District of Massachusetts
Press releases recorded for this federal judicial district.
Chief Executive Officer Sentenced to 30 Months in Securities Fraud SchemeRead the Press Release
BOSTON - The chief executive of Vida Life International Ltd., a public company that traded on the over-the-counter securities market, was sentenced yesterday to 30 months in federal prison for conspiracy to commit securities fraud, wire fraud and mail fraud.
John C. Jordan, 62, of Cameron Park, Calif., was sentenced by United States District Court Judge Nathaniel M. Gorton after being convicted in May by a jury. Jordan was also ordered to pay a fine and to forfeit his illegal earnings.
Jordan was sentenced for his role in a scheme to pay secret kickbacks to an investment fund representative who had agreed to steer the investment fund to buy stock in Vida Life. The kickbacks were concealed through the use of a sham consulting agreement and other fraudulent documents. Jordan did not know 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.
Two additional defendants who were charged as part of the undercover operation were sentenced last month. 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 in federal prison after pleading guilty to conspiracy to commit securities fraud.
Two other defendants are scheduled to be sentenced over the next several weeks. Karen Person, 62, of Las Vegas, Chief Executive Officer of the Small Business Company, Inc., is scheduled to be sentenced on August 16. Person also pleaded guilty to conspiracy to commit securities fraud. James Prange, 62, of Greenbush, Wis., a self-described financing consultant to small and emerging companies, who, like Jordan, was convicted after trial on multiple counts of conspiracy to commit securities fraud and wire fraud, is scheduled to be sentenced on September 25, 2013.
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. Six of the defendants have already pled guilty to charges arising out of their involvement in the scheme.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 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.
Federal Jury Convicts James “Whitey” BulgerRead the Press Release
BOSTON – Following a two-month long trial, the jury convicted James J. Bulger, holding him responsible for the murder of 11 people, as well as numerous counts of extortion, money laundering, drug dealing, and firearms possession. Sentencing will begin on Nov. 13.
After deliberating for over 32 hours, over five days, the jury found the former fugitive guilty of racketeering conspiracy and numerous racketeering acts of murder, extortion, narcotics distribution, money laundering and possession of firearms including machineguns. With this verdict, the jury has found that Bulger played a role in the murders of Deborah Hussey, Paul McGonagle, Edward Connors, Thomas King, Richard Castucci, Roger Wheeler, Brian Halloran, Michael Donahue, John Callahan, Arthur Barrett and John McIntyre.
Bulger, the former leader of the Winter Hill Gang, ran a vast criminal network that emanated from South Boston and controlled much of the city and the surrounding areas during the 1970s and 1980s. In order to generate money and maintain dominance among other criminal enterprises, Bulger and his associates engaged in numerous illegal activities such as loansharking, extortion of local business owners and bookmakers, trafficking of narcotics and firearms, and murder. Bulger, and associates under his direction, used violence, threats, and intimidation to carry out these illegal activities.
In late 1994, upon learning of his impending indictment, Bulger fled Massachusetts. On June 22, 2011, Bulger and his companion, Catherine Greig, were arrested in Santa Monica, California after 16 years on the run. Greig was later convicted of conspiracy to harbor a fugitive and is currently serving eight years in federal prison.
U.S. District Court Judge Denise J. Casper scheduled sentencing for November 13. He faces a maximum of up to life, plus 30 years in prison.
United States Attorney Carmen M. Ortiz; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Michael E. Horowitz, Inspector General for the Department of Justice; Vincent Lisi, Special Agent in Charge of the FBI’s Boston Field Division, and U.S. Marshal John Gibbons made the announcement today.
The case was prosecuted by Assistant U.S. Attorneys Fred M. Wyshak, Jr., Brian T. Kelly and Zachary Hafer of Ortiz’s Public Corruption and Special Prosecutions Unit.
Belmont Man Charged with Insider TradingRead the Press Release
BOSTON - A Belmont resident was charged today in federal court with securities fraud, for trading on material non-public information regarding his employer.
Jospeh M. Tocci, 59, was charged in an Information with one count of fraud in connection with the offer, purchase or sale of a security. The charge arises from Tocci’s purchase of “putTocci Joseph PR” options for stock of the company where he worked, after he learned of bad news that had not yet been publicly announced.
The Information alleges that Tocci was an assistant treasurer at Devens-based American Superconductor Corporation (AMSC), a producer of components for the wind power industry. On March 31, 2011, Tocci learned from AMSC’s chief financial officer that there was a serious problem with AMSC’s largest customer, a Chinese company that was refusing new shipments and was refusing to pay for prior AMSC shipments. On April 1, 2011, Tocci purchased approximately $12,652 worth of “put” options on AMSC stock, notwithstanding a corporate blackout period that barred designated employees, including Tocci,from trading in AMSC stock. Those “put” options positioned Tocci to make money if the company’s stock price fell significantly before May 21, 2011. After the close of trading on April 5, 2011, AMSC publicly announced its anticipated financial results for the preceding year and quarter, and also announced the news regarding its largest customer. The following day, AMSC’s stock price dropped sharply. Over the next few days, Tocci sold his options for a net profit of approximately $82,440.
Tocci is expected to plead guilty to the charge pursuant to a plea agreement that, if accepted by the court, provides for a probationary sentence.
United States Attorney Carmen 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 Federal Bureau of Investigation with assistance from the United States Securities and Exchange Commission. It is being prosecuted by Assistant U.S. Attorney Andrew E. Lelling of Ortiz’s Economic Crimes 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.
###Orthofix Territory Manager Sentenced to Eight Months in Prison for Committing Medicare Fraud and Paying KickbacksRead the Press Release
BOSTON – A Tennessee man was sentenced today in federal court to eight months in prison and ordered to pay $75,000 in criminal fines and forfeiture for committing Medicare fraud and paying kickbacks to health care professionals.
On May 7, 2013, Hunter A. Rigsby, 33, of Knoxville, Tenn., pleaded guilty to health care fraud and paying kickbacks. U.S. District Court Judge F. Dennis Saylor IV sentenced him to eight months in prison to be followed by one year of supervised release. Judge Saylor also ordered Rigsby to forfeit $70,000, pay a fine of $5,000, and pay restitution to victims of his offenses.
Rigsby, a former Territory Manager of Orthofix, Inc., admitted that he committed health care fraud, and paid kickbacks to two separate health care professionals. Between 2005 and 2011, Rigsby sold bone growth stimulator medical devices for Orthofix. Bone growth stimulators are used to assist spinal fusions and to help heal bone fractures that did not heal properly. On dozens of occasions, Rigsby altered patient medical records and forged physicians’ signatures on prescriptions and Medicare Certificates of Medical Necessity to induce the Medicare program to pay for bone growth stimulators that were not covered under program guidelines. Medicare only pays for “long bone” stimulators under certain circumstances; for instance, when at least 90 days have elapsed without clinically significant bone healing. Rigsby was well-aware of these guidelines, having received training on these guidelines at Orthofix. On numerous occasions, doctors in Rigsby’s territory ordered bone growth stimulators that did not satisfy Medicare’s guidelines. When this occurred, Rigsby falsified patient records to make it appear as though the claim was payable under Medicare’s guidelines, when in fact Medicare should not have paid. On some occasions, Rigsby prepared completely falsified orderswhere the physician had not ordered a bone growth stimulator at all.
In July 2009, Orthofix fired Rigsby after discovering his fraud scheme. Immediately thereafter, Rigsby and Orthofix sales personnel devised a scheme to allow Rigsby to continue to submit bone growth stimulator orders to Orthofix through a new front company that Rigsby created. Rigsby concealed his affiliation with the front company so that Orthofix compliance personnel would not detect that he was still doing business with the company. Rigsby continued to submit orders for stimulators, sending the orders in through separate individuals. Even though Rigsby had been fired for falsifying medical records, he continued to manipulate patient medical records and forge physician’s signatures until Orthofix finally severed its relationship with him in 2011. Through his scheme, Rigsby caused Medicare and other federal insurance programs to pay more than $400,000 for bone growth stimulators that should not have been paid because Rigsby falsified claims that were outside of program guidelines.
Rigsby also paid kickbacks to health care professionals to induce them to order Orthofix stimulators. For instance, Rigsby paid the person who was responsible for ordering stimulators at one of the largest medical practices in Tennessee. Rigsby approached this person and asked if he could pay this person in return for steering stimulator orders to Orthofix and Rigsby. The person agreed, and Rigsby left an envelope with $200 in cash at the person’s house. As another example, Rigsby entered into an arrangement to pay a nurse in Morristown, Tenn., each time that the surgeon who employed the nurse ordered an Orthofix stimulator. Rigsby left an envelope of cash ($200-$300) in the back of the nurse’s truck after the surgeon began to order stimulators.
In addition to the Rigsby sentence, the Orthofix investigation has to date resulted in a number of felony charges against employees and contractors of Orthofix, including the following:
- On Dec. 14, 2012, Orthofix was convicted of obstruction of a federal audit and paid approximately $42 million in criminal fines and civil payments, and was sentenced to probation for five years;
- On Jan. 22, 2013, Thomas Guerrieri, the former Orthofix Vice President of Sales, was sentenced to eight months in prison and was ordered to pay $50,000 in forfeiture and fines for paying kickbacks to health care professionals;
- On July 19, 2012, Michael Cobb, a physician’s assistant, was sentenced to six months in prison and six months home confinement and ordered to forfeit $10,000 and pay a $3,000 fine for accepting kickbacks from Orthofix;
- On Jan. 31, 2013, Mitchell Salzman, a former Orthofix Regional Manager, was sentenced to three months of home confinement and one year of probation for committing perjury;
- On Jan. 9, 2013, Derrick Field, a former Orthofix Territory Manager, was sentenced to five months of home confinement as part of a two year probation sentence, in addition to paying $44,000 in forfeiture and fines, for committing health care fraud;
- On Jan. 23, 2013, Michael McKay, a former Orthofix Territory Manager, was sentenced to three months home confinement and one year probation and paid $13,000 in forfeiture and fines for committing health care fraud;
- On Sept. 28, 2012, Brian Racey, a former Orthofix Territory Manager, was sentenced to one day incarceration, six month of home confinement, two years of supervised release, and a $2,500 fine for committing health care fraud; and
- On June 12, 2013, Ilene Terrell, MD, a physician in Virginia, was indicted for making false declarations to a grand jury in Boston. Her trial has not yet been scheduled.
The case was investigated by the Department of Health and Human Services Office of Inspector General. It was prosecuted by Assistant U.S. Attorney David Schumacher of U.S. Attorney Carmen M. Ortiz’s Health Care Fraud Unit.
New Jersey Man Sentenced to Ten Years for Receiving Child PornographyRead the Press Release
BOSTON – A Sayreville, N.J. man was sentenced yesterday in federal court in Boston on child pornography charges.
Anthony Scarano, 52, was sentenced by U.S. District Judge F. Dennis Saylor IV to 10 years in prison, followed by five years of supervised release. On May 14, 2013, Scarano pleaded guilty to two counts of receipt of child pornography.
On November 11 and November 24, 2012, Scarano coaxed a 15-year-old Massachusetts girl to send him pornographic videos of herself over the Internet. Scarano met the girl on an Internet chat room and over time groomed the girl for sexual exploitation. Police became aware of Scarano’s crimes after the girl’s guardian found disturbing images of her on her cell phone. At the time of the offenses, Scarano was married and employed as a Senior Content Manager at ThomasNet in New York City.
United States Attorney Carmen M. Ortiz; Kevin M. Niland, Inspector in Charge of the United States Postal Inspection Services; Barnstable Police Chief Paul MacDonald; and Yarmouth Police Chief Frank Frederickson made the announcement today. The case was prosecuted by Assistant U.S. Attorney David G. Tobin of Ortiz’s Major Crimes Unit.
Former Postal Worker Arrested for Stealing Video Games from the MailRead the Press Release
BOSTON - Federal charges against a former postal worker from Dorchester were unsealed today in U.S. District Court.
On July 30, James L. White, 38, was indicted for theft of mail by a postal employee. It is alleged that from July through November 2012, White, while working as a mail handler at the Boston General Mail Facility, stole GameFly video games from the mail. White was arrested today and his initial appearance is at 2 p.m.
The offense with which White is charged has a maximum penalty of five years in prison, followed by three years of supervised release and a $250,000 fine.
United States Attorney Carmen M. Ortiz and Rafael Medina, Special Agent in Charge of the United States Postal Service, Office of Inspector General for the Northeast Area Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Eugenia M. Carris of Ortiz’s 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.
Former Arlington Resident Receives 82 Months for Stalking and ThreatsRead the Press Release
BOSTON – A former Arlington resident was sentenced late yesterday to 82 months in federal prison for stalking and threatening to kill.
Phillip Andrew Bauer, 33, a Canadian citizen previously residing in Arlington, was sentenced by U.S. District Judge George A. O’Toole, Jr., to 82 months in prison to be followed by three years of supervised release. He is subject to deportation upon release from prison. In April 2013, Bauer pleaded guilty to mailing threatening communications and two counts of stalking.
Following a domestic altercation in February 2011, Bauer began to send threatening, harassing and extortionate communications in various forms to the victim and members of her family. In some communications, he threatened to kill the victim and/or two of her siblings and demanded $50,000 cash. Bauer sent some of the letters while he was incarcerated and while a restraining order was in effect.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Boston Police Commissioner Edward Davis; and Arlington Chief of Police Frederick Ryan made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Suzanne Sullivan Jacobus and David G. Tobin of Ortiz's Major Crimes Unit.Lee Police Chief Indicted for Extortion and Money Laundering Alleged Activity Includes Coercing Payment from Individuals Facing Prostitution Charges and Diverting Money Through Children’s Toy FundRead the Press Release
BOSTON – A federal grand jury in Springfield returned an indictment today against Lee Police Chief Joseph Buffis for extortion and three counts of money laundering.
It is alleged that in February 2012 Buffis, 55, of Pittsfield, acting in his official capacity as Lee Police Chief, extorted a $4,000 “donation” from two individuals who were facing prostitution-related charges. The “donation” was made payable to the Edward J. Laliberte Toy Fund, a holiday toy fund that Buffis controlled. Buffis deposited the $4,000 check into the Toy Fund’s bank account and quickly withdrew $3,990 which he then deposited into a joint bank account that he operated with his wife. The diverted money was then used to pay for various personal expenses. Buffis is alleged to have lied to law enforcement about the disposition of the funds.“To be entrusted to serve and protect is a great honor and privilege. The alleged actions of Chief Buffis disgrace the many incredible law enforcement stewards who uphold and enforce the law. Actions like these threaten the credibility of our justice system, and we will not stand idly by and allow the trust of our communities to be violated,” said United States Attorney Carmen M. Ortiz.
Berkshire District Attorney David F. Capeless said, “The allegations contained in the federal indictment describe a serious breach of the public trust, and my Office will continue to work with United States Attorney Ortiz and her Office to see that justice is done and order restored. It should be made clear that these accusations are made against one man, Joseph Buffis, not the Lee Police Department or any other members of its force. My Office will continue to work proudly alongside the Lee Police Department to ensure safety and justice in the town of Lee and throughout Berkshire County.”“This is another example of a successful investigation and extraordinary teamwork between the FBI, the Massachusetts State Police, United States Attorney and Berkshire District Attorney’s Offices. The conduct charged in this indictment demonstrates law enforcement’s commitment to pursue public corruption at any level. We will not tolerate these acts, especially from those who have sworn to serve and protect the community and its citizens,” said FBI Special Agent in Charge Vincent B. Lisi.
If convicted, Buffis faces a maximum of 20 years in prison on each of the counts followed by five years of supervised release, and $250,000 fine. Buffis will be summoned to appear in court for his initial appearance.
U.S. Attorney Ortiz; District Attorney Capeless; FBI Special Agent in Charge Lisi; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police, made the announcement today. The U.S. Attorney’s Office would like to thank District Attorney Capeless and the Massachusetts State Police Berkshire Detective Unit for uncovering the alleged violations and initiating the investigation which led to today’s indictment.
The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz=s Springfield Branch Office.
We are seeking the public’s assistance in this case. For those who have donated cash or toys to the Edward J. Lalilberte Toy Fund or for those who have applied to the Edward J. Laliberte Toy Fund, please contact the Federal Bureau of Investigation, Springfield Resident Agency, at (413) 732-0159. Please contact the FBI if you have any information, questions or concerns regarding this matter.
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.
Federal Grand Jury Indicts Two Men for Obstruction of Justice in the Boston Marathon Bombing InvestigationRead the Press Release
BOSTON – A federal grand jury today returned a two-count indictment against two men previously charged with conspiracy to obstruct justice in the Boston Marathon bombing investigation.
Dias Kadyrbayev, 19, and Azamat Tazhayakov, 19, nationals of Kazakhstan who were residing in New Bedford on student visas, were charged today with conspiracy to obstruct justice and obstructing justice with the intent to impede the Boston Marathon bombing investigation. Kadyrbayev and Tazhayakov were originally charged on May 1, 2013, via criminal complaint.Today’s indictment alleges that on the evening of 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 another conspirator, according to the indictment, then 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 Tsarnaev’s backpack, which contained several items including fireworks, in a garbage bag, and put it in a trash dumpster outside their New Bedford apartment.
If convicted Kadyrbayev and Tazhayakov face up to 20 years in prison on the obstruction of justice count and up to five years in prison on the conspiracy count, each to be followed by up to three years of supervised release and a $250,000 fine. Both face the possibility of being deported.
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.
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.
Atlanta Hospital Worker Pleads Guilty to Stealing $1.7 Million in Medical SuppliesRead the Press Release
BOSTON – A former employee of an Atlanta-based hospital pleaded guilty yesterday to conspiring to sell stolen medical supplies valued at more than $1.7 million.
Felicia Duggan, 41, of Georgia, pleaded guilty before U.S. District Judge Mark L. Wolf to conspiracy to commit the offense of interstate transportation of stolen goods and two counts of subscribing to a false tax return.
Over a two-year period, Duggan stole numerous medical supplies and devices from a supply room of an Atlanta-based hospital where she was formerly employed. Beginning in March 2008, Duggan conspired with others to sell those stolen medical supplies on the black market. The conspiracy originated in Boston and subsequently moved to Atlanta. Several people in the Boston and Atlanta areas have been charged as part of this investigation into the black market for stolen hospital medical supplies and devices.
The statutory maximum penalty is five years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss on the charge of conspiracy and $250,000 on the charges of subscribing false tax returns.United States Attorney Carmen M. Ortiz; Mark Dragonetti, Special Agent in Charge of the U.S. Food and Drug Administration, Office of Criminal Investigations in New England; Kevin Niland, Inspector in Charge of the U.S. Postal Inspection Service; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement.
This case is being prosecuted by Assistant U.S. Attorney Amanda P. M. Strachan of Ortiz’s Health Care Fraud Unit.
Dorchester Man Convicted of Wire Fraud and Aggravated Identity TheftRead the Press Release
BOSTON – A federal jury today convicted a Dorchester man for his role in a wire fraud and identity theft scheme.
Jean Exume, 31, was convicted of 22 counts of wire fraud and three counts of aggravated identity theft following a six-day jury trial.
Exume was convicted of using fraudulently obtained bank cards belonging to Bank of America customers who primarily were living in the Greater Boston area. The cards then were used to purchase tens of thousands of dollars’ worth of postal money orders. Exume was also convicted of using fraudulent Florida driver’s licenses in the names of these customers in connection with the purchases. Exume also used the Bank of America cards to withdraw funds directly from the customers’ accounts.
U.S. District Court Judge Nathaniel Gorton scheduled sentencing for Nov. 7, 2013. The statutory maximum penalty for each of the wire fraud charges is 30 years in prison, followed by three years of supervised release, a fine of $250,000, restitution and forfeiture. The mandatory penalty for an aggravated identity theft conviction is two years in prison to be followed by one year of supervised release.
United States Attorney Carmen M. Ortiz, Kevin M. Niland, Inspector in Charge of the U.S. Postal Inspection Service, Boston Division, and Boston Police Commissioner Edward Davis made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Vassili Thomadakis of Ortiz’s Economic Crimes Unit and Amy Harman Burkart of Ortiz’s Cybercrime Unit.
Dominican Man Sentenced for Illegal ReentryRead the Press Release
BOSTON – A Dominican man was sentenced yesterday for illegally re-entering the United States after previously being deported to the Dominican Republic.
Lenny Soto-Mateo, 30, was sentenced by U.S. District Judge Nathaniel M. Gorton to 21 months in prison, followed by three years of supervised release.In 2007, Soto-Mateo was convicted in U.S. District Court of aggravated identity theft and making false statements in application for a United States passport, and was sentenced to 25 months in prison. Following the completion of his sentence, Soto-Mateo was placed into removal proceedings and was deported back to the Dominican Republic. In 2009, Soto-Mateo was encountered by ICE officials in Louisiana. Soto-Mateo was charged in U.S. District Court in Western Louisiana with illegal reentry of a previously deported alien, and was sentenced to 15 months in prison. Following the completion of his sentence, Soto-Mateo was placed into removal proceedings and was deported to the Dominican Republic.
In 2012 immigration officials encountered Soto-Mateo following his arrest by the Boston Police Department. Soto-Mateo’s fingerprints were examined and determined to be a positive match on the two prior deportation warrants. Soto-Mateo was transferred into ICE custody and charged in the District of Massachusetts with illegal reentry.
United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of the 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 Kenneth G. Shine of Ortiz’s Major Crimes Unit.
Attleboro Business Man Sentenced for Falsifying Results of Harzardous Material TestingRead the Press Release
BOSTON – The owner of a North Attleboro company that tests compressed gas cylinders was sentenced today in U.S. District Court in Worcester for falsifying the re-testing of thousands of cylinders.
Aaron Beauchesne, 37, of Attleboro Falls, was sentenced by U.S. District Judge F. Dennis Saylor IV to six months home confinement, followed by two years of probation and $77,953 in restitution. In May 2013, Beauchesne pleaded guilty to failing to test and falsifying the results of almost 6,000 compressed gas cylinders for numerous customers in the South Shore area.
Beauchesne was the sole owner of Beauchesne Fire Equipment which tested and certified fire extinguishers and other compressed gas cylinders, such as oxygen tanks, for public and private customers. Under the Federal Hazardous Materials Transportation Law, cylinders used to transport compressed gasses must be requalified periodically to determine the structural integrity of the cylinders and to identify dangerous or nonperforming cylinders. Beauchesne Fire Equipment was certified by the U.S. Department of Transportation as an approved requalification facility for retesting and requalifying compressed gas cylinders. Throughout 2011 and continuing through early 2012, Beauchesne frequently failed to conduct hydrostatic testing and/or instructed employees to forego the testing on thousands of compressed gas cylinders.
United States Attorney Carmen M. Ortiz and Theodore L. Doherty III, Special Agent in Charge of the U.S. Department of Transportation, Office of the Inspector General, Office of Investigations, made the announcement today. The case was prosecuted by Assistant U.S. Attorney S. Theodore Merritt of Ortiz’s Public Corruption Unit.
Haverhill Man Pleads Guilty to Bankruptcy Fraud for Concealing Property in Puerto RicoRead the Press Release
BOSTON – A Haverhill man was convicted today in U.S. District Court in Worcester of bankruptcy fraud for concealing assets from his bankruptcy creditors; specifically, property he owned in Puerto Rico.
Peter A. Schutter, 57, pleaded guilty before U.S. District Judge Timothy S. Hillman to bankruptcy fraud involving the concealment of assets.
In 1994, Schutter’s mother deeded a parcel of property in Aguadilla, Puerto Rico to Schutter and his wife. The Schutters filed a Chapter 7 bankruptcy petition in Worcester in April 2009, but failed to list the Puerto Rico property as an asset. In May 2009, at a meeting of creditors, Schutter was specifically asked by his bankruptcy trustee whether he had owned any real estate in the prior four years and Schutter answered, under oath, “no, sir.” Schutter later disclosed the property to the trustee, but only after the trustee requested records from Schutter that would have led inevitably to the discovery of that property. The trustee later sold it for $115,000 for the benefit of creditors.
Judge Hillman scheduled sentencing for Dec. 18, 2013. The statutory maximum penalty for the bankruptcy fraud charge is five years in prison, followed by three years of supervised release and a $250,000 fine.
United States Attorney Carmen M. Ortiz and Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was referred for investigation by the U.S. Trustee’s Office in Worcester. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
Boston Man Indicted for Social Security, Passport FraudRead the Press Release
BOSTON – A Boston man was charged today with making false statements in passport applications and illegally receiving disability payments.
Antonio Pulinario Brea, 54, was indicted with theft of government money and two counts of making false statements in passport applications.
The indictment alleges that from 2004 to 2013, Pulinario Brea illegally received more than $60,000 in Social Security disability payments under another person’s identity. It is further alleged that in 2010 and 2011, Pulinario Brea used the alias to apply for United States passports.
The offenses with which Pulinario Brea is charged carry a maximum penalty of up to 10 years in prison, followed by three years of supervised release and a $250,000 fine.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Social Security Administration Office of the Inspector General, Office of Investigations, Boston Office; and Bruce Foucart, Special Agent in Charge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston, made the announcement today. The case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major 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.
Andover Man Convicted for Possessing Child PornographyRead the Press Release
BOSTON – An Andover man was convicted today for possessing child pornography.
William S. Thomas, 65, pleaded guilty before U.S. District Judge Patti B. Saris to possession of child pornography.
In October 2010, the United States Postal Service and Canadian officials began an investigation into a movie production company based out of Toronto which operated a website that offered DVDs and streaming videos for sale. The majority of these films involved young prepubescent males. In May 2011, officials executed a search warrant and seized thousands of videos, DVDs, photos, computers, business records and shipping labels. Law enforcement determined that these films were being shipped to customers worldwide, including hundreds of individuals residing in the United States. During a search of these records, officials determined that William S. Thomas of Andover was a customer and had purchased materials between 2005 and 2011.
In September 2012, a number of these items were seized from Thomas’ home following the execution of a federal search warrant. The materials seized, consisting of DVDs and photographs, contained video and photographs of prepubescent males engaged in sexually explicit conduct.
Sentencing is scheduled for Oct. 30, 2013. Thomas faces up to 10 years in prison, followed by a lifetime of supervised release and a $250,000 fine.
United States Attorney Carmen M. Ortiz, Kevin Niland, Inspector in Charge of the U.S. Postal Inspection Service, and Chief Brian J. Pattullo of the Andover Police Department, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
Beth Israel Deaconess Medical Center to Pay $5.3 Million to Resolve Improper Medicare ClaimsRead the Press Release
BOSTON – United States Attorney Carmen M. Ortiz and Susan J. Waddell, Special Agent in Charge of the Department of Health & Human Services, Office of Inspector General announced today that Beth Israel Deaconess Medical Center (BIDMC), a teaching hospital located in Boston, has agreed to pay the United States $5.315 million to settle allegations that it violated the False Claims Act by billing Medicare for inpatient admissions that should have been billed as lower reimbursed outpatient or observation services. The improper claims were submitted from June 1, 2004, through March 31, 2008.
The settlement resolves government allegations that BIDMC inappropriately submitted claims to Medicare for one-day stay inpatient admissions for patients with congestive heart failure, chest pain, and certain digestive and nutritional disorders. These claims should have been billed as observation services as the patients were briefly admitted for the limited purpose of observation and discharged the next day. In addition, the settlement resolves allegations that BIDMC submitted claims to Medicare for less-than-one day (zero day) stays that should have been billed as outpatient or observation services. Medicare reimburses hospitals, like BIDMC, at significantly higher amounts for inpatient admissions compared to outpatient or observation services. BIDMC has not admitted liability or wrongdoing in connection with the settlement.
“Today’s settlement furthers two critical purposes: ensuring that precious federal health care dollars are spent appropriately and in accordance with the law, and emphasizing that patient needs, not the bottom line, must be the basis for treatment decisions,” said U.S. Attorney Ortiz.
"When hospitals unnecessarily admit Medicare patients for short inpatient stays when the appropriate treatment would be outpatient or observation care, they improperly boost hospital profits at significant expense to taxpayers and patients," said HHS-OIG's Waddell. "We are committed to uprooting such schemes to eliminate waste in federal health care programs."
This settlement illustrates the government's continued emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since 2009, the Justice Department has recovered a total of more than $14.8 billion through False Claims Act cases, with more than $10.8 billion of that amount recovered in cases involving fraud against federal health care programs.This matter was investigated by Investigator Kristen Israelson of the Department of Health & Human Services, Office of Inspector General, Boston Regional Office of Investigations. It was handled by Assistant U.S. Attorney Jennifer Cardello and Special Assistant U.S. Attorney John O’Brien, both from Ortiz’s Affirmative Civil Enforcement Unit, and Senior Trial Counsel Marie Bonkowski of the Commercial Litigation Branch of the Justice Department's Civil Division.
Shrewsbury Man Sentenced for Sex TourismRead the Press Release
BOSTON – A Shrewsbury man was sentenced today in U.S. District Court in Worcester for traveling to the Dominican Republic to engage in sexual conduct with a minor.
Conrad Gallant was sentenced to 100 months in prison, followed by 10 years of supervised release, including requiring no unsupervised contact with minors. Upon release, Gallant will be required to register as a sex offender for any place he works, resides or is a student. In April 2013, Gallant pleaded guilty to engaging in illicit sexual conduct in foreign places and travel with intent to engage in illicit sexual conduct.
In February 2011, Gallant traveled to the Dominican Republic and had sexual relations in his apartment with a 14-year-old girl he knew was underage. Gallant returned to the Dominican Republic four times over the course of a year to engage in sexual relations with the underage victim, giving her money, a laptop computer, and jewelry. Additionally, on these trips, Gallant took photographs of her while she was nude and engaging in sexual acts, and brought those images back to the United States.
In February 2012, the National Tourist Police of the Dominican Republic learned that Gallant had engaged in sexual relations with the then 15-year-old victim. The victim was forensically interviewed by a medical professional and she confirmed that Gallant engaged in sex with her. She provided agents with a cell phone containing images of Gallant naked, including an image of Gallant and the victim engaged in sexual activity. The victim disclosed that Gallant had promised her certain items and money to take her mother to the doctor, which he never gave her. Additionally, the victim stated that Gallant forced her to have sex with him a couple times when she was unwilling. The victim also informed investigators that Gallant asked her to bring him other minor girls to have sex with and that this happened on two occasions. Gallant paid both of these minors $100.
In March 2012, during a federal search warrant executed at Gallant’s Shrewsbury address, agents recovered images of him and the victim engaged in sexually explicit conduct. There was also a close-up of the victim’s genitalia displayed in a sexually explicit manner. During a second federal search warrant, executed at Gallant’s apartment in the Dominican Republic, agents seized a laptop containing numerous images of child pornography, including images of Gallant engaging in sexual conduct with the victim.
United States Attorney Carmen M. Ortiz; Bruce Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement's Homeland Security Investigations in Boston; Worcester County District Attorney Joseph Early; Colonel Timothy Alben, Superintendent of the Massachusetts State Police; and Chief James Hester, Jr. of the Shrewsbury Police Department, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Michael I. Yoon, Stacy Dawson Belf, and Eve Piemonte Stacey of Ortiz's Major Crimes Unit.The U.S. Attorney’s Office would like to extend its appreciation to HSI’s attaché in Santo Domingo, the Dominican Tourist Police (Politur), Dominican prosecutors in Higuey and Santo Domingo, Dominican Migration and HSI's Santo Domingo Transnational Criminal Investigative Unit members for their assistance and cooperation.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed by the Department of Justice in 2006, 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/.
Charlestown Resident Sentenced for Tax Scheme at Suffolk DownsRead the Press Release
BOSTON – A Charlestown man was sentenced today for his scheme to help gamblers at Suffolk Downs evade the payment of taxes on over $2 million in winnings.
Gary Boyar, 53, was sentenced by U.S. District Judge Richard G. Stearns to one year and one day in prison, and ordered to pay $43,149 in restitution to the Internal Revenue Service. In February 2013, Boyar pleaded guilty to corruptly endeavoring to impede the IRS and tax evasion.
Boyar was a “10-percenter,” a phrase referring to the 10-percent fee charged by those who cash winning tickets for gamblers so that the gamblers’ identities are not reported to the IRS. This scheme allowed gamblers to avoid paying taxes on their winnings, which were taxable income. When Boyar cashed tickets and submitted forms to the IRS associated with those tickets, he used his deceased father’s social security number to obstruct the IRS. During the tax years 2004 through 2006, Boyar cashed more than $2 million in tickets at Suffolk Downs that belonged to winning gamblers, and submitted approximately 1,713 false IRS forms using his deceased father’s social security number. This conduct obstructed the IRS from determining the identities of the actual winners.United States Attorney Carmen M. Ortiz, Assistant Attorney General Kathryn Keneally of the Department of Justice Tax Division, and Special Agent in Charge William P. Offord of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was prosecuted by Trial Attorney Sean R. Delaney of the Tax Division.
Boston Man Convicted of Health Care FraudRead the Press Release
BOSTON – A Boston man was convicted yesterday following a jury trial for a scheme to defraud the Medicare program out of approximately $1 million.
Blessing Sydney Iwuala, 54, of Hyde Park, was convicted of conspiracy to commit health care fraud and three counts of health care fraud following an eight-day jury trial.
Iwuala was convicted of conspiring to bill the Medicare program for more than $1 million of durable medical equipment, including power wheelchairs, for Medicare patients who did not order and did not need the equipment. Medicare paid Iwuala approximately $450,000 in connection with the scheme.
Iwuala owned and operated a medical supply store called Above All Homecare and Supply, Inc. (Above All). Iwuala allowed a co-conspirator (Person A), whose Medicare supply privileges had been revoked, to use Above All as a front to submit fraudulent Medicare claims for patients in Texas. After doing virtually no business for the first 15 months of its existence, between February 2009 and May 2009, Above All billed Medicare for more than $1 million of medical equipment for 88 Medicare patients in Texas. Person A obtained these orders by paying another co-conspirator (Person B), for the prescriptions, which were forged. Iwuala allowed Person A to bill Medicare for these claims using Above All’s name, and Iwuala provided Person A with blank Above All paperwork to deliver power wheelchairs and other equipment to Medicare patients, who had not requested the equipment. Shortly after Person A was arrested in connection with a separate health care fraud scheme, Iwuala terminated Above All. Iwuala kept approximately $300,000 of the Medicare proceeds, paying Person A approximately $150,000. Most of the patients who were the subjects of the Above All scheme were “compromised” Medicare beneficiaries whose Medicare information had been used repeatedly in connection with other Medicare fraud schemes. As a result, when some of these patients actually needed medical equipment, they were unable to obtain this equipment due to the Above All fraud scheme, as well as others.
In addition to the conspiracy count, Iwuala was convicted of three health care fraud counts for billing Medicare for unnecessary medical equipment, much of which was never delivered, for three patients in Texas.
U.S. District Court Judge Richard G. Stearns scheduled sentencing for Iwuala on October 18, 2013. The statutory maximum penalty for each of the four charges is 10 years in prison, followed by three years of supervised release, a fine of $250,000 or twice the gross gain or loss resulting from the offense, restitution to the Medicare program, and forfeiture of any proceeds gained by Iwuala as a result of the offense.
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, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys David S. Schumacher and Amanda P.M. Strachan of Ortiz’s Health Care Fraud Unit. The trial team was also assisted by Medicare contractor Health Integrity, LLC.
Quincy Man Sentenced for Credit Card SkimmingRead the Press Release
BOSTON – A Quincy man was sentenced today in connection with his use of stolen credit card numbers to purchase more than $64,000 in cigarettes and other items in Massachusetts and New Hampshire.
Yek Doug Wong, 50, of Quincy, was sentenced by U.S. District Judge George A. O’Toole to 70 months in prison, followed by two years of supervised release and payment of $64,713 in restitution. In April 2013, Wong pleaded guilty to using counterfeit access devices (credit cards), possession of device-making equipment, and six counts of aggravated identity theft.
In October 2011, the Braintree, Brockton and Holbrook Police Departments received reports from numerous people who reported fraudulent activity on their credit card accounts even though all of the victims still possessed their actual cards. Law enforcement collected surveillance video from many of the locations where the purchases had been made as well as receipts from suspect transactions. The surveillance videos showed a man, later identified as Wong, making the purchases and driving off in a black Infiniti with a spoiler on the rear. Ultimately, one clerk noted the license plate of the car which led to Wong and to a search of his Quincy residence. The search resulted in the seizure of, among other things, at least 1,176 embossed and blank Visa, MasterCard and American Express cards, three credit card skimming devices, a card reader and encoding device, two credit card embossing machines, various pieces of computer equipment, 42 cartons of cigarettes, 22 bottles of rice wine, and $16,900 in cash. Officers also seized two safe deposit box keys which led to the seizure of an additional $4,250 in cash.
United States Attorney Carmen M. Ortiz; Steven D. Ricciardi, Special Agent in Charge of the U.S. Secret Service; Braintree Police Chief Russell W. Jenkins; Brockton Police Chief Emanuel Gomes; Holbrook Police Chief William W. Marble, Jr.; and Quincy Police Chief Paul Keenan, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.Lynn Man Sentenced to 15 Years on Drug, Firearm ChargesInvestigation Revealed Plot to Kill A Lynn Police OfficerRead the Press Release
BOSTON – A Lynn man, who discussed murdering a Lynn police officer, was sentenced late yesterday to 188 months in prison.
U.S. District Judge Denise J. Casper sentenced Modesto Cruz, 37, to 188 months in prison, followed by four years of supervised release. In March, Cruz pleaded guilty to conspiracy to distribute more than 100 grams of heroin, distribution of heroin, and being a felon in possession of a firearm.
In 2012, while Cruz was on pretrial release from a 2010 Lynn gun arrest, a cooperating witness working with the FBI’s North Shore Gang Task Force made four controlled buys of over 100 grams of heroin from Cruz. During the course of those recorded buys, Cruz and the cooperating witness talked about Cruz’s plan to kill one of the Lynn police officers that had arrested him on the gun charge. An undercover law enforcement officer, posing as a hitman, was ultimately introduced to Cruz by the cooperating witness. Cruz and the undercover talked about the price and logistics of the hit on the police officer. Cruz was arrested the next day.
United States Attorney Carmen M. Ortiz; Jeffrey S. Sallet, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Essex County District Attorney Jonathan Blodgett; Colonel Timothy Alben, Superintendent of the Massachusetts State Police; Lynn Police Chief Kevin Coppinger; and Essex County Sheriff Frank G. Cousins, Jr. made the announcement today.
The case was investigated by the FBI’s North Shore Gang Task Force, which consists of the FBI, the ATF, the Massachusetts State Police, the Lynn, Chelsea and Revere Police Departments, and the Essex County Sheriff’s Department. It was prosecuted by Assistant U.S. Attorneys in Ortiz’s Organized Crime and Gang Strike Force Unit.
Former Postal Service Contractor Sentenced to 51 Months for Stealing Credit Cards from the MailRead the Press Release
BOSTON – A former contractor to the United States Postal Service was sentenced today for stealing credit cards from a mail-sorting facility while on the job, and then using the credit cards to commit fraud.
Gerald K. Acholonu, 33, of Braintree, was sentenced by U.S. District Judge Richard G. Stearns to four years and three months in prison, to be followed by three years of supervised release, forfeiture, and restitution of $183,992 to the credit card company. In March 2013, Acholonu pleaded guilty to credit card fraud and stealing mail.
From August 2010 through May 2011, Acholonu worked for a contractor that sorted mail for the U.S. Postal system. In late April 2011, another employee spotted Acholonu leaving his employer’s restroom with a tray of U.S. mail. Investigators then searched Acholonu’s trash at home and found 11 stolen Discover credit cards and other evidence that he had used or was planning to use the Discover customers’ identities by setting up telephone accounts in their names. Further investigation proved that Acholonu was involved with theft of almost 400 other Discover credit cards. Using these cards, Acholonu and others tried to ring up nearly $430,000 in fraudulent transactions, about $184,000 of which were successful.
When agents arrested Acholonu, they found further evidence of identity theft and thus obtained a warrant to search his apartment. That search turned up USB thumb-drives that contained information associated with 21 victims of identity fraud who were unassociated with the Discover fraud. This information included the new victims’ true names, personal identifying information, credit card numbers, and credit reports in their names. It also included digital images of Acholonu’s Social Security card and driver’s license, both modified to remove his own information, such as his name or picture, apparently with the intent of modifying those documents further for other identities. Acholonu’s laptop computer itself had been purchased under the name of another identity theft victim who had experienced approximately $30,000 in fraud against his credit and whose name and other personal identifying information were found handwritten on a piece of paper at Acholonu’s residence.
U.S. Attorney Carmen M. Ortiz; Kevin Niland, Inspector in Charge of the U.S. Postal Inspection Service; and Rafael Medina, Special Agent in Charge of the U.S. Postal Service, Office of Inspector General, Northeast Area Office, made the announcement today. The case was prosecuted Scott L. Garland and Eric Christofferson, respectively of Ortiz's Cybercrimes and Economic Crimes Units.Manchester, N.H. Woman Sentenced to 10 Years for Obtaining U.S. Citizenship Unlawfully by Concealing Her Role in GenocideSentenced to 10 Years for Concealing Her Personal Participation in the 1994 Rwandan GenocideRead the Press Release
CONCORD, N.H. - A Manchester, N.H. woman was sentenced today by a federal judge in New Hampshire for two counts of procuring citizenship unlawfully. This is the first such conviction in the nation based on concealing one’s personal participation in Rwandan genocide.
District Court Judge Stephen J. McAuliffe sentenced Beatrice Munyenyezi, 43, to 10 years in prison, the maximum sentence for the charge of procuring citizenship unlawfully. She also faces removal proceedings after serving the sentence imposed by the court. Judge McAuliffe also stripped Munyenyezi of her U.S. citizenship on the day of her conviction.
Munyenyezi was charged in June 2010 and later convicted in March 2012, by a federal jury in N.H. who found that she had obtained her U.S. citizenship unlawfully, after fleeing her home country of Rwanda, by misrepresenting material facts to U.S. Immigration authorities.
Judge McAuliffe stated in court, “She has stolen the highly prized status of U.S. citizenship,” and “The defendant was not a mere spectator; the defendant personally participated in the killing of men, women and children, merely because they were called Tutsi.” He also stated, “This is the most egregious violation of [the statute] that one can imagine.”
Testimony during the 12-day trial revealed that Munyenyezi concealed her role in the 1994 Rwandan genocide, including her involvement in the MRND (National Republican Movement for Democracy and Development), the political party in power before and during the genocide, and its youth wing, the Interahamwe. The Interahamwe ran a militia that played a key role in the genocide. Evidence at trial demonstrated that Munyenyezi, as a member of the Interahamwe, participated in and aided and abetted persecution and murder of Tutsi people during the 1994 genocide. Several witnesses testified to Munyenyezi’s staffing of a notorious roadblock outside of her home during the course of the genocide, where she checked identification of passers-by and decided who would be allowed to pass, and who would be detained pending their almost certain death. The evidence demonstrated that Munyenyezi misrepresented these facts in order to obtain immigration and naturalization benefits, and was ineligible to become a citizen because her participation in genocide and murder precluded her from U.S. citizenship.
United States Attorney Carmen M. Ortiz said, “Today’s sentence should send a clear message to those involved in human rights violations that the United States will not protect those who take advantage of our accepting borders. I want to thank the tireless efforts of the prosecution team and investigators in this case, who have worked doggedly to ensure that justice is served.”
“Today’s sentencing clearly demonstrates that this nation will never be a safe haven for human rights violators and war criminals,” said Bruce M. Foucart, Special Agent in Charge of HSI Boston. “After a stellar collaborative investigation and prosecution by HSI special agents and our partners at the U.S. Attorney's Office for the District of Massachusetts, Munyenyezi will be held accountable for disguising her role as a participant in the Rwandan genocide. I am hopeful that this case will send a message to others like Munyenyezi: HSI will never allow our country to be a place where individuals seeking to distance themselves from their pasts can hide or evade detection.”Homeland Security Investigations investigated the case with the assistance of the Department of State Diplomatic Security Service. The case was prosecuted by Special Assistant U.S. Attorneys Aloke Chakravarty and John Capin from Ortiz’s Anti-Terrorism Unit in the District of Massachusetts.
Springfield Man Sentenced for Drug ConspiracyRead the Press Release
BOSTON – A Springfield man was sentenced yesterday in U.S. District Court in Springfield for dealing heroin.
Ariel Acevedo, 36, was sentenced by U.S. District Judge Michael A. Ponsor to nine years in prison, followed by four years of supervised release. In April 2013, Acevedo pleaded guilty to conspiracy to distribute heroin and possession with intent to distribute heroin.
On Feb. 18 and 19, 2012, Acevedo arranged for the sale of approximately 150 grams of heroin to another individual. During numerous conversations, which were consensually monitored and recorded by the Drug Enforcement Administration, Acevedo discussed quantities, pricing, and quality of the heroin. On Feb. 19, 2012, Acevedo met the individual on Chestnut Street in Springfield, and a few minutes later, Acevedo’s co-defendant, Jose Cruz arrived. Cruz provided the individual with a package containing 150 grams of heroin, and the individual provided Acevedo with $11,250 in cash, which Acevedo began to count. The DEA then arrested both Acevedo and Cruz. In June 2013, Judge Ponsor sentenced Cruz to five years in prison for his role in the offenses.
United States Attorney Carmen M. Ortiz; John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Mark Mastroianni, Hampden County District Attorney; and Commissioner William Fitchett of the Springfield Police Department, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz’s Springfield Branch Office.
Cyterra Corporation Agrees to Pay $1.9 Million to Resolve False Claims Act AllegationsRead the Press Release
BOSTON – CyTerra Corporation has agreed to pay the federal government $1.9 million to resolve civil liability arising from its failure to provide the United States Department of the Army with accurate, complete, and current cost or pricing data for its sales of mine detectors, the Justice Department announced today. CyTerra, headquartered in Waltham, manufactures equipment, including portable mine detectors, used by the United States military.
“The Department of Justice will hold accountable those who undermine the integrity of the public contract process in pursuit of financial gain,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the U. S. Department of Justice. “Those who wish to do business with the government are expected to do so fairly, and those who don’t will face the consequences.”
In 2003, the Department of the Army awarded CyTerra a contract for the production and delivery of AN/PSS-14 hand-held mine detection units. The contract was modified several times to provide for the production and delivery of additional mine detection units. The government contended that, in connection with the negotiations concerning three of the contract modifications, CyTerra knowingly failed to provide the Army with the most recent cost or pricing data on the number of labor hours needed to produce a mine detector. Under the Truth in Negotiations Act, CyTerra was required to provide the cost or pricing data that was “accurate, complete, and current.” The government alleged that if the Army had received such information, it would have negotiated a lower price.
“Contractors who negotiate with the government must be scrupulous in their dealings with the government,” said Carmen M. Ortiz, United States Attorney for the District of Massachusetts. “Government contractors should be on notice that the requirements of the Truth in Negotiations and False Claims Acts will be enforced.”
The civil settlement resolves a lawsuit pending in federal court in the District of Massachusetts under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. The action was filed by Kevin Bartczak and Keith Aldrich, two former CyTerra executives. As part of today’s resolution, Bartczak and Aldrich will share $361,000 from the civil recovery.
The case is being handled by the U.S. Attorney’s Office for the District of Massachusetts and the Civil Division’s Commercial Litigation Branch, with investigative assistance from the Defense Criminal Investigative Service.
“The Defense Criminal Investigative Service (DCIS) is committed to working with its partner agencies, such as the U.S. Department of Justice, the Naval Criminal Investigative Service, and the Army Criminal Investigation Command, to ensure the integrity of the Defense Department’s procurement process,” said Leigh-Alistair Barzey, Resident Agent-in-Charge of the DCIS Boston Resident Agency. “This settlement agreement reflects that commitment and is a successful resolution of this investigation, which could not have occurred without the direction of the Department of Justice, and the assistance of the Defense Contract Audit Agency’s Investigations Support Division.”
The civil lawsuit is captioned United States ex rel. Bartczak, et al. v. CyTerra Corporation., Civil Action No. 06-CA-10550-NMG.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Connecticut Man Charged with Receiving Child PornographyRead the Press Release
Defendant employed as a photographer of summer camp children and youth sports teams
BOSTON – A Connecticut man was in U.S. District Court in Springfield today after being charged with receiving child pornography.
Emil Kaufman, 21, of Hamden, Conn. was charged and arrested on June 26 in a criminal complaint with receipt of child pornography. Kaufman worked as a photographer of youth sports teams and as a photographer and website designer for a summer camp for children with learning disabilities in New York. Kaufman was released from custody today after a detention hearing.
According to court documents, on or about October 22, 2012, federal agents downloaded child pornography video files on the Giga Tribe peer-to-peer file sharing network from a user identified as “koolkidlime1991.” On June 17, 2013, federal agents again downloaded child pornography video files on the Giga Tribe network from “koolkidlime1991.” The agents determined that during each download, “koolkidlime1991” was using an Internet connection subscribed to by Kaufman’s father at a residence in Stockbridge, Mass. On June 26, 2013, agents executed a search warrant at the Stockbridge residence and seized, among other items, a MacBook Pro that contained numerous child pornography files. The agents also located Kaufman in the residence. Kaufman admitted to the agents that he had a “bad habit” of trading child pornography, he has approximately 300 to 400 files of child pornography, and he traded child pornography as recently as the previous night.
The statutory penalty for receipt of child pornography provides for a minimum mandatory of five years and a maximum of 20 years in prison, followed by up to a lifetime supervised release and a $250,000 fine.
United States Attorney Carmen M. Ortiz and Bruce M. Focuart, Special Agent in Charge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Boston, made the announcement today. HSI received assistance from the Massachusetts State Police, the Stockbridge Police Department, and the FBI in New Haven, Connecticut. The case is being prosecuted by Assistant U.S. Attorney Steve Breslow of Ortiz’s Springfield Branch.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274, and messages will be promptly returned.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the Criminal Division’s CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
The details contained in the complaint affidavit are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Burlington Man Pleads Guilty to Selling More Than $600,000 in Stolen MerchandiseRead the Press Release
BOSTON – A Burlington man pleaded guilty today to shoplifting more than $600,000 worth of merchandise from retail stores in Massachusetts and New Hampshire, then selling it on Ebay’s Half.com website.
John C. Strang, 67, pleaded guilty before U.S. District Judge Rya W. Zobel to interstate transportation of stolen property.
From at least 2007 through 2013, Strang shoplifted large quantities of merchandise - primarily books, audiobooks, and Lego products - from retail stores such as Barnes & Noble and The Paper Store. In total, Strang stole tens of thousands of items, with a total retail value of at least $600,000. He then sold them online at Half.com, an Ebay subsidiary, using the name “booksgoodtome.” Strang listed the stolen items at prices which were typically 40-50% of their retail prices. Strang then sold and shipped the stolen merchandise to purchasers throughout the United States. He routinely received payment of more than $2,000 every two weeks from Half.com.
Sentencing is scheduled for Oct. 15, 2013. The maximum statutory penalty is 10 years in prison, followed by three years of supervised release and a $250,000 fine.
United States Attorney Carmen M. Ortiz and Steven D. Ricciardi, Special Agent in Charge of the U.S. Secret Service, and Kevin Niland, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
Former Massachusetts Attorney Charged with Recording Fraudulent Federal Tax Lien Releases and with Bank FraudRead the Press Release
BOSTON – A Braintree man was charged in an indictment unsealed today with tax and bank fraud violations, primarily for recording and attempting to record false and fraudulent federal tax lien releases on properties he owned, and attempting to obtain a bank loan by fraud.
John C. McBride, 64, formerly of Marblehead and Edgartown, was charged in an Indictment with endeavoring to obstruct and impede the due administration of the internal revenue laws, and bank fraud.
The indictment alleges that McBride, a Massachusetts attorney from 1974 to 2007, owned residences in Marblehead and Edgartown, both of which had federal tax liens placed on them by the IRS to secure tax assessments of more than $650,000. The indictment alleges that in early 2008, in connection with his obtaining a $288,000 loan secured by the Marblehead property, McBride caused six false, forged, and fraudulent Certificates of Federal Tax Lien Release to be recorded against that property, knowing that they were in fact false, forged and fraudulent, and not issued by the IRS.
In March 2008, it is alleged that McBride attempted, unsuccessfully, to record two such fraudulent Certificates of Federal Tax Lien Releases against his Edgartown property. Finally, the indictment alleges that McBride attempted to obtain a $387,000 reverse mortgage loan from Bank of America in 2011, to be secured by the Edgartown property. In connection with that loan application, it is alleged that McBride provided false information concerning the liens on that property and about the status of his bankruptcy proceeding, and also caused to be recorded a fraudulent and unauthorized Discharge of Mortgage which purported to discharge a mortgage on the Edgartown property in an amount greater than $700,000. The indictment asserts that Bank of America discovered the fraudulent Discharge before the loan closed, and no funds were disbursed to McBride.
The statutory maximum sentence for the tax offense is three years in prison, followed by one year of supervised release and a $250,000 fine. The statutory maximum sentence for the bank fraud offense is 30 years in prison, to be followed by five years of supervised release and a $1 million fine.
United States Attorney Carmen M. Ortiz; Kevin J. McGlynn, Special Agent in Charge of the U.S. Treasury Inspector General for Tax Administration, Office of Investigations, New York Field Office; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit. The U.S. Attorney’s Office also received assistance from the U.S. Trustee’s Office in Boston.
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 Investment Adviser Charged for Fraud That Caused over $3 Million in LossesRead the Press Release
BOSTON - A Plymouth man was charged today in connection with an investment fraud that caused retired clients over $3 million in losses.
Jeffrey A. Liskov, 42, was charged in an Information with investment adviser fraud.
It is alleged that from November 2008 through August 2010, Liskov defrauded retired advisory clients. In 2008, despite sustaining large personal losses in risky, highly volatile foreign currency exchange trading, Liskov is alleged to have begun advising retired clients with conservative investment goals to allow him to engage in such trading with a portion of their retirement money. Liskov received significant performance fees for conducting this volatile trading on behalf of clients based on short-term gains, without regard to the long-term performance of his trading in the clients’ accounts.
In late 2009, after sustaining large trading losses for long-time clients, Liskov started liquidating securities in the brokerage accounts of these clients and investing the proceeds in foreign currency exchange trading without the clients’ knowledge or authorization. In order to fund these investments behind his clients’ backs, Liskov used white-out correction fluid and other methods to create fraudulent documents that allowed him to open new foreign currency exchange trading accounts and/or to transfer funds from client brokerage accounts to foreign currency exchange trading accounts. This allowed Liskov to secretly engage in additional foreign currency exchange trading on behalf of long-time clients for whom he had already lost significant amounts of money – additional trading from which, in some instances, Liskov was able to pocket large performance fees. The trading Liskov engaged in with the funds from this fraud caused over $3 million in losses to the long-time clients, but garnered Liskov over $200,000 in performance fees.
The statutory maximum offense for investment adviser fraud is five years in prison, followed by three years of supervised release, a $250,000, and restitution.
United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. US Attorney Ortiz expressed appreciation for the significant assistance her office received from the US Securities and Exchange Commission, and also acknowledged the cooperation of the United States Commodity Futures Trading Commission. The case is being prosecuted by Assistant U.S. Attorney Ryan M. DiSantis of Ortiz’s Economic Crimes 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.
Executive Sentenced to 21 Months in Prison for Participation in Securities Kickback SchemeRead the Press Release
BOSTON - A Cleveland man was sentenced in federal court today for using kickbacks in order to trigger investments in a thinly-traded stock.
Muhammad (M.J.) Shaheed, 45, was sentenced by U.S. District Judge Douglas P. Woodlock to 21 months in prison to be followed by two years of supervised release and forfeiture of $30,000. In February 2013, Shaheed pleaded guilty to mail and wire fraud arising out his participation in an undercover FBI operation. Shaheed admitted to paying secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in a publicly-traded company, Augrid Global Holdings Corporation, of which Shaheed was Chief Executive Officer. The kickbacks were concealed through the use of sham consulting agreements and other fraudulent documents. What Shaheed did not know was that the purported investment fund representative was actually an undercover agent.
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 SEC.
Shaheed is one of 15 defendants charged criminally with having participated in the undercover operation. Nine of those charged have now pleaded guilty and two were convicted after a jury trial.
The Securities and Exchange Commission, which conducted a parallel civil investigation alongside the FBI undercover operation, cooperated with criminal authorities throughout the course of the investigation and prosecution.
U.S. Attorney Carmen M. Ortiz and Richard DesLauriers, 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. Attorneys Sarah E. Walters 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.
Sterling Business Owner Sentenced for Claiming to Be Minority, Service-Disabled Veteran Operated BusinessRead the Press Release
BOSTON – A Sterling, Mass. man was sentenced yesterday in United States District Court in Worcester for conspiring to defraud the Small Business Administration and other government contractors by falsely representing that his business was a minority and service-disabled veteran-owned and operated business.
Tyrone Jones, 48, was sentenced by U.S. District Judge Timothy S. Hillman to one year and one day in prison, to be followed by two years of supervised release. Jones was also ordered to forfeit $399,000. In August 2012, Jones pleaded guilty to conspiracy to commit wire fraud.
Jones and his co-conspirators submitted false statements to the Small Business Administration and other government agencies, in order to get federal government contract awards that were set aside for or preferentially awarded to disadvantaged minority and service-disabled veteran-owned and operated businesses. The submissions falsely represented that their company was owned and managed by a minority and service-disabled veteran who purportedly managed the daily operations of the business
“We take very seriously the abuse of a program that is designed to give hope and opportunity to service-disabled veterans by giving them the chance to own and operate their own businesses and to favorably compete for government contracts,” said U.S. Attorney Carmen M. Ortiz. “The fraud here aimed at usurping benefits that are intended to assist service-disabled veterans and to honor their service to our country.”
"Investigating SDVOSB program fraud is one of VA OIG's priorities because this crime deprives eligible disabled veteran-owned small businesses from receiving financial opportunities intended by this set-aside program. The VA OIG, along with our law enforcement partners, will continue this fight against SDVOSB fraud on behalf of our Nation's heroes,” said George Opfer, Inspector General for the Department of Veterans Affairs.
“These kinds of lies cause real harm to Federal programs and procurement,” said U.S. General Services Administration Inspector General Brian D. Miller.
“Federal contracts should never be awarded to persons who commit fraud or claim eligibility for contracts set-aside for our nation’s service-disabled veterans,” said Inspector General Peggy E. Gustafson of the Small Business Administration. “I want to thank the U.S. Attorney’s Office and our law enforcement partners for their commitment to seek justice on behalf of the American taxpayer.”
U.S. Attorney Ortiz; Jeffrey Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; Luis A. Hernandez, Special Agent in Charge of the U.S. General Services Administration, Office of Inspector General, Office of Investigations; Michael D. Conner, Special Agent in Charge of the U.S. Army Criminal Investigation Command, Hartford Fraud Resident Agency; Inspector General Peggy E. Gustafson of the U.S. Small Business Administration, Office of the Inspector General; and Robert L. Panella, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, New York Regional Office, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Sara Miron Bloom of Ortiz’s office.
Gun Arrest from FBI Wiretap Prevents Gang ShootingRead the Press Release
BOSTON – Two Brockton men were indicted yesterday, charged with a federal firearms violation. The indictment resulted from federal, state and local authorities’ efforts to reduce violence and drug trafficking in the Brockton area by identifying and investigating individuals involved in these criminal activities.
Renaldo Wilson, a/k/a Nardo, 30, is charged with being a felon in possession of a firearm and ammunition and Aaron Heywood, a/k/a Young, 30, is charged with being a felon in possession of a firearm and ammunition. Wilson and Heywood were arrested yesterday morning in state court where they faced related charges. If convicted, Wilson and Heywood each face a maximum penalty of 20 years in prison, followed by three years of supervised release and a $250,000 fine.
A court filing revealed that Wilson and Heywood, both convicted felons, were in possession of a firearm. Federally authorized wiretap evidence demonstrated that an ongoing “beef” (a term for a gang war) between Wilson and Heywood, members of the “Eastside” gang, and rival members of the “Exchange Street” gang, was about to escalate into a shooting.
Through the recorded telephone calls, Wilson was heard in a confrontation with a rival gang leader. They discussed that the gang leader “lost two [men]” and confirmed that the two gangs were in a “beef.” He informed Wilson that the fight stemmed from the unsolved murder of his two gang associates in the summer of 2011. Following this conversation, Wilson called his gang associates and warned them of the “beef.” Wilson spoke about the beef and then asked an associate about obtaining bullets for a gun. Wilson already possessed the gun and stated that he needed more bullets because of the beef stating, “trust me, I’m gonna need ‘em.”
Law enforcement intervened and Wilson and Heywood were arrested during a motor vehicle stop, in which the firearm was seized. As detailed in the court filing, Wilson and Heywood both have extensive criminal histories.
“These arrests represent the ongoing commitment of local, state, and federal authorities to work together to reduce street violence in Brockton,” said United States Attorney Carmen M. Ortiz. “The recent increase in violence will not be tolerated, and this investigation demonstrates that the combined efforts of law enforcement to reduce this violence are paying off. I commend all of the investigators and prosecutors whose persistence and hard work resulted in the removal of these two dangerous individuals from the streets. Every single day that violent gang members are off the streets, members of the community are safer.”U.S. Attorney Ortiz; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Plymouth District Attorney Timothy J. Cruz; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Brockton Police Chief Emanuel Gomes, made the announcement today. This case is being prosecuted by Glenn A. MacKinlay in Ortiz’s Organized Crime Strike Force Unit.
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.
Connecticut Man Sentenced for Claiming to Operate Minority, Service-Disabled Veteran BusinessRead the Press Release
BOSTON – A Woodstock, Conn. man was sentenced yesterday in U.S. District Court in Worcester for conspiring to defraud the Small Business Administration and other government contractors by falsely representing that his business was a minority and service-disabled veteran-owned and operated business.
Brian Bauman, 38, was sentenced by U.S. District Judge Timothy S. Hillman to two years probation with six months to be served in home detention with electronic monitoring, forfeiture of $38,000, and completion of 200 hours of community service, preferably to be performed in a setting working on behalf of veterans. In September 2010, Bauman pleaded guilty to conspiring to commit wire fraud.
Jones and his co-conspirators submitted false statements to the Small Business Administration and other government agencies, in order to get federal government contract awards that were set aside for or preferentially awarded to disadvantaged minority and service-disabled veteran-owned and operated businesses. The submissions falsely represented that their company was owned and managed by a minority and service-disabled veteran who purportedly managed the daily operations of the business
United States Attorney Carmen M. Ortiz; Jeffrey Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; Luis A. Hernandez, Special Agent in Charge of the U.S. General Services Administration, Office of Inspector General, Office of Investigations; Michael D. Conner, Special Agent in Charge of the U.S. Army Criminal Investigation Command, Hartford Fraud Resident Agency; Daniel J. O’Rourke, Assistant Inspector General, U.S. Small Business Administration, Office of Inspector General, Investigations Division; and Robert L. Panella, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, New York Regional Office, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Sara Miron Bloom of Ortiz’s office.
Boston Man Sentenced in Armed RobberyRead the Press Release
BOSTON – A Boston man was sentenced today for the armed robbery of a Dorchester Metro PCS retail store in 2011.
Lynch Arthur, 42, was sentenced by U.S. District Judge Denise J. Casper to 19 years in prison, to be followed by five years of supervised release and a $300 special assessment. In March 2013, Arthur pleaded guilty to armed robbery, using and carrying a firearm during a crime of violence, and being a previously convicted felon in possession of a firearm.On Oct. 31, 2011, two men, later identified as Arthur and Ronald E. Brown, entered the Metro-PCS store on Washington Street in the Codman Square section of Dorchester. Brown distracted the store clerk while Arthur walked around the counter, displaying a semi-automatic handgun. After arming themselves with semi-automatic handguns, they forced the clerk into the back storage room and demanded cash. Using a roll of duct tape he was carrying, Arthur tied up the clerk. They removed cash from the register and fled the scene, running on Kenwood Street where they were stopped and questioned. The officers observed articles of clothing, reportedly worn by the subjects, on the sidewalk. After a sweep of the area, officers recovered the loaded firearms, duct tape, and U.S. currency consistent with the amount stolen. The individuals were brought back to the store and positively identified by the clerk.
The co-defendant, Brown, of Boston was convicted following a jury trial on June 3, 2013. He is scheduled to be sentenced in August 2013.
United States Attorney Carmen M. Ortiz, Boston Police Commissioner Edward Davis, and Kenneth J. Croke, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Kenneth G. Shine and Robert E. Richardson of Ortiz's Major Crime Unit.
Federal Grand Jury Returns 30-Count Indictment Related to Boston Marathon Explosions and Murder of MIT Police Officer Sean CollierRead the Press Release
BOSTON – A federal grand jury today returned a 30-count indictment against Dzhokhar A. Tsarnaev for his alleged role in using weapons of mass destruction at the Boston Marathon to kill three individuals and maim or seriously injure many others, as well as for using a firearm to intentionally kill Massachusetts Institute of Technology (MIT) Police Officer Sean Collier.
Tsarnaev (aka Jahar Tsarni), 19, a U.S. citizen residing in Cambridge, was charged by indictment with use of a weapon of mass destruction resulting in death and conspiracy; bombing of a place of public use resulting in death and conspiracy; malicious destruction of property resulting in death and conspiracy; use of a firearm during and in relation to a crime of violence; use of a firearm during and in relation to a crime of violence causing death; carjacking resulting in serious bodily injury; interference with commerce by threats or violence; and aiding and abetting.
The indictment alleges that beginning no later than February 2013 and continuing until Tsarnaev was apprehended on April 19, 2013, Tsarnaev and his brother Tamerlan Tsarnaev conspired to use improvised explosive devices (IEDs) against people, property, and places of public use. Specifically, the indictment alleges that on April 15, 2013, during the 117th running of the Boston Marathon, the brothers placed IEDs among the crowds of spectators who were cheering the runners towards the Marathon finish line. After placing the IEDs among the crowd, the indictment alleges, Tsarnaev and his brother detonated the bombs seconds apart, killing three people, maiming and injuring many more, and forcing a premature end to the Marathon. The indictment alleges that the IEDs were constructed from pressure cookers, explosive powder, shrapnel, adhesives, and other items, and were designed to shred skin, shatter bone, and cause extreme pain and suffering, as well as death.
The indictment also alleges that on April 18, 2013, the FBI released photographs of Dzhokhar Tsarnaev and his brother, identifying them as suspects in the Marathon bombings. These photographs were widely disseminated on television and elsewhere. The indictment alleges that hours later on April 18, Dzhokhar Tsarnaev and his brother, armed with five IEDs, a Ruger P95 semiautomatic handgun, ammunition, a machete, and a hunting knife, drove their Honda Civic to the MIT campus, where they shot and killed MIT Police Officer Sean Collier and attempted to steal his service weapon.
The indictment further alleges that shortly after Dzhokhar Tsarnaev and his brother killed Officer Collier, they carjacked a Mercedes, kidnapped the driver, and forced him to drive to a gas station, robbing him of $800 along the way. After the driver managed to escape, the brothers are alleged to have driven the carjacked vehicle to the vicinity of Laurel Street and Dexter Avenue in Watertown, where Watertown police officers located them and tried to apprehend them. The indictment alleges that the brothers fired at the police officers and used four additional IEDs against them. Dzhokhar Tsarnaev then reentered the carjacked vehicle and drove it directly at the officers, running over his brother as he managed to escape. Tsarnaev is alleged to have hidden in a dry-docked boat in a Watertown backyard until his arrest the following night.
Seventeen of the charges authorize a penalty of up to life in prison or the death penalty. The remaining charges authorize a maximum penalty of life in prison or a fixed term of years.
U.S. Attorney Carmen M. Ortiz; Middlesex County District Attorney Marian T. Ryan; Suffolk County District Attorney Daniel F. Conley; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division; Boston Police Commissioner Edward Davis; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; Kenneth J. Croke, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today during a press conference.
This investigation was conducted by the FBI’s Boston Division, Boston Police Department, Massachusetts State Police, and member agencies of the Boston Joint Terrorism Task Force, including the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Immigration and Customs Enforcement – Homeland Security Investigations, U.S. Marshals Service, Massachusetts Bay Transit Authority and others. In addition, the Watertown Police Department, the Cambridge Police Department, the MIT Police Department, the Boston Fire Department, the National Guard and police, fire and emergency responders from across Massachusetts and New England played critical roles in the investigation and response.
This case is being prosecuted by Assistant U.S. Attorneys William Weinreb and Aloke Chakravarty of the U.S. Attorney’s Office for the District of Massachusetts' Anti-Terrorism and National Security Unit, Nadine Pellegrini, Chief of its Major Crimes Unit, and Trial Attorneys of the U.S. Department of Justice's National Security Division's Counterterrorism Section and its Criminal Division.
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.
(Download Indictment )
Registry of Motor Vehicle Officials and Service Station Owner Charged with Extortion and FraudRead the Press Release
Allegations of selling motor vehicle safety inspection licenses and equipment for profit
BOSTON – A Massachusetts Registry of Motor Vehicle (RMV) project manager, an RMV senior inspector, and an owner of two motor vehicle service stations have been charged with scheming to extort other service station owners who wanted to obtain a license to conduct motor vehicle safety inspections.
Simon Abou Raad, 50, of Tyngsboro, and Mark C. LaFrance, 51, of Braintree, and David P. Gaw, 70, of Wakefield, were charged in U.S. District Court with conspiracy to extort money under color of official right in exchange for an official license to conduct Massachusetts motor vehicle safety inspections and with participating in a scheme to commit mail fraud and honest services mail fraud. Gaw was indicted by a federal grand jury, while Abou Raad and LaFrance were charged by Information, having previously been arrested on March 11, 2013.
According to the indictment, LaFrance, project manager for vehicle safety and compliance services at the RMV, had oversight responsibilities for the entire motor vehicle inspection program within Massachusetts. Abou Raad owned service stations in Tewksbury and Tyngsboro. Gaw was a senior inspector working out of Lawrence whose duties included inspecting service stations applying for licenses. In Massachusetts, applications to obtain a license to conduct motor vehicle safety inspections are intended to be granted off a waiting list with consideration given to geographic location. An applicant for a vehicle inspection license must pay a $100 fee and the actual equipment costs about $2,500. Because the inspection network was at its capacity, the RMV was not granting new licenses off the waiting list.It is alleged that LaFrance, Abou Raad and Gaw operated what was essentially “a black market” for such licenses through the use of LaFrance’s and Gaw’s official positions. LaFrance provided Abou Raad with a list of vehicle inspection stations that had a low volume of inspections and/or were planning to surrender their license and sell the inspection equipment. Abou Raad then contacted the service station owner and offered to buy the inspection license and equipment for prices usually in the range of $5,000 to $6,000. Abou Raad then sold such licenses and equipment to service station owners desirous of acquiring a license, often identified by Gaw, for prices between $50,000 to $75,000. Abou Raad then arranged the transaction to appear as if the service station owners selling and buying the license were merging as a new business entity or with a change in ownership. Abou Raad submitted forged documentation to the RMV, ostensibly on the part of the seller, falsely representing that there had been a bona fide merger. Or he caused the applicant to falsely list the seller as a corporate officer on filings with the RMV. Although he was aware that these purported mergers were not bona fide, LaFrance either approved the issuing of a new license or permitted others in the RMV to approve the new license. After the fraudulent transaction resulting in the issuance of a vehicle inspection licenses was completed and payment was made to Abou Raad, he would split the illegal proceeds with LaFrance and would pay Gaw a kickback as a finder’s fee if Gaw had supplied the buyer or conducted a site inspection for the new owner. Through this illegal scheme, Abou Raad sold at least 10 inspection licenses and/or machines for approximately $657,000.
During the investigation, which involved the interception of electronic communications, Gaw and Abou Raad are alleged to have discussed service station owners who were likely to sell their inspection machine and license. In one particular transaction where Gaw located the potential buyer, Gaw was intercepted asking Abou Raad, “how much you got for me?” and Abou Raad responded, “two grand.”
The maximum sentence under the extortion and mail fraud statutes is 20 years in prison, a fine of $250,000 or twice the gain or loss, whichever is greater, three years supervised release, restitution, and forfeiture.
United States Attorney Carmen M. Ortiz and Richard DesLauriers, 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. Attorneys S. Theodore Merritt and Robert Fisher of Ortiz’s Public Corruption Unit.The details contained in the charging documents are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Hadley Man Sentenced for Drug ConspiracyRead the Press Release
BOSTON – A former Hadley man was sentenced today in U.S. District Court in Springfield for conspiring to distribute more than five kilograms of cocaine.
Pablo Drullard, 32, was sentenced by U.S. District Judge Michael A. Ponsor to 10 years in prison, to be followed by four years of supervised release. In February 2013, Drullard pleaded guilty to conspiring to distribute more than five kilograms of cocaine.Between July 31, 2010, and May 2, 2011, Drullard and others participated in a criminal conspiracy to deliver kilograms of cocaine from Texas to western Massachusetts.
United States Attorney Carmen M. Ortiz, John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Kevin O’Regan of Ortiz’s Springfield Office.
Substitute Teacher and Boy Scouts Camp Counselor Facing Child Pornography ChargesRead the Press Release
BOSTON – A substitute teacher was charged today with possessing child pornography.
Bryce Garner, 22, of East Sandwich, was charged in a criminal complaint with possession of child pornography. On June 20, 2013, Garner was arrested on these charges. Garner is currently employed at a hotel, but also works part-time as a substitute teacher, babysitter, and camp counselor.
According to court documents, undercover agents in Oklahoma City, OK learned that Garner was using the peer-to-peer file trading system, Limewire, to share child pornography. On June 20, 2013, agents executed a search warrant at Garners’ home. During the time of the search warrant, an unrelated 14-year-old boy that Garner had previously babysat was found visiting the home since earlier that week. Initially, Garner denied downloading the images, but after agents searched the computer, Garner admitted to possessing child pornography. Garner further admitted that he is attracted to young boys and has been for several years.
The statute provides for a maximum of 20 years in prison, to be followed by up to lifetime supervised release and a $250,000 fine.United States Attorney Carmen M. Ortiz and Richard DesLauriers, 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 Stacy Dawson Belf of Ortiz’s Major Crimes Unit.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274, and messages will be promptly returned.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the Criminal Division’s CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
The details contained in the complaint affidavit are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Documentary Promotes Awareness of Gun and Gang ViolenceRead the Press Release
BOSTON – The Office of United States Attorney Carmen M. Ortiz has partnered with Stop Handgun Violence, Inc. to produce a 30-minute television documentary entitled “Hitting Home” which will air on WBZ-TV on June 23 at 2:00 pm and on myTV38 (WSBK) on June 26 at 10:30 pm.
The objective of “Hitting Home” is to raise awareness about the impact of gun and gang violence on residents in the areas where these problems are most prevalent. Additionally, the film encourages people to engage with local anti-violence community programs.
“Hitting Home” focuses on the cities of Boston and Springfield, providing a forum for people who have been affected by gun and gang violence in those cities. The film demonstrates what it is really like to live with these issues every day. The documentary further describes several effective grass-roots community groups making inroads of positive change in their neighborhoods.
“While the components of our mission include enforcing the law and providing leadership to prevent crime, it’s important for people to realize that we need them to be a part of the solution and work together with us and local law enforcement to improve the quality of life in our cities,” said United States Attorney Carmen M. Ortiz.
The documentary was developed as the result collaboration between CBS’s Community Partnerships division and the U.S. Attorney’s Project Safe Neighborhoods program, together with its media partner, Stop Handgun Violence. Boston’s WBZ-TV and sister-station myTV38 are part of CBS Television Stations, a division of CBS Corporation.
Holden Man Sentenced for Tax EvasionRead the Press Release
BOSTON, MA – A Holden man was sentenced yesterday in federal court in Worcester for committing tax evasion.
David L. Toppin, 47, was sentenced by U.S. District Judge Timothy S. Hillman to 36 months in prison to be followed by two years of supervised release. Toppin also was ordered to pay $716,479 in restitution to the IRS. Toppin was found guilty following a five-day jury trial in January 2013.
Toppin, the sole owner and operator of Pelletizer Group, Inc., did not file federal income tax returns for 1997-1999 until 2006. In the returns, Toppin reported owing $227,199 in federal income taxes for 1997-1999. The evidence at trial showed that Toppin evaded payment of his taxes and tried to impede the IRS’s collection of his income tax by, among other things, placing real estate and checking accounts in his wife’s name and by misleading the IRS about the extent of his assets and income.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Christine Wichers and Sandra Bower of Ortiz’s Economic Crimes Unit.
Florida Man Convicted of Defrauding U.S. InvestorsRead the Press Release
BOSTON – A Florida man was convicted today following a jury trial for his role in a scheme to defraud investors from across the country out of millions of dollars.
Alan Gilner, 78, of New Smyrna Beach, Fla., was convicted of conspiracy, mail fraud, wire fraud and money laundering following a seven-day jury trial. Last month, Randi A. Bochinski, a Canadian citizen, pleaded guilty to wire fraud, mail fraud, and money laundering for his role in the scheme.
Gilner was convicted for his role in a conspiracy to promote a series of high-yield investment programs. Gilner and Bochinski promised investors significant returns on their investments within a short amount of time. Gilner recruited United States-based investors, including friends and acquaintances in Florida, and also advertised in an investment newsletter that was distributed throughout the United States. Gilner often made the initial presentations selling the high yield investments and brought Bochinski in when he needed assistance in convincing someone to invest. Once investors sent their money to either Gilner or Bochinski, the defendants diverted the invested 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 often made at least some of the promised “return” payments, using other investor money to fund the “returns.” In some instances, Bochinski and Gilner attempted to return principal to frustrated investors by using counterfeit checks.
U.S. District Court Judge Douglas P. Woodlock scheduled sentencing for Gilner on September 26, 2013. Bochinski is scheduled to be sentenced on October 3, 2013.
The statutory maximum penalty for the conspiracy charge is five years in prison, to be followed by three years of supervised release and a $250,000 fine. The statutory maximum penalties for the mail and wire fraud charges are 20 years in prison, to be followed by three years of supervised release and a $250,000 fine. The statutory maximum penalty for the money laundering charge is 10 years in prison, to be followed by three years supervised release, and a $250,000 fine.
United States Attorney Carmen M. Ortiz, Kevin Niland, Inspector in Charge of the United States Postal Inspection Service, and William P. Offord, Special Agent in Charge of the U.S. Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was prosecuted by the Assistant U.S. Attorneys Sarah E. Walters and Stephen E. Frank of Ortiz’s Economic Crimes Unit.
Boston Man Sentenced to Four Years in Prison for Gun PossessionRead the Press Release
BOSTON - A Boston man was sentenced late yesterday in federal court for being a previously convicted felon in possession of a firearm.
Emmanuel Mervil, 32, was sentenced by U.S. District Judge Joseph L. Tauro to 48 months in prison to be followed by three years of supervised release. Mervil pleaded guilty on January 7, 2013.In October 2007, Boston Police responded to a 911 call of an armed domestic assault. Upon arrival, the officers were directed to a third floor area where they observed Mervil attempting to climb out the window. Mervil, armed with a firearm, was ordered back into the room and taken into custody. He was found in possession a loaded 9mm semi-automatic handgun.
Mervil was originally arrested and arraigned in the West Roxbury District Court. He was released on bail and defaulted on a court appearance. In 2008, Mervil, a previously convicted felon, was charged in United States District Court where an arrest warrant was issued. The United States Marshal’s Service located and arrested him in March 2012 as he exited a motel in Norwood.
United States Attorney Carmen M. Ortiz; Kenneth Croke, Acting Special Agent in Charge of the Bureau of Alcohol Tobacco, Firearms and Explosives, Boston Field Division; Boston Police Commissioner Edward Davis; and United States Marshal John Gibbons made the announcement today. The case was prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
Leominster Man, Fitchburg Construction Company Charged with Defrauding Union Benefit FundsRead the Press Release
BOSTON – A Leominster man was charged yesterday with operating a construction business under two different names in order to avoid paying union benefits for his employees, a practice commonly known as "double-breasting."
Juan J. Alonso, 59, and Aguila Construction Company, Inc. of Fitchburg were charged with theft or embezzlement from benefit plans subject to the provisions of Title I of the Employee Retirement Income Security Act of 1974 (ERISA), making false statements in documents submitted to benefit plans subject to ERISA, and making false statements to the United States Department of Transportation (DOT).
The Information alleges that Alonso operated Alonso Construction, Inc. and Aguila Construction Company from the same yard and office in Fitchburg. Alonso Construction and Aguila Construction performed the same type of work, used the same equipment, and used the same laborers and office staff. This “double-breasted” arrangement is often used in the construction industry to avoid paying union members the union wages and benefits they are entitled to.
In 2000, Alonso, on behalf of Aguila Construction had agreed to be bound by certain collective bargaining agreements with, among other unions, Laborers International Union of North America Local 39 (Local 39). The collective bargaining agreements governed the remittance of fringe benefit contributions to employee benefit plans. The agreements require signatories to accurately report to the plans the number of hours worked by members of Local 39 and to make contributions to the funds accordingly.
Between 2008 and 2011, Alonso and Aguila Construction defrauded the benefit funds by running part of the Aguila Construction payroll through Alonso’s “non-union” company, Alonso Construction, thereby underreporting the hours actually worked by Local 39 members. Alonso also defrauded the funds by paying Aguila Construction laborers in cash, in order to avoid making hourly payments to the benefit funds. Over the four-year period, the defendants failed to pay approximately $805,338 owed to the funds.
The Information further charges that between 2008 and 2011, Aguila Construction secured several publicly-funded projects, including 12 projects funded by the DOT pursuant to the American Recovery and Reinvestment Act of 2009 (ARRA). As part of the scheme, a portion of this contract work was conducted by Alonso Construction rather than Aguila Construction, the signator to the contracts.
In particular, between June 15, 2009 and May 23, 2010, Aguila Construction was subcontracted to perform construction work on an ARRA-funded construction project on Route 2 in Harvard and Littleton. In connection with this project, Aguila Construction completed and sent to the Massachusetts Department of Transportation certified payroll records falsely stating the identity of employees, the number of hours worked and the wages paid.
If Alonso is convicted, each of the statutes provides for a maximum sentence of five years in prison to be followed by three years of supervised release and a fine. Conviction of Aguila Construction could result in a fine and a term of probation between one and five years.
U.S. Attorney Carmen M. Ortiz; Theodore L. Doherty, III, Special Agent in Charge of the U.S. Department of Transportation, Office of Inspector General, Office of Investigations; Robert Panella, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering & Fraud Investigations; and Susan Hensley, Director, Boston Regional Office of the Employee Benefits Security Administration 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 defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
U.S. Attorney’s Office Hosts Greater Boston PFLAG for LGBT Pride MonthRead the Press Release
In recognition of LGBT Pride Month, the U.S. Attorney’s Office hosted representatives from the Greater Boston PFLAG (Parents, Families, and Friends of Lesbians and Gays). Greater Boston PFLAG aims to change attitudes and create an environment of understanding so that gay family members and friends can live in a world that is safe and inclusive. The organization works to create environments of understanding so that all people can live with dignity and respect through: support, to cope with an adverse society; education, to enlighten the public; and advocacy, to end discrimination and to secure equal civil rights. Greater Boston PFLAG also provides opportunities for dialogue about sexual orientation and gender identity, and acts to create a society that is healthy and respectful of human diversity.
Pam Garramone, Executive Director, and Deb Peeples, Board President, along with Amir Dixon and Zachary Kerr, spoke about Greater Boston PFLAG and shared their personal stories involving a wide variety of LGBT issues. Pam and Deb recently returned from the White House to receive recognition for the important work that they do on behalf of the LGBT community. Amir, 23, is an award winning writer, producer, filmmaker and activist who in 2011 became the youngest board member of the Hispanic Black Gay Coalition of Boston (HBGC). Zachary, 19, is a recent high school graduate and member of the Massachusetts Commission on LGBT Youth. He has been working to address the needs of transgender students.
In March 2013, the Department of Justice established a formal LGBT Special Emphasis Program. The formal designation of a LGBT Special Emphasis Program helps to institutionalize program activities that are currently in place to support the recruitment, retention and development of LGBT employees. The designation also complements existing Special Emphasis Programs which are designed to further develop a diverse and talented DOJ workforce.
Cape Cod Man Sentenced for Filing A False Tax Return for His Debt Collection BusinessRead the Press Release
BOSTON – A Cape Cod man was sentenced today for filing a false tax return.
William Burr, 48, of Cataumet, Mass., was sentenced by U.S. District Judge Douglas P. Woodlock to one year and one day in prison, to be followed by one year of supervised release. Burr was also ordered to pay $101,327 in restitution to the Internal Revenue Service. In January 2013, Burr pleaded guilty to filing a false tax return.
Burr was a 50% owner of a debt collection business. During 2003, the business operated under the names Pilgrim Financial LLC and Excel Acquisitions, LLC. Between January 1 and December 31, 2003, the gross receipts earned by the business totaled $726,226, but Burr did not provide his tax preparer with information necessary to determine a correct gross receipts figure for the business. Consequently, in April 2008, Burr filed a federal partnership tax return for the year 2003, falsely reporting that the gross receipts or sales of the business in 2003 were $246,731. By filing the false return, Burr evaded the payment of approximately $101,327 in taxes.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Kristina E. Barclay of Ortiz’s Pubic Corruption and Special Prosecutions Unit.
Virginia Doctor Indicted for Perjury in Orthofix InvestigationRead the Press Release
BOSTON – A Virginia woman was charged today with making a false declaration to a grand jury.
Ilene Terrell, 65, of Fredericksburg, Va., was indicted with making a false declaration to a grand jury.
The indictment alleges that Terrell, a podiatrist, and representatives of Orthofix, Inc., manipulated patient medical records to induce Medicare to pay for claims for Orthofix bone growth stimulator medical devices that did not meet Medicare’s payment guidelines. When Terrell was asked about these matters before the grand jury, she lied, claiming that she was not aware that any records had been manipulated. Bone growth stimulators are externally-worn medical devices that help regenerate bone cells and are used to assist the healing of broken bones. Medicare only pays for a bone growth stimulator if the medical supplier provides records demonstrating that fracture healing has ceased for three or more months. If the bone may heal on its own, Medicare will not pay for a stimulator, which can cost upwards of $4,000.
On numerous occasions, Terrell prescribed a stimulator for a patient where the claim would not have met Medicare’s guidelines. When this occurred, the Orthofix territory manager, Terrell, and an employee at Terrell’s direction often manipulated the patient’s medical records, making it appear as though the stimulator was not prescribed until three months had elapsed without healing, when in fact that was not true and Medicare should not have paid the claim. On some occasions, Terrell prescribed a stimulator for a patient and the patient’s bone healed within the prohibited three-month window. When that occurred, Terrell, an Orthofix representative, and an employee at Terrell’s direction deleted references in chart notes that the patient was using the stimulator and was healing, and they created a new, fictitious note at the end of the 90-day period stating that the bone was still broken and that a stimulator would be ordered. Terrell also created fictitious prescriptions to support the bogus claims.
On May 22, 2012, Terrell testified before the grand jury. She was asked several times if she was aware that patient records had been manipulated. Terrell lied to the grand jury, emphatically denying that she manipulated patient records or that she was even aware that anyone had done so. Terrell lied about other matters as well, including her communications with an Orthofix representative about the government’s investigation and her role in obstructing an audit performed by Orthofix when the company requested that she provide medical records related to claims for bone growth stimulators.
If convicted, Terrell faces a statutory maximum penalty of five years in prison, to be followed by three years of supervised release and a $250,000 fine on each count.
United States Attorney Carmen M. Ortiz and Susan J. Waddell, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney David S. Schumacher 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.
Pennsylvania Man Charged with Mortgage FraudRead the Press Release
BOSTON – A Woodlyn, Pa., man was charged today with multiple counts of wire fraud in connection with a mortgage fraud scheme in which he recruited a straw buyer to purchase three condominiums in Dorchester, Mass., which ultimately went into foreclosure, causing a loss to the lenders of nearly $900,000.
Simon H. Aouad, 34, of Woodlyn, Pa., was indicted with conspiracy to commit wire fraud and four counts of wire fraud.According to the Indictment, in August 2007, Michael Lee purchased a three-family dwelling at 162 Quincy Street, in Dorchester, for $400,000. He immediately converted the dwelling to three condominiums, which allowed Lee to sell the units individually. At the request of Lee and another individual, Michael Hicks, Aouad recruited a “straw buyer” to purchase all three units for $1.11 million. The straw buyer provided his identifying information to Aouad who forwarded it to Hicks. Hicks used this information, such as his name, address, date of birth and Social Security number, to apply for mortgages for the purchase of the three units at 162 Quincy Street. In the loan applications, Hicks falsely represented the straw buyer’s assets and employment. Aouad also arranged for false income tax returns to be submitted with the fraudulent mortgage applications.
In 2010, Hicks was sentenced to 42 months in prison, followed by three years of supervised release and restitution after pleading guilty to wire fraud and money laundering. In 2011, Lee was sentenced to one year and one day in prison, followed by three years of supervised release and restitution after pleading guilty to wire fraud.
Aouad faces a statutory maximum penalty of 30 years in prison, to be followed by five years of supervised release and a $1 million fine on each count.
United States Attorney Carmen M. Ortiz, Steven Ricciardi, Special Agent in Charge of the U.S. Secret Service, Boston Field Office, and William Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. This case is being prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.
The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former School Committee Member, and Boy Scout Leader, Pleads Guilty to 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 convicted today in U.S. District Court in Worcester of charges that he used the internet to entice minors to engage in unlawful sexual conduct and that he possessed child pornography.
Andrew Jonathan Myers, 34, of Whitinsville, Mass., pleaded guilty before U.S. District Judge Timothy S. Hillman to four counts of using the internet to entice, persuade, or induce a minor to engage in unlawful sexual conduct and of possessing child pornography.
Between July 13, 2012 and July 23, 2012, Myers communicated with a twelve year old Colorado boy, identified as juvenile victim 1 (JV-1), over the internet, first via email, and then via 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 JV-1 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, 2012, May 9, 2012, and June 28, 2012, Myers sent sexually explicit emails to three minors with whom he was acquainted, identified as JV-2 (age 13), JV-3 (age 11), and JV-4 (age 14), in which Myers 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.
Finally, the evidence would have proven that 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.
Sentencing is scheduled for September 9, 2013. Pursuant to a plea agreement with the government, Myers faces a sentence of between 15 to 21 years in prison, followed by 10 years of supervised release.United States Attorney Carmen M. Ortiz; Richard DesLauriers, 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 today. This was a joint investigation that was initiated by the Larimer County Sheriff’s Office who discovered Myers’ alleged conduct and provided the information that led to both Myers’ identification and these federal charges. The case is being prosecuted by Assistant U.S. Attorney Mark J. Grady of Ortiz’s Worcester Office.
Former Quincy Man Sentenced to Tax Evasion Schemes and Theft from Federal Housing ProgramRead the Press Release
BOSTON – A former Quincy man, now living in New Hampshire, was sentenced yesterday for carrying out two elaborate tax evasion schemes and theft of federal housing assistance funds.
Raymond C. Stebbins, 70, of Manchester, NH, was sentenced by U.S. District Judge George A. O’Toole, Jr. to three years in prison, to be followed by two years of supervised release and restitution to the Internal Revenue Service and the U.S. Department of Housing & Urban Development. In March 2013, Stebbins pleaded guilty to two counts of conspiracy, five counts of tax evasion, two counts of making false statements and theft of public money.Stebbins was engaged in two ten-year long schemes – first, a false invoice scheme aimed at evading the ascertainment and assessment of income taxes and, second, a Section 8 housing fraud scheme.
In 2000, Christopher McGadden, the General Manager of Xcel Fire Protection, a fire protection indoor sprinkler business, engaged in a false invoice/tax evasion scheme with Stebbins. Stebbins purportedly owned numerous businesses, among them a trucking company, a moving company, a real estate company, and two or more business equipment resale companies. Stebbins prepared and sent bogus invoices in the names of the companies he purportedly owned to Xcel. The invoices falsely reflected that one of the Stebbins’ companies had provided goods or services to Xcel when they had not. Knowing the invoices were bogus, McGadden authorized Xcel to pay the invoices by check. Stebbins then deposited the Xcel checks into various bank accounts he had opened, structuring the withdrawals of funds from those accounts. Thereafter, Stebbins gave McGadden 90 percent of the proceeds of those checks in cash and kept 10 percent for himself. In addition, McGadden caused Xcel’s customers to write checks directly in the name of one of Stebbins’ companies. Stebbins deposited those checks in to his bank account and did the same 90/10 split with McGadden. Neither Stebbins nor McGadden paid the proper income taxes on the $490,000 they took from Xcel checks and certain Xcel customer checks.
In a second conspiracy, starting in December 1999, Stebbins conspired with another individual, identified as FV, to defraud the IRS. Stebbins carried out a nearly identical false invoice tax evasion scheme in which the two men fraudulently diverted more than $3.3 million in funds rightfully belonging to FV’s construction company based in Nashua, NH. This scheme, although larger in scope, worked virtually identically to Stebbins’ scheme with McGadden. Neither Stebbins nor FV paid the proper income taxes on the money they took from FV’s company checks.
For the tax years 2005 through 2009, Stebbins attempted to evade a large part of income tax he owed to the IRS by filing erroneous returns which under-reported his income.
Furthermore, Stebbins made false statements to the U.S. Department of Housing and Urban Development when applying for the Section 8 Housing Assistance Program which provides housing assistance payments to people who need rent subsidy in order to obtain adequate housing.
Beginning in December 1997, Stebbins represented to HUD that he was unable to afford adequate housing. As a result, Stebbins received Section 8 benefits from June 1998 through May 2008. During this time, HUD periodically attempted to establish Stebbins’ continued eligibility for Section 8 benefits, and the level of those benefits, by sending him annual re-certification forms which requested information concerning his household income level and assets. Stebbins filled out the forms with false entries that under-reported his household income and assets. At the time he was receiving Section 8 benefits from HUD, Stebbins was an approved Section 8 housing assistance landlord for two multi-family properties, one in Quincy and another in Nashua, NH. Between January 1, 2002 and May 31, 2008, Stebbins effectively stole money from HUD in the form of Section 8 housing payments that he was not entitled to.
Judge O’Toole ordered Stebbins to report to the U.S. Marshal’s Office in Boston to begin serving his sentence on June 18, 2013.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Cary Rubenstein, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Regional Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Diane Freniere of Ortiz’s Public Corruption and Special Prosecutions Unit.