District of Massachusetts
Press releases recorded for this federal judicial district.
Massachusetts Man Sentenced for Making Hoax Emergency Services Calls to Elicit Swat Team ResponseRead the Press Release
BOSTON – An Athol, Mass., man was sentenced today for engaging in an illegal practice known as “swatting,” in which he made hoax emergency telephone calls and falsely reported an ongoing, dangerous crime in order to elicit an armed police response (from a SWAT team) to a specific location, typically in order to harass someone he believed was there.
Nathan Hanshaw, 22, was sentenced to 30 months in prison by U.S. District Court Judge Timothy Hillman as agreed upon in the plea agreement. In August 2013, Hanshaw pleaded guilty to a three-count information charging him with making interstate threats, threats to use explosives, and threats to use a firearm.
Hanshaw, in his swatting calls, typically claimed that he was a fugitive who was wanted by the authorities, was armed with weapons, explosives, and nerve agents, and that he had taken hostages. He demanded cash and a helicopter ride to Mexico and threatened to detonate his bombs and kill his hostages if his demands were not met. He also threatened to kill any law enforcement personnel who arrived at the location. Hanshaw generally claimed to be calling from an address that, unbeknownst to the law enforcement officers responding to the call, was the address of his intended swatting victim
From September 2012 through mid-January 2013, Hanshaw made swatting calls to emergency services numbers across the United States, including Denver, Colorado; Ventura, California; and Waverly, New York. In each case, armed police responses ensued. In response to Hanshaw’s swatting call to Ventura, California, for example, more than 40 local and federal officers arrived at the purported crime scene, a hotel was evacuated, and nearby streets were closed for several hours. His “swatting” activities created a serious risk of physical harm to innocent victims and caused extensive disruptions to important public services.
Acting Assistant Attorney General Mythli Raman and United States Attorney Carmen M. Ortiz made the announcement today. The case was investigated by the Federal Bureau of Investigation with significant assistance from the Massachusetts State Police and the Ventura Country Sherriff’s Department. The case is being prosecuted by Trial Attorney Mona Sedky of the Department of Justice’s Computer Crime and Intellectual Property Section, Criminal Division, and Assistant U.S. Attorney Adam Bookbinder in Ortiz’s Computer Crimes Unit.
Justice Department Files Lawsuit Against Iron Workers Union and Pension Fund to Enforce the Employment Rights of Navy Reserve MemberRead the Press Release
BOSTON - The Civil Rights Division and U.S. Attorney Carmen M. Ortiz announced today the filing of a complaint alleging that the Iron Workers District Council of New England Pension Fund (the Pension Fund) and the Trustees of the Iron Workers District Council of New England Pension Fund (the Trustees) willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to credit U.S. Navy Reserve Member Thomas Shea, a member of the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, Local 7 (the Union), with service time while he was serving in the armed forces in Afghanistan. The suit was filed in the Federal District Court for the District of Massachusetts.
USERRA requires that service members who leave their civilian jobs to serve in the military be treated as not having incurred a break in service with regard to their pension plans. USERRA further provides that each period served by a person in the uniformed services shall, upon reemployment, be deemed to constitute service with the employer or employers maintaining the plan for the purpose of determining the nonforfeitability of the person's accrued benefits and for the purpose of determining the accrual of benefits under the plan.
The complaint alleges that the Pension Fund and the Trustees violated USERRA by refusing to grant Shea pension credits that he earned while on military duty unless and until he (1) worked at least 300 hours in the one-year period following his discharge from the military; and (2) accrued 2.5 pension credits, which is equal to 3,000 hours, in the subsequent five-year period following his release from active duty. Both of these requirements exceed the requirements placed on members of the Pension Fund who do not take military leave and therefore violate USERRA. The complaint also seeks back payment of annuity contributions that were not made while Shea was on active duty.
“Reservists who are called to active duty sacrifice time away from their jobs to serve their country,” said Ortiz. “USERRA ensures that they are not discriminated against after they have returned from service and their employment rights are protected. We are committed to vigorously enforcing USERRA’s protections.”
“It is important for all employers and their organizations to realize that the Labor Department is here to protect the employment and reemployment rights of American service members under USERRA,” said Assistant Secretary Keith Kelly of the Veterans' Employment and Training Service. “We owe these brave Americans every protection when they return from their military obligations.”
The U.S. Department of Labor’s Veterans Employment and Training Service investigated Shea’s allegations with the assistance of the Department of Labor’s Office of Regional Solicitor. This case is being handled jointly by the Civil Rights Division in Washington, D.C. and the U.S. Attorney’s Office for the District of Massachusetts.
Civil rights enforcement is a top priority of the Department of Justice and District of Massachusetts. Additional information about USERRA can be found on the Justice Department website: www.servicemembers.gov and www.usdoj.gov/crt/emp, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm
Former Executive Director of Chelsea Housing Authority Charged with Conspiring to Defraud the United StatesRead the Press Release
BOSTON – The former Executive Director and Assistant Executive Director of the Chelsea Housing Authority (CHA) as well as an inspection consultant were charged today for their roles in rigging the inspection process for federally-funded housing units at the CHA.
Michael E. McLaughlin, 67, of Dracut; James H. Fitzpatrick, 63 of Acton; and Bernard J. Morosco, 50, of Utica, NY were indicted for conspiring to defraud the United States and the U.S. Department of Housing and Urban Development (HUD) by impairing, impeding, and defeating the proper operation of the physical condition assessment by HUD’s Real Estate Assessment Center (REAC), which relies on a statistically valid random sample of units to inspect.
According to the Indictment, pursuant to federal regulations to determine whether a
public housing authority is meeting the standard for its residents of conditions that are “decent, safe, sanitary, and in good repair,” REAC is required to “provide for an independent physical inspection of a public housing authority’s property or properties that includes, at a minimum, a statistically valid sample of the units in the PHA’s public housing portfolio to determine the extent of compliance with the standard.” REAC inspections are conducted by independent contractors who have received training from REAC on the inspection protocol and regulations and have been certified. Once certified, an inspector is given an inspector number and password to access the secure REAC server which contains data on all public housing authorities and also later enables the inspector to generate a random sample of units at the scheduled date of the inspection.
The indictment alleges that from 2006 through November 2011, McLaughlin and Fitzpatrick conspired with Morosco, whom they hired as a consultant for the REAC inspection process in those years. Morosco, himself a certified REAC inspector who had access to the secure REAC database, identified in advance the units of the CHA that would be randomly selected to be inspected by the assigned HUD REAC inspector on the day of the inspection. Morosco then provided to McLaughlin and Fitzpatrick a list of those units to be inspected sufficiently in advance of the inspection so that they could organize and direct REAC “SWAT” Teams of CHA employees to concentrate on ensuring that any needed repairs would be made to those identified units. When the REAC inspectors conducted the inspections in 2007, 2009 and 2011, the units that were randomly selected were the same as the ones provided in advance by Morosco.“Today’s indictment alleges a serious breach of public trust that affected residents of public housing, people who depend on the integrity of federally funded housing authorities to have a decent place to live,” said United States Attorney Carmen M. Ortiz. “This office remains committed to ensuring that taxpayer dollars spent on federally-funded housing units are used appropriately and that those who are entrusted with those funds are held accountable for actions that abuse that trust.”
“The charges made today prove our continuing resolve to root out corruption in all forms, especially the kind that ultimately hurts our most financially needy and deserving families who reside in public housing,” said Special Agent in Charge of U.S. Department of Housing and Urban Development, Office of Inspector General Christina Scaringi.
If convicted, McLaughlin, Fitzpatrick and Morosco each face a statutory maximum of five years in prison, three years of supervised release, and $250,000 fine.
USA Ortiz and SAC Scaringi announced the indictment today.
The case is being prosecuted by Assistant U.S. Attorney S. Theodore Merritt of the Public Corruption and Special Prosecutions Unit.
The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Member of Drug and Money Laundering Conspiracy SentencedRead the Press Release
BOSTON – A leading member of a drug trafficking and money laundering conspiracy was sentenced yesterday after a multi-year FBI task force investigation into illegal activity in Boston’s Chinatown.
Brant Welty, 41, of South Boston, was sentenced by United States District Court Judge Joseph L. Tauro to 100 months in prison and ordered to pay a criminal forfeiture money judgment of $85,500. In March 2013, he pleaded guilty to conspiracy to distribute oxycodone and money laundering conspiracy. Welty, along with 12 others, was first charged in 2011 for a conspiracy which spanned Massachusetts, Florida, New York, Rhode Island, South Carolina and elsewhere, trafficked hundreds of thousands of oxycodone pills and generated over $4 million in proceeds.
The FBI’s Organized Crime Task Force led a long-term investigation into drug-trafficking, illegal gambling, extortion, prostitution, and other criminal activity in Boston’s Chinatown and elsewhere. The investigation included a seven month, court-authorized wire surveillance of cell phones, including the phones of five of the defendants associated with the conspiracy. The investigation has resulted in the seizure of over $480,000 in cash, a 38-foot speed boat, numerous luxury vehicles, 13 firearms and approximately 12,000 oxycodone pills. Investigators also uncovered extensive evidence of illegal gambling and prostitution as well as the use of extortionate threats to collect loans to gamblers and others.The following were also convicted of the drug-trafficking conspiracy and, in the cases of some defendants, money laundering conspiracy: John Willis a/k/a Bac Guai John (White Devil John), 42, of Dorchester, the leader of the conspiracy, sentenced to 20 years; Kevin Baranowski, 41, of Boston, sentenced to 80 months; Peter Melendez, 50, of Sunrise, Fla., sentenced to 160 months; Colby Deering, 41, of Quincy, sentenced to 60 months; Brian Bowes, 42, of Sunrise, Fla., sentenced to 57 months; and Michael Clemente, 29 of Sunrise, Fla., sentenced to 36 months. Bridget Welty, 40, of Boston, was convicted of structuring and was sentenced to one year of supervised release. Anh Nguyen, 28, of Boston, was convicted of witness tampering, and sentenced to one year of probation. Aibun Eng, 38, of Quincy, was convicted of drug conspiracy and has yet to be sentenced.
In another case arising from this investigation, the following defendants were convicted of operating an illegal gambling business, which had been based at 17-23 Beach Street in Chinatown since 2010. Minh Cam Luong, a/k/a Ming Jai, 46; Hin Pau, 45; Judy Huyen Truong, 41, of Quincy; Jian Ming Chen, 38, of Brighton; Elburke Lamson, 47, of Chelsea; and Tan Ngo, 54, of Waltham. Luong and Pau also were convicted of conspiring to use and/or using extortionate means, including threats or actual use of violence, to collect debts, including debts owed to the illegal gambling business.
Luong, was sentenced to 84 months; Pau to 96 months; Chen to one year and one day; Lamson to six months; Ngo to18 months; and Truong to time served and seven months supervised release. Chien Van Tran, 43, of Malden, whose case is pending, is charged with operating an illegal gambling business and extortion conspiracy.
In another case arising from this investigation, Wei Xing Chen, 50, of Cambridge, was convicted of possession with intent to distribute benzylpiperazine (BZP), also known as ecstasy, and conspiracy to distribute BZP. In addition, Chen and Xiaohong Xue, 41, of Cambridge, were convicted of conspiring to induce travel to engage in prostitution. Chen also was convicted of money laundering conspiracy. Chen, who operated brothels in Cambridge and Boston, was sentenced to 70 months while Xue was sentenced to two years of probation, including six months of home detention.
Several members of the drug conspiracy, including Brant Welty and John Willis, frequented Chen’s brothels and/or Luong’s gambling den. Employees of Luong’s gambling business frequented Chen’s brothels. Some of Luong’s employees associated with Willis, and Willis also served as an enforcer for Chen.
In a final case arising from this investigation, brothers Stanley Gonsalves, 34, of Sandwich, and Joshua Gonsalves, 33, of Dennisport, have been charged with distribution and conspiracy to possess with intent to distribute oxycodone. Both defendants are detained pending trial.
U.S. Attorney Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was investigated by the FBI’s Organized Crime Task Force which includes IRS Criminal Investigation, Massachusetts State Police, Massachusetts Department of Correction, and Quincy, Medford and Boston Police Departments. Assistance was also received from the DEA, ICE Homeland Security Investigations, Cambridge Police Department, New York City Police Department, Broward County (Fla.) Sheriff’s Office and the Ridgeland and Dillon Police Departments in South Carolina. The case was prosecuted by Assistant U.S. Attorneys Timothy E. Moran and Richard L. Hoffman of Ortiz's Strike Force Unit.
Two Men Sentenced to Federal Prison for Their Roles in International High-Yield Investment SchemeRead the Press Release
Octuber 18, 2013BOSTON – Two men were sentenced today for their roles in a scheme to defraud investors from across the country out of millions of dollars.
Alan Gilner, 78, of New Smyrna Beach, Fla., and Randi A. Bochinski, 49, of British Columbia, Canada, were sentenced by United States District Court Judge Douglas P. Woodlock. Gilner was sentenced to 84 months in prison, three years of supervised release, and ordered to pay $5.2 million in restitution. In June 2012, Gilner was convicted of conspiracy, mail fraud, wire fraud and money laundering following a seven-day jury trial. Bochinski was sentenced to 72 months in prison; three years of supervised release, and ordered to pay $5.2 million in restitution. In May 2013, Bochinski pleaded guilty to wire fraud, mail fraud, and money laundering for his role in the scheme.
Gilner and Bochinski promoted a series of purported high-yield investment programs to investors throughout the United States, including friends and acquaintances of Gilner in Florida, as well as individuals in Massachusetts, Pennsylvania, Nevada, and Virginia. The men promised extraordinary rates of return on the investments within a short period of time, and also pledged that investors’ principal would be insured or maintained in an escrow account. Once investors sent their money to either Gilner or Bochinski, however, the defendants diverted the funds for other uses, including their own personal use.
In order to lull investors into believing that their funds had been invested as promised, Bochinski and Gilner typically made at least some purported “return” payments using money from other investors. In some instances, Bochinski and Gilner attempted to return principal to frustrated investors by using counterfeit checks.
Three Lynn Residents Sentenced in Mortgage Fraud CaseRead the Press Release
Octuber 18, 2013BOSTON – Three members of a Lynn family were sentenced today for their roles in a mortgage fraud scheme.
United States Attorney Carmen M. Ortiz and Steven Ricciardi, Special Agent in Charge of the United States Secret Service, made the announcement today. The case was investigated in cooperation with the Massachusetts State Police and the Lynn Police Department. The case was prosecuted by Assistant U.S. Attorneys John A. Capin and Brian Perez-Daple.
Steven Soto, 28, and his parents, Pedro Soto, 48, and Carmen Soto, 47, of Lynn were sentenced by U.S. District Judge Mark L. Wolf. Steven Soto was sentenced to 65 months in prison and four years of supervised release. Pedro Soto was sentenced to 48 months in prison, and three years of supervised release. Both men were ordered to pay $1,055,474 in restitution. Carmen Soto was sentenced to one year in prison, three years of supervised release, six months of home confinement, and $792,559 in restitution. Each defendant was convicted by a jury of multiple counts of mail fraud. On June 21, 2013, Steve and Pedro Soto were also convicted of aggravated identity theft.
The Soto’s operated Paradise Real Estate in Lynn and engaged in a scheme to defraud financial institutions by acquiring mortgage loans under false pretenses, including lying about the qualifications and identities of the borrowers taking out the loans. The scheme included one or more of the Sotos posing as others, recruiting straw purchasers, and submitting false loan applications. By doing so, the Sotos concealed their own roles in the mortgage scams. The Court found the loss associated with the scheme was over $1 million.Former Financial Aid Advisor Sentenced for Stealing over $62,000 in Student Financial AidRead the Press Release
BOSTON – A former financial aid advisor at a Brockton training school was sentenced today for stealing $84,298 in student financial aid.
Ayana Bean, 39, of Hyde Park, was sentenced to 12 months and a day in prison for theft or bribery concerning programs receiving federal funds.
Sullivan and Cogliano Training Centers (SCTC) is a for-profit career training school that offers certificate programs in information technology and other careers. The office of Federal Student Aid within the U.S. Department of Education administers financial aid to eligible students attending educational institutions around the country. Whenever an educational institution, such as SCTC, disburses federal financial aid funds by crediting a student’s account, and the total amount of all federal financial aid funds credited exceeds the amount of tuition and fees, room and board, and other authorized charges, the institution must pay the resulting credit balance directly to the student, often in the form of what is known as a federal financial aid refund check.In July 2010, Bean was employed by SCTC as a financial aid advisor. As part of her responsibilities, Bean also had access to SCTC students’ federal financial aid refund checks. On Aug. 15, 2012, a SCTC student contacted SCTC about the status of her federal financial aid refund check. SCTC staff determined that Bean had stolen the student’s check, forged the student’s endorsement, and deposited the check into a personal bank account. A subsequent investigation revealed that Bean had mishandled and stolen approximately 100 federal financial aid refund checks between June 2011 and August 2012. ATM surveillance images show Bean depositing some of the checks into her personal bank accounts.
In December 2005, Bean was convicted in Suffolk Superior Court on multiple counts of uttering false and forged records and larceny. In that case, Bean stole just under $240,000 worth of federal financial aid refund checks from two local colleges. Bean was sentenced to two years in prison; she served six months of that sentence followed by three years of probation.
United States Attorney Carmen M. Ortiz; Brian Hickey, Special Agent in Charge of the U.S. Department of Education, Office of Inspector General; and Chief Emanuel Gomes of the Brockton Police Department, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Maxim Grinberg of Ortiz’s Major Crimes Unit.
Newburyport Man Sentenced to 10 Months in Prison for Social Security FraudRead the Press Release
BOSTON - A Newburyport man was sentenced today for theft of public money.
John Flaherty, 61, was sentenced by U.S. District Court Judge Denise J. Casper to 10 months in prison, followed by one year of supervised release. He was also ordered to pay $168,830 in restitution to the Social Security Administration. In June 2013, Flaherty pleaded guilty to theft of public money.
From 1999 to 2012, Flaherty took monthly Social Security Widow's benefits intended for his mother, who was deceased. The payments totaled $168,830.
United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of the Office of Inspector General, Social Security Administration, Office of Investigations – Boston Field Division, made the announcement today. The case was prosecuted by Timothy Landry of Ortiz’s Major Crimes Unit.
Westminster Developer Arrested, Charged with Bank FraudRead the Press Release
BOSTON – A Westminster man was charged today in U.S. District Court in Worcester with defrauding Colonial Cooperative Bank in Gardner, Mass.
Lance N. Korich, 53, was indicted with four counts of bank fraud.
The indictment alleges that, from 2008 to 2010, Korich applied for four construction loans at Colonial Cooperative Bank in Gardner. In support of those loans, Korich submitted false and fraudulent purchase and sale agreements. In particular, Korich fabricated the names of the purported home buyers and forged their signatures on the purchase and sale agreements.
If convicted, Korich faces up to 30 years in prison, five years of supervised release and a $1 million fine.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Karin M. Bell of Ortiz’s Worcester Branch Office.
The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Worcester Businessman Charged with Attempted BriberyRead the Press Release
BOSTON – A Worcester man was charged today in U.S. District Court in Worcester with trying to bribe a federal safety investigator in order to avoid negative findings on a safety review of his motor carrier company.
Irfan Dushku, 43, was charged in a one-count Information with bribery of a public official.
The Information alleges that Dushku paid $1,000 to a Federal Motor Carrier Safety Administration (FMCSA) Safety Investigator in May 2013 to influence the safety investigator to produce a false compliance review of Dushku’s motor carrier company, Korca Enterprises, Inc.
The FMCSA is a separate administration within the United States Department of Transportation. The responsibilities of the FMCSA include the development and enforcement of federal regulations that promote motor carrier safety, and the establishment of safe operating requirements for commercial drivers, carriers, vehicles and vehicle equipment.
If convicted, Dushku faces a maximum sentence of 15 years in prison, three years of supervised release and a fine equal to the greater of $250,000 or three times the value of the bribe.
United States Attorney Carmen M. Ortiz and Theodore L. Doherty, III, Special Agent in Charge of the U.S. Department of Transportation, Office of Inspector General, Office of Investigations made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kristina E. Barclay of Ortiz’s Public Corruption and Special Prosecutions Unit.The details contained 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.
Springfield Man Indicted on Federal Firearms ChargesRead the Press Release
BOSTON – A Springfield man was charged today in U.S. District Court in Springfield with possession of a firearm and ammunition as a convicted felon.
Randy Rivera, 34, formerly of Springfield, was indicted with being a convicted felon in possession of a firearm.
The indictment alleges that on January 4, 2013, Rivera, who is a convicted felon, possessed a Smith & Wesson, model M&P 9C, 9mm pistol, and17 rounds of 9mm ammunition.
If convicted, Rivera faces a mandatory sentence of 15 years in prison, five years of supervised release and a $250,000 fine.
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 John Arvanitis, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kevin O’Regan of Ortiz’s Springfield Branch Office.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Pembroke Man Charged with Tax CrimesRead the Press Release
BOSTON - A Pembroke man has been charged with tax evasion and related offenses including sending documents to the Secretary of the Treasury demanding payment of $100 billion.
Theordore Hammond, Jr., 59, was indicted with two counts of tax evasion, seven counts of filing false tax returns, two counts of making false claims, and endeavoring to impede the IRS. The indictment was unsealed yesterday after Hammond was arrested.
The indictment alleges that Hammond was a self-employed carpenter for many years and, between 1998 and 2008, earned income of about $1.1 million. During that same period, Hammond failed to timely file federal income tax returns and, when he did file, reported zero income on most of the returns. Hammond also filed two returns for tax year 2008, falsely claiming he was owed refunds totaling more than $1.6 million. The indictment also alleges that, as the IRS attempted to collect the income taxes Hammond owed, Hammond took numerous steps to frustrate those collection efforts, including threatening to file improper liens against the Revenue Officer, refusing to provide records to the IRS, instructing an employer not to use Hammond’s Social Security Number on an IRS payment form, and sending documents to the then-Secretary of the Treasury demanding payment of $100 billion.
If convicted of the tax evasion or false claim counts, Hammond could serve a maximum penalty of five years in prison, three years of supervised release, and a $250,000 fine or twice the gross gain or loss, whichever is greater. If he is convicted of filing false tax returns or endeavoring to impede the IRS, he could a maximum penalty of three years in prison, one year of supervised release, and a $250,000 fine or twice the gross gain or loss, whichever is greater.
United States Attorney Carmen M. Ortiz and John G. Collins, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Christine Wichers of Ortiz’s Civil Division and Sandra S. Bower of the Economic Crimes Unit.The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Financing Consultant Sentenced to for Securities Fraud SchemeRead the Press Release
BOSTON - A self-described financing consultant to small and emerging companies was sentenced yesterday for his role in a kickback scheme.
James L. Prange, 63, of Greenbush, Wis., was sentenced by United States District Court Judge Nathaniel M. Gorton to 30 months in prison, two years of supervised release, a $15,250 fine and forfeiture.. In May 2013, Prange was convicted by a jury of conspiracy to commit securities fraud, wire fraud and mail fraud.
Prange was sentenced for his role in a scheme to pay secret kickbacks to an investment fund representative who had agreed to use the fund’s money to buy stock in three companies that had hired Prange’s firm, Northern Equity, to help them raise capital. The kickbacks were concealed through the use of sham consulting agreements and other fraudulent documents. Prange and the company executives were unaware that the purported investment fund representative was actually an undercover agent with the Federal Bureau of Investigation.
The conviction and sentence followed a year-long investigation focusing on preventing fraud in the micro-cap stock markets. Microcap companies are small publicly traded companies whose stock often trades at pennies a share. Fraud in the microcap markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the Securities Exchange Commission.
Executives of three publicly traded companies who were also charged as part of the undercover operation were sentenced in the last two months. In August, Karen L. Person, 62, of Las Vegas, Nev., the chief executive officer of SBCO, Inc., and John C. Jordan, 62, of Cameron Park, Calif., the chief executive officer of Vida Life International Ltd., were each sentenced to 30 months in prison for their roles in the scheme. Person pleaded guilty to conspiracy to commit securities fraud and Jordan was convicted after trial on multiple counts of conspiracy to commit securities fraud and wire fraud. In July, Steven Berman, 50, of Ohio, the former chief executive officer of China Wi-Max Communications, Inc., and Richard Kranitz, 69, a Wisconsin securities attorney who served as an adviser and a member of the board of directors of China Wi-Max, were each sentenced to 18 months after pleading guilty to conspiracy to commit securities fraud.
The Securities and Exchange Commission, which conducted a parallel civil investigation alongside the FBI undercover operation, cooperated with criminal authorities in bringing these, and charges against 10 other defendants who participated in the kickback scheme. Eight of those defendants have already pleaded guilty to charges arising out of their involvement in the scheme.United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Sarah E. Walters, Stephen E. Frank, and Vassili Thomadakis of Ortiz’s Economic Crimes Unit.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
U.S. Attorney Carmen M. Ortiz Delivers Remarks at 5th Annual U.S. Export Control ConferenceRead the Press Release
It is my pleasure to welcome you to the 5th annual Massachusetts Counter-Proliferation Working Group Conference. Thank you for taking the time to be here with us today.
In December 2007, almost six years ago, a multi-agency initiative was launched in this district to combat the growing national security threat posed by illegal exports of restricted U.S. military and dual-use technology to foreign nationals and terrorist organizations. Since 2007, our Counter-Proliferation Working Group, consisting of representatives of law enforcement and intelligence agencies, have been working together to coordinate investigations and share information regarding current threats and suspicious activities regarding the transfer of sensitive U.S. technology and information through illegal means.
The proliferation of weapons of mass destruction is one of the greatest threats our country faces today. The WMD threat is not isolated to a single country. For instance, while Iran is aggressively seeking U.S. origin goods to further its nuclear capabilities, terrorist groups are actively seeking to develop chemical weapons and obtain components for improvised explosive devices. Preventing our adversaries from obtaining U.S. export restricted technology is therefore one of our highest priorities. It is clear, however, that the government cannot guard our nation from this immense threat alone; we need the help of our business and academic partners to safeguard sensitive U.S. technology.
In addition, America faces a growing number of espionage threats, ranging from the activities of foreign intelligence services and terrorist groups, to emerging cyber-threats, to increasingly sophisticated operations to obtain trade secrets and technical data concerning U.S. military and dual-use technologies. Foreign states and terrorist organizations routinely seek arms, technology, and other materials from the United States to advance their technology capacity, weapons systems, and in some cases, weapons of mass destruction programs.
Foreign governments are aggressive in their efforts to illegally acquire U.S. technology and technical data. With each passing year, our adversaries become more creative and advanced in their methods to steal our technology. For instance, they have been observed directly targeting U.S. firms; employing commercial firms in the U.S. and third countries to acquire U.S. technology; and recruiting students, professors, and scientists to engage in technology collection.
Three months ago, President Obama called the cyber threat Aone of the most serious economic and national security challenges we face as a nation.@ Private companies are invaluable to handling these threats and often act as our first line of defense. Cyber intrusions are occurring more and more frequently. While prevention is the ultimate goal, we must also focus on disruption. This requires your help and assistance.
The speakers today will be addressing a number of extremely important topics, including the importance of protecting US technology and technical data, how to comply with U.S. export laws, how to protect your technology, and the ongoing threat posed by cyberattacks.
We ask for your help and partnership in protecting our nation’s national and economic security. Please report any suspicious contacts, inquiries and cyber intrusions. Even one suspicious email or call might expose an illegal procurement network or scheme to acquire critical U.S. technology. We ask for your help in keeping our country and our military troops safe.
Once again, I thank you for your participation and continued cooperation. I hope you all find today’s conference both beneficial and interesting.
Operators of Lowell Temp Agency Charged with Tax and Insurance FraudRead the Press Release
BOSTON – Four Lowell residents who operated a temporary employment agency have been charged with running an off-the-books payroll scheme, paying employees millions of dollars, evading employment taxes and workers compensation premiums.
Margaret Mathes, 67, Boseba Prum, 47, Sam Pich, 63, and Thaworn Promket, 52, have each been charged with conspiracy to defraud the Internal Revenue Service and to commit mail fraud and to violating laws against structuring monetary transactions to avoid reporting requirements. Mathes is also charged with two counts of structuring monetary transactions. Prum is also charged with 10 counts of filing false employment tax returns, six counts of mail fraud and two counts of structuring monetary transactions. Pich is also charged with 17 counts of assisting the filing of false employment tax returns, six counts of mail fraud and two counts of structuring monetary transactions. Promket is also charged with seven counts of filing false employment tax returns, six counts of mail fraud and two counts of structuring monetary transactions.
According to the indictment, the defendants are family members who together ran a temporary employment agency providing both short-term and long-term labor for client companies in the packaging and food services industries. Between 2004 and October 2008 the agency operated under the name International Temp Agency; from October 2008 through 2009 it operated under the name JP Company. Between 2004 and 2009, the defendants reported approximately $2.2 million in wages to the IRS. The indictment charges, however, that the defendants= total payroll was approximately $28 million during that period. According to the indictment, the defendants failed to withhold and pay employment taxes and worker=s compensation insurance premiums on these unreported wages.
In order to meet their outsized cash payroll without triggering the filing of currency transaction reports the defendants maintained multiple bank accounts at various institutions and cashed approximately 4,383 checks in amounts less than $10,000. The indictment also charges that defendants grossly understated their payroll in response to inquiries from their workers' compensation insurance provider, under reporting the number of clients and employees on applications for insurance and during audits conducted by the insurer. As a result, their workers compensation insurance premiums were fraudulently reduced by approximately $850,000 between 2004 through 2010.
If convicted, the maximum prison sentences that could be imposed for each count of the indictment are as follows: five years in prison for conspiracy; three years in prison for filing or procuring false tax returns; 20 years in prison for mail fraud; and 10 years in prison for structuring of financial transactions.
U.S. Attorney Carmen M. Ortiz; John G. Collins, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Anthony DiPaolo, Chief of Investigations of the Insurance Fraud Bureau of Massachusetts, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Andrew Lelling of Ortiz=s Economic Crimes Unit.
The details in the Indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.Counter-Proliferation Working Group Holds 5th Annual U.S. Export Controls and Espionage ConferenceRecord-breaking Numbers with over 250 in AttendanceRead the Press Release
BOSTON – The Counter-Proliferation Working Group (CPWG), chaired by the U.S. Attorney’s Office for the District of Massachusetts, today hosted more than 250 individuals at the fifth annual conference on U.S. export controls and espionage at Boston University. Representatives from U.S. corporations, including defense contractors, and academic institutions were in attendance.
During the conference, participants were provided information on how to comply with their export obligations and protect critical technology. Also discussed was the growing national security and economic threats posed by cyberattacks and procurement efforts by foreign nationals and foreign governments, primarily the People’s Republic of China and Iran, to illegally obtain export restricted U.S. military and dual-use technology as well as intellectual property and proprietary information of U.S. companies.
The conference was organized and moderated by Assistant U.S. Attorney and Export Case Coordinator B. Stephanie Siegmann of the U.S. Attorney’s Office. Opening remarks were provided by United States Attorney Carmen M. Ortiz and Gloria Waters, Vice President and Associate Provost for Research at Boston University.
During her remarks, United States Attorney Ortiz said, “Preventing our adversaries from obtaining U.S. export restricted technology is one of our highest priorities. It is clear, however, that the government cannot guard our nation from this immense threat alone; we need the help of our business and academic partners to safeguard sensitive U.S. technology.”
Presentations were provided by representatives of the U.S. Attorney’s Office, Department of Justice’s National Security Division, Federal Bureau of Investigation, Homeland Security Investigations, and Defense Security Service. Kevin J. Wolf, Assistant Secretary of Commerce for Export Administration, attended the conference and spoke on the changes to U.S. export laws resulting from the recent export reform initiative. Lastly, export compliance officers from Harvard Medical School, Boston University, and iRobot spoke on a panel on export compliance issues.
The Massachusetts CPWG, chaired by AUSA Stephanie Siegmann of the U.S. Attorney’s Office, was created in December 2007 to help combat illegal exports of U.S. military parts and sensitive technology. The CPWG consists of representatives of law enforcement and intelligence agencies, including the U.S. Department of Homeland Security's Homeland Security Investigations, Department of Commerce's Office of Export Enforcement, Federal Bureau of Investigation, Defense Criminal Investigative Service, Defense Security Service, Naval Criminal Investigative Service, Air Force Office of Special Investigations, Army, U.S. Customs and Border Protection, Missile Defense Agency, and Defense Intelligence Agency. The CPWG shares information regarding current threats and suspicious activities regarding the transfer of sensitive U.S. technology through illegal means and coordinates investigations.
###REMARKS
Webster Man Charged with Distributing CrackRead the Press Release
BOSTON – A Webster man was charged yesterday for selling crack cocaine to a cooperating witness.
Anthony Cruz, 27, was charged in a criminal complaint with conspiracy to distribute cocaine and distribution of crack cocaine.
The complaint alleges that on January 23, 2012, and again on February 3, 2012, Cruz sold 35 grams of crack cocaine to a cooperating witness in Webster. On July 17, 2013, Cruz agreed to sell the cooperating witness another 40 grams of crack cocaine. On the day of the deal, Cruz arranged the transaction and another individual, working with Cruz, distributed a controlled substance to the cooperating witness. Preliminary tests indicated that the substance tested positive for cocaine. Cruz was arrested on September 20, 2013 after distributing approximately 150 grams of a substance purported to be crack cocaine to the cooperating witness.
If convicted, Cruz faces a minimum mandatory sentence of five years and up to 40 years in prison, a minimum of four years and up to a lifetime of supervised release and a $5 million fine.
United States Attorney Carmen M. Ortiz; John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Chief Timothy J. Bent of the Webster Police Department, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Karin M. Bell of Ortiz’s Worcester Branch Office.
The details contained in the complaint are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Stakeholders Partner to Convene the Worcester Reentry Initiative ProgramRead the Press Release
BOSTON – United States Attorney Carmen M. Ortiz announced today her office’s partnership with the Worcester Reentry Initiative Program. Drawing on its experience with reentry programs throughout the Commonwealth, the U.S. Attorney’s Office in partnership with the Worcester County Sheriff’s Office, Worcester County District Attorney’s Office and Worcester Police Department convened the initiative, bringing together important stakeholders in an effort to reduce recidivism rates.
A 2008 study funded by the Urban Institute Justice Policy Center, reported that four out of 10 inmates returning from prison in Massachusetts are re-incarcerated within three years of being released. The federal statistics are equally, if not more stark. Even though the United States comprises just five percent of the world’s population, it incarcerates almost 25% of the world’s prisoners. More than 219,000 federal inmates are currently behind bars. Almost half of them are serving time for drug-related crimes, and many have substance use disorders. Nine to 10 million more people cycle through America’s local jails each year. And roughly 40% of former federal prisoners – and more than 60% of former state prisoners – are rearrested or have their supervision revoked within three years after their release, at great cost to American taxpayers and often for technical or minor violations of the terms of their release.
Citing those above statistics in a speech last month, U.S. Attorney General Holder said that while the aggressive enforcement of federal criminal statutes remains necessary, we cannot simply prosecute or incarcerate our way to becoming a safer nation. To be effective, federal efforts must also focus on prevention and reentry.
U.S. Attorney Ortiz said, “We must never stop being tough on crime. But we must also be smart and efficient when battling crime and understanding the conditions and individual choices which cause it. We look forward to the interagency and community partnerships that will measurably contribute to a decrease in crime and improvement in the quality of life for Massachusetts residents.”
“The cooperation on this initiative among law enforcement and social service agencies has been spectacular. It is never a good idea have a prisoner behind bars one day and out on the street the next day without some sort of re-entry buffer. That is a recipe for failure. Having so many parties working together to allow a former prisoner to reintegrate into the lawful parts of society gives us the best chance to stop recidivism. Without these services we have a pretty good idea that history will just repeat itself,” said Worcester County District Attorney Joseph D. Early Jr.
The Worcester Reentry Initiative Program is part of a nationwide trend to reform the paradigm of punishing repeat criminals with more prison time. Through the Worcester Reentry Initiative Program, federal, state, and local law enforcement join forces with social service agencies, mental health and substance abuse providers and faith-based organizations to tackle the complexities associated with reentry into the community after incarceration. Members of the Worcester Reentry Initiative Program will work with an average of 90 to 100 high-risk inmates per year.
High-risk prisoners agreeing to participate in this reentry program will be provided with information regarding pre- and post-incarceration services as well as the consequences of reoffending. Law enforcement, probation/parole officers and prosecutors, including a representative from the U.S. Attorney’s Office, will conduct meetings every other month with Worcester Reentry Initiative Program participants in an effort to educate them about the realities of future criminal behavior. For many, reoffending could result in significant state or federal prison sentences.
Through the Worcester Reentry Initiative Program, participants will be offered “wrap-around” services, receiving focused assistance from social service providers, case managers, parole and probation officers and others to ensure accountability and continuity of care. They will be provided enhanced opportunities to participate in employment training, education programs, substance abuse and mental health treatment, and to work with mentors. Pre-release, participants will be encouraged to build relationships with individuals representing resources that are needed for success on the outside, including the parole or probation officer who is a crucial component of the program. Participants will undergo intense supervision upon release from prison to ensure greater success and accountability.
The Worcester Reentry Initiative Program social services and mental health partners include: Worcester Sheriff’s Department After Incarceration Support Services, Massachusetts Department of Revenue, Spectrum Health Systems, Valley Psychiatric Services and the Counseling and Psychotherapy Center, Worcester Community Action Council, Workforce Central, the WISR Program and Straight Ahead Ministries.
The Worcester Reentry Initiative Program model is based on the award-winning Boston Reentry Initiative (BRI), which has achieved measurable success and national attention for its model of recidivism reduction. Both programs focus their resources on inmates who pose the greatest risks to reoffend.
Springfield Landlord Charged with FraudRead the Press Release
BOSTON – A Springfield man was charged yesterday in U.S. District Court in Springfield with making fraudulent claims for insurance proceeds following fires at two multi-family homes in Springfield.
Wilkenson Knaggs, 42, was indicted with mail fraud, forging check endorsements, and money laundering.
The Indictment alleges that following a November 16, 2008 fire on Franklin Street, Knaggs submitted a fraudulent contract for rehabilitating the three-family house in order to obtain a payout on his homeowner’s policy. He is also charged with forging 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 on Central Street. The Indictment also charges Knaggs with putting the title of the Central Street property in the name of a relative and using the relative to make a claim on the insurance policy after a March 7, 2010 fire.
If convicted, Knaggs faces up to 20 years in prison, five years of supervised release and a $250,000 fine.
United States Attorney Carmen M. Ortiz; John G. Collins, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Kevin Niland, Postal 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 is being prosecuted by Assistant U.S. Attorney Karen Goodwin of Ortiz’s Springfield Branch Unit.
The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Bank Teller Convicted of Stealing over $200,000 in U.S. Treasury Tax RefundsRead the Press Release
BOSTON – A Lawrence man pleaded guilty yesterday for his role in depositing fraudulently obtained tax refunds into various bank accounts.
Robert A. Montero, 37, pleaded guilty today to 30 counts of theft of government property.
Montero was a bank teller at Metro Credit Union in Lawrence. In November 2011, an individual from the Lawrence area offered Montero a fee if Montero helped the individual to deposit and negotiate U.S. Treasury checks containing fraudulently obtained tax refunds through various bank accounts at Metro West Credit Union. Between November 2011 and December 2012, Montero, in his capacity as a bank teller, helped the individual to deposit and negotiate 30 U.S. Treasury checks worth $211,214. These U.S. Treasury checks had been obtained by filing false tax returns with the IRS in the names of third parties.
Montero faces a maximum term of 10 years in prison, three years of supervised release, restitution, and a $250,000 fine. Sentencing is scheduled for January 9, 2014.
United States Attorney Carmen M. Ortiz, Steven D. Ricciardi, Special Agent in Charge of the U.S. Secret Service in Boston, and John G. Collins, Acting 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 Maxim Grinberg of Ortiz’s Major Crimes Unit.
Dominican National Pleads Guilty to Identity TheftRead the Press Release
BOSTON – A Dominican man was convicted today of stealing a U.S. citizen’s social security number to obtain benefits.
Pablo M. Severino, of Lynn, pleaded guilty before U.S. District Judge Nathaniel M. Gorton to aggravated identity theft, theft of public money and using another=s social security number to obtain benefits.
In March 2012, federal agents commenced an investigation into a social security identity which had been falsely used to obtain disability benefits. The investigation revealed that Severino had obtained the social security number and the identity of a true U.S. citizen living in Puerto Rico. Severino then used that individual’s identity to apply for and receive social security disability benefits. Further investigation revealed that Severino was not a U.S. citizen but rather a citizen of the Dominican Republic.
Sentencing is scheduled for December 19, 2013. Severino faces up to 10 years in prison on the charge of theft of money, followed by a consecutive term of two years in prison on the charge of aggravated identity theft. Additionally Severino faces a fine of up to $250,000, three years of supervised release and restitution. Following the completion of his sentence, Severino will be placed into deportation proceedings and deported back to the Dominican Republic.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the United States Social Security Administration, Office of the Inspector General, Office of Investigations, Boston Field Division; and William Squires, Special Agent in Charge of the U.S. Department of Agriculture, Office of the Inspector General, Office of Investigation, Northeast Regional, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz=s Major Crimes Unit.
Pittsfield Man Indicted for Production and Possession of Child PornographyRead the Press Release
BOSTON – A Pittsfield man was indicted today in U.S. District Court in Springfield with producing and possessing child pornography.
Jason Gendron, 34, was indicted with sixteen counts of sexual exploitation of minors by producing child pornography and possessing child pornography.
The Indictment alleges that between May 13, 2011 and August 24, 2012, Gendron produced or attempted to produce sixteen files of child pornography. The Indictment further alleges that on July 16, 2013, Gendron possessed other files of child pornography.
If convicted on the production charges, Gendron faces a mandatory minimum of 15 years and a maximum of 30 years in prison, followed by a maximum lifetime of supervised release, and a maximum fine of $250,000 on each count. If convicted on the possession charge, Gendron faces a maximum of 10 years in prison, a maximum lifetime of supervised release, and a maximum fine of $250,000.
United States Attorney Carmen M. Ortiz; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; Bruce Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston; and Chief Michael Wynn, of the Pittsfield Police Department, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Natick Man and Revere Woman Indicted for $27 Million Home Health Care Fraud SchemeRead the Press Release
SETPEMBER 20, 2013BOSTON – A Natick man and a Revere woman were charged today for orchestrating a $27 million home health care fraud scheme.
Michael Galatis, 62, was indicted on charges of conspiracy to commit health care fraud, 11 counts of health care fraud, and seven counts of money laundering. Janice Troisi, 64, was indicted on charges of conspiracy to commit health care fraud and 11 counts of health care fraud.
The indictment alleges that, between 2007 and 2012, Galatis and Troisi conspired to have the Medicare program pay for home health care services that, by and large, the beneficiaries did not need nor want. Galatis, a registered nurse, owned and operated At Home VNA (AHVNA), a home health agency located in Waltham. Troisi, also a registered nurse, was the Clinical Director for AHVNA. The Medicare program pays for home health services under specified conditions, including that a physician has certified that the patient is homebound and needs the services and that the services were provided to the Medicare patient. Galatis and Troisi had AHVNA bill Medicare, and Medicare paid AHVNA, millions of dollars for home health services that it should not have paid because the patients were not homebound, did not request nor need the services, and/or skilled services were not provided.
Galatis and Troisi trained AHVNA nurses to recruit Medicare beneficiaries who lived in residential facilities for senior citizens. They trained AHVNA nurses to hold “wellness clinics” where they would take residents’ blood pressure and vital signs. During these “clinics,” Galatis and Troisi trained the nurses to recruit the senior citizens by asking if they were Medicare beneficiaries, and if so, if they would like to have a nurse visit them in their home. Galatis and Troisi trained the nurses to manipulate the patients’ initial assessments to make it appear as though the patients qualified for home health services pursuant to Medicare’s guidelines, when that was often not the case. The home health prescriptions and plans of care were then signed by AHVNA’s paid medical director, who certified that the patients were homebound and in need of skilled services. In fact, the overwhelming majority of AHVNA’s patients were not homebound and did not need home health services: many of the patients worked, took out-of-state vacations, and lived independent lives. AHVNA’s nurses frequently complained to Galatis and Troisi that the patients did not want AHVNA’s services, were not home when they visited and/or were independent and did not need the services. Galatis and Troisi regularly refused the nurses’ requests to discharge the patients, ordering them to keep visiting the patients, or they simply assigned the patient to a new nurse.
Even though the AHVNA medical director certified that the patients were homebound and needed skilled services, he never treated or even met these patients. This was true even after 2011 when a new Medicare regulation required as a condition of payment that the patient have a face-to-face encounter with a physician demonstrating that the home health services were medically necessary. In fact, the patients’ primary care physicians were almost always unaware that the patients were receiving home health services. When some of the patient’s primary care physicians discovered that their patients were receiving home health services, they instructed AHVNA to terminate these services. In many instances, AHVNA continued to bill Medicare notwithstanding these complaints.
During the course of the conspiracy, AHVNA submitted more than $27 million in false and fraudulent claims to Medicare, and Medicare paid AHVNA more than $20 million. The vast majority of these claims should not have been paid because the patients were not homebound, did not need skilled services, and/or were not provided with skilled services
Galatis is separately charged with money laundering. The indictment alleges that Galatis spent a portion of the proceeds from the AHVNA fraud scheme to pay for a $750,000 house in Natick. Galatis withdrew and/or transferred funds from the AHVNA business bank account into his personal bank account, which he immediately used for a down payment for this house and then to pay off a $450,000 mortgage on the property in just 16 months.
If convicted, Galatis faces up to 10 years in prison, three years of supervised release and a $250,000 fine on each count. If convicted, Troisi faces up to 10 years in prison, three years of supervised release and a $250,000 fine on the conspiracy count and each health care fraud count.United States Attorney Carmen M. Ortiz; Susan J. Waddell, Special Agent in Charge of the Department of Health and Human Services, Office of Inspector General, Office of Investigations; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and John Collins, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys David S. Schumacher and Lisa A. Schlatz of Ortiz’s Health Care Fraud Unit.
The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
New Hampshire Woman Charged with Theft from Non-Profit OrganizationRead the Press Release
BOSTON – A New Hampshire woman was charged today for stealing from an organization that receives substantial federal funding.
Tysen Julian, 33, of East Hampstead, New Hampshire, was charged by complaint with wire fraud and theft from an organization receiving more than $10,000 in federal funds in a one year period.
The complaint alleges that from approximately October 2009 until July 2013, Julian stole about $120,000 from a nonprofit organization by submitting false expense reimbursements. The complaint further alleges that among other things, Julian forged various approval signatures in order to receive the money.
If convicted, Julian faces a maximum penalty of 20 years in prison for each count of wire fraud and 10 years in prison for each count of theft from a program receiving more than $10,000 in federal funding.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Sara Miron Bloom of Ortiz=s Economic Crimes Unit.
Law Enforcement Suicide Awareness & Prevention Training Provided to over 200 Law Enforcement in MassachusettsRead the Press Release
BOSTON – The United States Attorney’s Office in partnership with the Massachusetts Department of Public Health, Massachusetts Major City Chiefs, Massachusetts Chiefs of Police Association, Municipal Police Training Committee and In Harm’s Way®, a Department of Justice funded initiative, joined forces today to promote the importance of mental wellness among law enforcement. Held during Suicide Prevention Month, the goal of the training is to raise awareness of the problem of law enforcement suicide, with the hope of making a small step toward changing the culture.
The training, attended by over 200 law enforcement personnel at Regis College, provided an avenue to increase awareness regarding the risk factors and warning signs of law enforcement suicide and provide strategies for prevention, intervention and postvention. Participants included federal Special Agents in Charge, Chiefs of Police, law enforcement supervisors as well as peer support officers, training officers and agency Employee Assistance Program (EAP) coordinators.
“Reducing suicide by law enforcement is dependent upon changing law enforcement's perceptions of mental wellness," said United States Attorney Carmen M. Ortiz. "Law enforcement faces significant amounts of stress on a regular basis. Although they are heroes in their own right, they are not made of armor. As leaders, we must take every opportunity to encourage proactive and preventative measures so they can continue with long and successful careers.”
Dr. Barry Feldman, Director of Psychiatry Programs in Public Safety for UMass Medical School, and James Steffens, Chief Forensic Investigator and SWAT Commander of the Pasco County Sheriff's Office (Fla.), were the key presenters of the day. Yvette Lillge with the U.S. Coast Guard (USCG) spoke about the USCG’s comprehensive wellness program. Will Brown of AllOne Health Resources, a contracted EAP provider for the Massachusetts Interlocal Insurance Association (MIIA), discussed EAP related issues specific to the law enforcement community. Assistant U.S. Attorney Jamie Herbert, Everett Police Chief Steven Mazzie, President of the Major City Chiefs and Natick Police Chief James Hicks, President of the Massachusetts Chiefs of Police Association, provided welcome remarks.
“In this profession, we spend a lot of time training to respond to a whole host of issues that affect the people we serve in our communities. Sometimes, we forget to put the time into ensuring that our own people are ok. Today, we are taking steps in educating our own in hopes that we can aid fellow officers that may be in need of care before a tragedy occurs,” said Chief Mazzie.
“As Police Chiefs and leaders in law enforcement it is incumbent upon us to bring awareness to all of the law enforcement community of the potential danger that exists around suicide and law enforcement officers. This seminar will hopefully educate all that attend that we must think proactively and focus on prevention. Any knowledge gained will be a tremendous benefit to our employees and hopefully prevent a tragedy that can affect our departments for a long time after,” said Chief Hicks.
This training would not have been possible without resources provided by the Massachusetts Department of Public Health, In Harm's Way and Regis College.
Worcester Man Sentenced for Solicitation to Kidnap A ChildDungeon Discussed in Online Chats Discovered in Defendant’s BasementRead the Press Release
BOSTON – Geoffrey Portway, 40, a citizen of the United Kingdom and most recently of Worcester, Mass., was sentenced today in U.S. District Court in Worcester for solicitation to commit a crime of violence (kidnaping of a child), distribution and possession of child pornography.
In accordance with a plea agreement signed in May 2013, Portway was sentenced by U.S. District Judge Timothy S. Hillman to 320 months in prison and a lifetime of supervised release. He was also ordered to pay $3,000 in restitution to each of the five victims identified. Additionally, Portway faces deportation to the United Kingdom following release from prison.
“The facts of this case are disturbing and alarming. I applaud our law enforcement partners for aggressively tracking down the defendant and others that share his perverse desires,” said United States Attorney Carmen M. Ortiz. “The sentence Mr. Portway received today sends the message that the Department of Justice will ardently pursue those who exploit children, the most vulnerable, innocent and impressionable population of our country. Thanks to the dedication and coordination of local, state and federal law enforcement, there is not a place in the United States, or on the Internet, where these predators can hide.”
“Mr. Portway made his intentions explicitly clear in online conversations with depraved likeminded individuals. The sophisticated child torture chamber he built in his basement also clearly demonstrated his strong desires to ensnare a child victim,” said Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston. “There is no doubt in my mind that given the right set of circumstances, Mr. Portway would have acted on those perverse urges. Fortunately, as a result of today’s significant sentence, he will never have an opportunity to pursue his sordid desires. I commend the exceptional work of the HSI special agents, federal prosecutors and the many other law enforcement partners who contributed to Operation Holitna’s overwhelming success in rescuing some 167 child victims and the arrest of 54 predators worldwide. ”Portway engaged in numerous chats with many individuals about a mutual interest in abducting, raping, murdering, and eating children. Many of these conversations were accompanied by the trading of child pornography and other images of children relevant to these interests. These chats also included images of different real children, accompanied by discussions of desires to sexual abuse and murder and cannibalize those children know to those chatting.
Portway solicited several people for their help in abducting a child, predominately from Michael Arnett of Kansas. At least as early as 2010, Portway utilized Skype and other programs to communicate with Arnett, trading child pornography and images of injured, mutilated and deceased children while chatting about the sexual abuse, rape, abduction, murder, and cannibalism of children. Over months, Portway repeatedly solicited Arnett to kidnap a child for him, with the intent that Portway would ultimately rape, kill and eat that child. These solicitations for help abducting a child included discussing real children, by name and photo, which Arnett claimed to know and have access. In the chats, Portway and Arnett discuss different ways to kidnap children and the age range that Portway prefers. During the time that Portway was soliciting Arnett, he had been told that Arnett had helped others with such requests before and that he had experience with the abduction and sexual abuse of children. Arnett has since pleaded guilty in Kansas to the sexual exploitation of a child for the purposes of producing child pornography.
On July 27, 2012, federal agents along with state and local police, executed a federal search warrant at Portway’s Worcester home. Various computers and digital devices containing Portway’s child pornography collection were seized, in addition to the computer he used to trade child photography and attempt to plan the abduction of a child.
During the execution of the search warrant, agents also discovered a locked door in the basement of the residence. Inside the door was a sally port that led to a second door (with a keyed lock). Inside the second door was a dungeon, which was lined with acoustical sound-deadening material and contained a chair, television, and what appeared to be cable access to the internet. Also located in this room were a child-sized homemade coffin (with large speakers covered in wire mesh at one end) with exterior locking devices, a steel cage (approximately 3' wide, 2' high and 4' long) with multiple locking devices, and a steel table top (with steel rings at 6 points, presumably for restraints). Outside these rooms were a cabinet freezer, an upright freezer, disposable scalpels, butchering kits, and castration tools. This dungeon was described in detail by Portway in recovered chats as a place he intended to use to keep kidnaped children while he sexually abused them and as a place to eventually murder and cannibalize the children.A forensic examination of the computers uncovered evidence of over 4,500 trades of child pornography between Portway and others. Many of these trades involved Portway distributing child pornography to others based on their stated specific preferences, including images and videos appearing to depict dead children and the cannibalism of children.
U.S. Attorney Ortiz; SAC Foucart; Worcester County District Attorney Joseph Early; Colonel Timothy Alben, Superintendent of the Massachusetts State Police; and Chief Gary J. Gemme of the Worcester Police Department made the announcement today. The case was prosecuted by Assistant U.S. Attorney Stacy Dawson Belf of Ortiz’s Major Crimes Unit. The U.S. Attorney’s Office wishes to thank the Massachusetts State Police forensics troopers and detectives assigned to the Worcester County District Attorney’s Office as well as the detectives from the Worcester Police Department for their key assistance during the investigation.
This case is being 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, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/
U.S. Attorney Hosted Gang Prevention SummitRead the Press Release
BOSTON – On Sept. 16, 2013, the United States Attorney’s Office hosted nearly 500 law enforcement and community professionals from around New England at its Annual Gang Prevention Summit in Marlborough. This year’s summit, sponsored by the Department of Justice’s Project Safe Neighborhoods (PSN) program, focused on coalescing best practices that can be utilized throughout Massachusetts.
The summit began at 9:00 a.m. with opening remarks by U.S. Attorney Carmen M. Ortiz and Middlesex District Attorney Marian T. Ryan. The afternoon session was highlighted with the keynote address by Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police. Col. Alben discussed the challenges facing law enforcement today, citing the Marathon bombing case and the state drug lab scandal.Participants had the opportunity to learn from experts in the public and non-profit sectors about prevention and intervention involving youth in gangs, innovative community policing initiatives, and lessons learned from established prison re-entry programs. The diverse range of participants included local law enforcement, prosecutors, social workers, medical professionals, educators, faith-based partners and residents. The purpose of the summit was to form and strengthen working partnerships among stakeholders as well as to provide relevant training.
“Bringing together a varied group of professionals to work collaboratively to prevent violence in our communities, especially gun and gang violence, is critically important,” said U.S. Attorney Ortiz. “By continually educating ourselves and implementing proven, innovative approaches tailored to meet the challenges of individual communities, we will achieve greater progress in safeguarding security for all.”
The Project Safe Neighborhoods initiative was launched in 2001 by the Department of Justice to reduce gun and gang crime in America. Spearheaded by U.S. Attorneys’ Offices, PSN operates as a comprehensive, coordinated and community-based approach that promotes prevention and deterrence efforts. The five foundation principles of PSN are to create working partnerships, plan strategically, provide up-to-date training, further community outreach, and to be accountable for outcomes.
Pennsylvania Man Sentenced to 18 Years for Production of Child Pornography, Traveling to Engage in Sexual Acts with MinorsRead the Press Release
BOSTON - A York, Pa. man was sentenced late Friday for production of child pornography and traveling to engage in sex acts with a minor.
Derick Ritter, 42, was sentenced by U.S. District Judge F. Dennis Saylor, IV to 18 years in prison, to be followed by 15 years of supervised release. Ritter pleaded guilty to the charges on April 12, 2013.Pretending to be a teenage boy, Ritter lured a 15-year-old girl into an online relationship. He then enticed her to engage in sexually explicit conduct via web camera. Ritter recorded videos of the victim and saved them to his computer and persuaded her victim to create sexually explicit videos and send them to him. After “dating” the victim online for several months, Ritter traveled to Massachusetts to meet her in person. He took her to a motel and, despite her protests, engaged in sexual acts with her.
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 Karin M. Bell of Ortiz’s Worcester Branch Office.
Two Individuals Plead Guilty to Securities Kickback SchemeRead the Press Release
BOSTON – In two related, but separate proceedings, an executive of two publicly-traded companies and an advisor, pleaded guilty today to using kickbacks in order to trigger investments in thinly-traded stocks.
Seijin Ki, 42, of Toronto, Canada pleaded guilty to wire and mail fraud arising out of his participation in a deal that was part of an undercover FBI operation. Ki admitted to paying secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in a two publicly-traded companies, Lightlake Therapeutics, Inc. and Church & Crawford, Inc. Ki was an executive with both companies. The kickbacks were concealed through the use of sham consulting agreements and other fraudulent documents. What Ki did not know was that the purported investment fund representative was actually an undercover agent.
Kelly Black-White, 52, of Mesa, Ariz. pleaded guilty to conspiracy to commit securities fraud and wire fraud arising out of her role in a similar deal that was part of the same undercover FBI operation. Black-White, the operator of Premier Funding, Inc. and Premier Services, Inc. provides investor and public relations services to publicly-traded companies. Black-White admitted to referring executives of publicly-traded companies to the investment fund representative so that those executives could enter into the kickback arrangement. In exchange, Black-White accepted a portion of the kickbacks paid by the executives.
The pleas followed a year-long investigation focusing on preventing fraud in the micro-cap stock markets. Microcap companies are small publicly-traded companies whose stock often trades at pennies a share. Fraud in the microcap markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the Securities and Exchange Commission.
Ki and Black-White are two of 15 defendants charged criminally in this undercover operation. Thirteen of those charged, including Ki and Black-White, pleaded guilty and two were convicted after trial. Two defendants are scheduled for trial in October 2013.
United States District Court Judge William G. Young scheduled sentencing for Ki for Dec. 9, 2013. Black-White is scheduled to be sentenced by US District Court Judge Denise J. Casper on Jan. 29, 2014.
The statutory maximum penalties for the securities fraud conspiracy charges are 25 years in prison, three years of supervised release and a $250,000 fine and the statutory maximum penalties for mail and wire fraud are 20 years in prison, three years of supervised release and a $250,000 fine.
The Securities and Exchange Commission, which conducted a parallel civil investigation alongside the FBI undercover operation, cooperated with criminal authorities in bringing these charges as well as those against the other defendants.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, announced the conviction today. The case is being prosecuted by Assistant U.S. Attorneys Sarah E. Walters, Vassili Thomadakis and Eric Christofferson of Ortiz’s Economic Crimes Unit.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Shrewsbury Woman Indicted for Filing False Tax ReturnsRead the Press Release
BOSTON – In an indictment unsealed today, a Shrewsbury woman has been charged with underreporting income from her federal tax returns.
Roberta I. Crudale Blute, 55, was indicted on two counts of filing false tax returns for tax years 2007 and 2008.
The indictment alleges that Blute omitted from tax returns hundreds of thousands of dollars in income that she earned from numerous employers for tax years 2007 and 2008. Specifically, it is alleged Blute knowingly failed to report income she earned from four companies in 2007 and five companies in 2008.
The statutory maximum penalty is three years in prison, one year of supervised release and a $250,000 fine. Blute is scheduled to have her initial appearance today at 2 pm in Worcester.United States Attorney Carmen M. Ortiz; John G. Collins, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Vincent Lisi, Special Agent in Charge of the FBI’s Boston Field Division; and Susan J. Waddell, Special Agent in Charge of the Department of Health and Human Services, Office of Inspector General, Office of Investigations, made the announcement.
This case is being prosecuted by Assistant U.S. Attorneys Amanda P.M. Strachan and Miranda Hooker of Ortiz’s Health Care Fraud Unit.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Holyoke Woman Sentenced for Defrauding MassHealthRead the Press Release
BOSTON – A Holyoke resident was sentenced in U.S. District Court in Springfield for defrauding MassHealth, by billing for personal care attendant services that were never provided.
U.S. District Judge Michael A. Ponsor sentenced Miosottis Gonzalez, 25, to two years of probation and ordered her to pay $64,000 in restitution. In April, Gonzalez pleaded guilty to conspiracy to commit health care fraud. Three other individuals involved in the conspiracy, included Gonzalez’s aunt and uncle, previously pleaded guilty and were sentenced earlier this month.
Gonzalez engaged in a scheme to defraud the state’s Personal Care Attendant (PCA) Program. The PCA Program, funded by MassHealth, the Commonwealth’s Medicaid Program, helps individuals with permanent or chronic disabilities keep their independence, stay in the community, and manage their own personal care. Gonzalez recruited friends to provide identification documents which were used to bill MassHealth for PCA services that were never provided. Gonzalez also signed and submitted false time sheets in her own name to obtain payment for services she never provided.
United States Attorney Carmen M. Ortiz and Susan J. Waddell, Special Agent in Charge of the Department of Health and Human Services, Office of Inspector General (HHS-OIG), made the announcement today. The case was investigated by HHS-OIG with the assistance of the Commonwealth of Massachusetts Auditor’s Office, Bureau of Special Investigations, and the Commonwealth of Massachusetts, Office of the Attorney General, Medicaid Fraud Division. It is being prosecuted by Assistant U.S. Attorney Karen L. Goodwin of Ortiz’s Springfield Branch Office.
Former School Committee Member, and Boy Scout Leader, Sentenced for Charges of Child Sexual ExploitationRead the Press Release
BOSTON – A Whitinsville lawyer, who was also a Boy Scout troop leader and part-time middle school instructor, was sentenced to 18 years in prison on child pornography charges.
On September 9, in U.S. District Court in Worcester, Judge Timothy S. Hillman sentenced Andrew Jonathan Myers, 34, to 220 months in prison and 10 years of supervised release. On June 12, 2013, Myers pleaded guilty to four counts of using the Internet to entice, persuade, or induce a minor to engage in unlawful sexual conduct and possessing child pornography. Pursuant to a plea agreement with the government, Myers faced a possible sentence of between 15 and 21 years in prison and 10 years of supervised release.
Between July 13 and July 23, 2012, Myers communicated with a 12-year-old Colorado boy, identified as Juvenile Victim #1 (JV-1), over the Internet, first via email, and then through the web video service, Skype. During the course of the communications with JV-1, Myers told JV-1 that he was attractive, directed JV-1 to websites where child pornography could be found, and offered to “find” JV-1 “a place to sleep” if he came to Massachusetts. Throughout the communications, Myers repeatedly solicited JV-1 to take off his clothes and masturbate over the Skype video streaming service.
On May 7, May 9 and June 28, 2012, Myers sent sexually explicit emails to three minors, identified as JV-2 (age 13), JV-3 (age 11), and JV-4 (age 14), in which the he proposed to perform oral sex on the minors. Myers had served as a substitute school teacher for JV-2 and JV-3, and had been the Troop leader for JV-4's scout troop.
A computer and an external hard drive seized from Myers’ residence at the time of his arrest contained in excess of 600 videos depicting child pornography including an electronic video recording of a Skype video chat between Myers and a minor identified as JV-5, a 13-year-old South Carolina resident, in which JV-5 is depicted engaging in sexually explicit conduct.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; District Attorney Joseph Early of Worcester County; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; Chief Walter J. Worhol of the Northbridge Police Department; and Chief Kenny Powell of the Millbury Police Department, made the announcement.
This was a joint investigation that was initiated by the Larimer County, CO, Sheriff’s Office who discovered Myers’ alleged conduct and provided the information that led to both Myers’ identification and these federal charges. The case was prosecuted by Assistant U.S. Attorney Mark J. Grady of Ortiz’s Worcester Office.
Chinese National Sentenced for Illegally Exporting Military Electronics ComponentsRead the Press Release
BOSTON - Zhen Zhou Wu, a Chinese national, was re-sentenced yesterday to 84 months in prison for conspiring over a 10-year-period to illegally export military and sophisticated electronics to the People’s Republic of China (PRC).
Wu was also convicted of illegally exporting sensitive electronic components to the PRC on 12 occasions between 2004 and 2007. Several Chinese military entities were among those to whom the defendant exported the equipment, which is used in military phased array radar, electronic warfare, and missile systems. He was also ordered to pay a $15,000 fine. After serving his sentence Wu will be subject to deportation to the PRC.
On March 19, 2013, the U.S. Court of Appeals for the First Circuit affirmed Wu’s conviction on 15 of the 17 counts of export violations for which a jury convicted him after a six-week trial in 2010. The First Circuit vacated two counts of conviction that charged Wu with illegally exporting parts designated on the United States Munitions List because it held that the jury instructions given were constitutionally inadequate. However, the First Circuit observed that “from 1996 until 2008, Wu and his co-defendant, Yufeng Wei, shipped tens of millions of dollars worth of sophisticated electronic components from the United States to China, with little regard for whether the parts that they sold were export-controlled.” Further, the First Circuit found that Wu’s company “specifically pursued military customers; and Wu promoted himself as both an exporter of military supplies and an export compliance expert.” Lastly, the First Circuit determined that “Wu and Wei repeatedly attempted to disguise the fact that they were exporting to China and that they lacked the necessary licenses to do so.”
Because two counts of the conviction were vacated, the case was remanded for a re-sentencing hearing. Wei’s re-sentencing hearing has not yet been scheduled.
On May 17, 2010, Wu, his ex-wife, Wei, and his company, Chitron Electronics, Inc. were convicted of conspiring to unlawfully export to the PRC military electronics from 1997 to 2007 and export restricted electronics components and illegally exporting such parts to the PRC on numerous occasions between 2004 and 2007. The defendants’ illegal enterprise involved the use of Chitron Electronics, Inc., a company Wu established in Waltham, Mass., as a front company for its parent company, Chitron Electronics Limited, headquartered in Shenzhen, PRC. Wu used Chitron-US to procure export restricted equipment from US suppliers and then export the goods to from Waltham to China, through Hong Kong without the suppliers’ knowledge. The exported equipment is used in electronic warfare, military radar, fire control, military guidance and control equipment, missile systems, and satellite communications. Many of Chitron’s customers were Chinese military research institutes and military entities responsible for procuring, developing, and manufacturing electronic components for China’s Army, Navy and Air Force.The Department of Defense’s Defense Technology Security Administration concluded in a report filed with the Court that the defendants’ activities in this case seriously threatened “U.S. national and regional security interests.” According to the Department of Defense, the parts the defendants were convicted of illegally exporting are “vital for Chinese military electronic warfare, military radar, fire control, military guidance and control equipment, and satellite communications.” The report further concluded that the illegally exported parts are “precisely the [types of] items ... that the People’s Liberation Army actively seeks to acquire.”
United States Attorney Carmen M. Ortiz; Acting Assistant Attorney General John P. Carlin of the Justice Department’s National Security Division; John J. McKenna, Special Agent in Charge of the U.S. Department of Commerce, Office of Export Enforcement, Boston Field Office; Bruce Foucart, Special Agent in Charge of Homeland Security Investigations in Boston: Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office; and Leigh-Alistair Barzey, Resident Agent in Charge of Defense Criminal Investigative Service in Boston made the announcement. The case is being prosecuted by Assistant U.S. Attorneys B. Stephanie Siegmann and John A. Capin of Ortiz’s Anti-Terrorism and National Security Unit.
Two Men Found on Stateless Vessel in International Waters with Large Amount of CocaineRead the Press Release
BOSTON – Two men were arrested for transporting cocaine on a sailboat bound for Montreal.
Hicham Ramzi Nahra, 27, of Canada, and Benjamin Celma-Sedo, 49, of Spain, were charged today in a criminal complaint with possession of cocaine with intent to distribute on board a vessel subject to the jurisdiction of the United States.
The complaint alleges that by the United States Coast Guard found Nahra and Celm-Sedo on board a sailboat, named the Callisto, in international waters with 621 kilograms of cocaine. The cocaine has an approximate street value of more than $20 million.
On Sept. 2, the crew of the Coast Guard Cutter Dependable interdicted the 49-foot sailing vessel Elegance, in international waters about 400 nautical miles east of the United States. The Elegance was flying a Canadian flag, but was determined to be a stateless vessel, and according to Canadian law enforcement authorities, was never registered as a Canadian vessel. It was also determined that the Elegance was in fact the Callisto, a sailing vessel whose last port of call was in Venezuela. After receiving permission from the Canadian government to board and search the Callisto, U.S. Coast Guard crew members found 23 large, heavy plastic mesh bags each containing 25-27 kilogram brick shaped packages containing cocaine.
If convicted, Nahra and Celma face a maximum term of 20 years in prison, a minimum of three years and up to a lifetime of supervised release and a $1 million fine.
United States Attorney Carmen M. Ortiz; Rear Admiral Dan Abel, Commander in Charge of the First Coast Guard District; John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; 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. This case is being prosecuted by Assistant U.S. Attorney Neil Gallagher of Ortiz’s Drug Task Force.
Marlboro Man Convicted of Defrauding AirlinesRead the Press Release
BOSTON – A Marlboro man pleaded guilty today to charges stemming from his scheme to defraud various airlines.
Pedro Igor Duarte, 28 pleaded guilty to three counts of mail fraud.
Beginning October 2007 and continuing through April 2009, Duarte purchased airline tickets and flew on various airlines, including Continental Airlines, American Airlines, and Air Tran Airways (now Southwest Airlines), for the purpose of submitting, and obtaining payment on, lost baggage claims, when in fact he had not lost any baggage on those flights.
Duarte would purchase an airline ticket and prior to the flight would check his baggage with the airline. Upon arrival at his destination airport, Duarte would pick up his checked baggage, but then would submit a lost baggage claim form to the airline, falsely stating that the airline had lost his baggage. Duarte would alter slightly the spelling of his name on the baggage claim form so that the airline would not know that the same person was filing numerous lost baggage claims within a short time period. Duarte would also provide a Massachusetts address or, alternatively, provide an address outside of Massachusetts, but would later contact the airline and change his address to a Massachusetts location. In support of his lost baggage claim, Duarte would provide the airline with purchase receipts purporting to document the value of his lost baggage. Upon receipt of the necessary information from Duarte, the airline would mail him a check to compensate for the value of his purportedly lost baggage.
Duarte faces a maximum term of 20 years in prison, three years of supervised release, and a $250,000 fine. As part of the plea agreement, Duarte will repay the airlines $28,210 in restitution. Sentencing is scheduled for December 6, 2013.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Anthony DiPaolo, Chief of the Investigations of the Massachusetts Insurance Fraud Bureau, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Maxim Grinberg of Ortiz’s Major Crimes Unit.
Leicester Man Sentenced to 24 Years for Producing Child PornographyRead the Press Release
BOSTON – A Leicester man was sentenced today for various child pornography crimes.
Jason Clark, 31, was sentenced by U.S. District Judge Richard G. Stearns to 24 years in prison to be followed by 10 years of supervised release. In May 2013, Clark pleaded guilty to five counts of sexual exploitation of a child, distribution of child pornography, transportation of child pornography and possession of child pornography.Between October 2010 and October 2011, Clark used a five-year-old minor to produce child pornography and disseminated child pornography on the internet by trading it with other collectors and by posting it to websites.
Clark took pictures of his own sexual abuse of the five-year old girl that he gained access to because he was close friends with the child’s mother and the mother’s fiancé. Clark would stay overnight at their house and sleep in a room adjacent to the child’s room. He would also babysit the child, and lead the parents to believe that he was a caring friend. Clark, in e-mails and in a message he posted on the internet, expressed a desire to sexually abuse other young children, including a toddler. While addressing the Court, Clark admitted that he betrayed the trust of the child who looked up to him, and his best friend, the mother’s fiancé.
In addition, Clark cooperated with the government which resulted in the conviction of Anthony Hanifan, in Florida State Court on numerous charges including sexual battery of a two-year old girl. Hanafan faces a mandatory minimum sentence of life in prison in Florida.
“This case shows how the sexual abuse of children is often driven by the desire to feed the market for online child pornography,” said United States Attorney Carmen M. Ortiz. “People who produce, solicit, trade, and collect child pornography can cause a lifetime of pain for children and those closest to the young victims.”U.S. Attorney Ortiz; Mark G. Mastroianni, Hampden County District Attorney; and Colonel Timothy B. Alben, Superintendent of the Massachusetts State Police made the announcement today. The case was prosecuted by Assistant United States Attorney Alex J. Grant of Ortiz’s Springfield Branch Unit.
Illegal Alien Sentenced on Illegal Reentry CaseRead the Press Release
BOSTON – A resident of the Dominican Republic was sentenced today for illegally reentering the United States after being previously deported.
Odelio Alberto Sepulveda Guerrero, 35, of Dorchester, was sentenced by U.S. District Court Judge Joseph L. Tauro to 18 months in prison, and three years of supervised release. Guerrero also faces deportation to the Dominican Republic upon completion of his prison term. In June 2013, Guerrero pleaded guilty to illegal reentry of a deported alien.
Guerrero had previously been removed from the United States in 2002 and 2009; he re-entered the United States illegally at some point after each removal without permission. In 2002, Guerrero arrived to the United States from Santo Domingo, Dominican Republic and attempted to gain admission by presenting a U.S. passport under a false name to immigration inspectors in New York. Additionally, in 2008, he was convicted of felony narcotics offenses. Guerrero most recently re-entered the United States at an unknown place and date and came to the attention of agents in March 2013.
United States Attorney Carmen M. Ortiz; and Bruce M. Foucart, Special Agent in Charge U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz’s Major Crimes Unit.Dominican National Sentenced for Drug and Firearm ViolationsRead the Press Release
BOSTON – A Dominican man was sentenced today on drug and weapon related charges.
Alberto Feliz Garcia, 34, was sentenced today by U.S. District Court Judge Mark L. Wolf to 63 months in prison and four years of supervised release. Following the completion of his federal sentence, Garcia will be placed into removal proceedings and deported to the Dominican Republic. In October 2012, Garcia pleaded guilty to being a previously convicted felon in possession of a firearm, being an alien in possession of a firearm, passport fraud, and possession with intent to distribute heroin.
On the morning of Oct. 17, 2011, agents armed with a federal arrest warrant for passport fraud, encountered Garcia at his home where he was arrested in a second floor bedroom. The room was searched and the agents recovered a Fabrique Nacional 5.7 semi automatic pistol loaded with 19 rounds of armor piercing ammunition. The agents noted that the serial numbers on the pistol were obliterated. Later Garcia consented to a search of the home which recovered 517 grams of heroin, 45 grams of crack cocaine, 32 rounds of 9mm ammunition, and $12,040 in United States currency.
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 State Police; and Lawrence Police Chief John Romero, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Unit.
Cambridge Man Indicted for Making False Statements in the Boston Marathon Bombing Terrorism InvestigationRead the Press Release
BOSTON – A federal grand jury returned an indictment today against a Cambridge man previously charged with making false statements during the Boston Marathon bombing terrorism investigation.
Robel Phillipos, 19, was indicted after having been previously charged via complaint in May with making a series of materially false statements to federal law enforcement officials during a terrorism investigation. Phillipos is charged with two counts of making false statements. The indictment also charges Dias Kadyrbayev, 19, and Azamat Tazhayakov, 19, both of New Bedford with conspiring to obstruct justice and obstructing justice with the intent to impede a terrorism investigation. Kadyrbayev and Tazhayakov are both nationals of Kazakhstan who were temporarily living in the United States pursuant to student visas.
As alleged in the indictment, on April 18, 2013, after the FBI posted photographs of the two men suspected of carrying out the Marathon bombings (who were later identified as Tamerlan Tsarnaev and Dzhokhar Tsarnaev), Kadyrbayev received a text message from Dzhokhar Tsarnaev suggesting that he go to Tsarnaev’s “room and take what’s there.” Kadyrbayev, Tazhayakov, and Phillipos, according to the indictment, went to Tsarnaev’s dormitory room and removed several items, including Tsarnaev’s laptop computer and a backpack containing fireworks, and brought them to Kadyrbayev and Tazhayakov’s apartment in New Bedford. Later that night, Kadyrbayev, with Tazhayakov’s knowledge and agreement, placed Dzhokhar Tsarnaev’s backpack, which contained several items, including fireworks, in a garbage bag and placed it in a dumpster outside their New Bedford apartment.
The indictment further alleges that between April 19 and April 25, 2013, law enforcement officials assigned to the Joint Terrorism Task Force interviewed Phillipos concerning material facts related to the terrorism investigation into the Boston Marathon bombing and one of the suspected bombers, Dzhokhar Tsarnaev. During these interviews, Phillipos concealed the fact that he, Kadyrbayev and Tazhayakov had gone into Dzhokhar Tsarnaev’s dormitory room on the evening of April 18 and removed Dzhokhar Tsarnaev’s backpack from his room. In so doing, he made numerous false and misleading statements to the agents.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division, made the announcement today. This investigation was conducted by the FBI's Boston Division, the Massachusetts State Police, and member agencies of the Boston Joint Terrorism Task Force (JTTF) which is comprised of more than 30 federal, state and local enforcement agencies. The University of Massachusetts Dartmouth Department of Public Safety, the City of New Bedford, New Bedford Police Department, Dartmouth Police Department, U.S. Department of Transportation – Office of Inspector General, U.S. Treasury Inspector General for Tax Administration (TIGTA), Essex County Sheriff’s Office, and Internal Revenue Service, Criminal Investigations provided assistance to this investigation.
If convicted, Phillipos faces a maximum penalty of up to eight years in federal prison on each of the two counts. Kadyrbayev and Tazhayakov face a maximum penalty of 20 years in prison on the obstruction of justice count and five years on the conspiracy count. All face up to three years of supervised release and a $250,000 fine for each charge. Kadyrbayev and Tazhayakov also face the possibility of being deported at the conclusion of this prosecution.
The case is being prosecuted by Assistant U.S. Attorneys B. Stephanie Siegmann and John A. Capin of Ortiz’s Anti-Terrorism and National Security Unit with the assistance of the Counterterrorism Section of the Justice Department’s National Security Division.
The details contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Berlin Man Charged with Marijuana Trafficking, Money Laundering and Tax EvasionRead the Press Release
BOSTON – A Berlin man was charged today with conspiring to distribute more than 1,000 kilograms of marijuana, as well as money laundering and tax evasion.
Eric W. Sliwa, 32, was indicted for conspiracy to possess with intent to distribute and to distribute more than 1,000 kilograms of marijuana, 29 counts of money laundering, filing false tax returns and corruptly endeavoring to impede the administration of the IRS.
The indictment alleges that from 2001 to 2012, Sliwa and others distributed large quantities of marijuana. In June 2006, Sliwa set up a company, EWS Gem Corp., for the purpose of concealing his drug proceeds and making it appear as though he had legitimate income. While Sliwa filed personal tax returns for the tax years 2008 through 2010, he failed to report all of the proceeds from his drug trafficking business. During the time period of the conspiracy, Sliwa purchased several assets including his home in Berlin, Mass., a condominium in Killington, Vt. and multiple vehicles. Sliwa also possessed nearly $500,000 in cash as well as a coin and precious metal collection worth approximately $370,000.
If convicted, Sliwa faces a minimum mandatory sentence of 10 years in prison and a maximum of life, a minimum of five years and up to a lifetime of supervised release, a fine of $500,000 or twice the value of the property involved in the money laundering transactions, and forfeiture of multiple assets including, but not limited to, his home in Berlin, multiple vehicles, nearly $500,000 in cash and his coin/precious metal collection.
United States Attorney Carmen M. Ortiz; John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; and John G. Collins, 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 Cory Flashner of Ortiz’s Worcester Branch Office.
The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.Attleboro Man Charged with Securities FraudRead the Press Release
BOSTON – Federal charges against an Attleboro man were unsealed today after his arrest this morning on securities fraud charges.
Robert Burton, 36, the Managing Director of Pinnacle Financial Consulting LLC, Pinnacle Strategic Investments LLC, and the Pinnacle Asset and Capital Management Group LLC, was arrested this morning after being charged yesterday for promoting various high-yield investments through Promissory Notes and Offering Memoranda. According to the complaint, Burton represented that he would return the principal invested within approximately 30 days, along with an interest payment equal to 100% of the amount invested. Burton did not make the promised payments and, in some instances, provided investors with checks that ultimately bounced.
The statutory maximum penalties for the securities fraud charges are 20 years in prison, followed by five years of supervised release and a $5 million fine. Burton made an initial court appearance today and will appear for a detention hearing on September 4 at 11:30 a.m.
U.S. Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The Massachusetts Attorney General’s Office, which has a civil case pending against Burton, cooperated with the investigation. The case is being prosecuted by Assistant U.S. Attorney Sarah E. Walters of Ortiz’s Economic Crimes Unit.The details contained in the Complaint are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
U.S. Attorney’s Office Co-hosts Officer Safety and Survival TrainingOver 400 Massachusetts Law Enforcement Received Training This YearRead the Press Release
BOSTON – The United States Attorney’s Office in partnership with the Holden Police Department, the New England State Police Information Network® (NESPIN), and Anna Maria College hosted VALOR® Officer Safety and Survival Training for over 200 local and state law enforcement officers. The training is sponsored by the Department of Justice’s Bureau of Justice Assistance (BJA) and facilitated by the Institute for Intergovernmental Research (IIR). In April, IIR provided the training to over 200 Massachusetts law enforcement officers at Hanscom Air Force Base.
The Preventing Violence Against Law Enforcement and Ensuring Officer Resilience and Survivability (VALOR®) Specialized Program is a one-day BJA grant-funded training designed for front-line law enforcement to promote officer safety and to help prevent injuries and deaths to officers in the line of duty. During the training, participants learn to identify signs of emerging threats such as detecting concealed weapons and armed gunman. Additionally, officers gain knowledge of the mental and physical skills necessary for surviving high-risk tactical situations that may involve armed shooters. And most importantly, officers receive a critical review of emergency casualty care to respond to self-injuries and those of fellow officers. Taught by experienced law enforcement professionals from around the country, the VALOR® Program combines relevant sets of best practices with real-world experience.
“Our law enforcement officers face tremendous risks each day to keep every citizen safe,” said U.S. Attorney Carmen M. Ortiz. “It is their job to respond to unpredictable situations that may require them to put their safety in jeopardy. So it is incumbent upon us to reduce preventable injuries and deaths by emphasizing officer safety and appropriate training. The VALOR® Program aims to do just that by training officers in the most up-to-date techniques and procedures.”
Holden Police Chief George R. Sherrill said, “It is a pleasure to host this valuable training to the central Massachusetts law enforcement community. Officer safety training is so valuable and necessary as we respond each and every day in our communities. Special thanks to Anna Maria College President Jack Calareso for offering Anna Maria College as a host site."“NESPIN and the RISS Program are proud to be a long time partner with the VALOR Program which brings vital officer safety training to our law enforcement officers, not only here in New England, but for officers throughout the United States,” said Donald Kennedy, Executive Director of NESPIN.
This training would not have been possible without the Holden Police Department, Anna Maria College, NESPIN and the staff at IIR.Pennsylvania Man Pleads Guilty to Hacking into Multiple Computer NetworksRead the Press Release
BOSTON – A Pennsylvania man pleaded guilty today to charges stemming from his participation in a scheme to hack into computer networks and sell access to those networks.
Andrew James Miller, 23, of Devon, Penn., pleaded guilty before U.S. District Judge Mark Wolf to one count of conspiracy and two counts of computer intrusion.
From 2008 to 2011, Miller remotely hacked into a variety of computers located in Massachusetts and elsewhere, and, in some instances, surreptitiously installed “backdoors” into those computers. These “backdoors” were designed to provide future administrator-level, or “root,” access to the compromised computers. Miller obtained log-in credentials to the compromised computers. He and his co-conspirators then sold access to these backdoors, as well as other log-in credentials. The access sold by Miller and his co-conspirators allowed unauthorized people to access various commercial, education and government computer networks.
Sentencing is scheduled for November 19 at 3 p.m. The maximum penalty for conspiracy is five years in prison. One of the computer intrusion counts carries a maximum penalty of five years in prison and the other, involving intentional damage to a private computer, carries a maximum penalty of 10 years in prison.
United States Attorney Carmen M. Ortiz, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Vincent B. 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. Attorney Adam Bookbinder of Ortiz’s Cybercrimes Unit and Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section.
Former Salvadoran Military Officer Sentenced for Perjury and Concealing Information from U.S. GovernmentRead the Press Release
BOSTON – A Salvadoran man residing in Everett who faces charges of crimes against humanity and state terror in Spain was sentenced today for immigration fraud and perjury in connection with false statements he made on immigration forms in order to remain in the United States.
Inocente Orlando Montano, 70, was sentenced today by U.S. District Court Judge Douglas P. Woodlock to 21 months in prison, followed by one year of supervised release and a special assessment of $600. Montano previously agreed to be deported from the U.S. upon completion of his prison term. A judicial order of removal has been secured, and he will be removed from the U.S. to El Salvador following his sentence. In September 2012, Montano pleaded guilty to three counts of immigration fraud and three counts of perjury.
The crimes stemmed from false statements Montano made to obtain Temporary Protective Status (TPS), a benefit available to foreign nationals, permitting them to remain in the U.S. if they are unable to safely return to their home country because of ongoing armed conflict, the temporary effects of an environmental disaster, or other extraordinary and temporary conditions. In 2002, Montano was present in the U.S. and, on several occasions thereafter, applied for and obtained TPS. On his applications, Montano falsified the date on which he entered the country because he knew that if he stated the actual date, he would have been ineligible for TPS.
Montano, a citizen of El Salvador, served in the Salvadoran military for nearly 30 years, rising to the rank of colonel. From 1989-1992, the final years of a decade-long civil war, he served as the Vice Minister for Public Security. After the civil war, in 1993, the U.N. Truth Commission on El Salvador found that there was substantial evidence that Colonel Montano was part of the small core group of elite officers responsible for the 1989 murder of six Jesuit priests, their housekeeper, and the housekeeper’s daughter. Those murders, commonly referred to as the Jesuit massacre, constitute one of the most notorious human rights crimes in El Salvador’s history. The U.N. Truth Commission Report also named Colonel Montano as one of two top officials who covered up the military high command’s role in the Jesuit massacre by pressuring lower-level soldiers not to mention orders from above in their testimony to the Salvadoran court officially charged with investigating the crime.
According to the Government’s memorandum, Colonel Montano left El Salvador at a time when events in El Salvador made it appear that high level military officers would be prosecuted for their alleged role in the Jesuit massacre. Prosecutors asserted that Colonel Montano traveled to the U.S., at least in part, to distance himself from authorities in El Salvador that could prosecute him for his alleged role in the massacre.“Today’s sentence sends a strong message that those alleged to have engaged in human rights abuses overseas should not expect to hide in the United States,” said U.S. Attorney Carmen M. Ortiz. “We will continue to prosecute these cases fully to protect the integrity of our immigration system and to discourage those involved in wrongdoing in their home countries from seeking refuge here.”
“Today’s sentence emphasizes the fact that the United States will never be a safe haven for those who engage in alleged criminal acts in their home countries,” said Bruce M. Foucart, Special Agent in Charge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston. “I applaud the efforts of the skilled and dedicated special agents and federal prosecutors who were instrumental in bringing this case to a successful resolution.”
U.S. Attorney Ortiz and SAC Foucart made the announcement today. The case was prosecuted by Assistant U.S. Attorney John A. Capin of Ortiz’s Antiterrorism and National Security Unit.Lynn Tax Preparer Sentenced to Federal Prison for Identity Theft and Tax FraudRead the Press Release
BOSTON – A Lynn man was sentenced today in U.S. District Court in Boston for identity theft and tax fraud committed while operating a tax return preparation business.
Roosevelt Fernandez, 33, was sentenced by U.S. District Judge Douglas P. Woodlock to 42 months in prison, and ordered to pay $116,679 in restitution to the Internal Revenue Service. On Jan. 16, 2013, Fernandez pleaded guilty to a 13-count superseding information charging him with aiding and assisting in the preparation of false income tax returns and identity theft.
Fernandez held himself out as an experienced tax return preparer operating a business called H&T Multi Services in Lynn, Mass. On numerous occasions, Fernandez inserted false and fabricated information into his clients’ income tax returns. This information included wholly fictitious and fraudulently inflated claims relating to deductions and credits. In addition, Fernandez omitted the names and personal identifying information of dependent children from their actual parents’ income tax returns, and then charged other clients $500 or more to add those dependents to their income tax returns in order to generate larger tax refunds.United States Attorney Carmen M. Ortiz, Assistant Attorney General Kathryn Keneally of the Department of Justice Tax Division, and Acting Special Agent in Charge John Collins of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was prosecuted by Assistant United States Attorney Lori Holik of Ortiz’s Economic Crimes Unit and Trial Attorney Sean R. Delaney of the Tax Division.
Leader of Drug and Money Laundering Conspiracy Receives 20 Years in Federal PrisonRead the Press Release
BOSTON – The leader of an organized crime group was sentenced to 20 years in federal prison for drug trafficking and money laundering after a multi-year FBI task force investigation into illegal activity in Boston’s Chinatown.
John Willis, 42, of Dorchester, also known by his Chinese nickname “Bac Guai John” (White Devil John), was sentenced by United States District Court Judge Joseph L. Tauro. He pleaded guilty in March to conspiracy to distribute oxycodone and money laundering conspiracy. Judge Tauro also imposed a criminal forfeiture money judgment of $2 million. Willis, along with 12 others, was first charged in 2011 for leading an organization which spanned Massachusetts, Florida, New York, Rhode Island, South Carolina and elsewhere. The organization trafficked hundreds of thousands of oxycodone pills and generated over $4 million in proceeds.
The FBI’s Organized Crime Task Force led a long-term investigation into drug-trafficking, illegal gambling, extortion, prostitution, and other criminal activity in Boston’s Chinatown and elsewhere. The investigation included a seven month, court-authorized wire surveillance of cell phones, including the phones of five of the defendants associated with the conspiracy. The investigation has resulted in the seizure of over $480,000 in cash, a 38-foot speed boat, numerous luxury vehicles, 13 firearms and approximately 12,000 oxycodone pills. Investigators also uncovered extensive evidence of illegal gambling and prostitution as well as the use of extortionate threats to collect loans to gamblers and others.
“Twenty years in federal prison is well-deserved for Mr. Willis, a career criminal and the mastermind behind this organization,” said U.S. Attorney Carmen M. Ortiz. “Not only did this investigation expose a world of illegal gambling, prostitution, and extortion, but also revealed a significant Oxycodone distribution operation. This case significantly disrupted the flow of this highly-addictive, dangerous heroin substitute which has been responsible for numerous deaths in Massachusetts.”
“Mr. Willis and his associates are an example of the opportunistic nature of organized crime groups whose members share a common bond of victimizing their communities through drug dealing, illegal gambling, extortion and exploitation of women in their quest for illegal profits,” said Vincent Lisi, Special Agent in Charge of the FBI’s Boston Division. “The methodical nature and duration of this investigation reflects the focus of the Boston Organized Crime Task Force, which is composed of the Massachusetts State Police, Medford, Boston, and Quincy Police Departments, Massachusetts Department of Corrections and IRS-CID, to secure justice for the victims and to make the community safer.”
The following were also convicted of the drug-trafficking conspiracy and, in the cases of some defendants, money laundering conspiracy: Kevin Baranowski, 41, of Boston, sentenced to 80 months; Peter Melendez, 50, of Sunrise, Fla., sentenced to 160 months; Colby Deering, 41, of Quincy, sentenced to 60 months; Brian Bowes, 42, of Sunrise, Fla., sentenced to 57 months. Bridget Welty, 40, of Boston, was convicted of structuring, and was sentenced to a year of supervised release. Anh Nguyen, 28, of Boston, was convicted of witness tampering, and sentenced to a year of probation. Brant Welty, 39, of Boston, and Aibun Eng, 38, of Quincy, both convicted of drug conspiracy, are scheduled to be sentenced on Sept. 18. Michael Clemente, 29, of Sunrise, Fla., also convicted of drug conspiracy, is scheduled for sentencing on Oct. 1.
Willis has a long history of involvement in organized crime. He was involved with several others who were charged in this investigation. In one case, the following defendants were convicted of operating an illegal gambling business, which had been based at 17-23 Beach Street in Chinatown since 2010. Minh Cam Luong, a/k/a Ming Jai, 46, Hin Pau, 45, and Judy Huyen Truong, 41, of Quincy; Jian Ming Chen, 38, of Brighton; Elburke Lamson, 47, of Chelsea; and Tan Ngo, 54, of Waltham. Luong and Pau also were convicted of conspiring to use and/or using extortionate means, including threats or actual use of violence, to collect debts, including debts owed to the illegal gambling business.
Luong, was sentenced to 84 months; Pau, 96 months; Chen, one year and one day; Lamson, six months; Ngo,18 months; and Truong, time served and seven months supervised release. Finally, Chien Van Tran, 43, of Malden, whose case is pending, is charged with operating an illegal gambling business and extortion conspiracy.
According to an FBI affidavit filed with the court, Luong and Ngo were both members of Chinatown’s Ping On gang in the late 1980s and early 1990s, when the Ping On gang was vying for control of crime in Chinatown. Both were convicted and have served federal prison sentences on charges including heroin trafficking. Willis, also involved in the Ping On gang, was a follower of Ngo.
In another case arising from this investigation, Wei Xing Chen, 50, of Cambridge, was convicted of possession with intent to distribute benzylpiperazine (BZP), also known as ecstasy, and conspiracy to distribute BZP. In addition, Chen and Xiaohong Xue, 41, of Cambridge, were convicted of conspiring to induce travel to engage in prostitution. Chen also was convicted of money laundering conspiracy. Chen, who operated brothels in Cambridge and Boston, was sentenced to 70 months while Xue was sentenced to two years of probation, including six months of home detention.
Willis and several of his co-defendants frequented Chen’s brothels and Luong’s gambling den. Employees of Luong’s gambling business frequented Chen’s brothels. Some of Luong’s employees associated with Willis. Willis also served as an enforcer for Chen.
In a final case arising from this investigation, brothers Stanley Gonsalves, 34, of Sandwich, and Joshua Gonsalves, 33, of Dennisport, have been charged with distribution and conspiracy to possess with intent to distribute oxycodone. Both defendants are detained pending trial.
U.S. Attorney Ortiz and FBI Special Agent in Charge Lisi made the announcement today. The case was investigated by the FBI’s Organized Crime Task Force which includes IRS Criminal Investigation, Massachusetts State Police, Massachusetts Department of Correction, and Quincy, Medford and Boston Police Departments. Assistance was also received from the DEA, ICE Homeland Security Investigations, Cambridge Police Department, New York City Police Department, Broward County (Fla.) Sheriff’s Office and the Ridgeland and Dillon Police Departments in South Carolina. The case was prosecuted by Assistant U.S. Attorneys Timothy E. Moran and Richard L. Hoffman of Ortiz's Strike Force Unit.
Winthrop Insurance Advisor Sentenced to over Eight Years for Investment Fraud SchemeSeven Million Dollar Loss over 10-year PeriodRead the Press Release
BOSTON - A Winthrop man was sentenced late yesterday in federal court for his role in a $7 million fraud scheme that centered on steering clients into investments in “life settlements.”
United States District Court Judge Nathaniel M. Gorton sentenced Joseph Gennaco, 68, of Winthrop and Jupiter, Fla., to 100 months in prison to be followed by three years of supervised release for 27 counts of mail and wire fraud. He was ordered to pay $7 million in restitution to 40 victims. In February 2013, Gennaco pleaded guilty to all counts in the indictment. Gennaco has been held in custody since November 2011, when his bail was revoked because, among other things, he continued to defraud people even after he had been charged.
From 2001 through 2011, Gennaco defrauded customers of his insurance business by claiming that their money would be invested in various insurance-based instruments. Instead Gennaco diverted the customers’ funds for his own personal and business purposes. Gennaco operated in the name of several entities, including Gennaco & Associates, Oceanview Financial Services, GCT Trust, and Crescent Management Group. Gennaco told investors that their funds would be invested in one or more life insurance policies - or “life settlements” - and that the investments would be repaid with a “guaranteed” profit from the sale of those policies. In reality, Gennaco took investors’ funds for his own uses, allowed insurance policies to lapse by failing to pay the premiums, and failed to repay investors when he sold policies that had been purchased as investments. By continually reassuring investors that their money was safe, and by offering a variety of phony excuses for the delay in repaying investors, Gennaco strung along many of his victims for years.
United States Attorney Carmen M. Ortiz; Kevin M. Niland, Inspector in Charge of the United States Postal Inspection Service in Boston; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Suffolk County District Attorney Daniel Conley’s office; Secretary of the Commonwealth’s Securities Division; the Commonwealth’s Office of Consumer Affairs and Business Regulation, Division of Insurance; and the United States Trustee’s Office in Boston also provided assistance in the investigation. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
Former Lawrence IT Director Pleads Guilty to Fraud and TheftRead the Press Release
BOSTON - A Dover, NH, man was convicted yesterday in federal court of defrauding the City of Lawrence of more than $5,000 while serving as the Director of the city’s Informationi Technology (IT) Department.
Bryan J. Cahoon, 53, pleaded guilty before U.S. District Judge Rya W. Zobel to a one-count Information alleging fraud and theft concerning programs receiving federal funds.
Had the case proceeded to trial the Government’s evidence would have proven that in 2008 and 2009, Cahoon steered municipal contracts and paid internships to his friends and associates, who then performed services for Cahoon’s private company, Networks@Home, which had subcontracted work on projects for City of Lawrence from another company.
According to the Information and disclosed today in open court, Cahoon worked under a contractual arrangement with the City of Lawrence to serve as the city’s IT Director from April 2007 through January 2010. During this time, Cahoon had an ownership interest in a company called Networks@Home, which provided computer networking and telecommunications services. In 2008 - 2009, Networks@Home subcontracted IT-related work at the Lawrence Public Library and other city properties from another technology company. During that time frame, and in his capacity as IT Director for Lawrence, Cahoon steered city contracts just under $25,000, to friends and associates. He also hired acquaintances as interns for the IT Department by means of contracts just under $5,000. Cahoon then utilized the services of the individuals who had been awarded city contracts and paid internships with his assistance to perform work on city projects on behalf of Networks@Home. Effectively, therefore, the City of Lawrence was double billed for the same work, while Cahoon did little to no work in return for the funds he obtained from the city.
A substantial portion of the funds used to pay for work at the Lawrence Public Library, as well as discounts associated with IT equipment and services, came from the federal “E-Rate” program. The E-Rate program provides discounts to assist most local schools and libraries to obtain affordable telecommunications and Internet access.
Judge Zobel scheduled sentencing for Nov. 19, 2013. Cahoon faces up to 10 years in prison, to be followed by three years of supervised release and a $250,000 fine.
United States Attorney Carmen M. Ortiz, Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Division, Jonathan W. Blodgett, Essex County District Attorney and Glenn A. Cunha, Inspector General for the Commonwealth of Massachusetts, made the announcement. The case is being prosecuted by Assistant U.S. Attorney William F. Bloomer.Man Indicted for Embezzling from VA Program and Identity TheftRead the Press Release
BOSTON – A Massachusetts man was charged today with embezzling money from a Veterans Affairs program and identity theft.
Riccardo D’Orsainville, a/k/a “Riccardo Lloyd-D’Or,” was indicted for embezzling money from a program receiving federal funds, and for using the identity of other persons to open bank accounts.
The indictment alleges that between July 2012 and January 2013, D’Orsainville embezzled more than $66,000 in program payments and more than $2,000 in U.S. Treasury checks which were intended for the Boston Veterans Affairs Research Institute, Inc., (BVARI), where D’Orsainville was employed through a temporary agency as an executive assistant. BVARI is a federally funded non-profit organization which conducts medical research and educational activities for the Veterans Affairs health care system. It is further alleged that D’Orsainville used the identities of co-workers to open unauthorized corporate bank accounts under BVARI’s name, where he deposited the stolen checks and withdrew the funds for his own use.
If convicted, D’Orsainville faces a maximum penalty of up to 15 years in prison, to be followed by three years of supervised release and a $250,000 fine.
United States Attorney Carmen M. Ortiz and Jeffrey G. Hughes, Special Agent in Charge, 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 Shelbey D. Wright of Ortiz’s Health Care Fraud Unit.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Watertown Police Officer Convicted of Passing False Prescriptions Using Another’s IdentityRead the Press Release
BOSTON - A Framingham man pleaded guilty today in federal court in connection to crimes committed while in his official capacity as a Watertown police officer.
Joseph Deignan, 58, was convicted of unlawful possession of a controlled substance by fraud and fraud in connection with identification documents.
At today’s plea hearing, the prosecutor stated that Deignan, a former Watertown Police Officer who retired in February 2012, used the identity of another person to obtain oxycodone and other controlled substances by forging prescriptions in the other person’s name. Deignan stole the driver’s license of the person in 2010 while he was working as the traffic supervisor for the Watertown Police Department. From 2010 through December 2013, using various doctors’ information, Deignan forged over 100 prescriptions for controlled substances and used the stolen identity to fill the scripts.
The maximum sentence under the identity theft count is 15 years in prison, followed by three years of supervised release and a $250,000 fine. Judge Douglas P. Woodlock set sentencing for November 15.
United States Attorney Carmen M. Ortiz and John Arvanitis, Special Agent in Charge of the Drug Enforcement Administration’s New England Field Division made the announcement today. The DEA was provided assistance from the Marlborough Police Department. The Watertown Police Department has been cooperative during the investigation. The case is being prosecuted by Assistant U.S. Attorney Eugenia Carris of Ortiz’s Public Corruption Unit.