Man Pleads Guilty to Student Financial Aid FraudRead the Press Release
BOSTON – A Chelsea man pleaded guilty yesterday to submitting fraudulent financial aid applications to support his daughter’s Harvard College tuition.
Joseph N. Fonge, 59, pleaded guilty to three counts of wire fraud. U.S. District Court Judge William G. Young scheduled sentencing for March 4, 2015.
Fonge filed fraudulent financial information, including false federal tax returns, in support of applications for financial aid for his daughter while she was a student at Harvard College from 2010 through 2012. Based on the applications, Fonge’s daughter was approved for aid totaling more than $160,000 over the three school years. The same false information was used to support a financial aid application in the amount of $46,600 for Fonge’s second daughter who was attending the University of Rochester in 2010.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.United States Attorney Carmen M. Ortiz and Brian Hickey, Special Agent in Charge for the U.S. Department of Education, Office of Inspector General, Regions I & II, made the announcement. The case is being prosecuted by Assistant U.S. Attorney Victor A. Wild of Ortiz’s Economic Crimes Unit.