District of Massachusetts
Press releases recorded for this federal judicial district.
Lawrence Man Sentenced for Theft of over $230,000 in Federal Tax Refund ChecksRead the Press Release
BOSTON - A Lawrence man was sentenced today in connection with the theft of $230,000 in federal tax refund checks.
Wilson Santana, 41, was sentenced today to 21 months in prison to be followed by three years of supervised release. He was also ordered to pay restitution in the amount of $237,277.18 to the U.S. Department of the Treasury. Santana pleaded guilty in May 2014 to 34 counts of theft of public money.
Between November 2011 and March 2012, Santana provided Robert Montero, a bank teller at Metro Credit Union in Lawrence, with 30 U.S. Treasury checks containing fraudulently obtained tax refunds to be negotiated through various bank accounts controlled by or associated with Santana. Santana paid a fee to Montero for each check Montero negotiated. The U.S. Department of the Treasury had issued the checks based on tax returns that later were determined to contain false information. For example, although the tax returns contained biographical information of real people in Puerto Rico, their addresses were falsely listed in New York and Massachusetts. The tax returns also contained false employment information. Santana, knowing that the tax return checks had been issued based on false information, negotiated them with Montero’s help at Metro West Credit Union. The total value of the 30 refund checks was $211,214.18.
Between March and April 2012, Santana sold four more U.S. Treasury checks containing fraudulently obtained tax refunds to Montero. Unbeknownst to Santana, those transactions were monitored by federal agents. The four U.S. Treasury checks contained tax refunds in the amount of $26,227.00.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Lisa Quinn, Special Agent in Charge of the U.S. Secret Service made the announcement today. The case is being prosecuted by Maxim Grinberg of Ortiz’s Health Care Fraud Unit.
Last of Eight Defendants in Oxycodone Trafficking Ring SentencedRead the Press Release
Boston – The last of eight defendants was sentenced in U.S. District Court in Boston on Friday in connection with an oxycodone trafficking ring that distributed more than 70,000 Oxycodone pills in New England.
Michael Chenoy, 29, of Royal Palm Beach, Fla., was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 52 months in prison and three years of supervised release in connection with his role in supplying Oxycodone from Florida. Chenoy pleaded guilty to conspiracy to distribute oxycodone in January 2014.
Chenoy along with Michael Wilson, Ryan McGinnis, and Jonathan Deleeuw were Florida-based suppliers of Oxycodone. They sold the pills to Steven Kostenblatt of New Hampshire, who was the leader of the conspiracy. Kostenblatt and his then-girlfriend, Jillian Reis distributed the pills to other Oxycodone drug dealers on the South Shore of Massachusetts and in New Hampshire.
Wilson, McGinnis, Deleeuw, Kostenblatt and Reis each previously pleaded guilty in connection with their roles in the conspiracy and have been sentenced to terms ranging from 168 months to 42 months in federal prison.
According to prosecutors, the Florida-based members of the conspiracy obtained Oxycodone pills from one or more so-called pain clinics in or around Boca Raton, Fla. after first obtaining fraudulent MRIs from a mobile MRI trailer located behind a gentlemen’s club. Members of the conspiracy also paid individuals who had obtained prescriptions from the so-called pain clinics for their pills and purchased pills from other drug dealers.
The Florida-based suppliers then delivered the Oxycodone pills to Kostenblatt using various means, including runners and UPS packages. Two runners, Simeon Schwartz, of Florida, and Mark Devereaux, of Massachusetts, also pleaded guilty and have been sentenced.
During the course of the investigation, law enforcement agents seized more than 4,000 Oxycodone 30 mg. pills and in excess of $170,000 in drug proceeds in Boston, South Carolina, and Florida.
Sentences previously imposed on the defendants are as follows:
- Steven Kostenblatt, age 27, of Keene, N.H., was sentenced on May 23, 2014, by U.S. District Judge Nathaniel M. Gorton to 168 months in prison and three years supervised release.
- Jillian Reis, age 30, of Boston, Mass., was sentenced on Sept. 11, 2014, by U.S. District Judge George A. O’Toole, Jr. to 84 months in prison and three years supervised release.
- Jonathan Deleeuw, age 30, of Lake Worth, Fla., was sentenced on Aug. 8, 2014, by U.S. District Judge Nathaniel M. Gorton to 56 months in prison and two years supervised release.
- Ryan McGinnis, age 30, of Lake Worth, Fla., was sentenced on July 31, 2014, by U.S. District Judge Nathaniel M. Gorton to 42 months in prison and three years supervised release.
- Michael Wilson, age 30, of Lake Worth, Fla., was sentenced on June 23, 2014, by U.S. District Judge Nathaniel M. Gorton to 42 months in prison and one year supervised release.
- Simeon Schwartz, age 26, of Boyton Beach, Fla, was sentenced on June 25, 2014, by U.S. District Judge Nathaniel M. Gorton to 26 months in prison and two years supervised release.
- Mark Devereaux, age 25, formerly of Rockland, Mass., was sentenced earlier in the investigation in federal court in the District of Columbia by U.S. District Judge Ellen S. Huvelle to 28 months in prison and three years supervised release.
United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; and Quincy Police Chief Paul Keenan, made the announcement today. Significant assistance was also provided by the Billerica Police Department, the Massachusetts State Police, the Drug Enforcement Administration’s Office in West Palm Beach, Fla., Charleston, South Carolina, and the District of Columbia, the Massachusetts State Police, the South Carolina Highway Patrol, the Clarendon County South Carolina Sheriff’s Office, the Manchester New Hampshire Police Department, the Hancock New Hampshire Police Department, the Hillsborough County New Hampshire Attorney’s Office, the Middlesex District Attorney’s Office and the District of Columbia Metropolitan Police Department.
The case was prosecuted by Assistant U.S. Attorney James E. Arnold of Ortiz’s Organized Crime Drug Enforcement Task Force.
Springfield Man Pleads to Firearms and Drug Charges Agrees to 10 Year Prison SentenceRead the Press Release
BOSTON – A Springfield man pleaded guilty on Oct. 8, 2014 in U.S. District Court in Worcester with conspiring to illegally possessing a firearm and ammunition and with conspiring to distribute cocaine.
Kevin Sligar, 30, pleaded guilty to a superseding information charging him with conspiring to possess a firearm and ammunition after being previously convicted of a crime punishable by more than one year in prison and with conspiring to possess with the intent to distribute, and to distribute cocaine.
According to the facts agreed to by the parties, from approximately April 1, 2012 through July 21, 2012, Sligar operated a narcotics distribution operation, in and around Springfield, with three co-conspirators in which they distributed at least 300 grams of cocaine and an indeterminate amount of marijuana. In furtherance of their narcotics distribution operation, Sligar and a co-conspirator (“co-conspirator A”) jointly possessed a Hi-Point Model C9, 9mm pistol, even though both Sligar and the co-conspirator A had been convicted of a crime punishable by more than one year in prison.
During the evening of July 21, 2012, Sligar and his co-conspirators traveled to the Polish Festival in Ludlow in a Dodge Neon (the “Neon”). After leaving the festival, they encountered another car occupied by three individuals who were later identified by the police. While both cars were stopped at a traffic light, an argument broke out between the occupants of the other car and the occupants of the Neon. During the course of the argument, Sligar brandished the pistol. Shortly thereafter, the other car drove away, and the occupants called 911. The Neon attempted to escape the Springfield Police by driving at very high rates of speed, but ultimately crashed at an intersection, injuring Sligar and all of his co-conspirators A, B and C. During the search of the Neon, the SPD pistol, which was fully loaded with 9mm ammunition, was recovered.
According to Sligar’s Plea Agreement, Sligar has also agreed to plead guilty to assault with a dangerous weapon in a related case in Hampden Superior Court.
Sligar is scheduled to be sentenced on Jan. 12, 2015. According to the Plea Agreement, Sligar has agreed to be sentenced to 10 years in prison to be followed by six years of supervised release.
United States Attorney Carmen M. Ortiz, Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Boston Field Office, and Springfield Police Department Commissioner William John Barbieri made the announcement. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Passenger Indicted for Disrupting Transalantic FlightRead the Press Release
BOSTON – A Haitian national was indicted yesterday for interfering with flight crew members on a flight from Miami to Paris, which caused the flight to be diverted to Boston.
Edmond Alexandre, 60, a Haitian national residing in Paris, France, was indicted for interference with flight crew members and attendants. On Aug. 27, 2014, approximately two hours after takeoff, Alexandre allegedly began to argue with other passengers over a reclined seat. A flight crew member intervened. In response, Alexandre chased the crew member down the aisle of the plane and grabbed the crew member’s arm. Federal Air Marshals intervened and subdued Alexandre. The captain of the flight diverted the plane to Boston’s Logan International Airport where Alexandre was arrested.
The charging statute provides a sentence of no greater than 20 years in prison and 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 on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Dwain G. Troutt, Supervisory Air Marshal in Charge of the Transportation Security Administration, Office of Law Enforcement, Federal Air Marshal Service, Boston Field Office; Bob Allison, Federal Security Director for the Transportation Security Administration for the District of Massachusetts; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Colonel Timothy P. Allen, Superintendent of the Massachusetts State Police, made the announcement. The case is being prosecuted by Assistant United States Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
Malden Man Sentenced to 15 Years for Sex TraffickingRead the Press Release
BOSTON – A Malden man was sentenced yesterday to 15 years in prison for sex trafficking a 15-year-old girl.
David Minasian, 25, was sentenced by U.S. District Judge William G. Young to 15 years in prison, five years of supervised release, a fine of $250,000 and ordered to pay $4,000 in restitution to the victim. Minasian will be required to register as a sex offender upon his release from prison. In May 2014, Minasian pleaded guilty sex trafficking of a minor.
In 2012, Minasian and others photographed the 15 year-old victim wearing revealing lingerie and posing in provocative positions, and then posted these photographs to the adult section of Backpage.com, a site commonly used for advertising commercial sex activity, soliciting customers for “escort services.” Customers who responded to the advertisements were directed to where Minasian was staying with the victim to have sex with her for a fee. Minasian and his co-defendant also transported the victim to motels inside Massachusetts where they paid for rooms to prostitute her.
At the sentencing hearing, the victim’s mother addressed the Court on behalf of the victim, who was not present. The mother explained that Minasian had given the victim heroin and prostituted her once she became addicted. The victim is still battling her addiction. In imposing a 15 year sentence, Judge Young chastised the defendant for preying on a particularly vulnerable victim.
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 investigated by the Federal Bureau of Investigation’s Boston Child Exploitation Task Force, which is comprised of members from the FBI, Massachusetts State Police, and the Malden and Arlington Police Departments. It was being prosecuted by Assistant U.S. Attorney Leah Foley on Ortiz’s Civil Rights Enforcement Team.Harvard Student Charged with Making Hoax Bomb ThreatRead the Press Release
BOSTON – Eldo Kim, 21, of Allston has been charged in an Information in U.S. District Court in Boston with e-mailing several bomb threats to offices associated with Harvard University, including the Harvard University Police Department and the Harvard Crimson, the student-run daily newspaper.
Kim was previously charged by complaint and has been under pretrial supervision since his arrest. It is alleged that on Dec. 16, 2013, at approximately 8:30 a.m., the Harvard University Police Department, two officials of Harvard University, and the president of the Harvard Crimson, received identical e-mail messages bearing a subject line that read “bombs placed around campus.” The bomb threats specified four buildings on the Harvard campus – the Science Center, Sever Hall, Emerson Hall, and Thayer Hall.
Federal agencies, along with the Harvard University Police, Cambridge Police, Boston Police and Massachusetts State Police Departments, along with numerous other law enforcement and first responders, immediately went to the vicinity of the buildings specified in the e-mail messages. In addition, each of the Harvard buildings named in the threatening e-mails was immediately evacuated. Over the course of the next several hours, bomb technicians and hazardous materials officers conducted thorough sweeps of each of the four buildings. Law enforcement personnel ultimately concluded that no explosive devices had been placed in any of the four buildings.
In addition to filing the Information, the government requested that the court defer the prosecution for 18 months while Kim completes a pretrial diversion program, in which the Probation Department and Pretrial Services Office will supervise Kim and enforce various conditions, including home confinement for four months, payment of restitution to agencies that responded to Kim’s bomb hoax, and 750 hours of community service. Kim has also agreed to make a public apology.
If the court agrees to defer prosecution, and Kim successfully abides by all the terms of pretrial diversion, the government will dismiss the Information in 18 months. If Kim fails to abide by the conditions of the pretrial diversion program or fails to complete it successfully, the government will not dismiss the Information and the criminal prosecution will proceed.
United States Attorney Carmen M. Ortiz and Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being handled by Assistant U.S. Attorney John A. Capin.
Chiropractor Pleads Guilty to Bribing IRS AuditorRead the Press Release
BOSTON – A Lowell chiropractor pleaded guilty today for bribing an IRS auditor.
Steven Jacobs, 56, of Lowell, pleaded guilty to bribery of a public official. Jacobs paid an IRS auditor $5,000 in cash to favorably end an audit and ignore two deductions Jacobs improperly took on his 2011 and 2012 income tax returns. These deductions were in fact payments Jacobs made to two different women after they accused him of touching them inappropriately during medical treatments during 2011 and 2012. He was arrested on federal charges in February of this year.U.S. District Judge William G. Young scheduled sentencing for Jan. 13, 2014 at 2:00 pm.
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 is being prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit.
Cape Cod Brothers Convicted in Oxycodone Trafficking SchemeRead the Press Release
BOSTON – After a month-long federal trial, brothers Stanley D. Gonsalves and Joshua M. Gonsalves were convicted on multiple charges arising from a three-year conspiracy involving hundreds of thousands of 30-milligram oxycodone pills which were distributed on Cape Cod and generated over $5 million in proceeds.
Stanley Gonsalves, 36, of Sandwich, Mass., was convicted of an oxycodone trafficking conspiracy, a money laundering conspiracy, and 17 substantive money laundering charges. The money laundering charges relate to his purchase of two Mercedes vehicles and property located on Hoover Road in West Yarmouth. He was also convicted of possessing a firearm in furtherance of the oxycodone trafficking conspiracy.Joshua M. Gonsalves, 34, of Dennisport, Mass., was convicted of an oxycodone trafficking conspiracy, a money laundering conspiracy, and a substantive money laundering charge in connection with his purchase of a Cadillac.
The jury also required the forfeiture of the property in West Yarmouth and issued money judgments totaling $5,074,575.
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 fresh supplies of 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 attempted south-bound cash shipments totaling $140,000, and an attempted 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 (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 believed (incorrectly) 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.
The four-year investigation that resulted in this case originated in Boston’s Chinatown, and initially focused on John (White Devil) Willis, a Cantonese-speaking Caucasian who is now serving a 20 year sentence, arising from his role as the Gonsalves Brothers’ primary oxycodone supplier between late 2009 and May 27, 2011.
The convicted charges carry statutory maximum sentences of 20 years for oxycodone trafficking conspiracy, money laundering conspiracy and concealment laundering charges, 10 years for unlawful monetary transaction laundering, and a mandatory consecutive sentence of five years on the firearm charge. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. District Chief Judge Patti B. Saris scheduled sentencing for Jan. 16, 2015.
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, Boston, Quincy, Dennis, Plymouth, Sandwich, Yarmouth, Bourne, and Bristol County Police Departments, the Florence County (South Carolina) Sheriff’s Office, the Broward County (Florida) Sheriff’s Department, the Volusia County (Florida) Sheriff’s Office, and the Dillon and Ridgeland (South Carolina) Police Departments.
The case was prosecuted by Assistant U.S. Attorneys Richard L. Hoffman and Timothy E. Moran of Ortiz’s Organized Crime Strike Force Unit.
Tax and Social Security Check Thief SentencedRead the Press Release
Boston - A former Worcester resident was sentenced in U.S. District Court in Worcester today for leading a scheme to steal and launder over $100,000 in government money.
Marvin Lubin, 22, was sentenced by U.S. District Court Judge Timothy S. Hillman to one year and one day in prison, three years of supervised release, and was ordered to pay $110,299 in restitution to the federal government. In April 2014, Lubin pleaded guilty to theft of government money.
In early 2013, Lubin and a Florida man, Sniders Jean-Jacques, recruited couriers to open bank accounts in the name of sham businesses. Social Security benefits and IRS tax refund payments, all illegally obtained using stolen identities, were then deposited to the accounts. At the direction of Lubin and Jean-Jacques, cash was immediately withdrawn following each deposit and delivered by the couriers as instructed. All of the money involved represents funds stolen from the United States government.
On October 10, 2013, during the execution of a search warrant of Lubin’s home, law enforcement agents recovered evidence including a debit card associated with one of the sham business bank accounts and a list of 375 names with dates of birth and Social Security numbers. Law enforcement agents interviewed Lubin, who admitted to his role in this scheme.
Five others have pleaded guilty in connection with this scheme, including Jean-Jacques; couriers Juanita Hall, Natalia Santana, and Shantelle Smith; and Emeline Lubin, Lubin’s sister, who stole names and Social Security numbers from her then employer, Tufts Health Plan, and supplied the stolen information to Jean-Jacques for use in the scheme.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Lisa A. Quinn, Special Agent in Charge of the U.S. Secret Service; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations; and Worcester Police Chief Gary J. Gemme, made the announcement today. The case was prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Former Charter School Principal Pleads Guilty in Connection to MCAS CheatingRead the Press Release
BOSTON – A former Springfield charter school principal pleaded guilty today in U.S. District Court to a federal felony in connection with assisting students to cheat on the MCAS.
Janet Henry, 42, pleaded guilty to an Information charging her with committing mail fraud. U.S. District Judge Mark G. Mastroianni scheduled sentencing for Jan. 8, 2015.
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. According to the statement of fact filed in the case, Henry was acting under the pressure form a member of the charter school’s board of directors.On April 16, 2009, upon the completion of the MCAS examinations, Henry falsely certified that the tests had been administered honestly.
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, 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 is being prosecuted by Assistant United States Attorney Kevin O'Regan of Ortiz’s Springfield Office.
Plymouth Man Indicted on Child Pornography ChargesRead the Press Release
Boston – A Plymouth man was indicted yesterday with distribution and possession of child pornography.
Brendan R. Kessler, 25, was indicted by a federal grand jury in Boston in connection with his distribution of child pornography, discovered by undercover agents. According to an affidavit filed in support of a previously issued complaint, on May 16, 2014, law enforcement discovered that Kessler was utilizing a public file sharing program to post what appeared to be child pornography. On Sept. 2, 2014, a search warrant was executed at Kessler’s Plymouth residence and a computer, various digital devices, hard drives, and other media storage devices were seized and determined to contain multiple images and videos of child pornography. Additionally, 14 unsecured firearms (many of them loaded), various caliber ammunition, boxes of fireworks, detonator cords, remote firing switches, and hand written journals were observed. Kessler was arrested following the execution of the search warrant and is currently held in federal custody.
The charge of distribution of child pornography provides a maximum sentence of 20 years in prison, a minimum mandatory term of five years, and a lifetime of supervised release. The charge of possession of child pornography provides a maximum sentence of 10 years in prison, and a lifetime 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; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Plymouth Police Chief Michael E. Botieri, made the announcement. The case is being prosecuted by Kenneth G. Shine of Ortiz’s Major Crime Unit.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the Criminal Division’s CEOS, 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/.
Three Men Indicted for Lying About Casino LandAllegedly Concealed Charles Lightbody’s Financial Interest from Wynn Resorts and the Massachusetts Gaming CommissionRead the Press Release
BOSTON – Three men have been indicted on state and federal charges in connection with their efforts to hide the financial interest of a convicted felon in a parcel of land in Everett from Wynn Resorts, Limited (Wynn Resorts) and from state gaming regulators, U.S. Attorney Carmen Ortiz and Attorney General Martha Coakley’s Office announced today. The men all held a financial interest in FBT Everett Realty LLC (FBT), which held title to a parcel of land Wynn Resorts has proposed to locate a destination resort casino.
Charles Lightbody, 54, of Revere, Dustin DeNunzio, 37, of Cambridge, and Anthony Gattineri, 56, of Winchester, were indicted yesterday by a federal grand jury for their role in concealing from Wynn Resorts and Massachusetts gaming regulators the financial interests of Lightbody, a convicted felon and known New England Family of La Cosa Nostra (NELCN) associate, in the land and to obtain money from Wynn Resorts in exchange for the land. Each is charged with conspiracy to commit wire fraud, wire fraud and aiding and abetting.
It is alleged that, between December 2012 and July 2013, in order to conceal Lightbody’s financial interest from Wynn Resorts and the Massachusetts Gaming Commission (MGC), DeNunzio, Gattineri and Lightbody represented to others that Lightbody transferred his interest in FBT to Gattineri in exchange for a $1.7 million promissory note and arranged for the creation and execution of two fraudulent versions of documents reflecting the transaction. In addition, on Jan. 17, 2013, DeNunzio sent an email to Wynn Resorts falsely stating that DeNunzio, Gattineri and a third individual were the only people who had interest in FBT, when in fact Lightbody had a financial interest in FBT. In July 2013, DeNunzio, Gattineri and Lightbody also misled the MGC’s investigators about Lightbody’s interest in the land.
In addition to the federal charges, on Monday, a state grand jury charged Lightbody, DeNunzio and Gattineri with impeding a gaming investigation, conspiracy and tampering with evidence. Lightbody was also indicted for assault and battery on a person over 60 resulting in bodily injury. Those indictments were unsealed today.
It is alleged in the state indictments that in the summer of 2013, Lightbody, DeNunzio and Gattineri made concerted efforts to conceal Lightbody’s partnership in FBT, the entity that owns the Everett Parcel, on which Wynn Resorts proposes to build a casino, from the MGC investigators.
Despite attempts by Lightbody, DeNunzio and Gattineri to show that Lightbody was no longer a partner of FBT during FBT’s negotiations with casino companies, investigators determined that Lightbody was, in fact, still a partner at that time. The state investigation revealed that these three defendants allegedly attempted to hide Lightbody’s involvement in the company because he has a criminal record.State authorities also allege that Lightbody assaulted a man during a casino election rally in Revere on Oct. 12, 2013.
All three defendants, who were arrested today, will appear in U.S. District Court in Boston at a time to be determined. They will also be arraigned in Middlesex Superior Court at a later date and Lightbody will be arraigned on the assault charge in Suffolk Superior Court also at a later date.
The conspiracy statute provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000, or twice the gross gain or loss, whichever is greater. The wire fraud statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000, or twice the gross gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
On the state charges all of the defendants face up to five years in jail.
The federal case is being investigated jointly by the Federal Bureau of Investigation in Boston, the Massachusetts State Police and the Massachusetts Department of Correction, in collaboration with the Attorney General’s Office. The federal case is being prosecuted by Kristina E. Barclay of Ortiz’s Public Corruption Unit.
The state case is being prosecuted by Assistant Attorneys General David Rubin and Patrick Hanley of AG Coakley’s Gaming Enforcement Division. The case was investigated by the State Police assigned to the AG’s Gaming Enforcement Division in collaboration with the FBI and the U.S. Attorney’s Office. The AG’s Office received assistance from the Suffolk County District Attorney’s Office, the Revere and Everett Police Departments, the Massachusetts Department of Corrections, and the State Police Fusion Center.
For information on the state charges, please contact Brad Puffer at the Attorney General’s Office at 617-727-2543.
Springfield Felon Charged with Illegal Firearm and Ammunition PossessionRead the Press Release
BOSTON – A Springfield man was charged yesterday in U.S. District Court in Springfield with illegally possessing a firearm and ammunition.
Jamel Bolden, 21, was charged in an Information with possessing a firearm and ammunition after being previously convicted of a crime punishable by more than one year in prison.
According to the Information, on June 7, 2013, Bolden possessed a Ruger Single Six .22 Magnum caliber revolver loaded with six rounds of CCI .22 caliber ammunition after being previously convicted of a crime punishable by more than one year in prison. According to the plea agreement, Bolden has also agreed to plead guilty to assault with a dangerous weapon in a related case in Hampden Superior Court.
The charging statute provides a sentenced of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Boston Field Division; and Springfield Police Commissioner John Barbieri made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Mattapan Man Sentenced to Nine Years in Child Exploitation CaseRead the Press Release
BOSTON – A Mattapan man was sentenced today for distributing child pornography through the Internet.
Luis Miguel Gonzalez-Buzetta, 22, was sentenced by U.S. District Judge F. Dennis Saylor IV to nine years in prison and seven years of supervised release. Upon release, Gonzalez-Buzetta must register as a sex offender. In June of 2014, Gonzalez-Buzetta pleaded guilty to possession and distribution of child pornography.
Gonzalez-Buzetta extensively traded images of minors engaged in sexually explicit conduct, including images of girls between three and six years of age. On June 28, 2013, law enforcement discovered Gonzalez-Buzetta in possession of more than 6,000 images and almost 400 videos of children being exploited, including the lewd and lascivious posing and sexual penetration of young children. Forensic examination of Gonzalez-Buzetta’s digital devices also revealed that he had collected child pornography for at least a year, traded his collection via several digital platforms, and had attempted to hide his activities from law enforcement.
Additional investigation revealed that, between February 13 and March 11, 2013, Gonzalez-Buzetta was trading child pornography from his residence in Boston with an individual in Oregon. Gonzalez-Buzetta requested images from the individual in Oregon, who sent sexualized images of his five-year-old daughter. Gonzalez-Buzetta later requested that a video be made for him of the child engaging in sexual acts.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; and Boston Police Commissioner William Evans, made the announcement today. The U.S. Attorney’s Office also wishes to thank the Suffolk County District Attorney’s Office, the United States Secret Service, and the Boston Police Department for their tremendous work on the case and their cooperation with the prosecution. The case was prosecuted by Assistant United States Attorney Stacy Dawson Belf of Ortiz’s Major Crimes Unit.
The case was 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 Criminal Division’s CEOS, 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/.
Malden Man Sentenced to Jail for Tax CrimesRead the Press Release
BOSTON – A Malden man was sentenced today for tax crimes involving the filing of tax returns, and concealing income in the name of a deceased relative.
Mark R. Fisette, 54, was sentenced by U.S. District Judge Denise J. Casper to 10 months in prison, one year of supervised release, and ordered to pay $125,780 in restitution to the IRS. In June 2014, Fisette pleaded guilty to tax evasion and four counts of filing false tax documents.
Fisette worked as a freelance photographer for various weekly and daily newspapers, and had not timely filed or paid his income taxes. When state and federal taxing authorities began collection efforts, including seizing a paycheck, Fisette provided the newspaper distributor with the name and Social Security number of a deceased relative for future payments for Fisette’s photography services. Fisette filed false income tax returns and a false financial statement which did not report the income he received in the dead relative’s name.
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.Four Arrested and Charged with Participating in A Marijuana Trafficking ConspiracyRead the Press Release
BOSTON – Louis J. Dinunzio, 27, of Medford, Joseph Spagnuolo-Kazonis, 29, of Boston, John Woodman, 42, of Braintree, and Robert Fitzpatrick, 40, of Quincy, were charged with conspiracy to distribute and possess with intent to distribute 50 kilograms or more of marijuana.
All four men were arrested today and will appear in U.S. District Court in Boston.
The charge of marijuana distribution conspiracy carries a maximum sentence of 20 years in prison, a mandatory minimum of three years of supervised release and a maximum $1 million 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.
In a separate indictment returned on Wednesday, brought as part of a related ongoing federal investigation of organized crime in Massachusetts, two members of the New England Family of La Cosa Nostra (NELCN) were charged with conspiring to collect extortionate protection payments from a video poker machine company based in Revere. Anthony “Spucky” Spagnolo, 72, whom the indictment alleges to be the acting boss of the NELCN, and Pryce “Stretch” Quintina, 74, both of Revere, were each charged with one count of conspiring to interfere with commerce through extortion.
Spagnolo and Quintina were also arrested this morning and will appear later today in U.S. District Court in Boston.
The charge of extortion affecting commerce carries a maximum sentence of 20 years in prison, three years of supervised release and a $250,000 fine. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; 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; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police made the announcement today. The cases were investigated with the assistance of the Boston, Medford, and Quincy Police Departments and the Massachusetts Department of Corrections. The cases are being prosecuted by Assistant U.S. Attorney’s Timothy E. Moran of Ortiz’s Strike Force Unit and Seth B. Kosto of Ortiz’s Computer Crimes Unit.
The details contained in the indictments are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Four Defendants Plead Guilty in Connection with HMA Direct Insurance Fraud SchemeRead the Press Release
BOSTON – Four men pleaded guilty yesterday in connection with their participation in a fraudulent scheme perpetrated through a Massachusetts health insurance company known as HMA Direct.
William O’Brien, of West Barnstable, Mark Celentano, of Ipswich, Francis Gaetani, of Sutton, and Ronald Anger, of Sutton, pleaded guilty before U.S. Senior District Judge Mark L. Wolf. Sentencing is scheduled for Jan. 14, 2015.
O’Brien pleaded guilty to conspiracy, wire fraud, health care fraud, and obtaining customer information from a financial institution by false representation. Celentano pleaded guilty to conspiracy, health care fraud, and obstruction of justice. Gaetani and Anger each pleaded guilty to wire fraud.
HMA Direct offered self-funded insurance plans to small businesses in New England. At the heart of HMA Direct’s business was “carving out” from its clients’ self-funded plans those employees who had significant health risks, and then, through false statements, arranging for those employees to be insured through traditional health insurance providers.
O’Brien and Celentano participated in the carve-out scheme and subsequent lies to the health insurance providers. O’Brien also arranged for Gaetani and Anger, who were investors in HMA Direct, to pretend that they were satisfied customers of the company and to provide fake references to prospective clients. In addition, when contacted by federal investigators, Celentano obstructed justice by lying about the role he had played in the HMA Direct carve-out scheme.
For O’Brien, Gaetani, and Anger, the maximum sentence under the relevant statutes is 20 years in prison, three years of supervised release, and a $250,000 fine. For Celentano, the maximum sentence under the statute is 10 years in prison, three years of supervised release and a $250,000 fine.
Two other defendants in this scheme, Michael Cassandro, of Middleton, RI, and Shelley Lenkutis, of Waltham, previously pleaded guilty to related charges. They are scheduled to be sentenced on Dec. 10, 2014.
United States Attorney Carmen M. Ortiz; Susan Hensley, Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office; Cheryl Garcia, Special Agent in Charge for the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, New York Regional Office;
¬¬Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement. The case is being prosecuted by Assistant United States Attorneys Kristina Barclay, Gregg Shapiro, and Alexander Berlin.Brighton Resident Sentenced on Child Enticement ChargeRead the Press Release
BOSTON – A Brighton man was sentenced today for coercing and enticing a minor for the purpose of sexual activity.
Zachary Stoloff, 30, was sentenced today by U.S. District Judge F. Dennis Saylor IV to 10 years in prison, five years of supervised release, and ordered that he have no contact with the victim during the period of incarceration and supervised release. Stoloff is also required to register as a sex offender. In June 2014, Stoloff pleaded guilty to coercion and enticement of a minor.
Stoloff met the 14-year-old victim on the Internet and persuaded her to meet with him and engage in sexual intercourse. When she agreed, Stoloff traveled to the victim’s hometown in Massachusetts and then drove her to his Brighton residence where they had sexual intercourse.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the United States Postal Inspection Service; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Easton Chief of Police Allen Krajcik, made the announcement today. This case was prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.
Former Belmont Resident Charged with $6 Million Investment Fraud SchemeRead the Press Release
BOSTON – A former Belmont resident was arrested today in El Paso, Texas after being charged in U.S. District Court in Boston with defrauding at least 15 investors of more than $6 million.
John William Cranney, aka Jack Cranney, 73, was charged in an indictment unsealed today with four counts of wire fraud, 16 counts of mail fraud, and three counts of money laundering.
The indictment alleges that Cranney solicited money from people with whom he had personal and business relationships, represented that the money would be invested on their behalf, and guaranteed them a specific rate of return. In fact, Cranney did not invest the money, but instead spent it on personal and business expenses and to repay other victims and creditors.
According to the indictment, Cranney established shell investment entities called Cranney Capital I and Cranney Capital III and directed investors to send their money to those entities. Cranney led investors to believe that their funds were being invested through those entities, when, in fact, Cranney caused all funds deposited to those accounts to be transferred promptly to other accounts for his own use. Cranney also established the Cranney Capital I LLC Employee Stock Ownership Trust (ESOT), and represented to prospective investors that they could “roll over” their money held in IRA and 401(k) retirement accounts to the ESOT without paying withdrawal taxes and penalties, even though Cranney knew that none of the investors were employees of his or of the Cranney Capital I LLC. Cranney also sent some investors reports which purported to reflect the amounts those investors had earned and the total balance in their accounts, when in fact no such amounts had been earned and the stated balances did not exist in any account because Cranney had already spent all of the funds.
The maximum sentence under the mail and wire fraud statutes is 20 years in prison, three years of supervised release and a $250,000 fine or twice the gross gain/loss, whichever is greater. The maximum sentence under the money laundering statute is 10 years in prison, three years of supervised release and a $250,000 fine or twice the amount of the criminally derived property in the transaction, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; 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; and Susan A. Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, made the announcement today. The U.S. Attorney’s Office also received assistance in its investigation from the Office of the Secretary of State of the Commonwealth of Massachusetts and his Securities Division, as well as the U.S. Trustee’s Office in Boston. The case is being prosecuted by Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
North Adams Man Pleads Guilty to Possession of Child PornographyRead the Press Release
BOSTON – A North Adams man pleaded guilty today in U.S. District Court in Springfield to possession of material involving the sexual exploitation of a minor.
Wade Galli, 47, pleaded guilty before U.S. District Judge Mark G. Mastroianni. On May 29, 2013, Galli possessed numerous digital files containing child pornography. Galli told investigators that he also filmed girls aged 13 to 20 at beaches in Pittsfield and Vermont, and he surreptitiously filmed videos at a nude beach in Vermont about a dozen times.Sentencing is scheduled for Jan. 8, 2015.
Pursuant to a plea agreement, Galli has agreed to be sentenced to between 36 and 108 months in prison, and 10 years of supervised release.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 the Massachusetts State Police and the North Adams Police Department. It is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Airline Employees Charged with Cash Smuggling and Evading Airport Security Checkpoints in an Undercover Operation at Logan International AirportRead the Press Release
BOSTON – Five commercial airline employees were charged today after an undercover operation revealed that they used their airport security clearances to secretly smuggle hundreds of thousands of dollars in cash past security checkpoints.
According to the charging documents, Rupert Crossley, 26, of Lynn, and Anthony Trotman, 24, of Boston, have agreed to plead guilty to separate informations. Alvin Leacock, 28, of Hollywood, Fla.; Eric Vick, 24, of Mattapan; and Dino Dunkley, 31, of Boston, were indicted by a federal grand jury. Crossley, Leacock, Vick, and Trotman, all JetBlue Airways ground operations crew members, and Dunkley, a Delta Air Lines customer service ramp agent, were each charged with money laundering and conspiracy to defraud the United States, namely, the Transportation Security Administration (TSA), by entering Boston’s Logan International Airport with the intent to evade security procedures, and with the intent to commit a felony in a secure airport area.
According to the charging documents, each defendant used his individual airport security clearance to circumvent TSA security checkpoints and smuggle large amounts of cash 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 and, in some instances, aboard commercial airline flights at Logan International Airport. In return, each defendant received a cash payment from a cooperating witness involved in the investigation. It is alleged that nine money laundering transactions were completed, which involved approximately $417,000 in cash the defendants believed to be drug proceeds.The most significant statutes charged provides a statutory 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 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. The case was investigated with the assistance of the Transportation Security Administration, the Federal Air Marshal Service, and the Massachusetts State Police. The U.S. Attorney’s Office would also like to acknowledge the assistance and cooperation of Massachusetts Port Authority, JetBlue Airways Corporate Security and Delta Airlines. The case is being prosecuted by Assistant U.S. Attorneys Carlos A. Lopez of Ortiz’s Major Crimes Unit and Dustin Chao of Ortiz’s Public Corruption Unit.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Boston Woman Pleads Guilty to Social Security and Tax FraudRead the Press Release
BOSTON – A Boston woman pleaded guilty today to taking more than $220,000 in Social Security payments to which she was not entitled and failing to pay taxes on that income.
Frances Kenney Moseley, 65, pleaded guilty before U.S. District Judge Indira Talwani to theft of public money and tax evasion. In September 2014, Moseley was charged in a felony information. Sentencing is scheduled for Dec. 22, 2014.
Following the death of Moseley’s father in 2003, and, unaware that he was deceased, the Social Security Administration continued to deposit his retirement benefits into his bank account. Moseley, who was not herself entitled to the benefits, regularly withdrew the deposited Social Security funds after her father’s death. Between 2003 and 2010, Moseley withdrew approximately $222,172 in Social Security funds paid to her deceased father. Moseley also failed to report the money as income on her federal income taxes.
During the same period of time, TIAA-CREF, a private investment/annuity company, unaware that Moseley’s father had died, continued to deposit annuity payments into the father’s account. Between 2003 and 2010, Moseley regularly withdrew the annuity payments, totaling approximately $248,016. Under the terms of the annuity, the payments were to have ceased upon the death of Moseley’s father.
This case is brought as part of an ongoing effort by the U.S. Attorney’s Office in partnership with the Social Security Administration to investigate and prosecute the posthumous fraud of Social Security benefits. In many of these cases, family members, knowing they are not entitled to government benefits, continue to withdraw and spend the funds after a relative has died.
In 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 July 2014, Mary Murphy of Dorchester pleaded guilty to taking her deceased mother’s Social Security and Civil Service retirement benefits totaling $349,777, which were directly deposited into a joint bank account after her death in 1977. Murphy is scheduled to be sentenced on Oct. 22, 2014.
In March 2014, Richard Oldham of Old Orchard Beach, Maine, pleaded guilty to taking his deceased mother’s Social Security payments totaling $195,862 since her death in 1993. After his mother died, Oldham retrieved her Social Security checks from a post office box in Hopkinton, endorsed the checks in his mother’s name, and cashed them. Oldham is scheduled to be sentenced on Oct. 1, 2014.
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; Scott Antolik, Special Agent in Charge of the U.S. Social Security Administration, Office of the Inspector General, Office of Investigations, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Lisa A. Quinn, Special Agent in Charge of the U.S. Secret Service, made the announcement today. The Moseley case is being prosecuted by David G. Tobin and Timothy Landry of Ortiz’s Major Crimes Unit.
Merrimack College Professor Arrested for Possession of Child PornographyRead the Press Release
Boston – The chairman of Merrimack College’s Civil Engineering Department was arrested today for possession of child pornography.
Gary S. Spring, 61, of Danvers, was charged in a criminal complaint with possession of child pornography. Spring was also the administrator of the college’s residential summer camp for middle and high school aged children.
According to the criminal complaint, in June 2014, Merrimack College in North Andover, Mass. uncovered suspicious activity associated with one of the college’s loaner computers through virus threat detection alerts. An internal investigation determined that the computer had been loaned out to Spring, and that Spring had been logged on during the time the alerts were triggered. Further investigation determined that the computer was used to access child pornography. Search warrants were executed at Spring’s office at Merrimack College and his residence in Danvers. Spring was arrested after it was confirmed that he possessed child pornography.
The charging statute provides a sentence of no greater than 20 years in prison, five years to a lifetime 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; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; North Andover Police Chief Paul J. Gallagher, and Merrimack College Police Chief Michael DelGreco, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Eve A. Piemonte Stacey of Ortiz’s Major Crimes Unit.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
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.
Quincy Woman Sentenced for Mailing and Tweeting Bomb, Anthrax and Death ThreatsRead the Press Release
Boston – A Quincy woman was sentenced yesterday for sending multiple bomb, anthrax and other death threats through the U.S. mail, e-mail and Twitter.
Linda Louise Culkin, 55, was sentenced by U.S. District Court Judge George A. O’Toole, Jr. to 51 months in prison, three years of supervised release and ordered to pay over $125,000 in restitution. She was arrested in January 2012 and has been detained since. In November 2013, Culkin pleaded guilty to three counts of sending threats through the U.S. mail, two counts of sending threats over the Internet, five counts of sending threats and false information regarding explosives, and four counts of sending threats about biological agents such as anthrax.
From 2009 through the end of 2011, Culkin sent bomb, anthrax, and other death threats to several people and their workplaces in the United States and abroad. Investigators numbered the threats into the dozens; one victim estimated over a thousand. One of Culkin’s hoax bomb threats caused police in a foreign city, near one of the biggest train stations in the country, to evacuate a building and close off a neighborhood to keep out pedestrian and vehicle traffic for two hours. One of her hoax anthrax threats included a letter that, when opened, had white powder that flew into the air and caused people nearby to be quarantined and fear for their health until the threat was determined to be a hoax. Two victims spent thousands of dollars on added security to protect themselves.
Culkin started sending threats primarily through the mail. After being questioned by law enforcement officers about the mailed threats, Culkin started sending threats primarily through the Internet. Culkin made use of the Internet’s relative anonymity by never sending the e-mail and Twitter threats through a home computer that might be traced back to her. Instead, Culkin used computers at her workplaces, the apartment of a close friend, and at public libraries where she was recorded by surveillance video while on a computer making a threat.
Shortly after Culkin was recorded on video, a search of her apartment turned up numerous articles related to the victims and the threats, some of which items were hidden inside chairs and couches, under rugs, and inside her cat’s play structure.
United States Attorney Carmen M. Ortiz and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. The case was prosecuted by Assistant United States Attorney Scott L. Garland, who was with Ortiz’s Cybercrime Unit during the investigation and is now with the Anti-Terrorism and National Security Unit.
Dorchester Woman Pleads Guilty in Connection with Unlicensed Cosmetic InjectionsRead the Press Release
BOSTON –A Dorchester woman pleaded guilty yesterday in connection with offering cosmetic buttock and lip injections in exchange for money.
Valentina Perez Tavarez, a/k/a Rossi Tavarez, 37, pleaded guilty to receipt in interstate commerce of a misbranded device and the proffered delivery thereof for pay. U.S. District Judge F. Dennis Saylor IV scheduled sentencing for Dec. 9, 2014
Between February and September 2011, Tavarez, who was not a licensed physician or nurse, offered buttock and lip augmentation injections in her Dorchester home using a substance she referred to as “Metacor” and “Metacrill.” In a recorded conversation she stated, “Metacor” is “very safe,” and also stated that, “in this country [] like you know that’s illegal.” Tavarez referred to the substance as the “best stuff” that lasts “forever.” Tavarez offered to charge $700 per injection into each buttock.On Sept. 9, 2011, special agents visited Tavarez at her residence in Dorchester at which time Tavarez admitted that she had performed the procedure on at least 10 customers. From her bedroom closet she retrieved an opaque plastic bottle containing a clear, viscous liquid, along with a FedEx shipping box. The bottle bore a label “Estetical Plus 100% Natural,” along with a written description in Spanish that referred to its content as massage oil and provided directions for external skin application. The bottle did not provide any information or directions for using the substance for subcutaneous cosmetic injections. The bottle had been shipped from Colombia via Federal Express. Tavarez admitted that she had arranged for the shipment of the substance with a laboratory in Columbia and that she had paid by wire $500 per box containing three bottles of the substance.
The charging statute provides a sentence of no greater than one year in prison, one year of supervised release, five years of probation, and a fine of $10,000. 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; James Royal, Acting Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, New York Field Office; and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The case is being prosecuted by Maxim Grinberg of Ortiz’s Health Care Fraud Unit.
Agawam Man Sentenced for EmbezzlementRead the Press Release
BOSTON – An Agawam tax preparer was sentenced yesterday in U.S. District Court in Springfield for embezzling more than $400,000 from a corporate client.
James F. Hansmann, 86, of Agawam, Mass., was sentenced by U.S. District Judge Michael A. Ponsor to three years of probation and ordered to pay $408,035 in restitution to his client and $86,692 to the Internal Revenue Service. Hansmann also is permanently enjoined from preparing tax returns. In July 2013, Hansmann pleaded guilty to mail fraud and tax evasion.
Hansmann prepared corporate tax returns for a West Springfield company. Between 2007 and 2011, he instructed the company president to make out checks for estimated tax payments which he promised he was transmitting to the Internal Revenue Service. Instead, Hansmann deposited the checks into his personal bank accounts and used the money to pay person expenses. The West Springfield company was left with a huge tax bill for the years of unpaid taxes, which its president believed had been fully paid.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Shelly Binkowski, Inspector in Charge of the United States Postal Inspection Service, made announcement. The case was prosecuted by Assistant U.S. Attorney Karen L. Goodwin of Ortiz’s Springfield Branch Office.
Owner of Foreign Exchange Currency Trading Company Executive Sentenced to Nine Years in PrisonRead the Press Release
BOSTON – A Hopkinton man, and former owner of Boston Trading and Research, was sentenced this afternoon to nine years in prison after pleading guilty to charges that he and his business partner defrauded more than 700 investors out of more than $30 million.
Craig K. Karlis, 54, was sentenced by U.S. Senior District Court Judge Mark L. Wolf to nine years in prison, three years of supervised release, and ordered to pay $4,378,306 in restitution to the fraud victims as well as $457,438 to the Internal Revenue Service. In March 2014, Karlis pleaded guilty to nine counts of wire fraud and two counts of tax-related crimes. Karlis’ business partner, Ahmet Devrim Akyil, was also charged, but remains a fugitive and is believed to be in his native Turkey.
“By any measure, Boston is one of this nation’s leading financial centers, with more than a trillion of dollars under management,” said United States Attorney Carmen M. Ortiz. “This prosecution – aimed at protecting this robust market – is reflective of the rapidly developing partnership among the United States Attorney’s Office, the U.S. Securities and Exchange Commission, and the Federal Bureau of Investigation. While the criminal enforcement of corporate and securities laws are not often headline news, they are at the heart of the United States Attorney’s Office growing white collar enforcement effort.”In 2007, Karlis and Akyil founded Boston Trading and Research (BTR) and recruited customers to open accounts so that Akyil could trade the customers' money in the foreign currency exchange (FOREX) market. By July 2008, BTR had approximately 1,200 customers and more than $35 million under management.
Among other things, Karlis and Akyil falsely told customers that BTR was compensated based on a percentage of trading profits and that, through BTR's computerized customer trading platform and daily e-mailed account statements, customers saw every trade that was placed using customer money. Karlis and Akyil also falsely told customers that BTR had various different strategies to reduce risk, including most notably that, once BTR had lost 30% of the value of an individual customer's account, the computerized platform automatically shut down all trading on that account and trading would not resume unless and until the customer gave BTR permission to continue trading.
From the outset of the business, Karlis and Akyil ignored these, and a number of other, representations. Karlis and Akyil did not limit what BTR took to only a percentage of the customers' profit. Rather, Karlis and Akyil used millions of dollars from BTR customer accounts to pay BTR's business expenses and to pay for their own personal expenses, such as houses, cars, and jewelry. Karlis and Akyil concealed this misappropriation from BTR's customers on the computerized customer platform and account statements, which did not show all of the trades that BTR had placed using customer money. Finally, contrary to what Karlis and Akyil had told customers, the computerized platform did not have an automatic shut-down mechanism once BTR lost 30% of the value of customer accounts. In fact, over the course of BTR's existence, Akyil ignored the 30% Astop-loss@limit several times and then, in August and September 2008, continued trading long after losing more than 30%, eventually losing approximately 90% of the customers' money, or more than $30 million.
Karlis also filed a false tax document with the IRS in which he concealed the fact that he owned a second home that he had purchased with more than $600,000 in BTR customer money and then filed a false 2008 tax return in which he failed to report approximately $1.3 million in income he had received from BTR.
United States Attorney Carmen M. Ortiz; Vince 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 today. The SEC and the Commodity Futures Trading Commission also cooperated with the investigation. The case is being prosecuted by Assistant U.S. Attorneys Sarah E. Walters, Chief of Ortiz's Economic Crimes Unit and Adam J. Bookbinder, Chief of her Cybercrime Unit.
Armed Career Criminal Sentenced to Fifteen Years in PrisonRead the Press Release
BOSTON – A former Springfield man was sentenced today in U.S. District Court in Springfield for illegally possessing a firearm and ammunition.
Luis Colon, 31, was sentenced by U.S. District Judge Michael A. Ponsor to 15 years in prison, and three years of supervised release. In October 2013, Colon was convicted following a four-day jury trial of possessing a firearm and ammunition after being previously convicted of a felony. On Sept. 7, 2010, Colon sold a Smith & Wesson 9mm pistol with 14 rounds of Remington 9mm ammunition to a man working with the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Colon was targeted for federal prosecution because he had more than a dozen prior criminal convictions including crimes of violence and narcotics trafficking. In addition, at the time of this sentence, Colon was under a state criminal justice sentence. These prior convictions qualified Colon as an armed career criminal under federal law.
United States Attorney Carmen M. Ortiz; Interim Hampden County District Attorney James C. Orenstein; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Springfield Police Commissioner John Barbieri, made the announcement today. The case was prosecuted by Steven H. Breslow of Ortiz’s Springfield Branch Office.
Maryland Skilled Nursing Facility Agrees to Pay $1.3 Million to Resolve Allegtions That It Submitted False Claims for Rehabilitation TherapyRead the Press Release
Boston, MA – Episcopal Ministries to the Aging, Inc. (EMA), an Eldersburg, Md. based company that operates William Hill Manor, a skilled nursing facility in Easton, Md., has entered into an agreement to pay $1.3 million to resolve allegations that it submitted false claims for rehabilitation therapy purportedly provided by RehabCare Group East, Inc. (RehabCare), a subsidiary of Kindred Healthcare, Inc.
“Patients in nursing homes should not be left to wonder whether the therapy they receive is based on their own clinical needs, or is instead tied to the financial targets of the companies providing their care,” said Carmen M. Ortiz, United States Attorney for the District of Massachusetts. “This settlement, like others recently announced by this office, makes it clear that when a skilled nursing facility contracts with an outside rehabilitation therapy provider, the facility remains responsible for ensuring that its patients are receiving, and Medicare is paying for, reasonable and necessary care.”
This settlement resolves allegations that EMA submitted false claims to Medicare that sought inflated amounts of reimbursement based on the provision of unreasonable or unnecessary rehabilitation therapy that was dictated by financial considerations rather than patient needs.
In January 2010, William Hill Manor hired RehabCare to provide rehabilitation therapy at its facility. As with the prior settlements involving facilities that hired RehabCare, the United States alleges that EMA and William Hill Manor failed to prevent RehabCare from engaging in a pattern and practice of providing high levels of therapy that were not reasonable or necessary during so-called “assessment reference periods.” EMA billed Medicare patients at the highest therapy reimbursement level, and then provided less therapy to those same patients outside the assessment reference periods, when the facility was not required to report to Medicare the amount of therapy RehabCare was providing to its patients. In that way, RehabCare, EMA, and William Hill Manor “ramped up” Medicare patients’ therapy minutes when it served to maximize the reimbursement rate and correspondingly reduced the patients’ therapy minutes, regardless of patient need, when the time spent on that therapy would not affect the Medicare reimbursement rate. The government alleges that, as a result of RehabCare’s practice of “ramping,” EMA frequently billed Medicare for its patients’ care at the highest therapy-based levels, even though the patients frequently were not receiving therapy at those levels.
This settlement further resolves allegations that EMA and William Hill Manor failed to prevent other RehabCare practices designed to inflate Medicare reimbursement, including: (1) presumptively placing patients in the highest reimbursement level unless it was shown that the patients could not tolerate that amount of therapy, rather than using individualized evaluations to determine the level of care most suitable for each patient’s clinical needs; (2) providing the minimum number of minutes of therapy required to bill at the highest reimbursement level while discouraging the provision of therapy in amounts beyond that minimum threshold, despite the Medicare requirement that the amount of care provided be determined by patients’ clinical needs; (3) arbitrarily shifting the number of minutes of planned therapy between different therapy disciplines to ensure targeted reimbursement levels were achieved; (4) providing significantly higher amounts of therapy on the final day of an assessment reference period in order to achieve the minimum level of therapy necessary to achieve the highest RUG level; and (5) reporting estimated or rounded minutes instead of reporting the actual minutes of therapy provided.
“Patient need must dictate the provision of Medicare benefits rather than the fiscal interests of providers,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division. “Today’s settlement demonstrates the department’s continued commitment to safeguarding both Medicare beneficiaries and taxpayer dollars by holding accountable all entities involved in billing for unnecessary services, including those that did not directly provide the unnecessary services.”
This announcement follows a $3.75 million settlement announced by this office and the Department of Justice on Sept. 5, 2014, which arose out of a related investigation involving two other skilled nursing facilities that allegedly retained RehabCare to provide rehabilitation therapy and then failed to prevent RehabCare from engaging in the practices described above in an effort to inflate amounts of Medicare reimbursement.
This matter was investigated by the Department of Health and Human Services, Office of the Inspector General, and the Federal Bureau of Investigation. The case was handled by District of Massachusetts Assistant United States Attorneys Gregg Shapiro and Patrick Callahan and Department of Justice Trial Attorneys Christelle Klovers and Rohith Srinivas.
Gloucester Sex Offender Sentenced to 25 Years for Child Pornography ProductionRead the Press Release
BOSTON – A Level III sex offender was sentenced today for production of child pornography.
Mark Pallazola, 38, of Gloucester, was sentenced by U.S. District Judge William G. Young to 300 months in prison and 10 years of supervised release. In May 2014, Pallazola pleaded guilty to production and possession of child pornography.
On Nov. 19, 2012, federal agents received information that an online user of a photo sharing website had uploaded a series of non-pornographic images of a prepubescent child, with comments indicative of child exploitation. Law enforcement traced this posting to Pallazola at his residence in Gloucester.
The following day, law enforcement officers interviewed Pallazola and executed a search warrant. A preliminary review of the computers located at the residence was conducted and child pornography was located on Pallazola’s computer. Forensic analysis later revealed that Pallazola participated in sexual acts involving a young girl and recorded those acts. He also possessed thousands of other images of child pornography.
This was not Pallazola’s first conviction. In 2002, he was convicted of felonious sexual assault in Concord, NH, after having sexual contact with two girls under the age of 13.
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 Massachusetts State Police and the Gloucester Police Department assisted with the investigation and arrest of Pallazola. The case was prosecuted by Eve A. Piemonte Stacey of Ortiz’s Major Crimes Unit.
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 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.
Federal Jury Convicts Billerica Woman on Advance Fee ScamRead the Press Release
BOSTON – A Billerica woman was convicted following a five-day jury trial on wire fraud charges in connection with a bogus bank guaranty program.
Diane Glatfelter, 48, was found guilty by a federal jury of four counts of wire fraud. Glatfelter had been indicted in August 2012. U.S. District Judge Douglas P. Woodlock scheduled sentencing for Dec. 16, 2014.
In 2007 and 2008, Glatfelter engaged in 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 and 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.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release and a $250,000 fine on each of the four counts. 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; 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 today. The case is being prosecuted by Assistant U.S. Attorneys Sandra S. Bower and Christine Wichers of Ortiz’s Economic Crimes Unit and Civil Division, respectively.Longmeadow Tax Preparer Sentenced for 29 Counts of Preparing False Tax ReturnsRead the Press Release
BOSTON – A Longmeadow tax preparer was sentenced today in U.S. District Court in Springfield for filing false tax returns for customers of his business, JLF Tax Group, Inc.
Jonathan Fein, 55, of Longmeadow, Mass., was sentenced by U.S. District Judge Michael A. Ponsor to six months in prison, six months in a community corrections center, and six months in home confinement. The court also ordered Fein to repay $138,474 to the IRS and $29,000 to the Massachusetts Department of Revenue. Fein is permanently enjoined from preparing tax returns. In December 2012, Fein pleaded guilty to twenty-nine counts of falsely preparing tax returns.
Fein operated a tax preparation business called JLF Tax Group, Inc., d/b/a American Tax or American Tax Service (JLF), which was located in Springfield and Greenfield. Fein prepared individual federal income tax returns for various JLF customers, most of whom were unfamiliar with the Internal Revenue laws and relied upon Fein to prepare correct, accurate, and complete returns. Between January 2007 and April 2012, Fein prepared numerous tax returns that he knew were fraudulent, so that his customers could receive larger tax refunds from the IRS. Fein generally deducted his tax preparation fee from the fraudulently obtained tax refunds. In November 2010, Fein falsely stated to federal agents that he did not fraudulently prepare any tax returns in order to conceal his fraud.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz’s Springfield Branch Office.
Hyde Park Man Sentenced to More Than 10 Years in Sex Trafficking CaseRead the Press Release
BOSTON – A Hyde Park man was sentenced today for transporting a woman from Massachusetts to New Jersey, Vermont and Pennsylvania for the purpose of prostituting her.
Darrell B. Graham, a/k/a Diamond, 52, was sentenced by U.S. District Judge Nathaniel M. Gorton to 150 months in prison, five years of supervised release, and $58,403 in restitution. In April 2014, Graham pleaded guilty to transporting a woman to engage in prostitution.
Graham promised a vulnerable, 19-year-old victim money and dreams of a better life. Instead, Graham took the victim’s identification documents, posted her picture on the Internet, instructed her to cut ties with her family and friends, and for the next two months prostituted her in hotel rooms in several states. Graham never paid the victim, and instead coerced her to engage in commercial sex through a scheme that included placing her in fear by using violence and threats of violence. Graham ultimately pleaded guilty to transporting the victim from Massachusetts to New Jersey on Aug. 18, 2011, from Massachusetts to Vermont on Sept. 19, 2011, and from Massachusetts to Pennsylvania on Sept. 24, 2011 for the purpose of engaging in prostitution.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Kristina E. Barclay and S. Theodore Merritt of Ortiz’s Civil Rights Enforcement Team.
Peabody Investment Advisor Sentenced for Defrauding ClientsRead the Press Release
BOSTON – A Peabody investment advisor was sentenced today for defrauding several Boston-area residents out of their retirement savings.
John Michael Babiarz, 40, was sentenced by U.S. District Judge F. Dennis Saylor, IV to four years in prison, restitution of more than $645,000 to his victims, and forfeiture of his house, an automobile, and a brokerage account. In May 2014, Babiarz pleaded guilty to wire fraud and aggravated identity theft.
Following his September 2011 termination from Bishop, Rosen & Co., a retail brokerage firm headquartered in New York, Babiarz falsely told some of his former clients that he had taken a job at Fidelity Investments, the Boston-based asset management firm. Babiarz told other clients that he was working as an independent financial advisor. Babiarz told his clients that he could continue to manage their money if they opened online brokerage accounts at Fidelity, assisted them to open such accounts, and in so doing, set up the user names and passwords for those accounts. Unbeknownst to his clients, Babiarz then caused their funds – or money he borrowed in their names on margin – to be diverted to accounts that he controlled at several other banks and brokerage firms. Babiarz used the money to buy a new home and a car – assets that the Court ordered forfeited today – and to pay other personal expenses.
Babiarz was previously charged in an administrative complaint brought by the Massachusetts Securities Division with engaging in unregistered and fraudulent activities in violation of the Massachusetts Uniform Securities Act and applicable regulations.
United States Attorney Carmen M. Ortiz and Shelly A. Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. The case was prosecuted by Assistant United States Attorney Stephen E. Frank of Ortiz’s Economic Crimes Unit.
Cromwell, Connecticut Man Pleads Guilty to Child Pornography ChargesRead the Press Release
BOSTON - A Cromwell, Conn. man pleaded guilty yesterday to child exploitation charges in federal court in Bridgeport.
Samuel DiProto, 63, pleaded guilty before U.S. District Court Judge Jeffrey Alker Meyer to receiving child pornography. DiProto was charged in March 2013. Sentencing is scheduled for December 2, 2014.
From 2009 through March 2013, DiProto downloaded child pornography from the Internet. A Connecticut State Police detective discovered DiProto’s child pornography after logging into a publicly available Internet file sharing network. The investigator discovered downloaded images and videos of child pornography from a computer connected to the network with an Internet Protocol (IP) address assigned to DiProto.DiProto’s conviction carries a mandatory minimum sentence of five years in prison. The statutory maximum penalty is 20 years in prison to be followed by up to a lifetime 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; Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation; and Connecticut State Police Colonel Brian F. Meraviglia made the announcement today.
This matter was investigated by the Connecticut State Police Computer Crimes Unit, the Federal Bureau of Investigation and the Connecticut Child Exploitation Task Force, which includes federal, state and local law enforcement agencies. The case is being prosecuted by Assistant United States Attorney Paul Smyth, Chief of Ortiz’s Springfield Branch Unit, and Assistant United States Attorney Neeraj N. Patel in the District of Connecticut.
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/.
Chicopee Man Pleads Guilty to Failing to Register as A Sex OffenderRead the Press Release
BOSTON – A Chicopee man pleaded guilty today in U.S. District Court in Springfield to failing to register as a sex offender.
Joseph Trombley, 35, had been indicted in September 2013, and peladed guilty today before U.S. District Judge Michael A. Ponsor. Sentencing is scheduled for Dec. 17, 2014.
From February 2013 to August 2013, Trombley traveled from Massachusetts to numerous other states and eventually arrived 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 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.The charging statute provides a sentence of no greater than 10 years in prison, five years to a lifetime of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and John Gibbons, U.S. Marshal of the U. S. Marshals Service, District of Massachusetts, made the announcement today. The case is being prosecuted by Alex Grant of Ortiz’s Springfield Branch 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/.
Attorney General Eric Holder Recognizes District of Massachusetts EmployeesRead the Press Release
BOSTON – Members of the U.S. Attorney’s Office in Boston were recognized today by Attorney General Eric Holder and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson at the 30th annual Director’s Awards Ceremony in Washington D.C.
Assistant United States Attorneys Richard L. Hoffman, Neil J. Gallagher, Jr., Linda M. Ricci, Forensic Auditor Lori Moccaldi, Public Affairs Officer Christina DiIorio-Sterling, and former AUSA Patricia M. Connolly were among the members of the Department of Justice recognized by the Attorney General in the Great Hall at the Robert F. Kennedy Department of Justice Building.
In his prepared remarks to awardees, Attorney General Holder said, “Locally, nationally, and internationally, you represent the very best that this Department has to offer. Your work embodies our ongoing commitment – not merely to win cases, but to do justice; to protect our fellow citizens from crime, violence, and terrorism; to empower the most vulnerable among us; and to uphold the rule of law.”
EOUSA Director Monty Wilkinson echoed those sentiments, saying to the recipients, “You have persevered, and remained focused and motivated – achieving remarkable results in work that makes a difference in the lives of citizens across our great country. The vast scope of your collective accomplishments is nothing short of exceptional.”
In the category of Superior Performance by a Litigative Team, Assistant United States Attorneys Richard Hoffman, Neil Gallagher and Linda Ricci, along with paralegal Lori Moccaldi were recognized for the exceptional investigation and prosecution of a complex money laundering scheme dubbed “Operation Fire and Ice.” The team obtained the conviction of high-level money launderers in Colombia and the seizure of more than 120 banks accounts which had a substantial deterrent on criminal financial markets in Venezuela and Colombia.
In March 2009, the DEA launched the undercover money laundering investigation which resulted in the seizure of more than $151 million. The seizure froze the entire “permuta” market for several days and was widely reported in the news in South America as well as the front page of the Wall Street Journal. The prosecution of Rama K. Vyasulu, one of the principals who opened the bank accounts used to launder millions in drug proceeds, and the resulting seizure, shut down a parallel criminal market that was used to launder millions of dollars of drug money through Venezuela and Colombia. The investigation resulted in the indictment, extradition and conviction of 12 defendants from Colombia for laundering drug proceeds for La Oficinia de Envigado, a violent drug cartel and organized crime group based on Medellín, Colombia. The DEA executed more than 50 seizure warrants that led to the seizure of more than $10 million in tainted proceeds in U.S. bank accounts.
Lori Moccaldi, a Forensic Auditor with the U.S. Attorney’s Office in Boston, oversaw the analysis of voluminous bank records and other financial data. The initial phase of the case was prosecuted by Trial Attorney Scott Paccagnini of the Asset Forfeiture Money Laundering Section and Assistant U.S. Attorneys Richard Hoffman and Neil Gallagher of the U.S. Attorney’s Office in Massachusetts. The second phase of the case was prosecuted by Assistant U.S. Attorneys Linda Ricci and Neil Gallagher, also of the U.S. Attorney Office in Massachusetts.
Christina DiIorio-Sterling received the Director’s Award for Superior Performance in Public Affairs. DiIorio-Sterling was recognized for her extraordinary efforts during the Boston Marathon bombing case and the capture and subsequent trial of FBI Top 10 fugitive, James “Whitey” Bulger.
Following the explosions at the Boston Marathon, Ms. Sterling assembled and managed a team to inform the nation about this unprecedented incident. Her work during the chaotic days following the bombing was instrumental in providing information that the public could trust. In addition to managing a joint information center, she was responsible for the coordination of press conferences attended by hundreds of media outlets from around the world, and populated with leaders from the highest levels of federal, state and local government.
On the evening of Bulger’s capture, Ms. Sterling coordinated the media coverage, working through the night to prepare statements, field questions from the press and organize a press conference. Her use of social media introduced the public to the USAO in a novel way and paved the path for the ground-breaking efforts she later employed during the Boston Marathon Bombing case.
Patricia M. Connolly received the James Robert Browning Award for Exceptional Service. Connolly was recognized for her dedication to the DOJ community while serving as the Executive Office for United States Attorneys Affirmative Civil Enforcement (ACE) and Health Care Fraud (HCF) Coordinator from 2007 to 2013.
“Each and every day, the employees of the U.S. Attorney’s Office demonstrate exceptional dedication to advancing the cause of justice,” said United States Attorney Carmen M. Ortiz. “Their work is not solely motivated by winning cases, but by preserving public safety in communities across Massachusetts. I am honored to work alongside these committed public servants, and proud to recognize their hard work and tremendous accomplishments.”
EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.
Greek National Sentenced to Eight Years on Money Laundering ChargesRead the Press Release
BOSTON – A Greek man was sentenced in U.S. District Court in Boston today for his role in perpetrating a multi-million dollar scheme which defrauded developers of $7.9 million.
Evripides Georgiadis, 49, of Larisa, Greece, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to eight years and six months in prison and ordered to pay $8.4 million in restitution. In May 2014, following a three-week trial, Georgiadis was convicted of conspiracy to commit wire fraud, 11 counts of wire fraud, and conspiracy to commit money laundering.
Between 2007 and 2011, Georgiadis participated in a conspiracy to defraud developers who were seeking financing for large-scale alternative energy and commercial projects by pretending to be a representative of a multi-billion dollar fund located in Luxembourg. Georgiadis and his co-conspirators convinced developers to give deposits between $300,000 and $1 million to this fraudulent fund with the promise that the deposit would be fully refundable. Georgiadis and his co-conspirators spent and transferred the developers' deposit money out of the country, and the fraudulent fund never financed any projects. In perpetrating this scheme, Georgiadis helped create fake letters of credit and a phantom New Zealand bank, all to reassure developers about the safety of their deposits.
Over $7 million was stolen from victims, including $600,000 which had originally been provided by the West Springfield financial adviser Sean Mansfield. Mansfield, in turn, had stolen the funds from his clients. In 2011, Mansfield was sentenced to 60 months in prison for defrauding his clients.
Georgiadis’s co-defendants, John Condo, Frank Barecich, and Michael Zanetti, have all been convicted. In July 2014, Condo and Barecich were sentenced to 90 months and 12 months in prison, respectively. Zanetti was sentenced to 37 months in prison.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Susan Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, 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 Alex J. Grant and Karen L. Goodwin of Ortiz’s Springfield Branch Office.
Former Haverhill Resident Sentenced for Child Pornography ChargesRead the Press Release
BOSTON – David Keith, 31, was sentenced yesterday by U.S. District Court Judge George A. O’Toole, Jr. to 78 months in prison, and 10 years of supervised release with specific conditions, including that he register as a sex offender. In May 2014, Keith pleaded guilty to distribution of child pornography, possession of child pornography, and accessing child pornography.
In September 2010, law enforcement officers executed a search warrant at Keith’s Haverhill residence. Keith, who was at home at the time, consented to an interview. Among other things, Keith admitted to having child pornography on his computer as well as to sexually assaulting a small child several years earlier. A forensic examination of the two computers seized revealed a total of 1,751 images of child pornography.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police, made the announcement today. The case was prosecuted by Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.
Justice Officials Meet with Key Stakeholders on Launch of Elder Justice WebsiteRead the Press Release
WASHINGTON - Earlier today, Associate Attorney General Tony West, Assistant Attorney General Stuart Delery for the Civil Division and members of the Department’s Elder Justice Initiative met with stakeholders in the field of elder abuse and financial exploitation to launch the Elder Justice website in an effort to further prevent and combat elder abuse and financial exploitation.
Associate Attorney General West and Assistant Attorney General Delery delivered remarks at the outreach event to federal, state and local law enforcement, as well as to other partners who combat elder abuse. The remarks focused on the significant contributions that the Elder Justice website can make to the field and on the Department’s commitment to protecting seniors from abuse and exploitation. The Elder Justice website will serve as a resource for elder abuse prosecutors, researchers and practitioners, and most importantly, for victims of elder abuse and their families. This website will also serve as a forum for law enforcement and elder justice policy communities to share information and enhance public awareness on the subject matter.
“The launch of the Elder Justice website today marks another milestone in reaching our shared goal of keeping older Americans safe from abuse and neglect,” said Associate Attorney General West. “The more we embrace our elders with respect and care, the stronger our society will be. This tool helps move us closer to that goal.”
Protecting older Americans is one of the Department's top priorities, as evidence shows that nearly one in 10 people over the age of 60 suffer abuse and neglect. Elder abuse includes physical, sexual and emotional abuse, neglect and financial exploitation. Elder abuse depletes the resources of individuals, families, businesses and public programs, including Medicare and Medicaid, by billions of dollars each year, which in turn places enormous burdens on our health care, financial and judicial systems.
Older Americans are also targeted by consumer scams, health care fraud and financial exploitation, and protecting this group from financial exploitation is also a priority of the department. It is estimated that older adults in the United States lose more than $2.9 billion annually from financial exploitation. Financial loss may result in loss of independence, decreased health and psychological distress, all of which culminate in a diminished quality of life for older adults. Over the years, the department has successfully prosecuted a number of criminals who targeted the elderly through reverse mortgage fraud scams and lottery scams. Healthcare fraud prevention and consumer protection efforts are examples of ways the department protects older Americans from financial exploitation.
“The website provides resources and a means for improved communication among prosecutors, supports victims and families, and establishes a mechanism for collaboration for researchers and practitioners,” said Assistant Attorney General Delery. “While there are many other victim support websites available, we believed that the department could add significant value in this domain by consolidating information nationwide and making it more user-friendly. The Civil Division will continue to strengthen its efforts to protect the elderly.”
Partners in attendance included the Federal Trade Commission; the American Bar Association; the U.S. Department of Health and Human Services-Office of the Inspector General; the National Association for Medicaid Fraud Control Units; the Office of the U.S. Attorney General for the District of Columbia; the Consumer Financial Protection Bureau; and the Social Security Administration.Three Companies to Pay $3.75 Million for Submitting False Claims for Rehabilitation TherapyRead the Press Release
Boston – Life Care Services LLC (LCS), a Des Moines, Iowa-based manager of skilled nursing facilities, its affiliate, group purchasing organization Care Purchasing Services LLC (CPS), and CoreCare V, LLP, d/b/a ParkVista, a skilled nursing facility in Fullerton, Calif., have entered into agreements to pay a total of $3.75 million to resolve allegations that they submitted, or caused the submission of, false claims for rehabilitation therapy purportedly provided by RehabCare Group East, Inc. (RehabCare), a subsidiary of Kindred Healthcare, Inc.
“Patients in skilled nursing facilities and their families should have confidence that the facilities are not allowing therapy companies to manipulate the therapy they provide based on financial motives,” said Carmen M. Ortiz, United States Attorney for the District of Massachusetts. “Settlements like this one show that, when a facility contracts with an outside rehabilitation therapy provider, the facility has a continuing responsibility to ensure that the provider is not engaged in conduct that causes the submission of false claims to Medicare.”
LCS has operated and managed skilled nursing facilities across the country, including ParkVista and, until 2013, a facility in Massachusetts. The settlements resolve allegations that ParkVista submitted, and LCS caused both ParkVista and the Massachusetts facility to submit, false claims that sought inflated amounts of Medicare reimbursement based on the provision of unreasonable or unnecessary rehabilitation therapy that was dictated by financial considerations rather than patient needs. LCS’ affiliate, CPS, referred RehabCare to ParkVista and the Massachusetts facility. The United States alleges that LCS and ParkVista failed to prevent RehabCare from engaging in a pattern and practice of providing high levels of therapy that were not reasonable or necessary during so-called “assessment reference periods,” thereby causing ParkVista and the Massachusetts facility to bill for their Medicare patients at the highest therapy reimbursement level, and then providing less therapy to those same patients outside the assessment reference periods, when the facilities were not required to report to Medicare the amount of therapy RehabCare was providing to their patients. In that way, RehabCare and the facilities “ramped up” Medicare patients’ therapy minutes when it served to maximize the reimbursement rate and correspondingly reduced the patients’ therapy minutes, regardless of patient need, when the time spent on that therapy would not affect the Medicare reimbursement rate. The government alleges that, as a result of RehabCare’s practice of “ramping,” ParkVista and the Massachusetts facility often billed Medicare for their patients’ care at the highest therapy-based levels, even though the patients often were not receiving therapy at those levels.
The settlements further resolve allegations that LCS and ParkVista failed to prevent other RehabCare practices designed to inflate Medicare reimbursement, including: (1) in lieu of using individualized evaluations to determine the level of care most suitable for each patient’s clinical needs, presumptively placing patients in the highest reimbursement level unless it was shown that the patients could not tolerate that amount of therapy; (2) providing the minimum number of minutes of therapy required to bill at the highest reimbursement level while discouraging the provision of therapy in amounts beyond that minimum threshold, despite the Medicare requirement that the amount of care provided be determined by patients’ clinical needs; (3) arbitrarily shifting the number of minutes of planned therapy between therapy disciplines to ensure targeted reimbursement levels were achieved; (4) providing significantly higher amounts of therapy on the final day of an assessment reference period in order to achieve the minimum level of therapy necessary to achieve the highest RUG level; and (5) reporting estimated or rounded minutes instead of reporting the actual minutes of therapy provided.
As recounted in the settlement agreement with LCS and CPS, the United States alleges that LCS had a reduced incentive to monitor RehabCare adequately, since RehabCare was paying CPS three percent of the revenues RehabCare received from those facilities. Finally, the settlement with LCS and CPS resolves the United States’ allegation that CPS accepted a kickback from RehabCare in the form of the “free” services of a RehabCare employee.
“The provision of Medicare benefits must be dictated by patient need, not the fiscal interests of providers,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division. “Today’s settlement demonstrates the Department’s commitment to safeguarding both Medicare beneficiaries and taxpayer dollars by holding accountable all entities involved in billing for unnecessary services.”
This matter was investigated by the Department of Health and Human Services, Office of the Inspector General and the Federal Bureau of Investigation, and was handled by District of Massachusetts Assistant United States Attorneys Gregg Shapiro and Patrick Callahan and Department of Justice Trial Attorneys Christelle Klovers and Rohith Srinivas.
Ludlow Man Sentenced for Child ExploitationRead the Press Release
Boston – A Ludlow man was sentenced in U.S. District Court in Springfield today for child exploitation charges.
James Pease, 36, was sentenced by U.S. District Court Judge Denise J. Casper to 15 years in prison and 10 years of supervised release. In May 2014, Pease pleaded guilty to four counts of sexual exploitation of a child, receipt of child pornography, and possession of child pornography.
During 2010 and 2012, Pease surreptitiously recorded minor females while they showered. From 2006 to 2012, Pease also received and possessed child pornography which he obtained from the Internet.
United States Attorney Carmen M. Ortiz and Leigh Alistair Barzey, Resident Agent in Charge of the Department of Defense’s Office of Inspector General, Defense Criminal Investigative Service, made the announcement today. The case was prosecuted by Alex J. Grant of Ortiz’s Springfield Branch 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/.
Italian National and Previously Convicted Felon Arrested for Unlawful ReentryRead the Press Release
Boston – An Italian national and illegal alien was arrested on Sept. 2, 2014 for reentering the United States after being removed on three prior occasions to Italy.
Philip Mario Carnovale, 62, who most recently resided in Danvers, was charged in a criminal complaint with unlawful reentry of a previously removed alien.
According to the criminal complaint, in December 1992, Carnovale was convicted in federal court of six counts of money laundering and racketeering and, subsequently, sentenced to 108 months in prison. Following his sentence, in May 2004, Carnovale was removed from the United States to Italy, his country of origin. Carnovale then reentered the United States on two separate occasions and was removed each time. Carnovale allegedly reentered the United States at an unknown location and date after his third removal and was encountered by federal agents.
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 upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; and David W. Hall, Special Agent in Charge of U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Carlos A. López of Ortiz’s Major Crimes Unit.
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.
Two Chinese Citizens Plead Guilty to Trafficking Counterfeit Cell Phone CasesRead the Press Release
Boston – Two Chinese citizens, living in Massachusetts, pleaded guilty today to importing and reselling counterfeit cases for cell phones.
Zexiong Chen, 28, and Haotian Chen, 26, who are unrelated, pleaded guilty before U.S. District Court Judge F. Dennis Saylor IV to trafficking in counterfeit goods. Sentencing is scheduled for Dec. 11, 2014.
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, Zexiong Chen and Haotian Chen 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, 20013, federal agents searched the Max Wireless store and found more than 2,500 counterfeit cell phone cases and accessories.
The total retail price for the authentic versions of all of the cell phone cases seized during the course of this investigation was more than $350,000, but the defendants paid far less for the cases and typically resold the cases for far less than suggested retail price.
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 that time. Haotian Chen, who was also arrested in February 2014, was released by the Court on conditions, and remains on release.
The charging statute provides a sentence of no greater than 10 years in prison, three 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 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. Attorney Adam Bookbinder, Chief of Ortiz’s Cyber Crime Unit.
NECC Supervising Pharmacist Arrested at Logan International AirportRead the Press Release
BOSTON - A Canton man was arrested today at Boston’s Logan International Airport in connection with the U.S. Attorney’s Office’s and the Justice Department’s Civil Division’s ongoing criminal investigation of New England Compounding Center (NECC).
Glenn Adam Chin, 46, was attempting to board a plane to Hong Kong when he was arrested by federal authorities. He was charged in U.S. District Court with one count of mail fraud. He is scheduled to appear before Chief Magistrate Judge Boal later today.
The U.S. Attorney’s Office and the Civil Division’s Consumer Protection Branch have had an active ongoing criminal investigation of NECC since the nationwide fungal meningitis outbreak began in the Fall of 2012. Following the outbreak, the CDC reported that 751 patients across the country were diagnosed with a fungal infection after receiving injections of preservative-free methylprednisolone acetate, or MPA, compounded at NECC. The CDC reported that of those 751 patients, 64 died.
Chin was a supervising pharmacist at NECC who was involved in compounding the contaminated MPA that caused the outbreak. The criminal complaint charges Chin with participating in a scheme to fraudulently cause one lot of MPA to be labeled as injectable, meaning that it was sterile and fit for human use, and shipped to one of NECC’s customers, Michigan Pain Specialists. As alleged in the affidavit, after receiving the MPA from NECC, doctors at Michigan Pain Specialists injected the drug into their patients believing it to be injectable as labeled. As a result, 217 of those patients contracted fungal meningitis, of which 15 died.Although the criminal investigation of Chin and others is ongoing, the U.S. Attorney’s Office charged and arrested Chin today after federal authorities learned that he was planning to leave the country on an international flight that was scheduled to depart this morning.
If you are a victim in the NECC matter you may call the U.S. Attorney’s Office victim assistance message line at 888-221-6023 or email [email protected] to obtain case status information or assistance. You may also find information on our website at http://www.justice.gov/usao/ma/news.html.
The maximum sentence under the statute is 20 years in prison, followed by three years of supervised release and a $250,000 fine.
U.S.Attorney Carmen M. Ortiz; Assistant Attorney General for the Civil Division Stuart F. Delery; James Royal, Acting Special Agent in Charge of the Food and Drug Administration; Office of Criminal Investigations; Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Jeffrey Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; and Patrick J. Hegarty, Resident Agent-in-Charge, Office of Inspector General, Defense Criminal Investigative Service in Boston made the announcement today. The case is being prosecuted by George P. Varghese and Amanda P.M. Strachan of Ortiz’s Health Care Fraud Unit, and John W.M. Claud of DOJ’s Consumer Protection Branch.
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.Former Pepperell Man Charged with Bankruptcy FraudRead the Press Release
Boston – A former Pepperell man was charged with concealing $3 – $4 million in bankruptcy filings.
Cyril Gordon Lunn, 66, formerly of Pepperell, Mass., was charged in an indictment with concealing assets from his bankruptcy creditors and making a false statement in one of his bankruptcy schedules.
The case was originally indicted in September 2006, but it was unsealed today after Lunn was arrested by Canadian authorities.
According to the indictment, Lunn filed a bankruptcy petition in October 2001 in which he failed to disclose that he owned approximately $3 – $4 million in cash. From 1998 through September 2001, Lunn transferred the cash from the United States to Canada, and deposited some or all of the funds in safe deposit boxes in Canada. In May 2004, Lunn filed a civil suit in Canada in which he submitted affidavits and testified under oath concerning his ownership of approximately $3 – $4 million and the transfer of those funds from the United States to Canada in the years prior to 2002.
Lunn is also charged with making a false statement in one of his bankruptcy filings by falsely stating he had closed all safe deposit boxes by September 2001, when in fact. Lunn had failed to disclose a safe deposit box he had opened at the Granite Bank in New Hampshire, and which Lunn continued to access after the bankruptcy filing.
The charging statute provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of the greater of $250,000 or twice the gross 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 and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit. The case was referred to the United States Attorney’s Office by the U.S. Trustee’s Office in Boston and Worcester.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Passenger Arrested for Disrupting Transatlantic FlightRead the Press Release
BOSTON – A passenger on American Airlines (AA) Flight 62 from Miami to Paris last evening, was charged today in federal court with interfering with flight crew members. The flight was diverted to Boston’s Logan International Airport where the passenger was arrested.
Edmund Alexandre, 60, of Paris, France, was a passenger on AA Flight 62 from Miami to Paris which departed at 7:00 p.m. At approximately 9:10 p.m., Alexandre allegedly began arguing with another passenger and became disruptive. A flight crew member intervened, and asked Alexandre to calm down. Alexandre continued to raise his voice, left his seat and became disruptive to other passengers. As the crew member turned and walked away, Alexandre allegedly began raising his voice again, followed the crew member towards the back of the plane, and grabbed the crew member’s arm. It was at that time that federal air marshals identified themselves and subdued and handcuffed Alexandre. Alexandre was taken into custody, and the captain of the flight diverted the flight to Boston’s Logan Airport.
The charging statute provides a sentence of no greater than 20 years in prison to be followed by 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; Bob Allison, Federal Security Director for the Transportation Security Administration for the District of Massachusetts; Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation in Boston; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
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Four Family Members Plead Guilty to Defrauding IRS of over $5 MillionRead the Press Release
BOSTON – Four family members who operated a temporary employment agency pleaded guilty yesterday to charges relating to a scheme to hide $25 million in employees’ wages from the U.S. Internal Revenue Service.
Margaret Mathes,67, Boseba Prum, 47, Sam Pich, 63, and Thaworn Promket, 52, all of Lowell, pleaded guilty to conspiracy to defraud the Internal Revenue Service, mail fraud, and to violating laws against structuring monetary transactions to avoid reporting requirements. Prum also pleaded guilty to 10 counts of filing false employment tax returns, six counts of mail fraud, and two counts of structuring monetary transactions. Pich also pleaded guilty to 17 counts of assisting the filing of false employment tax return, six counts of mail fraud and two counts of structuring monetary transactions. Promket also pleaded guilty to seven counts of filing false employment tax returns, six counts of mail fraud and two counts of structuring monetary transactions. The defendants were indicted in September 2013, and on Nov. 24, 2014 they are scheduled to be sentenced by U.S. Senior District Judge Mark L. Wolf.
The defendants ran a temporary employment agency providing both short-term and long-term unskilled labor to companies in and around Lowell, including those in the packaging and food services industries. Between 2004 and 2009, the agency operated under the name International Temp Agency (INT) and JP Company.
Between 2004 and 2009, the defendants reported to the IRS that their temporary employees made about $2.2 million in wages, when the real figure was nearly $30 million. The defendants also defrauded the agency’s workers compensation insurer, Granite State Insurance Co., by hiding the true number of temporary workers the defendants employed, thus avoiding about $880,000 in insurance premiums. As part of the conspiracy to help cover up the unreported worker wages, the defendants withdrew cash from about 20 bank accounts and paid their temporary workers “off the books.” To further ensure that they would not be caught, the defendants structured these bank transactions – over 4300 in all – so they could withdraw the cash needed to pay the workers without triggering federal reporting requirements.
Each of the statutes provide a maximum penalty of between five and 20 years in prison. The statutes also provide for substantial fines and up to three years of supervised release. Note that 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; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Anthony DiPaolo, Chief of Investigations of the Massachusetts Insurance Fraud Bureau, made the announcement today. The investigation was undertaken jointly by the IRS, the FBI, and the Massachusetts Insurance Fraud Bureau. The case is being prosecuted by Andrew E. Lelling of Ortiz’s Economic Crimes Unit.
Former Lee Police Chief Charged with Fraud and Money LaunderingRead the Press Release
BOSTON – The former Chief of the Lee Police Department (LPD) was charged today in U.S. District Court in Springfield with wire fraud, mail fraud and money laundering.
Joseph Buffis, 56, of Pittsfield, Mass., was charged today in a superseding indictment with three counts of wire fraud, mail fraud, and four counts of money laundering. On Aug. 8, 2013, Buffis was charged in an initial indictment with extortion and three counts of money laundering.According to the superseding indictment, as the Lee Police Chief, Buffis solicited public donations on behalf of the Edward J. Laliberte Toy Fund (Toy Fund), ostensibly to use for toy purchases, primarily by sending notices on LPD letterhead to a local newspaper, The Berskshire Eagle, for publications in its print and online editions. The Eagle regularly published Buffis’ Toy Fund notices. Buffis’ notices were materially fraudulent and false in that they failed to disclose that Buffis was using a substantial part of the donations for his personal use. Based upon Buffis’s solicitations, individuals provided both cash and check donations to the Toy Fund for distribution to needy families. In addition, others donated toys to the Toy Fund, thus providing Buffis with a reserve of toys that he could provide to applicants without having to use Toy Fund monies.
As alleged in the superseding indictment, from January 2007 through December 2011, Buffis deposited 706 checks into the Toy Fund account from 343 different donors totaling $52,105. During this same period, Buffis deposited cash into the Toy Fund account only once: a deposit of $145 on Nov. 23, 2010. Buffis wrote only one Toy Fund check of $250 to a needy family in December 2009. From Jan. 1, 2007 through Jan. 31, 2012, Buffis wrote approximately 53 checks totaling approximately $51,044, a substantial portion of which he used for the benefit of himself and his family. These checks included checks written to Buffis and/or “Cash” and deposited into accounts which he owned with family members.
Also, in February 2012, Buffis extorted a $4,000 check Adonation,@ payable to the Toy Fund from two individuals who were facing prostitution-related charges. Buffis then deposited the check into the Toy Fund’s bank account and quickly withdrew $3,990 of these funds in three checks that he wrote to “Cash” but deposited into a joint bank account that he operated with his wife. Buffis used the diverted funds to pay various personal expenses. When law enforcement commenced an investigation into this activity, Buffis repeatedly lied about the disposition of these funds.
In addition, soon after Buffis became Chief in 2011, he arranged for the Town of Lee to provide the LPD with four iPhones – one for himself and three for other LPD officers. Rather than distribute the three iPhones to his LPD officers, Buffis gave them to his wife and their two children for their own personal use. From October 2011 to August 2013, Buffis caused the Town of Lee to mail Verizon Wireless a series of checks totaling approximately $5,091 for the phones he gave to his wife and children.
The charging statutes provide a sentence of no greater than 20 years in prison, five years of supervised release, and a fine of $250,000 on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; 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; and Timothy P. Alben, Commissioner of the Massachusetts State Police, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
The details contained in the superseding indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Two Indicted with Impersonating Federal Agents in Immigration ScamRead the Press Release
BOSTON – Two men were charged today in federal court in Boston with impersonating federal agents in connection with a scheme to defraud persons trying to obtain legal resident status in the United States.
Francisco Soares, 44, of Foxborough and Paul Stein, 58, of Mashpee, were charged with conspiracy to impersonate a federal officer and falsely impersonating a federal agent.
According to the indictment, form October 2011 until July 2014, Soares posed as a U.S. Immigration and Customs Enforcement Special Agent and Stein posed as a Federal Bureau of Investigation employee. The men told persons who were present in the United States illegally that they could fix their immigration problems, remove any impediments including evidence of prior immigration arrests, and get them lawful permanent resident status – known as a “green card” – in exchange for as much as $10,500. Stein allegedly fingerprinted the aliens, for a fee of $50-$250, ostensibly to facilitate the process of “cleaning” the aliens’ records. The aliens were charged various amounts in incremental payments and the process often extended over a period of months or even years.
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 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. The Massachusetts State Police, Woburn, Foxborough, and Mashpee Police Departments, and Bristol County Sheriff’s Office also assisted with the investigation. The case is being prosecuted by Thomas E. Kanwit of Ortiz’s Major Crimes Unit.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.