District of Massachusetts

BOSTON – A former Lowell man and convicted felon was sentenced yesterday for illegally possessing multiple firearms, including a semi-automatic pistol.

Eric Texeira, 34, was sentenced by U.S. District Judge Denise J. Casper to 42 months in prison and three years of supervised release.  In November 2014, Texeira pleaded guilty to a one-count Information charging him with being a felon in possession of firearms and ammunition.

On May 16, 2014, Texeira, a convicted felon, possessed a Glock semi-automatic pistol and sold multiple other firearms, including two revolvers and a rifle, to another individual for $1,300.  Some of the firearms had obliterated serial numbers.  

United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Lowell Police Superintendent William Taylor, made the announcement.  The case was prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.

BOSTON – An Adams man pleaded guilty in U.S. District Court in Springfield yesterday in a conspiracy to traffic in contraband tobacco.

Hasmit Kharbanda, 34, pleaded guilty to conspiracy and three counts of trafficking in contraband smokeless tobacco.  In October 2014, Kharbanda and two others were charged in an Information.  Kharbanda’s sentencing is scheduled for July 21, 2015 before U.S. District Judge Mark G. Mastroianni.

Kharbanda, two co-defendants, and others, worked together to avoid paying “thousands of dollars in” large sums of excise taxes on smokeless tobacco and cigars they sold from warehouses in Springfield, Mass. and Danbury, Conn.  Co-defendants Jugjeev Kharbanda and Jaspal Singh pleaded guilty in January 2015 and October 2014 and are scheduled to be sentenced on June 25, 2015 and April 21, 2015, respectively.

United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorneys Alex J. Grant of Ortiz’s Springfield Branch Unit and Veronica M. Lei of Ortiz’s Asset Forfeiture Unit.

BOSTON – James Kerasiotes, 61, former Massachusetts Secretary of Transportation, was sentenced today to six months in prison by U.S. District Court Judge William G. Young for filing false tax returns.  Judge Young also ordered Kerasiotes to serve one year of supervised release, four months of which must be served in home confinement, $31,448 in restitution to the IRS and a $5,000 fine.  Kerasiotes was ordered to report to the U.S. Marshals on March 20, 2015.

“As a former cabinet-level official in state government whose salary was paid with tax dollars, James Kerasiotes was well versed in the fundamental obligation to honestly report his income,” said U.S. Attorney Carmen M. Ortiz.  “Instead he did just the opposite – seeking to cheat the system and undermine the work of good government.”

Kerasiotes pleaded guilty in September 2014.  In January 2015, after a four-day evidentiary hearing, the Court held that the government had proven that the tax loss attributable to Kerasiotes’s crimes was more than $30,000.

Kerasiotes admitted that he was a self-employed consultant providing strategy and business origination services to clients in the transportation and construction industries.  For the calendar years 2010 and 2011, Kerasiotes filed Forms 1040, U.S. Individual Income Tax Returns, knowing that those forms reflected only a portion of the income Kerasiotes earned from his consulting business during those years.  By underreporting his total business income for 2010 and 2011, Kerasiotes evaded the payment of income taxes to the IRS.

United States Attorney Carmen M. Ortiz, William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston and Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, New York Regional Office, made the announcement today.  The case was prosecuted by Kristina E. Barclay of Ortiz’s Public Corruption Unit.

BOSTON – A Manchester man was sentenced today for stealing more than $160,000 in government benefits to which he was not entitled.

Charles Gerbutavich, 71, was sentenced by U.S. District Court Judge Rya W. Zobel to one year of probation, including three months of home confinement, and was ordered to pay a $3,000 fine and $161,587 in restitution to the Social Security Administration.  In October 2014, Gerbutavich pleaded guilty to stealing public money in the form of Social Security payments paid out for the benefit of his father.

Gerbutavich’s father died in 1993, but his monthly Social Security benefits continued to be directly deposited into a joint bank account in his and Gerbutavich’s names.  From 1993 to 2014, Gerbutavich continued to receive his deceased father’s benefits totaling $161,587. 

This case was brought as part of an ongoing effort by the U.S. Attorney’s Office in partnership with the Social Security Administration to investigate and prosecute the posthumous fraud of Social Security benefits.  In many of these cases, family members, knowing they are not entitled to government benefits, continue to withdraw and spend the funds after a relative has died. 

One of the ways the Social Security Administration detects this kind of fraud is through the Medicare Non-Utilization Project, in which the agency investigates people receiving benefits who are at least 90 years old and who have not used their Medicare Part B benefits for three or more years.  In some instances, the agency learns that such a person is actually deceased, but a surviving child has continued to take the deceased person’s benefits.

Since October 2013, the U.S. Attorney’s Office has prosecuted several similar cases involving a total of more than $1 million in stolen government money.

In January 2015, Graeme Griffith, of Andover, pleaded guilty to taking his deceased father’s Social Security benefits totaling $149,285, which were directly deposited into a joint bank account after the father’s death in 2003.  Griffith is scheduled to be sentenced on April 16, 2015.

In October 2014, Mary Murphy, of Dorchester, was sentenced to 18 months of home confinement, 10 hours per week of community service, and was ordered to pay a fine of $40,000 and $331,630 in restitution – which she paid in full in October – for taking her deceased mother’s Social Security and Civil Service retirement benefits, which were directly deposited into a joint bank account after her death in 1977.

Also in October 2014, Richard Oldham, of Old Orchard Beach, Maine, was sentenced to four months in prison, six months of home confinement, and was ordered to pay $195,862 in restitution for endorsing Social Security checks in his deceased mother’s name following her death in 1993. 

In September 2014, Frances Kenney Moseley, of Boston, pleaded guilty to stealing over $220,000 in Social Security benefits, which were directly deposited into her father’s bank account after his death in 2003.  Moseley is scheduled to be sentenced on March 23, 2015.

In August 2014, George Bergstrom, of Shrewsbury, was sentenced to one year of probation and was ordered to pay $57,948 in restitution – which he paid in full in August – for taking his deceased mother’s Social Security benefits, which were directly deposited into a joint bank account after her death in 2009.

In October 2013, John Flaherty of Newburyport, was sentenced to 10 months in prison and was ordered to pay $168,830 in restitution for taking his deceased mother’s Social Security benefits, which were directly deposited into a joint bank account after her death in 1993.

United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today.  The Gerbutavich case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.

BOSTON – The former operations manager and a control technician at Berkshire Power Plant were charged today with tampering with environmental monitors in violation of the Clean Air Act.

Fred Baker, 51, of Southampton, Mass., the former Operations and Maintenance Manager at Berkshire Power Plant in Agawam, Mass. and Scott Paterson, 44, of Manchester, Conn., the former Instrument and Control Technician were charged today in Informations with conspiracy to violate the Clean Air Act, and other criminal violations of that statute.  Both Baker and Paterson have agreed to plead guilty to the charges.

“Air pollutants emitted in the western part of our state can have a profound impact on our urban environments in and around Boston, as well as into coastal Maine,” said United States Attorney Carmen M. Ortiz. “Protecting New England’s airshed, through the criminal enforcement of the Clean Air Act, plays an important role in preserving human health and the environment.  Berkshire Power Plant’s managers and a compliance worker deliberately sought to deceive regulators about the release of air pollutants, and fittingly now face criminal prosecution for that conduct.”

According to the Informations, from 2008 until March 2011, Baker instructed Paterson and other operators at Berkshire Power Plant to tamper with the plant’s Continuous Emissions Monitoring System (CEMS).  The CEMS is an environmental monitoring system, required by federal law, which continuously samples, measures and records the concentration of regulated pollutants.  Baker, Paterson and others at Berkshire Power Plant, tampered with the CEMS to save money, delay repairs and to avoid reporting to federal and state regulators that the plant, at times, was releasing pollutants – in this case, nitrogen oxides -- in excess of regulatory limits. 

Initially, the defendants lowered the CEMS monitors by approximately .5 parts per million (ppm).  In the summers of 2009 and 2010, when the plant underwent required independent audits of the pollution monitoring equipment, Baker instructed Paterson to take out the fraudulent adjustments in the monitors prior to the audit and re-introduce them after the auditors had left.  Paterson made the fraudulent adjustments prior to, and after, each independent audit.  Berkshire Power Plant was required to and did report the results of these audits to the Massachusetts Department of Environmental Protection (MassDEP) and the United States Environmental Protection Agency.

In 2010, the .5 ppm adjustment was not sufficient to allow the plant to run at full power and comply with the facility’s Clean Air Act permit.  Rather than doing the necessary repairs to the plant and its environmental pollution control equipment, or running the plant at lower power levels, Baker instructed staff, including Paterson, to lower the CEMS readings even more to avoid reporting pollution emissions. 

“Berkshire Power Plant management and staff had institutionalized a deliberate scheme to evade compliance with the Clean Air Act by altering their emission monitoring equipment as it suited them and not the law.  This not only creates an unfair advantage over competitive energy and utility sources, but underscores how our environment suffers at the hand of criminal greed,” said Tyler Amon, Special Agent in Charge of the Environmental Protection Agency’s Criminal Investigation Division in Boston.

“These employees intentionally cut corners and violated environmental laws intended to monitor pollution emissions,” said Massachusetts Attorney General Maura Healey.  “These charges are the result of a collaborative effort with our state and federal partners, and we will continue to investigate cases in which people seek to take shortcuts at the expense of the environment.”

“This complex technical investigation and resulting plea agreement, involving fraudulent practices related to air pollution monitoring, is the result of state and federal officials combining resources and working together to find the truth,” said Massachusetts Department of Environmental Protection Commissioner Martin Suuberg.  “Through partnership with our federal law enforcement and environmental protection counterparts, MassDEP increases its ability to fulfill our mission to protect our air and the public health.” 

The statutory maximum penalties for the conspiracy charge are five years in prison and three years of supervised release.  The statutory maximum penalties for each of the Clean Air Act charges are two years in prison and one year of supervised release.  Both statutes provide for a maximum fine of $250,000 or twice the gross loss or gain per count, 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. 

U.S. Attorney Ortiz, Attorney General Healey, and EPA SAC Amon, made the announcement today.  The case was investigated with the assistance of the Massachusetts Attorney General’s Environmental Crimes Strike Force, the Massachusetts Environmental Police and the Massachusetts Department of Environmental Protection.  The case is being prosecuted by Sara Miron Bloom of Ortiz’s Economic Crimes Unit and Daniel Licata, Assistant Attorney General with the Massachusetts Attorney General’s Office working as a Special Assistant U.S. Attorney.

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

BOSTON – A former JetBlue Airways employee was sentenced yesterday for smuggling thousands of dollars of what he believed to be drug money past security checkpoints at Logan International Airport.

Anthony Trotman, 24, of Boston, was sentenced by U.S. District Court Judge F. Dennis Saylor to 14 months in prison, one year of supervised release, and ordered to pay $3,000 in criminal forfeiture.  In October 2014, Trotman waived indictment and pleaded guilty to a five-count Information charging conspiracy to commit money laundering, conspiracy to defraud the United States, and three counts of illegally entering an airport area with intent to commit a felony.

A federal undercover operation revealed that on three occasions from July 2013 through February 2014, Trotman used airport security credentials to evade TSA security and smuggled $125,000, which was represented to be drug proceeds, from non-secure airport.  In return, Trotman received a total of $3,000 as compensation from a cooperating witness involved in the investigation.

Co-defendant Rupert Crossley pleaded guilty in October 2014 to a four-count Information charging money laundering conspiracy, conspiracy to defraud the United States, and three counts of illegally entering an airport area with intent to commit a felony.  Crossley was sentenced on Jan. 7, 2015, before U.S. District Court Judge William G. Young to two years in prison, one year of supervised release, and ordered to pay $4,000 in criminal forfeiture.

Three additional co-defendants are alleged to have also used their airport credentials to evade security as part of the scheme.  Alvin Leacock, Eric Vick and Dino Dunkley were indicted in September 2014 for a money laundering conspiracy, conspiracy to defraud the United States, money laundering, and illegally entering an airport area with intent to commit a felony.

United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today.  The case was investigated with the assistance of Bob Allison, Federal Security Director, Transportation Security Administration; Dwain Troutt, Special Agent in Charge, Federal Air Marshal Service; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police.  The U.S. Attorney’s Office would also like to acknowledge the assistance and cooperation of the Massachusetts Port Authority, JetBlue Airways Corporate Security and Delta Airlines.  The case was prosecuted by Assistant U.S. Attorneys Carlos A. López of Ortiz’s Organized Crime Drug Enforcement Task Force Unit and Dustin Chao of Ortiz’s Public Corruption Unit.

BOSTON – Michael Hayes, 24, of Bolton, was sentenced yesterday by U.S. District Court Judge Timothy S. Hillman to 40 months in prison and eight years of supervised release for possession of child pornography.  The court scheduled a hearing in March 2015 on the issue of restitution.  Hayes pleaded guilty to the charge in September 2014.

In November 2013, Hayes permitted an undercover federal agent, through the use of a peer-2-peer file sharing network, to download a number of image files and video files which depict child pornography.  During the subsequent execution of a search warrant at Hayes's residence, a laptop computer and other storage media were seized, which contained over 2,000 images and videos of child pornography.

United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, and Bolton Police Chief Vincent C. Alfano, made the announcement.  The case is being prosecuted by Michelle L. Dineen Jerrett of Ortiz’s Worcester Branch Office.

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 DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.

BOSTON – A Somerville man was sentenced today for leading an armed robbery conspiracy and possessing an illegal firearm.

Antonio Correia, Sr., 45, of Somerville, was sentenced before U.S. District Court Judge Richard G. Stearns to 123 months in prison and five years of supervised release.  In April 2014, Correia pleaded guilty to conspiracy to commit robbery, possession of a firearm in furtherance of a violent crime, and four counts of being a felon in possession of a firearm.

After selling five firearms, including a rifle and shotgun, to a cooperating witness, Correia sought to use the cooperating witness to identify a drug dealer whom he could rob.  The cooperator provided this information to law enforcement officers who then created a sting operation using a fictitious target in Malden to investigate Correia.  Correia arranged for five other men to participate in the planned robbery on Aug. 2, 2013, several of whom travelled to Massachusetts from New Jersey the day before.  On that date, Correia and two men traveled to the alleged robbery site in a car driven by the cooperating witness, while three other co-conspirators followed in a pick-up truck.  Correia and another man were each armed with a loaded, semi-automatic pistol.  In addition to the two handguns, the six conspirators also possessed a starter’s pistol (which could be used to intimidate their victim by firing blanks), an electric taser, two knives, pepper spray, plastic zip ties, masks, and gloves.   Once the two vehicles, which were being followed by law enforcement officers, arrived at the alleged site of the robbery, officers participating in the sting operation arrested all of the conspirators.

The five co-conspirators, Antonio Carreia, Jr., Marquis Simmons, Julio Rodriguez, Branden Correia, and Jokarly Fernandez, pleaded guilty to federal charges and were sentenced by Judge Stearns.

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; Malden Police Chief Kevin Molis; and Middlesex Sheriff Peter J. Koutoujian, made the announcement today.  The case was prosecuted by Assistant U.S. Attorney Michael Crowley of Ortiz’s Organized Crime Strike Force Unit.

BOSTON – The United States reached a civil settlement yesterday with Performance Nutrition, a Seekonk, Mass.-based business that sells nutritional supplements online and in retail stores in Massachusetts, New Hampshire, and Rhode Island, in connection with civil drug diversion allegations.

Based on facts developed in the course of the investigation, the government contended that Performance Nutrition violated the Combat Methamphetamine Epidemic Act of 2005 in connection with its sale of anti-asthma products containing ephedrine, a chemical that can be used to make methamphetamine.  Specifically, the government alleged that Performance Nutrition failed to self-certify with the DEA for online sales, failed to send the DEA monthly reports of its sales, made online sales exceeding the maximum amount of ephedrine permitted, failed to ask purchasers for photo IDs, maintained sale logbooks with incomplete information, and failed to train all its employees on the legal requirements for selling ephedrine products.  Performance Nutrition has agreed to pay $60,000 in settlement of these claims.

“Sales of products containing ephedrine are subject to strict requirements because ephedrine can be used to manufacture methamphetamine,” stated United States Attorney Carmen M. Ortiz.  “The mishandling of any chemicals used to manufacture meth, a highly addictive and dangerous illegal drug, is a serious offense which will be pursued by my office.  We will continue to work with our law enforcement partners to ensure that retail and online sellers of products containing such chemicals abide by their legal obligations.”

“Methamphetamine can destroy communities and devastate the lives of the users,” stated Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division.  “Ephedrine is a key component in the manufacturing of this dangerous drug.  DEA, along with our law enforcement partners, will continue to investigate businesses that violate the Combat Methamphetamine Act of 2005.”

The announcement was made today by U.S. Attorney Ortiz and Acting DEA SAC Ferguson.  The investigation was conducted by Diversion Investigators with the DEA, Boston Field Division.  The case was handled by Assistant U.S. Attorneys Jessica Driscoll and Christine Wichers of Ortiz’s Civil Division.

BOSTON – A Boston man was sentenced today to 17 years in prison after a jury found him guilty of drug trafficking and illegal firearm possession.

Kenneth Whigham Jr., 33, of Boston, was sentenced before U.S. District Court Chief Judge Patti B. Saris to 17 years in prison.  In October 2014, Whigham was convicted following a three-day jury trial of being a felon in possession of a firearm n and possession with intent to distribute cocaine base.

Shortly before midnight on Feb. 28, 2013, two Massachusetts State Police troopers stopped Whigham for erratic driving in the O’Neil Tunnel in Boston.  A video recording of the traffic stop showed one of the troopers attempting to enter Whigham’s car as Whigham slid a loaded handgun under the front passenger seat.  The troopers entered the car, found the gun – a .25 caliber Raven Arms handgun with an obliterated serial number loaded with six rounds of ammunition – and arrested Whigham.  The troopers seized individually-wrapped pieces of crack cocaine packaged for sale and $666 on Whigham when they arrested him.

At today’s sentencing hearing, the prosecutor recommended that the Court sentence Whigham to 21 years in prison.  The prosecutor’s recommended sentence was based in large part on Whigham’s lengthy criminal record, which included two previous federal crack cocaine distribution convictions and state convictions for unlawful possession of a firearm and assault and battery with a dangerous weapon.  Due to his criminal history, Whigham faced a fifteen year mandatory minimum sentence for possessing the firearm.

United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Boston Field Division; and Colonel Timothy P. Alben of the Massachusetts State Police, made the announcement today.  The case was prosecuted by Assistant U.S. Attorney Christopher Pohl of Ortiz’s Organized Crime Strike Force Unit.

BOSTON – A Connecticut man pleaded guilty in U.S. District Court in Springfield today in a conspiracy to traffic in contraband tobacco.

Jugjeev Kharbanda, 29, of Seymour, Conn. pleaded guilty to conspiracy and three counts of contraband smokeless tobacco trafficking.  In October 2014, Kharbanda and two others were charged in an Information.  U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for June 25, 2015.

Kharbanda, two co-defendants, and others, worked together to avoid paying large amounts of tobacco excise taxes on smokeless tobacco and cigars sold from warehouses in Springfield, Mass. and Danbury, Conn.  Co-defendant Jaspal Singh pleaded guilty in October 2014 and is scheduled to be sentenced on April 21, 2015.

United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorneys Alex J. Grant and Veronica M. Lei of Ortiz’s Springfield Branch Unit.

BOSTON – John Faherty, 56, of Hopedale, Mass. pleaded guilty to an information charging him with filing a false federal income tax return.  U.S. District Judge F. Dennis Saylor, IV scheduled sentencing for April 17, 2015.

Faherty’s wife received substantial commissions as a manufacturers’ representative, promoting products from various factories to retailers.  Faherty, who compiled the income and expenses for his wife’s business, repeatedly withheld a portion of the commissions his wife received from their return preparer.  As a result, the returns prepared, and filed with the Internal Revenue Service were false in that they failed to report a significant portion of his wife’s income.  In total, the couple owed an additional $100, 678 on the income Faherty failed to report between 2007 and 2009.

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

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

BOSTON – A former office manager of a medical practice in Northampton pleaded guilty today in U.S. District Court in Springfield to wire fraud and tax evasion.

Roxanne Tubolino, 56, of Belchertown, Mass., pleaded guilty to wire fraud and six counts of tax evasion.  In November 2014, Tubolino was charged in an Information.  U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for April 16, 2015.

From 2008 through September 11, 2013, Tubolino was employed as an office manager for Northampton Internal Medical Associates (NIMA), a medical practice with offices in Northampton, Mass.  During this period, Tubolino embezzled approximately $1,562,206 by writing numerous checks from NIMA’s corporate account to pay her personal credit card bills for accounts that she held at American Express, Bank of America, Chase, and Barclays.  Tubolino concealed this theft by falsely and fraudulently entering these checks into NIMA’s Quickbooks records as business expenses, such as “Clint Pharmaceuticals,” “Oncology Supplies,” and “Abbot Laboratories.”  Tubolino also filed tax returns for 2008 through 2013 in which she did not report any of the income that she received from her embezzlement at NIMA.

The charge of wire fraud provides a sentence of no greater than 20 years in prison, five years of supervised release, and a fine of $250,000.  The charge of tax evasion provides a sentence of no greater than five years in prison, three years of supervised release, and fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.

BOSTON – After a month-long federal trial, Joshua M. Gonsalves was sentenced on multiple charges arising from a three-year conspiracy involving hundreds of thousands of 30-milligram oxycodone pills which he and his brother distributed on Cape Cod and generated over $5 million in proceeds.

Joshua M. Gonsalves, 34, of Dennisport, Mass., was sentenced by U.S. District Court Chief Judge Patti B. Saris to 20 years in prison, five years of supervised release, forfeiture of $1,522,372 and property, including seized currency, a house in West Yarmouth, a Cadillac, and a Nissan Altima.

In October 2014, Joshua Gonsalves was convicted of oxycodone conspiracy, money laundering conspiracy and money laundering.  Joshua Gonsalves’s brother, Stanley D. Gonsalves, 36, also of Sandwich, Mass., was convicted of an oxycodone trafficking conspiracy, a money laundering conspiracy, and 17 substantive money laundering charges.  Stanley Gonsalves is scheduled to be sentenced on Feb. 24, 2015.

During the trial, witnesses testified that the conspiracy’s couriers transported multi-thousand-pill loads of 30-milligram oxycodone pills from South Florida up to New England, first by plane and later by car.  Once the pills were brought to numerous area hotels or conspirators’ homes and apartments in Dorchester, Quincy, and Onset, Mass., the conspirators would divide them into 100-pill packs and then take the pills to Cape Cod for sale to the dealer-level customers.

The primary object of the related money laundering conspiracy was to use the millions of dollars in drug proceeds to purchase additional oxycodone pills and to pay the ongoing expenses of the oxycodone conspiracy.   During the trial, witnesses testified about seizures from the Gonsalves Brothers’ co-conspirators of two south-bound cash shipments totaling $140,000, and a north-bound pill shipment of 5,700 pills.  Other large pill seizures occurred in Fort Lauderdale (8,000 pills), in Volusia County, Fla. (900 pills), along Route 6 in Barnstable, Mass. (280 pills), and along Route 3 Southbound in Kingston, Mass (4,000 pills).  Other related cash seizures from co-conspirators totaled $167,000.

The trial evidence also included extensive testimony about a car chase and rollover incident which occurred on Route 3 Northbound on May 13, 2011, in which the Gonsalves Brothers allegedly rammed their Mercedes SUV into a Volvo station wagon which they mistakenly believed contained the $225,000 in cash drug proceeds which had just been taken from them in a Bourne robbery.  The men in the Volvo, who allegedly were only assisting the primary robbers (who were watching these events unfolding from a different car) managed to survive the rollover crash and then fled into the woods.  In a recorded call a few days later, which was played at the trial, Stanley Gonsalves told a criminal associate about the robbery, boasting that the robbers “didn’t expect us to do what we did” in retaliation. 

At today’s hearing, the prosecutor noted that newly-inaugurated Massachusetts Governor Baker and Attorney General Healey have both named the Massachusetts opiate epidemic as among their top priorities.  U.S. Attorney Ortiz has been working for many months with federal state and local officials to combat opiate addiction in Massachusetts.  Chief Judge Saris found the defendant responsible for over 89,000 oxycodone pills and described his criminal record as “shocking.”

United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police, made the announcement today.  Significant assistance was also provided by the DEA Cape Cod Drug Task Force; the Barnstable County and Cape and Islands District Attorneys Offices; the Barnstable, Boston, Bourne, Chatham, Dennis, Franklin, Harwich, Plymouth, Sandwich, Quincy, Yarmouth, and Wareham Police Departments; the Barnstable and Bristol County Sheriff’s Departments; the Florence County (South Carolina), Broward County (Florida) and Volusia County (Florida) Sheriff’s Offices; and the Dillon and Ridgeland (South Carolina) Police Departments.

The case was prosecuted by Assistant U.S. Attorney Timothy E. Moran and recently retired Assistant U.S. Attorney Richard L. Hoffman of Ortiz’s Organized Crime Strike Force Unit.

BOSTON – A Boston man was sentenced yesterday to 16 years in federal prison for drug trafficking and firearm charges.

Gerald Smith, a/k/a “G-Man,” 38, of Boston, was sentenced yesterday to 16 years in prison and five years of supervised release.  In October 2014, Smith pleaded guilty before U.S. District Court Judge Richard G. Stearns to two counts of distribution of cocaine base, possession with intent to distribute 280 grams or more of cocaine base, and being a felon in possession of a firearm and ammunition.

Smith was a long-time Boston-based crack cocaine trafficker who regularly sold crack cocaine in the Esmond Street neighborhood of Boston, an area plagued by drug, gun, and gang violence.  During their investigation, federal agents used a cooperating witness and an undercover police officer to purchase crack cocaine from Smith over a dozen times. When agents executed a search warrant at an apartment in Revere used by Smith, they seized nearly a kilogram of cooked crack cocaine ready for street-level sale and a loaded firearm.

Due to his criminal history, Smith faced a 15-year mandatory minimum sentence for possessing a firearm and a 10-year mandatory minimum sentence for possessing more than 280 grams of crack cocaine with intent to distribute.

At the sentencing hearing, the government recommended that the Court sentence Smith to 16 years in prison based, in large part, on Smith’s criminal record. This is Smith’s fourth drug trafficking conviction and he has previously been sentenced to state prison twice before for drug trafficking.

United States Attorney Carmen M. Ortiz and Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement.  The case was prosecuted by Assistant U.S. Attorney Christopher Pohl of Ortiz’s Organized Crime Strike Force Unit.

BOSTON – An Andover man pleaded guilty today to stealing more than $149,000 in government benefits.

Graeme Griffith, 60, pleaded guilty to theft of public money.  U.S. District Court Senior Judge Mark L. Wolf scheduled sentencing for April 16, 2015.  In January 2015, Griffith was charged in a felony Information.

In 2003, Griffith’s father died, but his monthly Social Security benefits continued to be directly deposited into a joint bank account in his and Griffith’s names.  From 2003 to 2014, Griffith continued to receive his deceased father’s benefits totaling $149,285.

This case was brought as part of an ongoing effort by the U.S. Attorney’s Office in partnership with the Social Security Administration to investigate and prosecute the posthumous fraud of Social Security benefits.  In many of these cases, family members, knowing they are not entitled to government benefits, continue to withdraw and spend the funds after a relative has died.

One of the ways the Social Security Administration detects this kind of fraud is through the Medicare Non-Utilization Project, in which the agency investigates people receiving benefits who are at least 90 years old and who have not used their Medicare Part B benefits for three or more years.  In some instances, the agency learns that such a person is actually deceased, but a surviving child has continued to take the deceased person’s benefits. 

Since October 2013, the U.S. Attorney’s Office has prosecuted several such cases involving a total of more than $1 million in stolen government money:

In October 2014, Charles Gerbutavich, of Manchester, pleaded guilty to taking his deceased father’s Social Security benefits totaling $161,587, which were directly deposited into a joint bank account after the father’s death in 1993.  Gerbutavich is scheduled to be sentenced on Feb. 3, 2015.

Also in October 2014, Mary Murphy, of Dorchester, was sentenced to 18 months of home confinement, 10 hours per week of community service, and was ordered to pay a fine of $40,000 and $331,630 in restitution – which she paid in full in October.  Murphy pleaded guilty in connection with taking her deceased mother’s Social Security and Civil Service retirement benefits, which were directly deposited into a joint bank account after her death in 1977.

Also in October 2014, Richard Oldham, of Old Orchard Beach, Maine, was sentenced to four months in prison, six months of home confinement, and was ordered to pay $195,862 in restitution for endorsing Social Security checks in his deceased mother’s name following her death in 1993.

In September 2014, Frances Kenney Moseley, of Boston, pleaded guilty to stealing over $220,000 in Social Security benefits, which were directly deposited into her father’s bank account after his death in 2003.  Moseley is scheduled to be sentenced on March 23, 2015.

In August 2014, George Bergstrom, of Shrewsbury, was sentenced to one year of probation and was ordered to pay $57,948 in restitution – which he paid in full in August – for taking his deceased mother’s Social Security benefits, which were directly deposited into a joint bank account after her death in 2009.

In October 2013, John Flaherty, of Newburyport, was sentenced to 10 months in prison and was ordered to pay $168,830 in restitution for taking his deceased mother’s Social Security benefits, which were directly deposited into a joint bank account after her death in 1993. 

United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today.  The case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.

BOSTON – A Vineyard Haven CPA pleaded guilty today to filing false tax returns in which he underreported more than $800,000 in income for three years.

Roger A. Armstrong, 61, pleaded guilty to an Information charging him with three counts of filing false tax returns.  U.S. District Court Judge Indira Talwani scheduled sentencing for April 28, 2015.

Armstrong, a CPA and tax preparer who lived and worked on Martha's Vineyard, owned rental property in Massachusetts and Florida.   As a sole proprietor, Armstrong was required to accurately report his gross receipts and his business profit or loss on his individual income tax returns and also was to report any rental income he received.  For tax years 2009 through 2011, Armstrong filed tax returns in which he significantly underreported both his business gross receipts and his rental income.  For these three tax years, Armstrong did not report a total of approximately $790,000 in gross receipts and approximately $47,000 in rental income.  As a result of the underreporting, Armstrong did not pay $200,000 in taxes.

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

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

BOSTON – A twice convicted sex offender who was residing in Ohio was sentenced yesterday in U.S. District Court in Boston for failing to register as a sex offender.

Jonathan Fey, 45, formerly of Dorchester, was sentenced by U.S. District Court Judge Rya W. Zobel to 18 months in prison and five years of supervised release.  In October 2014, Fey pleaded guilty to a one-count indictment charging him with failure to register as a sex offender.  In May 2014, Fey was apprehended in Ohio and returned to Massachusetts.

In March 2001, Fey was convicted in Bristol County Superior Court of rape and indecent assault and battery on a person over the age of 14 and received a 9-11 year sentence of incarceration and 10 years of probation.  In June 2010, Fey was released from prison and registered as a level II sex offender as required by the court.  At some point in July 2011, without permission from or notification to the probation department, Fey left Massachusetts and moved to Kentucky, Arkansas, and most recently in Ohio, but never registered as a sex offender in any of those states.

Additionally, in 1989, Fey was charged with a sex offense in Rhode Island, but given the date of this conviction was not required to register as a sex offender for that offense.

U.S. Attorney Carmen M. Ortiz and John Gibbons, U.S. Marshal for District of Massachusetts, made the announcement.  The case was prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.

State-Federal Agreement Alleges Defendants Operated Unlawful Grant Program

BOSTON – The South Shore Physician Hospital Organization (SSPHO) in South Weymouth has agreed to pay $1.775 million to settle allegations of operating a recruitment grant program through which it paid kickbacks to its physician members in exchange for patient referrals.  The United States and the Commonwealth will share in this recovery.

Today, in a consent judgment, the South Shore Physician Hospital Organization, Inc. (SSPHO) and its member organizations, South Shore Hospital, Inc. and Physicians Organization of the South Shore, Inc., acknowledged that the SSPHO paid kickbacks in the form of cash grants to doctors who agreed to make referrals to SSPHO providers.  From 2001 to 2010, SSPHO allegedly approved 103 separate recruitment grants to 33 different physician groups as part of this scheme.  The recruitment grant program requested that grant recipients refer patients to participating providers, which included the South Shore Hospital.

“Unlawful patient referral schemes not only limit patient provider choices, but ultimately lead to higher health care costs,” said United States Attorney Carmen Ortiz.  “Our close working relationship with the Commonwealth’s Attorney General’s Office on heathcare fraud matters including this one is a law enforcement partnership which puts patients care first and foremost.”

“Instead of giving patients lower cost options and flexibility in health care services, we allege these defendants looked to increase their referrals through an unlawful kickback operation,” Massachusetts Attorney General Coakley said.  “We are pleased to have worked with our partners in federal law enforcement to ensure that improper incentives do not undermine the integrity of our healthcare system.”

According to the settlement, the defendants made disclosures about the recruitment grant program in 2012 to the Massachusetts Attorney General’s Office, the U.S. Department of Justice and the Office of Inspector General for the U.S. Department of Health and Human Services.  The defendants cooperated fully with this investigation.

As a result of this conduct, SSPHO and its member organizations allegedly caused participating providers who received referrals from grant recipients to submit false claims for payment to the Medicare Program and the Massachusetts Medicaid program (MassHealth), because those claims were made in violation of the federal Anti-Kickback statute, and violated the Massachusetts Consumer Protection Act.

Under the terms of the settlement, SSPHO will pay a total of $1.775 million, including more than $620,000 to the Commonwealth, $310,625 of which will go directly to MassHealth.  The remainder will be paid to the federal government.

This matter was jointly investigated by the U.S. Attorney’s Office for the District of Massachusetts, the U.S. Department of Health and Human Services, Office of Inspector General, and the Massachusetts Attorney General’s Office.  This case was handled by Assistant U.S. Attorney George Henderson III and Assistant Attorneys General Courtney Aladro and Eric Gold of the Health Care Division and Assistant Attorney General Angela Neal of the Medicaid Fraud Division.

BOSTON – A Chelsea man was sentenced today for his role in a scheme to produce fraudulent identification documents.

Leonel Sanchez, 52, was sentenced to a total of 26 months in prison and three years of supervised release.  In October 2014, Sanchez pleaded guilty before U.S. District Court Judge Douglas P. Woodlock to conspiracy to produce false identification documents and aggravated identity theft.  From December 2012 through January 2013, Sanchez bribed an employee of the Massachusetts Registry of Motor Vehicles in connection with a scheme to issue Massachusetts driver’s licenses to individuals who presented fraudulently obtained Puerto Rican identification documents.

This sentencing is the most recent development in the ongoing investigations involving identity theft and public corruption relating to the Massachusetts Registry of Motor Vehicles.

United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; Celia J. Blue, Registrar of the Massachusetts Registry of Motor Vehicles; Colonel Timothy P. Alben, Superintendent of the Massachusetts States Police; David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office; and Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, New York Regional Office, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Eugenia M. Carris of Ortiz’s Public Corruption Unit.

BOSTON – A Peabody man was indicted yesterday on child pornography charges.

Patrick Lynch, 22, of Peabody, was indicted on receipt and possession of child pornography.  The indictment alleges that beginning in May 2013, Lynch began receiving emails containing child pornography.  A federal investigation revealed that Lynch was affiliated with the Boy Scouts, including a position at the Philmont Training Center for Boy Scouts of America.  Lynch had also been employed at the Greater Beverly YMCA, and had recently begun employment with Beanstalk Adventure Ropes Course in Reading, Mass.

The charge of receipt of child pornography provides for a mandatory minimum term of five years and no greater than 20 years in prison.  The charge of possession of child pornography provides for no greater than 20 years in prison.  Both statutes provide for a mandatory minimum of five years and up to a lifetime of supervised release and a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston made the announcement today.  Assistance was also provided by the Massachusetts State Police and the Peabody Police Department.  The case is prosecuted by Assistant U.S. Attorney Eve A. Piemonte Stacey of Ortiz’s Major Crimes Unit.

The case is brought as part of Project Safe Childhood.  In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse.  Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.

BOSTON – A Miami man operating throughout South Florida was sentenced on Jan. 9, 2015, for his role in an oxycodone distribution conspiracy involving thousands of oxycodone pills and stolen identities of Puerto Rican residents.

Jose Perez, 40, was sentenced by U.S. District Court Judge Richard G. Stearns to 46 months in prison and three years of supervised release.  In April 2014, Perez pleaded guilty to conspiracy to possess with intent to distribute and to distribute oxycodone, distribution of oxycodone, and identity theft.

In February 2011, a federal investigation into the oxycodone distribution organization operated by Perez in Florida and several co-conspirators in the Boston area revealed that from at least 2011 through January 2013, Perez sold large quantities of oxycodone pills to co-conspirators in Massachusetts and Rhode Island who distributed the oxycodone pills in Massachusetts.  Beginning in November 2011, Perez initiated an identity theft and tax refund scheme where he sold hundreds of legitimate names, dates of birth, and Social Security numbers of Puerto Rican residents to an undercover federal agent, intending that the identities be used to fraudulently obtain tax refunds.  Over the last several years, increasing numbers of drug dealers have diversified their operations to include lucrative identity theft and tax fraud schemes.

United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement.  The case was prosecuted by Assistant U.S. Attorney Christophe F. Bator of Ortiz’s Drug Task Force Unit.

BOSTON – The owner and operator of a Brockton physical therapy company and her employee were sentenced today for defrauding insurance companies in connection with physical therapy services purportedly provided to patients involved in car accidents.

Walkyrie Massie, a/k/a Vicky Lopes, 39, and Edward Rossi, 65, of Rochester, were sentenced by U.S. District Court Judge Richard G. Stearns to 30 months and 18 months, respectively, two years of supervised release, and ordered to pay $174,597 in restitution to the defrauded insurance companies.  Massie and Rossi pleaded guilty to conspiracy to commit mail fraud and two counts of mail fraud in September and August 2014, respectively.

“The scam perpetrated by Massie and her employees defrauded insurance companies and deprived injured patients of proper care,” said U.S. Attorney Carmen M. Ortiz.  “Patients deserve quality care and insurance providers need honest care-givers.  This kind of fraud is corrosive to our healthcare system.”

“Westgate Physical Therapy was solely motivated by profit rather than patient care when it forged patient records and billed for medical care never provided scamming private insurance companies out of hundreds of thousands of dollars,” said Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division.  “The FBI is dedicated to aggressively investigating this type of criminal activity because it has a great impact not only on private insurance companies but on the economy as a whole as well.”

Massie, the owner and operator of Westgate Physical Therapy in Brockton, and her employees submitted fraudulent medical progress notes to insurance companies, in connection with physical therapy the company purportedly provided to patients involved in car accidents.  Specifically, Rossi, a licensed physical therapy assistant, was supposed to provide physical therapy to patients several times a week until the physical therapist, Deidre Chouinard, re evaluated the patient and signed off that the treatment was complete.  Westgate would then send a bill to the responsible insurance company.  The progress notes contained in the patients’ chart would also be used to determine personal injury protection payments, as well as any bodily injury settlements with other insurance companies.

In reality, for the majority of patients, Rossi simply filled in cookie-cutter treatment notes for patients who either never showed up that day, came into the clinic for mere minutes, or were not seen at all by Rossi because he was not present.  Furthermore, Rossi signed notes for treatments that Massie performed, even though she was not licensed to do so.  Based on these fraudulent submissions, from 2009 to 2011, Westgate billed insurance companies more than $400,000 and received more than $174,000 in payments.

During the investigation into Westgate’s activities, federal law enforcement used a cooperating witness, who claimed to have been in a car accident and sought treatment at Westgate.  From March through June 2011, recordings made of this individual’s visits to Westgate captured how Massie boasted about forging the individual’s name to the sign-in sheets to falsely show that he had come in for treatment when he had not.  In one recorded conversation, Rossi can be heard demonstrating how the therapy exercise equipment worked so that the individual would be able to describe the physical therapy if he were called in to give a statement to the insurance company about his injuries and treatment at Westgate.

In December 2014, Chouinard, Westgate’s physical therapist, was sentenced to three years of probation.  A fourth defendant is awaiting trial.

U.S. Attorney Ortiz and SAC Lisi made the announcement today.  The Massachusetts Insurance Fraud Bureau also assisted in this investigation.  The case was prosecuted by Assistant U.S. Attorney Shelbey Wright.

BOSTON – Two New Bedford men pleaded yesterday in U.S. District Court in Boston to selling heroin.

Manuel Lopes, a/k/a “Junior” Lopes, 36, and Harry Parsons, 27, pleaded guilty before U.S. District Judge Denise J. Casper.  Lopes pleaded guilty to conspiracy to distribute 100 grams or more of heroin, distribution of heroin, and possession with intent to distribute 100 grams or more of heroin.  Parsons pleaded guilty to conspiracy to distribute heroin and distribution of heroin.  Sentencing is scheduled for April 14 and 15, 2015 for Parsons and Lopes, respectively.

Lopes and Parsons conspired with each other and another individual to sell heroin in New Bedford.  In particular, on Feb.15, 2013, Lopes, Parsons, and a co-conspirator sold almost 100 grams of heroin to a cooperating witness.  Lopes drove with the cooperating witness to Parson’s home where the heroin sale was completed.  Lopes and another individual planned and arranged for the sale of an additional 50 grams of heroin to the cooperating witness that was to take place on Feb. 25, 2013, although the sale was not completed.

On March 1, 2013, agents arrested Lopes and another individual.  Pursuant to a search warrant executed at Lopes’ home, agents seized approximately 7,500 packages of heroin, several large packages of marijuana, brass knuckles, and a bullet-proof vest.

At the time of this offense, Lopes was on federal probation from a previous drug and gun trafficking conviction in U.S. District Court in Boston.

For Lopes, the charging statutes provide for a minimum sentence of ten years in prison and a maximum penalty of life in prison; eight years of supervised release, and a maximum fine of $8 million.  Pursuant to a written plea agreement, the government and Lopes agreed to recommend to Judge Casper that he serve a sentence of 188 months in prison.  For Parsons, the charging statutes provide a sentence of no greater than 30 years in prison, six years of supervised release, and a fine of $2 million.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; and Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement today.  The case was investigated by a DEA Task Force comprised of agents and officers from the Massachusetts State Police, the New Bedford and Fairhaven Police Departments, the Bristol County Sheriff’s Department, and other federal, state, and local law enforcement agencies.  The case is being prosecuted by Assistant U.S. Attorney Christopher Pohl of Ortiz’s Organized Crime Strike Force Unit.

BOSTON – A Melrose man pleaded guilty in U.S. District Court in Boston on Monday to impersonating a federal agent.

Gjerji Pelushi, a/k/a “George Pelushi,” 28, pleaded guilty on Jan. 12 to two counts of impersonation of an officer of the United States.  U.S. District Judge Denise J. Casper scheduled sentencing for April 8, 2015.

In 2014, the FBI received information about Pelushi from two victims who, like Pelushi, are originally from Albania.  In separate interviews, both victims told agents that they had each paid thousands of dollars to Pelushi to assist them in obtaining a law enforcement job or in dealing with a law enforcement-related problem.  One of the victims had a pending state court case which Pelushi promised to get dismissed.  The victims paid for Pelushi’s help because he repeatedly told them he worked for the FBI.

During an undercover operation, agents recorded several telephone calls and meetings between Pelushi and the victims.  On the recordings, Pelushi referred to himself as an FBI agent, confirmed he had taken thousands of dollars from both victims, and promised to use his connections as an agent to help them.  In  one meeting, Pelushi claimed to have patrolled this year’s Boston Marathon in plain clothes while armed and that “the Director” had told him and his fellow agents that if they “tell someone to stop and they reach for the bag, shoot them in the head!”

When Pelushi was arrested in August 2014, agents seized, among other items, a fake Harvard diploma and a private investigator manual.  Pelushi ultimately admitted to agents that he had taken money from both victims and that he was not in fact an FBI agent.

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

United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement.  The case was prosecuted by Assistant U.S. Attorney Christopher Pohl of Ortiz’s Organized Crime Strike Force Unit.

BOSTON – A Marblehead man pleaded guilty today to tax and bank fraud violations, primarily for recording fraudulent federal tax lien releases on properties he owned in Marblehead and Edgartown.

John C. McBride, 65, pleaded guilty before U.S. District Chief Judge Patti B. Saris to endeavoring to obstruct and impede the due administrations of the Internal Revenue laws and bank fraud.  McBride, who was indicted in June 2013, is scheduled to be sentenced on April 28, 2015.

In early 2008, McBride, a now-disbarred criminal defense lawyer, recorded six fraudulent federal tax lien releases against his Marblehead home, in order to obtain a $288,000 loan secured by that property and deprive the IRS of its nearly $700,000 secured interest.  McBride prepared the releases himself, without the knowledge or authorization of the IRS, and forged the signatures of IRS officials on them.  In March 2008, McBride attempted, unsuccessfully, to record two similar fraudulent tax lien releases against a second home he owned in Edgartown, on Martha’s Vineyard.  In 2011, McBride attempted to obtain a $387,000 reverse mortgage loan from Bank of America, which was to have been secured by his Edgartown property.  In connection with that loan application, McBride falsely told the bank that there were no liens on the Edgartown property and that he was not then in bankruptcy.  In fact, there were substantial liens on the property and McBride’s bankruptcy case, which he had filed in 2009, was still ongoing.  In furtherance of his effort to obtain the bank loan, McBride prepared and recorded a fraudulent and unauthorized discharge of mortgage which purported to discharge a more than $700,000 existing mortgage on his Edgartown property.  Bank of America discovered that the discharge was fraudulent before the loan closed, and no funds were disbursed to McBride.

The charge of bank fraud provides a sentence of no greater than 30 years in prison and three years of supervised release.  The charge of endeavoring to obstruct and impede the due administrations of the Internal Revenue laws is three years in prison and one year of supervised release.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; Robert E. O’Malley, Special Agent in Charge of the U.S. Treasury Inspector General for Tax Administration, Office of Investigations, New York Field Office (TIGTA); Vincent B. Lisi, Special Agent Charge of Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.

BOSTON – A Lowell chiropractor was sentenced today to nine months in prison for bribing an IRS agent.

Stephen Jacobs, 56, of Lowell, was sentenced to nine months in prison, two years of supervised release, and ordered to pay a $10,000 fine.  Jacobs must report to the custody of the Bureau of Prisons by Feb. 24, 2015.  In October 2014, Jacobs pleaded guilty before U.S. District Court Judge William G. Young to bribery of a public official.

In August 2013, an IRS auditor met with Jacobs, a chiropractor, to examine numerous issues with his federal income tax forms for 2011.  During the initial interview, the auditor advised Jacobs that two $5,000 payments were not allowable deductions after Jacobs admitted that each was a payment to two different women after they accused him of touching them inappropriately during medical treatments.  Jacobs told the auditor that he paid the women because he was concerned that they would report him to the police or to the chiropractic board.  Jacobs admitted that he had begun kissing one woman’s feet while he was treating her.  He also admitted to other inappropriate contact when he was giving the second woman a massage.

Jacobs asked the IRS auditor if there was anything he could do to “just deal with this…”  When the agent said he could not “just deal with this,” Jacobs became agitated and combative, ultimately threatening the agent that he would “ruin [his] career.”

The following month, after several electronically monitored discussions regarding his non-deductible expenses, Jacobs offered to bribe the auditor in exchange for terminating the examination, saying, “. . . you want a bribe? You want me to pay you?...”  The auditor, acting under the direction of law enforcement, then accepted Jacobs’s offer of $5,000 to give Jacobs a favorable audit letter showing no additional tax for one year and a small refund for the next year.  Jacobs paid the auditor $5,000 in cash for the favorable treatment.  

United States Attorney Carmen M. Ortiz and Robert O’Malley, Special Agent in Charge of the Treasury Inspector General for Tax Administration, made the announcement today. The case was prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit.

BOSTON – An armed career criminal was sentenced today in connection with the illegal sale of three guns and ammunition.

James Dawn, 48, of Brockton, was sentenced to 15 years in prison and three years of supervised release.  In Sept. 2014, Dawn pleaded guilty before U.S. District Judge Douglas P. Woodlock to being an armed career criminal, possessing a firearm and ammunition, and dealing in firearms without a license.

In March 2014, Dawn was arrested after he sold three guns – two pistols and one shotgun, along with ammunition for each weapon, to a cooperating witness on three separate occasions.  Dawn also offered other types of weapons for sale and discussed future “business.”  At the time, Dawn was a lifelong violent criminal.  He had numerous felony convictions, including two jail sentences for cocaine trafficking convictions, and numerous other convictions for violent crimes.

During the sentencing hearing, Judge Woodlock noted the seriousness of the offense and the need to protect the public from those, like Dawn, who sell guns illegally on the street.  Judge Woodlock also described Dawn’s extensive criminal record as a factor in his sentence.
 
United States Attorney Carmen M. Ortiz and Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Boston Field Division, made the announcement today.  The case was prosecuted by Assistant U.S. Attorney Glenn A. MacKinlay of Ortiz’s Strike Force Unit.

BOSTON – An attorney specializing in real estate closings and a co-conspirator were charged today with depositing almost $1 million in fraudulently obtained IRS refund checks into several different bank accounts, including the attorney's trust account, in an effort to launder the proceeds.

R. David Cohen, 63, and Francisco Oscar “Frank” Grullon, 48, both of Andover at the time of the alleged crime, were indicted on charges of conspiracy, conversion and receipt of stolen United States property, and conspiracy to commit money laundering.  Cohen was previously arrested by complaint on Dec. 17, 2014.  Grullon is believed to be outside of the United States.

According the indictment and an affidavit filed in the case, the investigation identified a scheme in which individuals filed fraudulent tax returns with fictitious W-2 information, usually a name and social security number of a resident of Puerto Rico, whose residents are not required to file federal income tax returns.  Once the fraudulent returns were accepted by the IRS, refund checks were sent to designated addresses in Lawrence, East Boston and New York controlled by his co-conspirators.

Beginning in October 2011, Cohen, Grullon and another co-conspirator deposited 152 fraudulently deposited tax refund checks totaling $993,677 into various local banks to launder them through Cohen’s “Interest On Lawyer’s Trust Accounts” (IOLTA), as well as through bank accounts in the name of AD Professional Association, Inc.  When questioned by bank officials about the large amount of third-party U.S. Treasury checks Cohen was depositing and negotiating through his IOLTA and personal accounts, Cohen falsely claimed that the payees were his clients. 

The charge of conspiracy provides a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000 or twice the loss or gain from the offense.  The charge of conversion and receipt of stolen U.S. property provides a sentence of no greater than 10 years in prison, three years of supervised release, a fine of $250,000 or twice the loss or gain from the offense.  The charge of money laundering provides a sentence of no greater than 20 years in prison, five years of supervised release, a fine of $500,000 or twice the value of the property involved in the transaction.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today.  The case was also investigated by the Department of Homeland Security and U.S. Secret Service. The case is being prosecuted by S. Theodore Merritt of Ortiz’s Public Corruption and Special Prosecutions Unit.

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

BOSTON – The Director of Technical and Development Operations at a South Boston-based media technology company was charged today in connection with his alleged theft of nearly one million dollars’ worth of iPads and other Apple products from his employer.

Michael S. Denning, 33, of Peabody, was charged in an Information with mail fraud and filing false tax returns.

The Information alleges that in late 2010, Denning began working at a South Boston-based media technology company where his job responsibilities included purchasing computer equipment, software, and other technology-based products for use by employees.  Shortly after he was hired, Denning began ordering extra Apple computer equipment, primarily iPads, from a wholesale computer vendor.  Denning then intercepted these packages and sold them for cash, initially on eBay and Craigslist, and later to eBay resellers.  Denning generated and submitted fraudulent invoices so that his company would pay the wholesale vendor.  In doing so, Denning changed the description on the invoices so that they appeared to be for other items that he had legitimately purchased, such as software licenses, toner cartridges, computer monitors and other items.  He also took measures to conceal the theft with the wholesale vendor, for instance by falsely noting that the iPads ordered were for “new hires.”  By the end of 2013, Denning, who was promoted to Director of Technical and Development Operations, had ordered almost one million dollars of Apple computer equipment in this manner when only a handful of these products were legitimate purchases.  Denning filed individual income tax returns that falsely listed his salary from as his employer as his only source of income.

The charge of mail fraud provides a statutory maximum sentence of 20 years in prison, three years of supervised release, and a fine of $250,000 or twice the gain or loss, whichever is greater.  The charge of filing false tax returns provides a sentence of no greater than three years in prison, one year of supervised release, a fine of $250,000 or twice the gain or loss.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the United States Postal Inspection Service; and William P. Offord, Special Agent In Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Amy Harman Burkart of Ortiz’s Cybercrime Unit.

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

Boston – Daiichi Sankyo, Inc., a global pharmaceutical company with its U.S. headquarters in New Jersey, has agreed to pay the United States and state Medicaid programs $39 million to resolve allegations that it violated the False Claims Act by using lavish meals and speaker program honoraria as kickback vehicles to induce physicians to prescribe the drugs Azor, Benicar, Tribenzor, and Welchol.

“Drug companies are prohibited from using lavish entertainment and padded speaker program payments to induce physicians to prescribe their drugs for beneficiaries of federal health care programs,” said Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts.  “Settlements like this one show that the government will continue to pursue health care companies that use kickbacks to promote their products.”

The settlement resolves allegations that Daiichi caused the submission of false claims for Azor, Benicar, Tribenzor, and Welchol.  The claims were false because they resulted from kickbacks that Daiichi provided to physicians who prescribed the drugs.  Specifically, it is alleged that Daiichi’s kickbacks took the form of honoraria payments, meals and other remuneration to physicians who participated, or supposedly participated, in Physician Opinion & Discussion programs (PODs) from Jan. 1, 2005, through March 31, 2011, and other speaker programs from Jan. 1, 2004, through Feb. 4, 2011.  The United States contends that the honoraria, meals and other remuneration were kickbacks because Daiichi paid physicians who participated in the speaker programs even if, among other things:  (1) the honoraria recipient spoke only to members of his or her own staff in his or her own office; (2) the physician participants in PODs took turns accepting a “speaker” honoraria for duplicative discussions; (3) the audience included the honoraria recipient’s spouse; (4) the honoraria recipient did not speak at all because the event was cancelled beforehand; and/or (5) the associated dinners were lavish and at times even exceeded Daiichi’s own internal cost limitations of $140 per person.

“The Anti-Kickback Statute prohibits payments intended to influence a physician’s ordering or prescribing decisions,” said Acting Assistant Attorney General Joyce R. Branda for the Department of Justice’s Civil Division.  “The Department of Justice is committed to preserving the independence and objectivity of those decisions, which is a cornerstone of our public health programs.”

"This settlement is evidence of the continuing efforts of the Defense Criminal Investigative Service and our law enforcement partners to protect medical beneficiaries and assure integrity within the pharmaceutical industry," said Craig W. Rupert, Special Agent in Charge of the DCIS Northeast Field Office, the investigative arm of the Office of the Inspector General, Department of Defense.  "The Department of Defense purchases substantial quantities of pharmaceuticals and is affected by fraud schemes within this industry. DCIS will continue to aggressively pursue allegations of fraud and corruption harmful to U.S. taxpayers and the Department."

"It is vital to veterans receiving care at the VA that they are prescribed safe and effective medications for the sole purpose of healing their ailments,” said Special Agent in Charge Jeffrey Hughes.  “The VA Office of Inspector General will continue to work with our partners in the law enforcement community to ensure that is the case.”

“Schemes such as this are particularly abhorrent,” said Inspector General Daniel R. Levinson for the U.S. Department of Health and Human Services.   “Manufacturers and physicians who engage in them are cheating Medicare and Medicaid out of millions of dollars and threatening programs upon which many elderly and disabled Americans rely.  My office will take whatever steps necessary to guard against improper alliances between manufacturers of drugs and those who prescribe them.  Through our Corporate Integrity Agreement we will be closely monitoring Daiichi.”

“This settlement is another example of the FBI’s commitment to ensure those who refuse to play by the rules and provide illegal incentives to influence the decision-making of health care providers are held accountable,” said Vincent B. Lisi, Special Agent in Charge of the FBI’s Boston Division.”

The Anti-Kickback Statute was enacted to ensure that physicians’ medical judgment is not compromised by improper payments or gifts.  The statute generally prohibits anyone from offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare and Medicaid.

As part of the settlement, Daiichi has agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General (HHS-OIG), which obligates Daiichi to undertake substantial internal compliance reforms for the next five years.

The settlement announced today stems from a complaint filed by Kathy Fragoules, a former Daiichi sales representative, under the whistleblower provisions of the False Claims Act, which authorize private parties to sue on behalf of the United States, and to receive a portion of any recovery.  Ms. Fragoules will receive $6.1 million of the federal recovery.

This matter was investigated by the Department of Defense Criminal Investigative Service; the Department of Veterans Affairs, Office of the Inspector General; HHS-OIG; and the Federal Bureau of Investigation.  The matter was handled by Assistant U.S. Attorneys Gregg Shapiro, Lisa Asiaf, and Giselle Joffre of Ortiz’ office; Department of Justice Trial Attorney Douglas Rosenthal; Zachary Cunha, currently an Assistant U.S. Attorney in the District of Rhode Island; and Kimberly Friday, currently an Assistant U.S. Attorney in the Northern District of California.

The case is captioned U.S. ex rel. Fragoules v. Daiichi Sankyo, Inc., Civil Action No. 10-10420 (D. Mass.).

BOSTON – A previously convicted felon pleaded guilty yesterday in connection with the sale of multiple firearms, including handguns with obliterated serial numbers.

Shayne Sullivan, 25, of Lowell, pleaded guilty to being a felon in possession of firearms and ammunition.  U.S. District Judge Richard G. Stearns scheduled sentencing for April 2, 2015.

On March 5, 2014, Sullivan, sold a .357 caliber revolver with an obliterated serial number as well as ammunition to an undercover agent for $600.  Eleven days later, Sullivan arranged for another convicted felon to sell several other firearms, including two revolvers with obliterated serial numbers and a rifle, to another criminal for $1,300.  Sullivan’s prior convictions include, among other offenses, armed robbery with a gun and assault and battery on a disabled person over the age of 65.

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

United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Lowell Police Superintendent William Taylor, made the announcement.  The case is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.

BOSTON – A former Springfield charter school principal was sentenced yesterday in U.S. District Court in Springfield for a federal felony in connection with assisting students to cheat on the MCAS.

Janet Henry, 42, was sentenced by U.S. District Judge Mark G. Mastroianni to one year of probation and a $500 fine.  In October 2014, Henry pleaded guilty to an Information charging her with mail fraud.

According to the Information, in 2009 Henry became Principal of the Robert M. Hughes Academy Charter School in Springfield.  In March and April 2009, the Massachusetts Comprehensive Assessment System (MCAS) tests were administered to the student body during which time Henry instructed teachers to give clues and other tips to students.  For example, if teachers saw students entering nonsense answers, then they were to tell students to review their answers again.  During preparation meetings, Henry stated to teachers that “this is where we earn our money,” and warned that the school could close or everyone would lose their jobs, if the test scores were not satisfactory.  On April 16, 2009, upon the completion of the MCAS examinations, Henry falsely certified that the tests had been administered honestly.

United States Attorney Carmen M. Ortiz; Brian M. Hickey, Special Agent in Charge of the U.S. Department of Education, Office of Inspector General, Northeast Region; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  The case was prosecuted by Assistant U.S. Attorney Kevin O'Regan of Ortiz’s Springfield Branch Office.

BOSTON – A Chicopee man was sentenced in U.S. District Court in Springfield yesterday for failing to register as a sex offender.

Joseph Trombley, 35, was sentenced by U.S. District Court Judge Michael A. Ponsor to 30 months in prison, and five years of supervised release.  In September 2014, Trombley pleaded guilty to failure to register as a sex offender.

From February 2013 to August 2013, Trombley traveled from Massachusetts to numerous other states and eventually settled in Colorado.  During that period, Trombley had outstanding arrest warrants for probation violations in a number of criminal cases from Massachusetts state court.  Following a 2006 conviction for unnatural acts with a child under the age of 16 in Northampton District Court, Trombley was required to register as a sex offender; however, he failed to do so in any of the states in which he resided between May 2013 and August 2013.

United States Attorney Carmen M. Ortiz and John Gibbons, U.S. Marshal of the U.S. Marshals Service, District of Massachusetts, made the announcement.  The case was prosecuted by Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Branch Office.

The case is brought as part of Project Safe Childhood.  In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse.  Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.

BOSTON – A Boston woman pleaded guilty yesterday to stealing over $135,000 in public housing benefits, which she obtained by lying about her living situation and employment.

Astride Dubuisson, 42, waived indictment and pleaded guilty to an Information charging her with stealing public money.  U.S. District Judge Nathaniel M. Gorton scheduled sentencing for April 9, 2015.

In 2006, Dubuisson applied to the Department of Housing and Urban Development (HUD) for housing benefits, claiming that she needed help paying rent for an apartment on Vernon Street in Hyde Park.  In fact, Dubuisson owned the entire Vernon Street building, which would disqualify her from receiving benefits.  Based on her falsehoods, HUD approved her application and began sending benefits checks to a fabricated landlord.  From 2006 to 2013, Dubuisson cashed those government checks, which totaled more than $135,000, and repeatedly lied about her ownership of the property and her income.

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

United States Attorney Carmen M. Ortiz and Cary Rubenstein, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, New York Regional Office, made the announcement today.  The case is being prosecuted by Eric P. Christofferson of Ortiz’s Economic Crimes Unit.

BOSTON – A former JetBlue Airways employee was sentenced today for smuggling thousands of dollars of what he believed to be drug money past security checkpoints at Logan International Airport.

Rupert Crossley, 26, of Lynn, was sentenced by U.S. District Court Judge William G. Young to two years in prison, one year of supervised release, and ordered to pay $4,000 in criminal forfeiture.  In October 2014, Crossley waived indictment and pleaded guilty to a four-count Information charging conspiracy to commit money laundering, conspiracy to defraud the United States, and two counts of illegally entering an airport area with intent to commit a felony.

In August 2012 and March 2013, a federal undercover operation revealed that Crossley used airport security credentials to evade TSA security and smuggle $85,000, which was represented to be drug proceeds, from non-secure airport areas such as curbside passenger drop-off/pick-up or public restrooms near baggage claim to secure areas of the airport such as passenger departure gates.  In return, Crossley received a total of $4,000 as compensation from a cooperating witness involved in the investigation.

Four co-defendants are alleged to have also used their airport credentials to evade security as part of the scheme.  Alvin Leacock, Eric Vick and Dino Dunkley were indicted in September 2014 on money laundering conspiracy, conspiracy to defraud the United States, money laundering, and illegally entering an airport area with intent to commit a felony.

Co-defendant Anthony Trotman pleaded guilty in October 2014 to a five-count Information charging money laundering conspiracy, conspiracy to defraud the United States, and three counts of illegally entering an airport area with intent to commit a felony.  Trotman is scheduled to be sentenced on Jan. 29, 2015 before U.S. District Court Judge Dennis Saylor.

United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today.  The case was investigated with the assistance of Bob Allison, Federal Security Director, Transportation Security Administration; Dwain Troutt, Special Agent in Charge, Federal Air Marshal Service; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police.  The U.S. Attorney’s Office would also like to acknowledge the assistance and cooperation of the Massachusetts Port Authority, JetBlue Airways Corporate Security and Delta Airlines.  The case was prosecuted by Assistant U.S. Attorneys Carlos A. Lpez of Ortiz’s Organized Crime Drug Enforcement Task Force Unit and Dustin Chao of Ortiz’s Public Corruption Unit.

BOSTON – More than $18,000,000 was seized from accounts connected to the owners of New England Compounding Center (NECC).  The funds were seized from 13 different financial institutions, pursuant to 26 seizure warrants issued by the federal court in Boston.  The seizure warrants were unsealed today.

Approximately $1,500,000 was seized from three accounts held by Barry J. Cadden, a shareholder and the head pharmacist of NECC.  Cadden was recently charged in a 131-count criminal indictment along with 13 other individuals, in connection with the 2012 fungal meningitis outbreak caused by contaminated medications made by NECC.  Among the charges that Cadden faces are 25 acts of second degree murder as well as mail fraud, conspiracy and violations of the Food, Drug and Cosmetic Act.

In addition, approximately $16,800,000 was frozen in accounts held by or connected to Carla Conigliaro, 51, and Douglas A. Conigliaro, 53, of Dedham, Mass.  Carla Conigliaro is the majority shareholder of NECC, and Douglas A. Conigliaro is her husband.  Both were recently charged with transferring assets following the 2012 fungal meningitis outbreak.

According to the allegations in the application for the seizure warrants unsealed today, the Conigliaros transferred millions the same month that NECC surrendered its pharmacy license and shortly before NECC’s petition for bankruptcy.  Carla and Douglas A. Conigliaro also allegedly transferred millions more after the bankruptcy court issued two orders prohibiting them from transferring any assets.

United States Attorney Carmen M. Ortiz; Jeffrey Ebersol, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations; and Shelly Binkowski, Postal Inspector in Charge of the U.S. Postal Inspection Service, Boston Division, made the announcement today.  The asset forfeiture seizures are being handled by Assistant U.S. Attorney Veronica M. Lei of Ortiz’s Asset Forfeiture Unit.  The case is being prosecuted by Assistant U.S. Attorneys George P. Varghese and Amanda P.M. Strachan of the Health Care Fraud Unit for the U.S. Attorney’s Office in the District of Massachusetts, and Trial Attorney John W.M. Claud of the Civil Division’s Consumer Protection Branch.

BOSTON - A Worcester woman was charged in federal court in Worcester today with lying to federal agents investigating child exploitation offenses which occurred at her home daycare.

Donna Belanger, 49, was charged with making false statements to the FBI about her son’s prior sexual assaults against children and about whether her son had been allowed unsupervised contact with the children in her home daycare center.

According to the criminal complaint affidavit, in February of this year FBI and Worcester Police executed a federal search warrant at the home of Donna Belanger, in connection with the arrest of her son, Brian Belanger, on charges of producing child pornography.  During the execution of that warrant, the FBI interviewed Donna Belanger about her knowledge of her son’s prior sexual assaults against children and whether her son had been allowed unsupervised contact with the children in her home day care.

While Donna admitted that her daycare had been shut down in June 2012 after an investigation of claims that her son Brian had sexually assaulted a child attending the daycare, Donna allegedly denied any other knowledge of her son sexually assaulting a child.  It further alleges that Donna repeatedly denied that Brian had ever been allowed unsupervised contact with the children in her day care.

According to the affidavit, a subsequent investigation, including interviews of Brian and other witnesses, revealed that Donna knew that her son Brian had previously sexually assaulted a six-year-old neighbor in 2005 and that she had allowed her son to have unsupervised access to the children in her home daycare.

According to the affidavit, Brian Belanger has admitted to sexually assaulting multiple children, both male and female, who had attended his mother’s home daycare center. 

Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.

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

United States Attorney Carmen M. Ortiz; Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division; and Chief Gary J. Gemme of the Worcester Police Department; made the announcement today.  The case is being prosecuted by Mark J. Grady and Karin M. Bell of Ortiz’s Worcester Branch Office.

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

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

BOSTON – An illegal alien residing in Chelsea was arrested last night on a complaint charging conspiracy to fraudulently issue identification documents.

Edwin Amaurys Parra Suarez (Parra), 37, was arrested in connection with a scheme to produce false identification documents.  The complaint affidavit alleges that from December 2012 through January 2013, Parra bribed an employee of the Revere office of the Massachusetts Registry of Motor Vehicles (RMV) in connection with a scheme to issue Massachusetts driver’s licenses to individuals who were not eligible to obtain such documentation.

According to the affidavit, Parra conspired with a RMV clerk to produce at least 29 Massachusetts drivers’ licenses for individuals who are not entitled to them.  Parra allegedly paid the clerk between $100 and $1,000 in cash for each of the fraudulent licenses.

This arrest is the most recent development in investigations involving identity theft and public corruption relating to the Massachusetts Registry of Motor Vehicles.

A probable cause hearing will be held on Jan. 7, 2015 at 2:15.  The charging statutes provide for a sentence of no more than five years in prison, three years of supervised release and a $250,000 fine.  Actual sentences for federal crimes are typically less than the statutory maximum penalties.  Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston; Colonel Timothy P. Alben, Superintendent of the Massachusetts States Police; David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office; and Cheryl Garcia, Acting Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, New York Regional Office, made the announcement today. The case is being prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit.

SPRINGFIELD - A Springfield landlord was convicted in federal court today of fraud and related charged in connection with fires at two of his Springfield properties.

Wilkenson Knaggs, 43, was convicted by a jury following a five-day trial of three counts of mail fraud,  two counts of negotiating checks with forged endorsements, and two counts of spending the mail fraud proceeds.   U.S. District Judge Mark Mastroianni scheduled sentencing for March 20, 2015.

Following a Nov. 16, 2008 fire at 376-378 Franklin Street in Springfield, Knaggs submitted a fraudulent contract for rehabilitating the three-family house in order to obtain a payout on his homeowner’s policy.  He also forged the endorsement of the City of Springfield on a second check, cashing the check at a Boston check cashing company, and using the proceeds to buy a two-family house at 99 Central Street.  In addition, Knaggs recorded the title to 99 Central Street in the name of a relative and used the relative to make a claim on the insurance policy after a March 7, 2010, fire at the Central Street property. 

The charging statutes provide for a sentence of no more than 20 years in prison, three years of supervised release and a $250,000 fine on each mail fraud count with lower maximum sentences on the other charges.  Actual sentences for federal crimes are typically less than the statutory maximum penalties.  Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Shelley Binkowski , Postal Inspector in Charge, United States Postal Inspection Service; and Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division made the announcement today.  The case is being prosecuted by Assistant U.S. Attorneys Karen Goodwin and Deepika Shukla of Ortiz’s Springfield Branch Office.

BOSTON – The former owner of a Lawrence-based financial services company was sentenced today for defrauding investors, filing false tax returns on behalf of certain clients, and filing his own false tax returns.

Robert Burton, 37, the former Managing Director of Pinnacle Financial Consulting LLC, Pinnacle Strategic Investments LLC, and the Pinnacle Asset and Capital Management Group LLC, was sentenced by U.S. District Court Senior Judge Mark L. Wolf to four years in prison, three years of supervised release, and ordered to pay $159,500 in restitution to the fraud victims, as well as $271,640 to the Internal Revenue Service.  In August 2014, he pleaded guilty to three counts of securities fraud, two counts of procuring false tax returns, and three counts of subscribing false tax returns.

Burton acted as an investment advisor to at least some of his clients and promised to invest their money in various securities, including stocks, mutual funds, and in a debt portfolio allegedly managed by Pinnacle.  In some instances, he promised to return the principal invested within approximately 30 days, along with an interest payment equal to 100% of the amount invested.  Burton did not invest the money as promised, did not make the promised payments and, in some instances, provided investors with checks that ultimately bounced.

Through Pinnacle, Burton also provided tax preparation services and, in at least two instances, prepared, and filed, false tax returns on behalf of his clients.  Finally, although Burton derived substantial income through the operation of Pinnacle, he failed to identify that income on his own tax returns and admitted to filing false tax returns for the 2008 through 2011 tax years.
 
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the U.S. Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today.  The Massachusetts Attorney General’s Office, which has a civil case pending against Burton, cooperated with the investigation.  The case was prosecuted by Assistant U.S. Attorney Sarah E. Walters, Chief of Ortiz’s Economic Crimes Unit.

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This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

BOSTON – A Dominican man, who most recently resided in Salem, was convicted yesterday of participating in a North Shore drug trafficking conspiracy.

Jaime Aristy, a/k/a Junito, 29, was convicted following a seven-day jury trial for conspiracy to possess with intent to distribute and distribution of cocaine, a Schedule II controlled substance.  In November 2012, Aristy was indicted.  U.S. District Court Judge Denise J. Casper scheduled sentencing for March 25, 2015.

Aristy was one of eleven defendants charged with participation in a large-scale cocaine trafficking conspiracy between 2009 and 2012.  The conspiracy included several members of the same family, including Jaime Aristy, who were involved in the distribution of multi-kilogram quantities of cocaine in Lynn, Salem, and Peabody.  The investigation included court-authorized wiretaps as well as the seizure of kilograms of cocaine, more than $100,000 in currency, and drug paraphernalia used by the criminal organization.  On Sept. 1, 2011, Aristy was arrested following a motor vehicle stop in Salem during which law enforcement officers recovered more than $93,000 in cash that was stashed in a shoe box on the back seat of the car, two cell phones used by the drug organization, and a drug ledger that reflected a series of drug transactions involving multiple kilograms of cocaine and tens of thousands of dollars.

The charging statute provides a sentence of no greater than 20 years in prison and a minimum of three years of supervised release.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement today.  The Salem Police Department and the Massachusetts State Police also assisted with the investigation.  The case was tried by Linda M. Ricci and David J. D'Addio of Ortiz’s Drug Task Force Unit.

BOSTON – Amber Lopresti, 28, of Taunton, was indicted for embezzling the U.S. mail and stealing the contents of the U.S. mail while she was an employee of the United States Postal Service in Hanover.

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

United States Attorney Carmen M. Ortiz; Rafael Medina, Special Agent In Charge of the U.S. Postal Service, Office of Inspector General, Northeast Area Field Office; and Hanover Police Chief Walter Sweeney, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.

BOSTON – A Dominican doctor and his assistant were sentenced today for their roles in altering the fingerprints of illegal aliens through a surgical process.

 Danilo Ramon Martinez, 61, was sentenced by U.S. District Court Judge Richard G. Stearns to 27 months in prison, three years of supervised release, and a fine of $5,000.  Martinez’s assistant, Teresa Araujo Ramirez, 40, was sentenced to 18 months in prison, and three years of supervised release.  It is anticipated that, upon completion of their sentences, Martinez and Ramirez will be deported to the Dominican Republic.  In December 2013, Ramon Martinez and Araujo Ramirez were indicted for conspiring to harbor illegal aliens by altering their fingerprints and to distribute controlled substances.

 Martinez, a licensed medical doctor in the Dominican Republic, performed surgery that altered the fingerprints of aliens illegally in the United States, thereby assisting in the concealment of their true identities and criminal histories.  Ramirez charged $4,000 for this service.  Araujo Ramirez assisted and supplied pain medications, including Oxycodone and other controlled substances, to the patients following the procedures. 
 
 United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The case was prosecuted prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.

BOSTON – A Baltimore man was sentenced today to 138 months in prison in connection with the sex trafficking of a 15-year-old girl.

Justin Richardson, 22, of Baltimore, Maryland was sentenced by U.S. District Judge Nathaniel M. Gorton to 138 months in prison and five years of supervised release.  In August 2014, Richardson pleaded guilty to recruiting and transporting a minor to engage in prostitution.  On Dec. 15, 2014, codefendant, Mark Pinnock, of Boston, was sentenced to eight years in prison, and a second codefendant, Martin Pinkney, also of Baltimore, will be sentenced on Dec. 22, 2014.  
 
In late December 2013, officers responded to an emergency call from a Cambridge hotel, where they found the 15-year old victim and Pinnock.  The minor stated that Richardson and Pinkney had arranged for her to travel by bus from Baltimore to Boston.  Pictures were taken of her in both Baltimore and Boston and used to post ads soliciting prostitution on the websites backpage.com and Craigslist.  While in Boston, the minor victim engaged in sex for a fee at the direction of Pinnock at two local hotels.  

United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; and Cambridge Police Commissioner Robert C. Haas, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorneys Seth Kosto and Carlos López, both members of Ortiz’s Civil Rights Enforcement Team.  The U.S. Attorney’s Office also wishes to thank the Middlesex County District Attorney Marian C. Ryan’s Office for its participation in the investigation.

The enforcement of federal civil rights laws is a high priority of the U.S. Attorney’s Office for the District of Massachusetts.  Since U.S. Attorney Ortiz created the Civil Rights Enforcement Team in 2010, the Office has substantially increased its efforts in civil and criminal civil rights enforcement actions. In the last four years, the Office has charged an increasing number of defendants with sex trafficking and other criminal civil rights violations.

BOSTON – Three individuals were charged today in U.S. District Court in Boston with distributing oxycodone via false prescriptions.

Leslie Credle, a/k/a Chanel, 48, of Jamaica Plain; William Ford, a/k/a Billy, 33, of Winthrop; and Lisette Carrasquillo, a/k/a Jacqueline, 37, of Allston were indicted on conspiracy to possess oxycodone with intent to distribute and conspiracy to obtain possession of oxycodone by misrepresentation, fraud, forgery, deception, or subterfuge.  On June 30, 2014, the defendants were originally charged by criminal complaint at which time Credle and Ford were arrested and have since been held in custody.  Carrasquillo was arrested on July 1, 2014 and was released on bond and pre-trial conditions.

According to court documents, beginning in November 2013, DEA investigators detected the diversion of a large amount of Oxycodone pills through fraudulent prescriptions filled at various pharmacies in eastern Massachusetts.  Through the investigation, law enforcement discovered that Credle forged multiple prescriptions, after which Ford, Carrasquillo, and others passed the created prescriptions for Oxycodone at Boston-area pharmacies.

For Credle, the charging statute provides a sentence of no greater than 30 years in prison, a lifetime of supervised release, and a fine $2 million.  For Ford and Carrasquillo, the charging statute provides a sentence of no greater than 20 years in prison, a lifetime of supervised release, and a fine of $1 million.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
 
United States Attorney Carmen M. Ortiz and Michael J. Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division made the announcement today.  The case was investigated by the DEA, Massachusetts State Police, Billerica Police Department, Boston Police Department, Dedham Police Department, Quincy Police Department, and Waltham Police Department; and in coordination with the Norfolk County District Attorney’s Office and the Suffolk County District Attorney’s Office.  The case is being prosecuted by Michael I. Yoon of Ortiz’s Organized Crime Drug Enforcement Task Force.

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

BOSTON – A Pennsylvania woman pleaded guilty yesterday in U.S. District Court in Boston to orchestrating a multi-million dollar investment fraud scheme that harmed scores of victims.

Patricia S. Miller, 68, pleaded guilty to five counts of wire fraud after being indicted in June 2014.  U.S. District Court Judge Leo T. Sorokin scheduled sentencing for March 10, 2015.

Miller used her position as a trusted financial adviser, as well as her association with a Massachusetts-based broker dealer, to obtain money from clients for purported investments that she never made on behalf of clients.  Specifically, Miller promised high returns if clients put their money into “investment clubs” called, among other things, “KS Investments” and “Buckharbor.”  Miller represented, among other things, that funds put into her “investment clubs” would be placed in fixed-income notes and other investments.  Miller was able to obtain over $2.5 million from more than 50 clients for these purported investment clubs.  Instead of investing the money as promised, she misappropriated client funds for her own use.

The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement.  U.S. Attorney Ortiz also expressed appreciation for the help and cooperation her office received from the U.S. Attorney’s Office for the Western District of Pennsylvania and the Federal Bureau of Investigation, Pittsburgh Field Division.  The case is being prosecuted by Assistant U.S. Attorney Ryan M. DiSantis of Ortiz’s Public Corruption Unit.
 
If you believe you are a victim of the crimes alleged against Patricia Miller, you may contact the United States Attorney’s Office for the District of Massachusetts at [email protected].  Identified victims will receive notification through the automated victim notification system.  If you have not received notification, and believe you should be included as a victim in this case, please contact the U.S. Attorney’s Office for the District of Massachusetts at [email protected].

Pittsburgh-Area Victims:

If you are a victim from the Pittsburgh, Pa. area, please contact the Victim Witness Unit at the U.S. Attorney’s Office for the Western District of Pennsylvania at (412) 644-3500.  Pittsburgh victims may also find information online at http://www.justice.gov/usao/paw.

 Today’s announcement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s Securities and Commodities Fraud Working Group. The interagency FFETF was created to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force, chaired by Attorney General Eric Holder, includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.

BOSTON – A Holden woman was sentenced today in U.S. District Court in Worcester in connection with a scheme to steal nearly $1 million from her elderly in-laws.

Chiao Fang Ku, 45, was sentenced by U.S. District Court Judge Timothy S. Hillman to 18 months in prison, one year of supervised release, and ordered to pay $954,571 in restitution.  In August 2014, Ku pleaded guilty to one count of wire fraud.

After Ku’s father-in-law became ill in 2008, Ku offered to help her mother-in-law manage the couple’s finances.  Ku was given access to her in-laws’ savings and investment accounts.  She thereafter began siphoning funds from those accounts through online transfers, forged checks, and cash withdrawals.  Ku used the money for on-line gambling activities and other personal uses.  She also obtained credit cards in her mother-in-law’s name without authorization, and then used those cards for personal expenses.  In total, Ku stole over $950,000 from her in-laws over a five-year period.

United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  The case was prosecuted by Eric P. Christofferson of Ortiz’s Economic Crimes Unit.

BOSTON – A Wakefield veteran pleaded guilty today to stealing $174,000 in benefits paid to him based upon falsified Vietnam War service records.

Albert L. Seely, 67, pleaded guilty today before Senior U.S. District Court Judge Rya W. Zobel.  Seely admitted to theft of government funds from October 1, 1999 through July 1, 2014.  Sentencing is scheduled for March 18, 2015.

Seely, a former U.S. Marine, was deployed to Vietnam and served there from 1966 to 1967.  In December 1970, Seely filed his discharge papers with the Veterans Benefit Administration (VBA) and misrepresented the dates and places of his deployment in Vietnam.  He also falsely listed numerous decorations, including two Purple Hearts, a Vietnam Cross of Gallantry, a Bronze Star, and a Silver Star.  In March 1999, Seely applied for and received VBA disability payments based upon his false claims of combat and valor.  He ultimately fraudulently obtained $174,656 in government benefits.  In February 2014, the VBA terminated his benefits after his fraud was revealed.

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

 United States Attorney Carmen M. Ortiz, and Jeffrey G. Hughes, Special Agent in Charge of the Department of Veterans Affairs, Office of Inspector General, Northeast Field Office, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crime Unit.

BOSTON – A Billerica woman was sentenced yesterday for wire fraud charges in connection with a bogus bank guaranty program.

Diane Glatfelter, 48, was sentenced by U.S. District Judge Douglas P. Woodlock to 30 months in prison, three years of supervised release, and ordered to pay $1,575,000 in restitution.  In September 2014, Glatfelter was found guilty following a five-day jury trial of four counts of wire fraud.

In 2007 and 2008, Glatfelter engaged in a scheme to defraud a young real estate businessman from California who was seeking funding for a development project.  Glatfelter promised to secure a $20 million loan for him, but required him to pay $125,000 in up-front fees.  The loan never materialized.  Glatfelter used the money for various purposes other than to secure any funding.  As part of her scam, Glatfelter set up two bogus front companies and used her unsuspecting sister to make these fronts appear legitimate.   
 
At sentencing, Glatfelter was also held accountable for an additional $1,450,000 in fraud against four other victims in connection with three transactions during the same time period.  Glatfelter promised all of the victims that through the efforts of K2 Unlimited and 211 Ventures, she could procure huge sums of money for their projects (up to $100 million), but they would need to pay a percentage of the amount sought up-front in order for her to procure the bank guarantee or the loan, or to participate in the trade program.  The victims wired their payments to Glatfelter’s 211 Ventures and K2 bank accounts, in one instance to her lawyer’s bank account, and thereafter, Glatfelter disbursed the funds to her business partner and to her own temporary staffing agency.  She never procured the funding.  Glatfelter also provided false reasons for the delays in funding.

United States Attorney Carmen M. Ortiz; Lisa A. Quinn, Special Agent in Charge of the U.S. Secret Service; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston,  made the announcement.  The case was prosecuted by Assistant U.S. Attorneys Sandra S. Bower and Christine J. Wichers of Ortiz’s Economic Crimes Unit and Civil Division, respectively.