Eastern District of Michigan
Press releases recorded for this federal judicial district.
Former Wayne County Employee Charged with Stealing over $1.7 Million in County FundsRead the Press Release
DETROIT – A former Wayne County Roads Division employee was charged in an indictment today with conspiring to steal over $1.7 million in county funds, Wayne County Prosecutor Kym Worthy and United States Attorney Dawn N. Ison announced.
Worthy and Ison were joined in the announcement by James A. Tarasca, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, Wayne County Sheriff Raphael Washington, and Warren C. Evans, Wayne County Executive. Wayne County Executive Warren C. Evans and his administration have been assisting and cooperating with the ongoing investigation since they first learned of fraudulent activity within their organization.
The indictment charges John L. Gibson, 54, of Detroit with one count of conspiring to embezzle county funds and three counts stealing county funds. Together, Gibson and his supervisor, Kevin Gunn, 64, of West Bloomfield, defrauded Wayne County out of nearly $2 million in taxpayer funds. Gunn, Gibson, and others were engaged in a scheme to use taxpayer dollars to make unauthorized purchases of generators and other power equipment from retailers in southeast Michigan which they then sold for personal profit. Last week, the government filed an information charging Gunn for his involvement in the criminal activity.
In March of 2021, the Wayne County Sheriff’s Department began an investigation into the misuse of taxpayer dollars. The Sheriff’s Department then solicited the assistance of the FBI to investigate the criminal actions of Gunn, Gibson, other employees of the Wayne County Roads Division, and vendors to Wayne County. At the beginning of the investigation, the Wayne County Prosecutor’s Office secured a search warrant which exposed Gunn’s role in the embezzlement scheme. Subsequent investigation by FBI revealed Gibson’s involvement in the conspiracy. Investigators with the Wayne County Prosecutor’s Office have played an ongoing and important role in the investigation.
As part of the scheme to defraud, between January 2019, and August 2021, Gunn and Gibson solicited approved Wayne County vendors to purchase generators and other power equipment from local retailers on behalf of Wayne County. The vendors would then submit invoices for these items to Wayne County. In order to conceal the scheme to defraud, Gunn instructed the vendors to falsify the invoices they submitted to the Roads Division, and list items the vendors were authorized to sell to the county under their contracts, rather than the generators and power equipment they were unlawfully acquiring at Gunn’s and Gibson’s request. Roads Division employees would then approve and pay each vendor’s invoice with taxpayer funds. After these fraudulent purchases were verified and approved by Roads Division employees, Gibson took possession of the equipment, paid Gunn for the items, and resold the generators and other items for personal profit.
A review of invoices from Wayne County vendors revealed that between January 16, 2019, and August 3, 2021, Wayne County vendors purchased 596 generators, and a variety of other power equipment including lawnmowers, chainsaws, and backpack blowers. The purchase of these items was not authorized under any vendor contract with Wayne County nor were the items ever provided to or used by Wayne County. The total value of equipment purchased as part of the scheme was approximately $1.7 million in taxpayer funds. Gibson and Gunn were arrested in May by FBI agents, Wayne County Prosecutor’s Office Investigators, and Wayne County Sheriff’s Deputies.
Conspiracy to commit federal program theft carries a maximum sentence of up to 5 years’ imprisonment and a fine of up to $250,000. Each count of embezzlement of county funds carries a maximum sentence of 10 years’ imprisonment and a fine of $250,000.
“We must be ever vigilant about rooting out corruption wherever we find it. Especially when it lands close to home. CEO Warren Evans, my detectives and I share a vision of a corruption free Wayne County,” said Prosecutor Kym Worthy.
United States Attorney Dawn Ison said, “Today’s indictment demonstrates the ability of our federal, state, and local law enforcement officers to work together to seek justice for the citizens of the Eastern District of Michigan. We thank Wayne County Prosecutor Kym Worthy, and Wayne County Executive Warren C. Evans for their unwavering efforts to eradicate corrupt public officials who steal from hardworking taxpayers and elevate their own greed over the best interests of the public.”
Wayne County Executive Warren Evans said, “Criminal behavior will not be tolerated in Wayne County government. Betraying the trust of Wayne County citizens as an employee will result in the harshest penalties. I’ve remained committed to seeking justice at the highest level which includes long-term prison sentences and financial restitution to the citizens of Wayne County. Our citizens deserve and expect better.”
The alleged actions of this individual is nothing short of disgraceful,” said Sheriff Raphael Washington. “To brazenly steal from hardworking taxpayers and fraudulently line his own pockets while holding positions of public trust make these crimes all the more deplorable. Today’s indictment is another example of our strong commitment to working together.”
“Public officials should be trusted to use taxpayer money for its intended purpose and not for their personal gain,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Field Office. “I commend the Wayne County Prosecutor, Wayne County Executive, and the Wayne County Sheriff’s office for their early work on this investigation and for their ongoing collaboration and commitment to holding Mr. Gibson and his co-conspirators accountable for their federal crimes.”
The investigation of this case was conducted by the Wayne County Prosecutor’s Office, the Wayne County Sheriff’s Department, and the Detroit Area Public Corruption Task Force, which is led by the Federal Bureau of Investigation, with assistance from the Michigan Attorney General's Office, Detroit Police Department, Customs & Border Protection, U.S. Postal Inspection Service, and the U.S. Department of Homeland Security. The case is being prosecuted by Assistant U.S. Attorney Eaton P. Brown.
An indictment is only a formal charging document and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Employee of the National Oceanic and Atmospheric Administration Charged with Making False Statements to Obtain Security ClearanceRead the Press Release
DETROIT - An employee of the National Oceanic and Atmospheric Administration (NOAA) was charged with making false statements concerning his contacts with the Taiwanese Navy and falsifying records in a federal investigation related to his application for a security clearance in a federal criminal complaint that was unsealed today, announced United States Attorney Dawn N. Ison.
Ison was joined in the announcement by Special Agent in Charge James A. Tarasca, Federal Bureau of Investigation, Detroit Division.
Charged was Yifei Chu, also known as Philip Chu, 57, of Ypsilanti, Michigan.
According to the criminal complaint, Chu, a naturalized U.S. citizen and current employee of NOAA, had recently applied for a three-year detailed assignment to the United States Embassy in Singapore working for the United States Navy in the Office of Naval Research Global. To obtain this position, Chu was required to apply for and obtain a “Secret” security clearance. Chu made several false statements in his security clearance application, during an interview with federal background investigators, and in an affidavit he signed regarding his security clearance application. Chu’s false statements included his failure to disclose extensive contacts with members of the Taiwanese Navy and a Taiwanese company, including the fact that Chu was hired by the Tiwanese company to provide consulting services on a “classified” Taiwanese Navy project, and that he met on multiple occasions with members of the Taiwanese Navy on a military base in Taiwan in performance of his consulting services. The consulting services Chu provided the Taiwanese Navy related to work he did during a period of employment with United States Navy, which predated his work at NOAA. Chu also sought to conceal the fact that he is still a citizen of Taiwan.
The offense of making a false statement carries a maximum sentence of 5 years’ imprisonment and a fine of $250,000, and the offense of falsification of records in a federal investigation carries a maximum sentence of 20 years’ imprisonment and a fine of $250,000.
The investigation of this case was conducted by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Ronald Waterstreet and Michael Martin.
A criminal complaint is only a charging document and is not evidence of guilt.
Prior Convicted Felon Sentenced to 25 Years in Federal Prison for Attempting to Produce Child PornographyRead the Press Release
DETROIT – Andrew Joseph Vinyard, 43, of Ypsilanti, was sentenced yesterday to 25 years in federal prison on charges of attempted production of child pornography, announced United States Attorney Dawn N. Ison. Vinyard was sentenced by United States District Judge Laurie Michelson following his guilty plea in June of this year.
Ison was joined in the announcement by Special Agent in Charge James A. Tarasca of the Federal Bureau of Investigation-Detroit Division (FBI).
According to court documents, in November of 2019, Vinyard began offering two fourteen-year-old victims "modeling opportunities" and money in exchange for sex. In response to the concerns of the victims’ parents, an undercover officer posing as a female student at the same school as the minor victims, contacted Vinyard via his Instagram account. After being told that the undercover officer was 14 years old, Vinyard offered to purchase the undercover officer a new phone in exchange for sex acts and for the undercover officer taking sexually explicit photos with the phone. Vinyard also offered the undercover officer $500 to get together and get high on cocaine so he could "take her virginity" and take sexually explicit photographs of her. Vinyard requested multiple photos and videos of the undercover officer engaging in sexual activity. Vinyard also solicited live video texts of the undercover officer so Vinyard could direct the undercover officer to perform sex acts on herself.
“Today’s sentence reaffirms our office’s commitment to protecting the most vulnerable and defenseless members of our community – children,” said U.S. Attorney Ison. “It is our hope that a 25-year sentence sends a message to the defendant, and the community at large that we will continue to root out this type of evil in our society and pursue stiff sentences for defendants like this who repeatedly prey on the young.”
“Protecting children from dangerous, serial child predators like Andrew Vinyard is a priority for our office," said James A. Tarasca, Special Agent in Charge of the FBI's Detroit Field Office. "His repeated attempts to lure and exploit children are deplorable and our young people are safer with him behind bars. I am proud of the FBI, our law enforcement partners, and the concerned parents that came forward to hold this man accountable."
The case was investigated by the officers of the Huron Township Police Department and special agents of the FBI. The case was prosecuted by Assistant United States Attorney Eaton Brown.Former Detroit Police Officer Pleads Guilty to Conspiracy to Commit BriberyRead the Press Release
DETROIT – A former Detroit Police Officer pleaded guilty today to conspiring with a Detroit police lieutenant to commit bribery in connection with corruption in the towing industry in Detroit, United States Attorney Dawn N. Ison announced.
Ison was joined in the announcement by James A. Tarasca, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.
Daniel Vickers, 54, of Livonia, Michigan, spent his career as a police officer in Detroit. During the plea hearing, Vickers admitted to conspiring with Detroit Police Lieutenant John F. Kennedy. Kennedy at one point commanded the department’s Public Integrity Unit, a division of the Internal Affairs Division responsible for investigating reports of law violations and professional misconduct by police officers and other city employees. The two conspired to commit bribery by accepting money and other items of value in exchange for Kennedy using and promising to use his influence as a supervisor to persuade other officers to make tow referrals to a towing company in violation of the city’s ordinance and Detroit Police Department policy. Under the city’s towing rotation, qualifying private towing companies are called by the police to tow cars that are seized by the police or reported stolen. Kennedy and Vickers were aware that by making towing referrals directly to a towing company which was not on the city’s towing rotation, they were violating the city’s rules and an ordinance which prohibit a towing company from receiving towing referrals if they are not on police department’s towing rotation. Kennedy pleaded guilty to the bribery conspiracy in August 2022.
Vickers also admitted that he and Kennedy conspired to solicit and accept thousands of dollars in cash, cars, car parts, car repairs, and new carpeting for Vickers’ home, in exchange for providing the towing company that Kennedy was investigating with information about the status of the Public Integrity Unit’s case.
In total, between February 2018, and June 2018, Vickers accepted over $3,400 in bribe payments from the towing company. In addition, Kennedy accepted bribes amounting to $14,950 during the course of the conspiracy.
Based on his conviction for bribery conspiracy, Vickers faces a maximum sentence of 5 years’ imprisonment and a fine of $250,000. Vickers pleaded guilty before United States District Judge Laurie J. Michelson.
Vickers and Kennedy were charged as part of the government’s investigation known as “Operation Northern Hook.” Northern Hook is an investigation of corruption within the government and the Police Department of the City of Detroit relating to the towing industry and other matters. Thus far, six defendants have been charged in the probe.
United States Attorney Ison said, “Today’s plea represents our commitment to holding our law enforcement officers to the highest standards of integrity and professionalism. Our citizens deserve nothing less. We thank Chief of Police James White for his assistance in this investigation.”
“Daniel Vickers used his official position to personally benefit himself. His actions are not in keeping with the integrity and professionalism exhibited by the Detroit Police Department day in and day out,” said James A. Tarasca of the FBI’s Detroit Field Office. “The FBI appreciates the partnership and cooperation of Police Chief James White as we continue to address public corruption in the City of Detroit.”
“The actions of these former officers are completely unacceptable for a Detroit Police officer,” said Detroit Police Chief James E. White. “We appreciate U.S. Attorney Ison’s work to rid our city of corruption and will continue to collaborate in any investigation of alleged wrongdoing by our officers. It is a top priority of my administration to ensure that Detroit citizens can rely on our officers to act ethically.”
The case was investigated by the Detroit Area Public Corruption Task Force, which is led by the Federal Bureau of Investigation, with assistance from the Detroit Police Department, Michigan Attorney General's Office, Customs & Border Protection U.S. Postal Inspection Service, and the U.S. Department of Homeland Security. The case is being prosecuted by Assistant U.S. Attorney Eaton P. Brown and was originally indicted by United States Attorney Dawn N. Ison.
Detroit Street Gang Member Pleads Guilty to Murdering Two People as Part of a Racketeering ConspiracyRead the Press Release
DETROIT – A Detroit street gang member pleaded guilty to murdering a rival gang member and an innocent 13-year-old bystander as part of a racketeering conspiracy, United States Attorney Dawn N. Ison announced today.
Ison was joined in the announcement by Special Agent in Charge James A. Tarasca, Federal Bureau of Investigation, Detroit Division.
According to court records, Edwin Mills, 32, of Detroit, Michigan, admitted to being a member of the “6 Mile Chedda Grove” gang, which is a street gang that operates on the eastside of Detroit. 6 Mile Chedda Grove is a violent organization responsible for murders, assaults, robberies, and narcotics trafficking in the Detroit metropolitan area and in other states. The gang used violence to retaliate against rivals and to advance members’ positions within the gang.
As a part of his plea, Mills admitted to participating in the 2015 murder of a rival gang member and an innocent bystander. According to plea documents, Mills was with another gang member when he saw the rival in a car outside of a market in the eastside of Detroit. Mills and a co-conspirator killed the rival gang member and an innocent bystander when they fired multiple shots at the vehicle. Mills and his fellow gang member also seriously injured two other people who had been sitting on the hood of the car at which Mills had been firing.
When authorities had first arrested Mills and searched his residence, they found two AK-47 rifles, a pistol, several hundred rounds of ammunition, multiple loaded “magazines” of ammunition (including loaded AK-47 magazines taped together (allegedly “for faster re-loading”), and a bayonet.
Mills is the last of the eleven members of 6 Mile Chedda Grove to be convicted. Ten other gang members have previously pleaded guilty for their roles in the gang.
“Edwin Mills admitted to committing violent crimes, including murder, as a member of the 6 Mile street gang. Tragically, while retaliating against a rival gang member, Mills shot and killed an innocent 13-year-old bystander,” said U.S. Attorney Ison. “Two other minor children were
also injured by his actions. This case represents how violent crime, particularly gun violence, devastates our community, and why I will use every resource of the federal government to bring those who commit violence to justice.”
Sentencing for Mills is set for February 2, 2023. Under the terms of the plea agreement, Mills faces a sentence of 25 years in prison.The case was investigated by special agents of the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Robert Moran and Andrew R. Picek.
U.s. Attorney Dawn N. Ison Announces $348,836.00 in Justice Department Grants to Support Project Safe NeighborhoodsRead the Press Release
SAGINAW – U.S. Attorney Dawn N. Ison announced today that the Department of Justice has awarded $348,836.00 to support the Project Safe Neighborhoods Program in the Eastern District of Michigan. Funding will support community efforts to address the epidemic of gun crime and serious violence in the district. The grant, to Saginaw Community Foundation, Inc., is one of a number of awards being made to state and local agencies across the country. Funds are administered by the Bureau of Justice Assistance, part of the Department’s Office of Justice Programs.
Launched two decades ago as an evidence-based and community-oriented response to serious gun crime, Project Safe Neighborhoods, known as PSN, is a key component of the Department’s Comprehensive Strategy for Reducing Violent Crime, outlined by Deputy Attorney General Monaco in May 2021. The PSN approach is guided by four key principles: fostering trust and legitimacy in our communities; supporting community-based organizations that help prevent violence from occurring in the first place; setting focused and strategic enforcement priorities; and measuring the results of our efforts. The fundamental goal is to reduce violent crime, not simply to increase the number of arrests or prosecutions.
“By focusing on the most violent offenders and the most violent places, Saginaw has the opportunity to greatly improve the quality of life for the residents of Saginaw who are most acutely affected by gun violence,” said U.S. Attorney Dawn N. Ison. “This award is great news for Saginaw as it will provide the funding needed to help reach our goal of reducing gun violence.”
“Reducing violence and sustaining those reductions will require strong partnerships between criminal justice agencies and community stakeholders and a shared commitment to the safety and well-being of every community member,” said OJP Deputy Assistant Attorney General Maureen Henneberg. “The investments we are making through Project Safe Neighborhoods will enable every stakeholder to play a part in building safer and healthier communities.”
PSN programs are led by U.S. Attorneys’ Offices in collaboration with local public safety agencies and community organizations. The programs’ emphasis on community engagement, prevention and intervention measures, focused and strategic enforcement, and measurement and accountability has helped achieve overall reductions in violent crime, including gun homicides, in neighborhoods where PSN strategies have been implemented.
“Over its two-decade history, Project Safe Neighborhoods has evolved to meet the complex challenges of community violence by enlisting the insights and expertise of local partners and by relying on the latest evidence,” said BJA Director Karhlton F. Moore. “We are proud to support our U.S. Attorneys and their allies in their critical work to curb violent crime and build the mutual trust necessary to ensure lasting success.”
The awards announced above are being made as part of the regular end-of-fiscal year cycle. More information about awards under PSN and other OJP grants can be found on the OJP Grant Awards Page.
The Office of Justice Programs provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, advance racial equity in the administration of justice, assist victims and enhance the rule of law. More information about OJP and its components can be found at www.ojp.gov.
Saginaw Man Convicted of Drug and Gun Offenses in Federal CourtRead the Press Release
BAY CITY - A 21-year-old Saginaw man, Cortiyah Moore, was convicted yesterday of several drug and gun offenses by a federal jury in Bay City following a 3-day trial before the Hon. Thomas L. Ludington, United States Attorney Dawn N. Ison announced today.
Ison was joined in the announcement by Paul Vanderplow, Special Agent in Charge of the Alcohol, Tobacco, Firearms & Explosive Detroit Field Division.
According to testimony and evidence introduced at the trial, on September 27, 2021, troopers with the Michigan State Police conducted a traffic stop on a vehicle occupied by three men. The troopers found a loaded, semi-automatic pistol equipped with an extended magazine at Moore’s feet who was seated in the back seat. Moore had a large sum of cash on his person, as did the driver and front seat passenger. Elsewhere in the vehicle, the troopers found distribution quantities of fentanyl and crack, and a second pistol equipped with a drum magazine and an auto-sear which made the firearm a fully automatic machinegun. The jury returned guilty verdicts on all counts; conspiracy to distribute fentanyl and crack cocaine, possession with intent to distribute fentanyl and crack cocaine, possessing a firearm in furtherance of a drug trafficking crime, and felon in possession of a firearm.
Moore, a convicted felon who was on probation at the time, faces a mandatory minimum sentence of five years in prison and a maximum of life. Moore will be sentenced by the Hon. Thomas L. Ludington on January 19, 2023.
The case was investigated by troopers with the Michigan State Police and special agents with the ATF. The case was prosecuted by Assistant United States Attorney J. Michael Buckley.
Allen Park Man Convicted of Fentanyl/Heroin Trafficking and Firearm OffensesRead the Press Release
DETROIT - An Allen Park man was convicted today by a federal jury in Port Huron on charges of possessing fentanyl and heroin with the intent to distribute them, maintaining a drug premises, and possession of a firearm and ammunition by a previously convicted felon, announced United States Attorney Dawn N. Ison.
Joining Ison in the announcement was Orville O. Greene, Special Agent in Charge of the Detroit Field Division of the Drug Enforcement Administration.
Found guilty was Robert Cortez Burrell, 52. The five-day trial was conducted before United States District Judge Robert H. Cleland. The jury deliberated less than an hour before returning their verdicts. Brown faces at least ten years in prison, up to life, when he is sentenced, likely early next year.
According to the evidence presented at trial, DEA agents began investigating Burrell in the fall of 2020. During their investigation, they learned he was storing and manufacturing drugs using two houses in Lincoln Park and his personal residence in Allen Park, as well as distributing fentanyl and heroin in Michigan and Ohio. On December 10, 2020, DEA agents executed warrants at the three houses, resulting in the discovery of more than 800 grams of fentanyl; over 300 grams of heroin (some of which was a fentanyl/heroin mix); cutting and narcotics packaging materials; a Sterling semi-automatic pistol; 15 rounds of .25 Auto ammunition; a half-kilo press with heroin residue; a grinder with fentanyl residue; another grinder with heroin, cocaine, and fentanyl residue; and approximately $15,000 in cash.
Fentanyl is a powerful synthetic opioid, and two milligrams is typically considered a potentially lethal dose. So, Burrell had, conservatively, about 400,000 lethal doses of the drug. According to the CDC, in the twelve-month period ending December 2020, more than 92,000 Americans lost their lives to drug overdoses. Products - Vital Statistics Rapid Release - Provisional Drug Overdose Data (cdc.gov). 75% of U.S. drug overdose deaths in 2020 involved an opioid.
“Our office will vigorously pursue opioid traffickers who inject poisons like fentanyl and heroin into our community and we will do all we can to stop them from continuing to destroy the lives of our friends, neighbors, and loved ones who suffer from substance addiction” said Ison.
This investigation was led by agents of the Drug Enforcement Administration assigned to the Detroit Field Division. The case is being prosecuted by Assistant U.S. Attorneys Jihan Williams and John O’Brien.
Federal Inmate Sentenced to over 24 Years for Murder of Fellow InmateRead the Press Release
DETROIT - A federal inmate was sentenced to more than 24 years in prison yesterday for murdering a fellow inmate at Milan Correctional Facility, in Milan, Michigan, United States Attorney Dawn N. Ison announced.
Ison was joined in the announcement by James A. Tarasca, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Jonathan Hemingway, Warden, Milan Federal Correctional Institution.
Adam Taylor Wright, 42, formerly of Springfield, Illinois, pled guilty to Second Degree Murder in February of this year. United States District Court Judge Paul D. Borman sentenced Wright to 292 months, which will run concurrently/consecutively to the sentences of imprisonment he is serving in other cases.
According to court records, on January 2, 2019, Wright, along with co-defendants Alex Albert Castro, 42, and Jason Dale Kechego, 41, killed fellow inmate Christian Maire. Specifically, Wright and Kechego repeatedly kicked and stomped Maire in the head, and Wright prevented corrections officers from intervening while Castro repeatedly stabbed Maire. Wright, along with his two co-defendants, then worked together to throw Maire’s body down a flight of stairs. Maire died from multiple stab wounds (28 total) and blunt force trauma to the head.
“Deterring violence inside prisons will always be a priority of this office. Senseless acts of violence that jeopardize the safety of employees and inmates of the Bureau of Prisons will be aggressively prosecuted.” said U.S. Attorney Ison.
This case was investigated by special agents of the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Frances Lee Carlson and Andrew R. Picek.
Detroit Equity Fund Owner Charged with Defrauding Investors of over $27 millionRead the Press Release
DETROIT – An equity fund CEO was charged with bilking investors of over $27 million by fraudulently exaggerating his fund’s investment performance and by embezzling from the fund, United States Attorney Dawn N. Ison announced today.
Ison was joined in the announcement by James A. Tarasca, Special Agent in Charge of the Detroit Field Division of the Federal Bureau of Investigation.
Andrew H. Middlebrooks, age 30, of Dallas, Texas, the former majority owner, chief executive officer, chief investment officer, and portfolio manager of EIA All Weather Alpha Fund 1 Partners (EIA) is charged in a Criminal Information with one count of wire fraud. During a significant part of the scheme, Middlebrooks resided in the Detroit metropolitan area. The information charges that from May 2017 through May 2022, Middlebrooks solicited clients for EIA by telling them he was able to exploit “inefficiencies” in global equity markets which would result in large returns for investors. From the beginning of the scheme to defraud, however, EIA’s fund failed to produce the predicted returns and suffered catastrophic losses.
Instead of informing EIA’s existing investors that the fund was failing, Middlebrooks solicited new investors with false statements about the fund’s performance and lulled existing investors by lying to them about the returns their investments generated. Middlebrooks also created and distributed false documents claiming that EIA’s performance was exceptional. In one document, created in the fall of 2019, Middlebrooks falsely claimed that EIA’s track record included a cumulative return of 476.81% with 81.82% of monthly trading showing a profit.
Middlebrooks also lied to investors about how their money would be used. During the scheme, Middlebrooks routinely took money from the fund for living expenses and transferred money from the fund to his wife’s business. By the Spring of 2022, Middlebrook’s scheme to defraud began unraveling, and EIA’s fund collapsed. Losses to at least 100 investors exceeded $27 million.
“Middlebrooks used an apparently legitimate company, sophisticated methods, and a complex web of lies to deceive his victims, but his crime amounts to nothing more than theft and unbridled greed. Middlebrooks’s ability to convince the victim-investors that his false promises were true allowed him to steal their money,” said United States Attorney Dawn N. Ison. “Today’s charge demonstrates our commitment to ensure the integrity of our financial systems.”
“Mr. Middlebrook allegedly lied to and stole money from investors and potential investors by providing false financial statements and inflating the fund's returns,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Division. “This case is an example of the FBI’s commitment to work with our partners to investigate those engaged in financial fraud and to protect the financial well-being of honest, hard-working Americans.”
Middlebrooks faces the following statutory maximum penalties: 20 years in prison, a $250,000 fine, and up to 3 years supervised release. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The investigation of this case was conducted by the Federal Bureau of Investigation. Both the United States Attorney’s Office and the Federal Bureau of Investigation wish to acknowledge and thank the Securities and Exchange Commission for its assistance.
Texas Man Sentenced to 14 Years in Prison for Transporting 286 Pounds of Methampthemine and 60 Pounds of FentanylRead the Press Release
DETROIT – A Texas man was sentenced today to 14 years in prison after being caught transporting 286 pounds of methamphetamine, 60 pounds of Fentanyl, and 60 pounds of cocaine hidden in a truck carrying a load of wine, announced United States Attorney Dawn N. Ison.
Ison was joined in the announcement by Special Agent in Charge Orville O. Greene, Drug Enforcement Administration.
Roque Carranza-Alvarado, 28, formerly of Dallas, Texas, was sentenced in federal court in Port Huron by the Hon. Robert H. Cleland, Untied States District Judge.
Carranza-Alvarado had previously pleaded guilty in March 2022 to three counts of possession with intent to distribute controlled substances. Court records show that Carranza-Alvarado was stopped in his truck by the Michigan State Police and arrested on June 13, 2021, near Marma, Michigan, while headed to the Detroit area. Using a drug-sniffing dog, law enforcement agents discovered and seized 286 pounds of methamphetamine, 60 pounds of a fentanyl analogue, 60 pounds of cocaine, and 800 grams of crack cocaine from the cab of Carranza-Alvarado’s truck. The defendant’s truck was loaded with 1,100 cases of wine from California to be delivered in Roseville, Michigan. The State Police also seized $11,000 in cash from the defendant. In total, the drugs from the defendant had a street value of between $3 and $4 million.
“Fentanyl and methamphetamine are poisoning our communities and killing our citizens. We will aggressively pursue and prosecute those who are harming our communities with dangerous drugs,” stated U.S. Attorney Dawn N. Ison.
“This defendant was caught transporting a very significant amount of drugs that could have done untold damage to Michigan communities. DEA and our state, local and federal partners, will employ every resource available to hold individuals and organizations, who peddle poisons-for-profit, accountable,” said Special Agent Greene.
This case was the result of an ongoing investigation by the Drug Enforcement Administration (DEA). The case was prosecuted by Assistant United States Attorney John O’Brien.
Detroit Man Pleads Guilty to Spree of Three Violent CarjackingsRead the Press Release
DETROIT – Rayquan Sturgis, 23, of Detroit, MI, pled guilty today to a spree of three violent carjackings he committed in June and July 2020. Sturgis also pled guilty to additional charges of using and discharging a firearm during crimes of violence. Sturgis faces a mandatory minimum sentence of 15 years in prison with a maximum possible sentence of life in prison.
United States Attorney Dawn N. Ison announced the plea today and was joined in the announcement by James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Division.
“My office is committed to using all of our resources to combat violent crime in our community, particularly targeting those who use firearms to commit that violence. Today’s guilty pleas reflect that commitment and serve as a warning to those who use a gun to terrorize and harm others,” stated US Attorney Ison.
According to court records, Sturgis committed the three carjackings between June 10, 2020 and July 7, 2020 on the west side of Detroit. All three of the victims were strangers to Sturgis who had offered him a ride in their car. In the first carjacking on June 10, 2020, Sturgis pulled out a gun, pointed it at the victim, and forced her out of her car before stealing it.
In the second, on June 18, 2020, Sturgis got out of the victim’s van when they stopped, walked around to the driver’s side, and immediately fired multiple shots at the victim, striking him in the leg, arm, and hand. The victim suffered permanent injuries as a result.
Finally, on July 7, 2020, Sturgis got a ride from the third victim, before pistol whipping him and stealing his car and driving away.
Sentencing is set for January 25, 2022.
The case was investigated by special agents of the FBI and was prosecuted by Assistant United States Attorney Andrew R. Picek.
Three Family Members of the Former Director of the St. Clair Housing Commission Plead Guilty to Conspiracy and to Defrauding HUDRead the Press Release
DETROIT – Three family members of the former executive director of the St. Clair Housing Commission, Lorena Loren, pleaded guilty today to various federal offenses due to their involvement in Loren’s fraudulent scheme to steal money from the U.S. Department of Housing and Urban Development (HUD), United States Attorney Dawn N. Ison announced.
Ison was joined in the announcement by Machelle L. Jindra, Special Agent in Charge of the U.S. Department of Housing and Urban Development and James Tarasca, Special Agent in Charge, Federal Bureau of Investigation.
Lorena Loren (now deceased) had previously pleaded guilty and been sentenced to prison for conspiring with several family members to steal federal funds provided to the St. Clair Housing Commission by HUD to administer low-income housing programs within St. Clair County. As part of her scheme, Loren stole approximately $336,000 in federal funds, including money earmarked for HUD’s Housing Choice Voucher program, commonly known as Section 8 housing, which allows low-income families to lease privately owned rental properties with the assistance of HUD rental subsidies.
Today, the three family members who pleaded guilty before the Honorable Mark A. Goldsmith are as follows:
Brian Loren (Lorena Loren’s husband), age 61, pleaded guilty to conspiring to commit federal program fraud. According to court records, Brian Loren conspired with his wife and others to embezzle money from the St. Clair Housing Commission. Brian Loren and another individual opened a joint bank account at a PNC Bank in Deland, Florida. Between August 2014 and August 2016, fraudulent Section 8 rental subsidy payments were issued to the PNC Joint Account Holder to benefit Lorena Loren, Brian Loren, and the PNC Joint Account Holder.
Ryan Loren (Lorena Loren’s son), age 35, pleaded guilty to receiving unlawful compensation from HUD with the intent to defraud. Ryan Loren admitted that, from August 2008 through August 2016, he made false statements to HUD and to a federal grand jury regarding where he lived in order to receive improper funds from HUD. Ryan Loren agreed that he illegally received between $40,000 and $95,000.
Kayla Loren (Ryan Loren’s wife and Lorena Loren’s daughter-in-law), age 31, also pleaded guilty to receiving unlawful compensation from HUD with the intent to defraud. Like her husband, Kayla Loren admitted that, from August 2010 through August 2016, she made false statements to HUD and to a federal grand jury regarding who lived with her in order to receive improper funds from HUD. Kayla Loren also agreed that she received between $40,000 and $95,000.
As part of her their guilty pleas, the defendants paid the remaining restitution owed to HUD. The total amount of restitution paid today was $99,835.29. In total, $336,340.22 in restitution has been repaid to HUD as a result of the prosecutions of the Loren family.
U.S. Attorney Dawn Ison commended the work of HUD and the FBI in conducting this criminal investigation and said, “The HUD Section 8 program serves some of the neediest in our community, very low-income families, the elderly, and the disabled. We are committed to prosecuting public officials who steal from any federal program and anyone who assists public officials in depriving lawfully-entitled citizens of the vital assistance they need.”
“HUD OIG is committed to bringing to justice those who fraudulently divert Federal housing program resources for their own personal gain,” said Special Agent in Charge, Machelle L. Jindra. “Together, with our law enforcement partners, we will pursue and hold accountable bad actors who prey on our most vulnerable communities and steal taxpayer funded resources that support these programs.”
“Having been trusted to serve the residents of St. Clair as a public official, Lorena Loren instead conspired with her family to steal federal funds for herself and her family, and today that family is admitting their collective role in that criminal scheme,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Field Office. “This case is yet another example of the FBI’s commitment to rooting out public corruption in order to protect the integrity of the institutions that are supposed to serve the best interests of our citizens.
Brian Loren faces a maximum of five years in prison and a fine of up to $250,000. Ryan Loren and Kayla Loren each face a maximum of one year in prison and a fine of up to $100,000. A sentencing date will be set by the court.
The case was originally prosecuted by Dawn N. Ison and is now being prosecuted by Assistant United States Attorneys Sarah Resnick Cohen, Craig A. Weier, and Gjon Juncaj.
The case was investigated by agents of U.S. Department of Housing and Urban Development-Office of Inspector General and the Federal Bureau of Investigation.
Serial Bank Robber Sentenced to Prison for Bank FraudRead the Press Release
DETROIT – A man previously convicted and imprisoned for four bank robberies was sentenced last week to 71 months in federal prison for stealing the identities of ten people to commit bank fraud, announced United States Attorney Dawn N. Ison.
Ison was joined in the announcement by Special Agent in Charge James Tarasca of the FBI’s Detroit Field Office.
Rynell Roberts, 39, of Redford, Michigan, was sentenced before Chief United States District Court Judge Sean F. Cox. Court records show that Roberts was previously convicted of four bank robberies back in 2008. During all of the bank robberies, Roberts threatened tellers with a firearm, even firing a pistol inside the bank during one of the robberies. After being released from prison on the armed bank robbery charges, Roberts switched to fraud to steal from banks.
According to court records, Roberts was sentenced for using stolen identifications to make approximately $119,000 in purchases at area retail stores. He admitted that he used the names and stolen personal identifiers of ten individuals to open fraudulent credit accounts to make these purchases. As part of his sentence, Roberts was ordered to pay $119,000 in restitution.
U.S. Attorney Ison stated, “Identification theft not only robs individuals of time and peace of mind, but it also causes unwarranted damage to the credit of law-abiding citizens. All consumers ultimately bear the costs of these crimes. My office remains committed to holding identity thieves accountable.”
“It is a misperception that identity theft is a victimless crime,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Division. “Victims of this type of fraud can spend significant time and effort clearing up financial issues caused by the greed of these criminals and often causing a significant financial burden to the victim in the process. The FBI will continue to investigate these thieves and protect Michiganders from this type of criminal activity.”
This case was prosecuted by Assistant United States Attorney Philip A. Ross. The case was investigated by the Federal Bureau of Investigation with assistance from the Blackmon Township and Grosse Isle Police Departments.
Former Macomb County Public Works Commissioner Anthony Marrocco Pleads Guilty to ExtortionRead the Press Release
DETROIT – Former Macomb County Commissioner of Public Works Anthony Marrocco pleaded guilty to extortion by withholding county permits from businessmen who refused to contribute to Marrocco’s campaign accounts, United States Attorney Dawn N. Ison announced today.
Ison was joined in the announcement by James Tarasca, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation and Sarah L. Kull, Special Agent in Charge of the Detroit Field Office of IRS Criminal Investigations.
Marrocco, 73, of Ray Township, Michigan, pleaded guilty before United States District Judge Robert H. Cleland at the Port Huron, Michigan Federal Courthouse.According to the plea agreement, Marrocco served as the Commissioner of Public Works from 1993 through 2016. Marrocco pleaded guilty to Count Three of the Indictment charging him with attempted extortion of a Macomb County developer in April 2016. Marrocco admitted that he pressured the developer to spend thousands of dollars to purchase tickets to one of Marrocco’s fundraisers. Marrocco threatened to delay or withhold approval of county permits sought by the developer if he did not purchase additional tickets to Marrocco’s political fundraiser.
The extortion conviction of Marrocco is the final and most significant development in federal law enforcement’s years-long effort to aggressively investigate and prosecute corruption in suburban Detroit, and Macomb County in particular. Thus far in this effort, some twenty-three public officials and bribe-paying businessmen have been charged and convicted in connection with the Macomb County corruption probe, including two defendants convicted after jury trials, as well as the conviction and imprisonment of elected Macomb County Prosecutor Eric Smith.
United States Attorney Ison said: “The conviction of Marrocco for extortion sends a clear signal that public officials cannot use their governmental power to coerce individuals to contribute to their political campaigns. This conviction symbolizes our years-long crackdown on corruption in Macomb County that has helped to further the rule of law and good government for the county’s citizens.”
“Public officials, whether elected or appointed, hold positions of trust in the eyes of the public and that trust is broken when these officials commit crimes,” said Special Agent in Charge Sarah Kull, Internal Revenue Service – Criminal Investigation, Detroit Field Office. “If you commit a crime, status as a political leader will not protect you from federal prosecution.”
This investigation was conducted by the Federal Bureau of Investigation's Detroit Area Corruption Task Force and the Internal Revenue Service. The Detroit Area Corruption Task Force member agencies include the FBI, State of Michigan Attorney General's Office, Michigan State Police, Detroit Police Department, U.S. Customs and Border Patrol-Office of Professional Responsibility, Internal Revenue Service, and U.S. Department of Homeland Security. The case is being prosecuted by Assistant U.S. Attorneys Steven Cares and Robert Moran.
Glock Boyz Gang Member Sentenced to 60 Months in Prison for Aggravated Identity Theft and Firearms OffensesRead the Press Release
Detroit – A member of the Glock Boyz street gang was sentenced to 60 months in prison today after being convicted of aggravated identity theft, wire fraud, and illegally possessing firearms, United States Attorney Dawn N. Ison Announced today.
Ison was joined in the announcement by Special Agent in Charge James A. Tarasca of the FBI’s Detroit Division.
According to court records, Damon Long, 25, of Detroit, was a member of a violent street gang, the “Glock Boyz TMC” (too much cash). The Glock Boyz have perpetrated acts of violence against rival gangs and have been victims of such violence. Court records tie Long to these violent attacks and to being the target of rival gangs.
In May 2021, the FBI executed a search warrant at Long’s residence in Detroit and seized two of Long’s loaded pistols. Agents also seized evidence that Long engaged in wire fraud by submitting false applications for federal Unemployment Insurance (UI) benefits using stolen identities totaling over $300,000. Long used the identities and Social Security numbers of at least ten individuals in perpetuating his scheme. Long boasted about his fraud schemes on social media, and his membership in the street gang was also revealed on his social media accounts.
In addition to 60 months in prison, Long was also ordered to pay restitution of $300,000.
The Detroit office of the FBI investigated this case with assistance from the Department of Labor. The case is being prosecuted by Assistant United States Attorneys assigned to the United States Attorney’s Office’s Violent & Organized Crime Unit.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Dearborn Doctor Who Attempted to Flee to Mexico Sentenced for Illegally Selling Powerful Opioid PillsRead the Press Release
DETROIT - A Dearborn doctor was sentenced to four years in federal prison based on his conviction for conspiring to distribute and distributing over 12,000 powerful opioid pills, United States Attorney Dawn N. Ison announced today.
Ison was joined in the announcement by Special Agent in Charge James Tarasca of the FBI’s Detroit Field Office and Special Agent in Charge Mario Pinto of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office.
United States District Court Judge Nancy G. Edmunds imposed the sentence on Dr. Tete Oniango, 48, of Oakland, Michigan. According to court records, Dr. Oniango was sentenced based on his plea of guilty to conspiring with patient recruiters and others to distribute prescription opioid pills in violation of his medical and DEA licenses. Dr. Oniango unlawfully prescribed 12,500 hydrocodone pills, a powerful, Schedule II controlled substance. Hydrocodone is commonly known by the brand names of Vicodin, Lortab, Lorcet, and Norco. Oniango issued these prescription drugs without regard to medical necessity and outside the course of professional medical practice. The doctor would issue opioid prescriptions to patients who appeared at his Dearborn medical clinic without conducting any medical examinations or appropriate testing. As part of his sentence, Dr. Oniango was also ordered to forfeit approximately $38,000 in cash that was seized from his medical office.
In 2021, while on bond and pretrial release following his indictment in 2020, Dr. Oniango attempted to flee the United States by taking a bus to Mexico. However, Mexican border agents apprehended Oniango and returned him to United States authorities.
U.S. Attorney Ison stated, “Michigan has been devastated by opioid drug overdoses in the last decade. Dr. Oniango betrayed his oath as a physician and injected poison into our communities for profit. My office will zealously pursue medical providers who abuse their licenses and inflict harm upon our community.”
“As a physician, Dr. Oniango was trusted to prescribe potent narcotics in keeping with laws and regulations designed to prevent the diversion of prescription drugs that fuel the ongoing opioid epidemic. Not only did he break that trust, but he also attempted to flee the consequences of his criminal behavior,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Field Office. “The FBI is committed to working with our law enforcement partners to investigate this type of criminal behavior and to ensuring those who operate outside the law face the consequence for that choice.”
This case was prosecuted by Assistant United States Attorney Philip A. Ross as part of the district’s efforts to address the nation’s opioid crisis. The Eastern District of Michigan is one of twelve districts included in the Attorney General’s Opioid Fraud Abuse and Detection initiative. The case was investigated by special agents of the Federal Bureau of Investigation and the U.S. Department of Health and Human Services Office of Inspector General.
Seven People Indicted for $28 Million Cellphone Fraud and Identity Theft SchemeRead the Press Release
DETROIT - Seven individuals were indicted by a federal grand jury in Detroit charging them with conspiracy to commit wire fraud, and aggravated identity theft related to a $28 million cellphone upgrade fraud scheme spanning multiple states, announced United States Attorney Dawn N. Ison.
Ison was joined in the announcement by Angie M. Salazar, Special Agent in Charge, Department of Homeland Security, Homeland Security Investigations.
Charged were:
EMMANUEL LUTER, 31, of Atlanta, Georgia (formerly of Southfield, Michigan)
JOSEPH INGRAM, 31, of Atlanta, Georgia (formerly of Southfield, Michigan)
DALONTAE DAVIS, 31, of Sachse, Texas (formerly of Southfield, Michigan)
DONNELL TAYLOR, 30, of Southfield, Michigan
DOMINIQUE BARNES, 33, of Southfield, Michigan
DELANO BUSH, 32, of Southfield, Michigan
JOSHUA MOTLEY, 33, of Detroit, Michigan
According to the indictment, unsealed today, the defendants, a group that referred to themselves as the “Clear Gods”, engaged in an ongoing scheme to defraud, using the personally identifiable information (PII) of other people to acquire significant numbers of Apple-branded cellular devices on credit, which were then resold for profit.
The defendants did this by first purchasing individuals’ PII from various locations, including from “dump sites” on the internet. The defendants then used the unlawfully acquired PII to open customer cellular accounts with AT&T. Following the successful completion of a credit check, the defendants would add themselves or their associates as “authorized users” on the fraudulent account, allowing those seemingly authorized individuals to charge devices to the customer accounts. The authorized users would then enter one of a variety of retail stores, in a variety of states—most frequently Apple stores—to “upgrade” the service lines on the fraudulent cellular accounts. These devices were then “charged” to the fraudulent customer cellular accounts or otherwise purchased on credit, with defendants typically needing to pay, at most, a small upgrade fee per device. The defendants would then reverse or “clear” the upgrades from the service lines, often allowing them to repeat the previous step of the scheme at another Apple store location.
The members of the conspiracy employed various methods to gain unauthorized access to AT&T’s computer systems for the purpose of creating AT&T accounts, fraudulently adding authorized users, and for clearing the fraudulent upgrades from the service lines. At the beginning of the scheme, this involved the collusive-acquisition or theft of RSA tokens and employee IDs, allowing defendants to later open new accounts (and make changes to existing accounts) by calling into one an internal AT&T support hotline and impersonating AT&T Retail Sales employees.
As the scheme progressed and AT&T restricted employee tokens to allow access exclusively via AT&T equipment (as opposed to remote-access using personal computing equipment), members of the conspiracy took steps to acquire actual AT&T-networked devices—this included social engineering and sleight-of-hand “swapping” of broken or disabled tablets for active tablets from retail sales employees; the outright theft (or collusive acquisition) of retail sales employees’ tablet-computers; and the occasional, strong-armed theft of desktop computer towers from AT&T stores. Throughout the scheme, the defendants routinely sought out and worked with corrupt AT&T retail store employees.
As alleged in the indictment, from as early as June 2017 and continuing through at least September 2019, Defendants conducted more than 26,000 fraudulent transactions, resulting in a loss of more than $28 million dollars.
United States Attorney Ison stated, “As alleged in the indictment, the defendants engaged in an incredibly sophisticated scheme to defraud, evolving their tactics over time in what was ultimately a failed attempt to evade detection and avoid prosecution. This indictment is the culmination of significant efforts by multiple law enforcement agencies across multiple jurisdictions. I want to commend all of those involved for their work to unravel this scheme and prosecute those responsible.
“HSI with our law enforcement partners persevered to unravel the sophisticated scheme which ultimately led to this indictment,” said Special Agent in Charge of HSI Detroit Angie Salazar. “These types of crimes are often mislabeled as victimless, which could not be farther from the truth. Oftentimes victims of fraud are required to spend many years clearing up financial issues and fixing incorrect personal identifying information caused solely by the greed of these criminals. HSI will continue to investigate those criminals who seek to exploit the trade, travel, or finance of the United States.”
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
The case is assigned to U.S. District Court Judge Laurie J. Michelson. The case was investigated by agents from the Detroit Metro Airport resident agency of the Department of Homeland Security, Homeland Security Investigations (HSI), with assistance from the Social Security Administration Office of the Inspector General (SSA-OIG), the Department of Labor Office of the Inspector General (DOL-OIG), the Detroit Metro Airport Police Department, the Taylor Police Department, and the Wayne State University Police Department. The case is being prosecuted by Assistant U.S. Attorney Ryan A. Particka.
Registered Nurse Pleads Guilty to Tampering with Painkillers at HospitalRead the Press Release
DETROIT - A registered nurse pled guilty in United States District Court to tampering with vials and syringes of liquid painkiller at the Detroit hospital where she worked, U.S. Attorney Dawn N. Ison announced today.
Ison was joined in the announcement by Acting Special Agent in Charge Ronne G. Malham, Food and Drug Administration (FDA) Office of Criminal Investigations Chicago Field Office.
According to court documents, Mary Cheatham, 42, of Ypsilanti, Michigan, a registered nurse who previously was employed in the critical care unit at a hospital in Detroit, Michigan, removed vials and syringes of injectable hydromorphone from the medication dispensing machines, by extracting the hydromorphone using syringes, and then replaced the saline filled vials and syringes into the unit’s medication dispensing machines. Cheatham’s tampering took place between March 2020 and August 2020. Cheatham knew the vials and syringes of hydromorphone were intended to be administered to patients for the purpose of pain relief in the critical care unit of the hospital.
“Patients entering a hospital must have confidence they will receive the treatment they are promised,” United States Attorney Ison, stated. “Cheatham violated that trust and potentially exposed patients to unnecessary pain and suffering and must be held accountable for her actions.”
“The FDA oversees the U.S. drug supply to ensure that it is safe and effective, and those who knowingly tamper with medicines put the health of patients at risk,” said Acting Special Agent in Charge Ronne G. Malham. “We will continue to protect the public health and bring to justice health care professionals who take advantage of their unique position and compromise their patients’ health and comfort by tampering with needed drugs.”
Cheatham’s sentencing is scheduled for January 18, 2023. Cheatham faces a maximum of 10 years in federal prison and a fine of up to $250,000. The Court will determine the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
This case is being prosecuted by Assistant United States Regina R. McCullough. The case was investigated by special agents of the Food and Drug Administration.
Flint Rapper Cliff Mac Charged in Murder-for-Hire PlotRead the Press Release
FLINT– A Flint rapper was charged yesterday for hiring a man to murder a Sterling Heights woman for $10,000 in cash today, announced United States Attorney Dawn N. Ison.
Joining in the announcement were James A. Tarasca, Special Agent in Charge of the Federal Bureau of Investigation, Detroit Division, and Special Agent in Charge Paul D. Vanderplow, Bureau of Alcohol, Tobacco, Firearms and Explosives, Detroit Field Division.
A federal grand jury issued a superseding indictment charging Clifton E. Terry, III, a.k.a. “Cliff Mac,” 31, of Flint with conspiracy to commit murder-for-hire resulting in personal injury, murder-for-hire resulting in personal injury, and using a firearm during and in relation to a crime of violence. The grand jury had previously indicted defendant Andre D. Sims, 25, of Grand Rapids, on March 16, 2022, for his role in the murder-for-hire plot with Terry.
According to the indictment, Terry solicited Sims to murder a female Sterling Heights resident for $10,000 in cash. On November 27, 2020, Sims traveled from Grand Rapids to Flint where he obtained a vehicle. In the early morning of November 28, 2020, Sims drove to the victim’s residence in Sterling Heights and parked across the street. When the victim left her residence several hours later Sims approached her vehicle and fired seven to eight gunshots at the victim. Despite being shot multiple times, the victim survived. The shooting was captured on the victim’s home security system. After the shooting, Sims drove to a nearby apartment complex where he abandoned his vehicle. Shortly thereafter, Terry picked Sims up from the apartment complex. Terry later agreed to pay Sims $2,500 for the failed hit.
Terry is also charged with first degree murder in a separate case in Genesee County Circuit Court for his alleged role in the August 17, 2021, killing of Devaroe Davis.
Sims was recently sentenced to life in prison following his murder conviction in the Kent County Circuit Court for the shooting death of a 65-year-old woman.
Based on the charges of conspiring to commit murder-for-hire and for committing murder-for-hire resulting in personal injury, Terry faces a maximum of twenty years in prison and a fine of up to $250,000. Based on the charge of aiding and abetting the use and discharge of a firearm during a crime of violence, Terry faces a mandatory minimum of ten years in prison and a maximum of life in prison and a fine of up to $250,000.
This case was investigated by special agents of the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms & Explosive, with assistance from the Sterling Heights Police Department, the Flint Police Department, the Drug Enforcement Administration, the Michigan State Police, Oakland County Sheriff’s Office, and the Genesee County Prosecutor’s Office.
The case is being prosecuted by Assistant United States Attorneys Jules DePorre, Anthony Vance, and Tim Turkelson.
An indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Former Romulus Mayor Pleads Guilty to Wire FraudRead the Press Release
DETROIT – Former Romulus Mayor LeRoy Burcroff, 58, of Romulus, pleaded guilty today to wire fraud following his theft and misuse of over $15,000 in campaign funds, United States Attorney Dawn N. Ison announced.
Ison was joined in the announcement by James A. Tarasca, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.
Burcroff was elected mayor of the City of Romulus in 2014. As part of his election efforts, Burcroff established a committee to elect (CTE) fund entitled, “Committee to Elect LeRoy D. Burcroff.”
Over the next two-and-a-half years, Burcroff devised and executed a scheme to defraud donors to his CTE account by fraudulently using these funds for his personal benefit rather than for his election. For example, in November 2017, Burcroff spent over $6,000 in campaign funds to pay for a family member’s wedding. Burcroff spent the CTE money on a church fee, a banquet room rental, flowers, and a $4,500 bill for alcohol. In 2017 and 2018, Burcroff used CTE funds to pay over $11,600 in dues and expenses to the Belleville Yacht Club (BYC) which he used for his personal benefit. On multiple occasions, Burcroff overpaid his dues using his CTE account thereby causing the BYC to write him a check for $2,000 in December of 2017. Burcroff deposited this money into his personal bank account. In 2018, Burcroff made a $1,000 donation of CTE funds to a trade industry for his personal benefit. In 2019, Burcroff spent $3,000 of campaign funds on a personal vacation to Florida.
The wire fraud charge carries a maximum sentence of 20 years’ imprisonment and a fine of $250,000.
United States Attorney Ison said, “The citizens of the Eastern District deserve to be served by public officials of the highest integrity. Those who abuse positions of trust by misusing campaign donations for their own benefit will face stiff consequences. Today’s plea represents our commitment to ensuring the citizens of Michigan have the utmost trust in our campaign finance system.”
“Burcoff betrayed his supporters and neighbors, the people of Wayne County, by embezzling their donations to fund his lifestyle,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Field Office. “The FBI prioritizes exposing corrupt public officials whose greed erodes the public’s confidence in government.”
The case was investigated by the Detroit Area Corruption Task Force, which is led by the Federal Bureau of Investigation, with assistance from the Detroit Police Department, Michigan Attorney General's Office, Customs & Border Protection, and the U.S. Department of Homeland Security. The case is being prosecuted by Assistant U.S. Attorney Eaton P. Brown
Southfield Man Sentenced to Prison for Stealing Identities and $400,000 in Pandemic Aid MoneyRead the Press Release
DETROIT - A Southfield man was sentenced today to 5 years in federal prison on charges of wire fraud and identity theft in connection with a scheme to defraud and obtain more than $400,000 in unemployment insurance benefits from the states of Michigan and Pennsylvania, announced United States Attorney Dawn N. Ison.
Joining in the announcement were James A. Tarasca, Special Agent in Charge, Federal Bureau of Investigation (FBI), Detroit Field Office, and Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General
Samuel Baker, 39, of Southfield, was sentenced by United States District Judge Paul D. Borman in United States District Court in Detroit this afternoon.
According to the court documents, beginning on or about May 8, 2020, and continuing through at least July 28, 2020, Baker submitted fraudulent applications for $370,000 in unemployment insurance benefits in Michigan and Pennsylvania. Baker also successfully obtained a fraudulent $47,000 Economic Injury Disaster Loan (EIDL) from the Small Business Administration. Baker submitted the unemployment claims by stealing the identities of numerous individuals, including using their Social Security Numbers. Baker directed the benefits to be paid out via debit cards and then used these cards to repeatedly withdrawal the funds via ATMs throughout Metro Detroit. At the time of his arrest, federal agents seized $187,000 in cash from Baker, as well as four Rolex watches and ten gold coins.
“We remain committed to working with our law enforcement partners to investigate and prosecute thefts from a multitude of federal assistance programs. Individuals who stole money from the government during the pandemic should know that they will be held accountable. We are actively working a number of these cases and we will continue to bring the perpetrators of these crimes to justice,” stated U.S Attorney Ison.
"Samuel Baker defrauded multiple state workforce agencies by filing for unemployment insurance benefits in the names of identity theft victims, which resulted in a loss of more than $365,000. We will continue to work with our law enforcement partners and state workforce agencies to protect the integrity of unemployment insurance benefit programs," said Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
Baker was also ordered to pay restitution to the victim-states and the Small Business Administration in the total amount of $414,454. Likewise, he forfeited his interest in the $187,000 in cash that was seized, as well as the Rolexes and gold coins.
The investigation of this case was conducted by the Federal Bureau of Investigation and the U.S. Department of Labor, Office of Inspector General, with the assistance of the Bloomfield Township Police Department. The case was prosecuted by Assistant United States Attorney Ryan A. Particka.
Man Pleads Guilty to Role in Stealing more than $2.2 Million in Pandemic Assistance BenefitsRead the Press Release
DETROIT - A Detroit resident pleaded guilty today to conspiracy to commit wire fraud and mail fraud, in connection with schemes to defraud multiple state workforce agencies and the Small Business Administration out of more than $2.2 million in Covid-19 pandemic assistance and also to defraud the U.S. Postal Service of another $200,000, announced United States Attorney Dawn N. Ison.
Joining in the announcement were Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General, Special Agent-in-Charge James A. Tarasca, Federal Bureau of Investigation, Andre Martin Special Agent-in-Charge, U.S. Postal Service Office of Inspector General, and Rita Saenz Director of the California Employment Development Department.
Chaz Duane Shields, 34, entered his guilty pleas today, before United States District Judge Robert H. Cleland. Shields is facing up to twenty years in prison, a $250,000 fine, and restitution of the proceeds of his fraud.
According to court records, beginning at least as early as May 2020 and continuing through at least July 2021, Shields and others agreed to commit wire fraud. Specifically, Shields and his coconspirators submitted more than 240 fraudulent unemployment insurance claims to more than 20 states and territories, fraudulently obtaining more than $2,200,000 in benefits. Shields also successfully obtained a fraudulent $20,833.00 Paycheck Protection Program (PPP) loan.
Separately, Shields admitted to defrauding the U.S. Postal Service of over $200,000 through a scheme in which he conspired to submit more than 1,000 fraudulent insurance claims, in the names of more than 40 separate individuals. Shields and others used USPS Self-Service Kiosks to mail a number of packages. For each of the packages, the conspirators subsequently filed and received a fraudulent insurance claim by attesting that the package contained an item of significant value. In reality, the packages typically contained empty plastic picture frames with little to no value.
Cortney Saquan Shields, 33, of Detroit and Daeshawn Tamar Posey, 26, of Detroit have previously pleaded guilty connected to the case. Brittany Levett Witherspoon, 26, of Warren has also been charged in connection to the investigation.
This is case is being prosecuted by Assistant United States Attorneys Ryan A. Particka, Timothy J. Wyse, and Special Assistant United States Attorney Corinne M. Lambert. The investigation is being conducted jointly by agents from the Department of Labor Office of the Inspector General, the Federal Bureau of Investigation, and the United States Postal Service Office of the Inspector General.
Former Detroit Police Lieutenant in Charge of Integrity Unit Pleads Guilty to Conspiracy to Commit BriberyRead the Press Release
DETROIT – Former Detroit Police Lieutenant John F. Kennedy pleaded guilty today to conspiring with another Detroit police officer to commit bribery, in connection with the corruption of towing permits in Detroit, United States Attorney Dawn N. Ison announced.
Ison was joined in the announcement by James A. Tarasca, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.
Kennedy, 57, of Rochester Hills, at one point commanded the Detroit Police Department’s Integrity Unit—a division of the department’s Internal Affairs Division—and was responsible for investigating reports of law violations and professional misconduct by police officers and other city employees. Kennedy conspired with fellow Detroit police officer Daniel S. Vickers to commit bribery by accepting money and other items of value in exchange for Kennedy using and promising to use his influence as a supervisor to persuade other officers to make tow referrals to a towing company in violation of the city’s ordinance and Detroit Police Department policy. Under the city’s towing rotation, qualifying private towing companies are called by the police to tow cars that are seized by the police or reported stolen. Kennedy and Vickers were aware that by making towing referrals directly to a towing company which was not on the city’s towing rotation, they were violating the city’s rules and an ordinance which prohibit a towing company from receiving towing referrals if they are not on police department’s towing rotation.
Kennedy and Vickers also conspired to solicit and accept thousands of dollars in cash, cars, car parts, car repairs, and new carpeting for Vickers’ home, in exchange for providing the towing company that Kennedy was investigating with information about the status of the Integrity Unit’s case.
In total, between October 2018, and March 2021, Kennedy accepted over $14,000 in cash, cars, and car repairs as a bribe from the owner of the towing company and from an undercover federal agent.
The bribery conspiracy count carries a maximum sentence of 5 years’ imprisonment and a fine of $250,000.
United States Attorney Ison said, “Today’s plea represents our commitment to ensuring that the citizens of Detroit are protected by officers characterized by the highest levels of integrity. We will not accept members of law enforcement who prioritize their personal gain over policing excellence. We thank Chief of Police James White for his assistance in this investigation.”
“Today, John Kennedy has admitted to using his official position for his personal benefit. His actions are not in keeping with the integrity and professionalism exhibited by the Detroit Police Department,” said James A. Tarasca of the FBI’s Detroit Field Office. “The FBI appreciates the partnership and cooperation of Police Chief James White as we continue to address public corruption in the City of Detroit.”
"I'm disappointed that this officer has tarnished the badge that represents integrity and professionalism," said Detroit Police Chief James E. White. "The actions of one officer clearly do not represent the largest policing agency in the state of Michigan and those who put themselves in harm's way each day. We will continue to fully cooperate with our federal partners, and most importantly, be transparent with our community."
The case was investigated by the Detroit Area Corruption Task Force, which is led by the Federal Bureau of Investigation, with assistance from the Detroit Police Department, Michigan Attorney General's Office, Customs & Border Protection, and the U.S. Department of Homeland Security. The case is being prosecuted by Assistant U.S. Attorney Eaton P. Brown and originally indicted by United States Attorney Dawn N. Ison.
Dearborn Bank Robber Nabbed in Porta Potty Pleads GuiltyRead the Press Release
DETROIT, MI – An Inkster resident pleaded guilty to bank robbery in federal court this morning in Detroit on charges stemming from his robbery of the Dearborn Federal Savings Bank, announced United States Attorney Dawn N. Ison.
Joining United States Attorney Dawn Ison in the announcement is Acting Special Agent in Charge James A. Tarasca, Federal Bureau of Investigation, Detroit Division and Issa Shahin, Chief, Dearborn Police Department.
Charles William Woolery, age 52, admitted guilt to robbing the savings bank in Dearborn , Michigan before U.S. District Judge Mark A. Goldsmith. According to court records, on the afternoon of March 2, 2022, Woolery entered the Dearborn Federal Savings Bank wearing a black facemask. He approached a victim teller, handed her a note, and gestured to his hip as if he had a weapon. The note demanded the teller to “smile” and put money in a bag or Woolery would “kill everyone.” The teller, fearing for her safety, placed $1,690 in cash in a black bag and handed it to Woolery. Woolery then fled the bank on foot. He was later arrested by Dearborn police officers hiding out in a Port-a-John located in the parking lot of the Hampton Inn on Michigan Avenue near the bank. Officers found the $1,690 cash in the front of a Lions’ hoodie that Woolery was wearing. Officers also recovered Woolery’s facemask, full tan Carhartt style suit, and tan gloves like those used in the bank robbery in the Port-a-John where Woolery was hiding.
“This case shows that violent criminals can run, but they can’t hide no matter where they may go,” stated U.S. Attorney Ison. “The federal authorities appreciate the assistance and partnership of the Dearborn Police Department.”
Woolery faces a statutory maximum penalty of 20 years in prison for bank robbery. Judge Goldsmith will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing has been set for December 19, 2022.
This case is being investigated by special agents of the FBI along with the assistance of the Dearborn Police Department. Assistant U.S. Attorney Rosemary Gardey is prosecuting the case.
Registered Sex Offender Sentenced to 25 Years in Prison for Attempted Sexual Coercion of a Child and Possession of Child PornographyRead the Press Release
DETROIT - Glen William Vellner, 47, of Mount Clemens, Michigan, was sentenced yesterday to 25 years in federal prison before United States District Judge Denise Page Hood on charges of attempted coercion and enticement of a minor to engage in illegal sexual activity, receipt of child pornography, and penalties for registered sex offenders, announced United States Attorney Dawn N. Ison.
Ison was joined in the announcement by James A. Tarasca, Special Agent in Charge, Federal Bureau of Investigation, Detroit Division.
As part of his prior guilty plea, Vellner had admitted that on January 8, 2021, he requested that an individual that he believed to be a 13-year-old girl send him a picture of her genitals during a chat on Google Hangouts. He also admitted that he received child pornography over the internet between June 5, 2016, and August 1, 2019. Vellner committed these offenses while already being a registered sex offender for prior criminal convictions directed at children. In 2001, Vellner was convicted of two counts of criminal sexual conduct against a 13-year-old girl. After only serving probation for these offenses, Vellner was convicted of ten counts of child sexually abusive activity in 2006. After being released from prison in 2015 based on his 2006 convictions, Vellner went on to commit the crimes in this case while being a registered sex offender. When federal agents searched Vellner’s house in this case, they located a notebook containing passwords to various accounts. Vellner frequently used the phrase “ILuv2RapeLiLgirls” as a password to his accounts. In total, Vellner possessed 4,317 images and 320 videos of child pornography. Of those, 1,319 images and ten videos contained images of infants or toddlers and 179 images and three videos contained sadistic or machoistic conduct or violence.
“Repeat sexual offenders who victimize children present a special danger and require significant sentences to assure the safety of our kids and the community. The court’s sentence today is just punishment and prevents this defendant from further victimizing children. This office will continue to strenuously prosecute these offenders to keep children safe.” stated Dawn N. Ison, United States Attorney.
The case was investigated by the Southeast Michigan Trafficking and Exploitation Crimes Task Force (“SEMTEC”) of the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorneys Christopher Rawsthorne and Catherine Morris.
Ponzi Scheme Fraudster Sentenced to 11 Years in Prison for Embezzling over $4 MillionRead the Press Release
DETROIT - A 55-year-old former resident of Macomb County was sentenced yesterday to over 11 years in federal prison for defrauding seventeen people of over $4 million in an investment fraud scheme, United States Attorney Dawn N. Ison announced.
Joining in the announcement was James A. Tarasca, Special Agent in Charge of the Federal Bureau of Investigation, Detroit Division.
U.S. District Judge Laurie J. Michelson sentenced Gino Accettola to 135 months in prison following his April 2022 guilty plea to wire fraud charges and ordered that Accettola pay restitution to his seventeen victims in the amount of $4,199,846.35.
According to court records, from 2014 to 2016, Accettola solicited investments from associates and friends of friends. Accettola offered investors abnormally high short-term returns. Accettola told investors that the money they invested with him was in support of various commercial construction projects in Michigan and Florida. Many of the commercial construction projects that Accettola described to investors did not exist. Specifically, Accettola solicited investments in support of purported work for a Michigan based manufacturing facility and claimed to be friends with the managing partner of the company. In reality, Accettola had no connection to company nor was he friends with the managing partner. In order to perpetuate his fraud, Accettola provided investors with fraudulent emails, contracts, payout schedules and other information purportedly from the company, the managing partner or other company employees. Between 2014 and November 2016, Accettola defrauded investors of approximately $4,199,846.35. Accettola had a long history of cheating and deceiving people, having previously been convicted of sixteen fraud crimes between 1991 and 2019.
“This defendant lied to his victims in order to carry out his fraud. He told his victims that he was investing their money for legitimate construction projects when in reality he used their money on himself at casinos, restaurants, and on entertainment,” stated U.S. Attorney Ison. “Today’s sentencing should send a clear message that we will hold accountable all those who take advantage of others for personal gain.”
Special Agent Tarasca stated, “Criminals like this use every means of deceit available to further their selfish goals, and investors need to exercise great caution so as not to become victimized.”
The case was investigated by the FBI and prosecuted by Assistant United States Attorney Sara Woodward.
Detroit Man Sentenced to Ten Years in Federal Prison for Carjacking and Firearms ViolationsRead the Press Release
DETROIT – Johnnie Watkins, 32, of Detroit, MI, was sentenced in federal court yesterday on charges of carjacking and brandishing a firearm during and in relation to a crime of violence, United States Attorney Dawn N. Ison announced. Watkins was sentenced by United States District Judge Paul D. Borman to more than ten years in federal prison, followed by three years of supervised release.
Ison was joined in the announcement by James A. Tarasca, Special Agent in Charge of the Federal Bureau of Investigation, Detroit Division.
“We are committed to bringing the full weight of the justice system to bear on individuals who terrorize citizens going about their daily lives, stated U.S. Attorney Ison.
According to court records, during the evening hours of November 9, 2019, Watkins – armed with a loaded firearm - approached a man sitting in his car near the area of Wayne State University and verbally threatened to kill him. Watkins then proceeded to rob the victim of his personal belongings, including his cell phone, wallet, coat, and car keys. The victim, fearing for his life, exited his vehicle at which time Watkins entered the vehicle and drove off. Police were notified of the armed carjacking and within 20 minutes located Watkins driving the stolen vehicle. After seeing the police, Watkins accelerated, lost control of the vehicle and crashed. The impact was so violent that both airbags deployed. Watkins then ran on foot and was later found hiding in a building not far from the crash scene.
The case was investigated by special agents of the FBI and officers with the Detroit Police Department and Wayne State University Police Department. The case was prosecuted by Assistant United States Attorneys Jeanine Brunson and Michael Taylor.
Southfield Resident Sentenced in COVID-19 Fraud SchemeRead the Press Release
DETROIT - Southfield resident Mykia King was sentenced today to 34 months in prison after having pleaded guilty earlier this year to wire fraud and aggravated identity theft arising out of a pandemic-related unemployment insurance fraud scheme, announced United States Attorney Dawn N. Ison.
Joining in the announcement were Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General, Special Agent in Charge John Marengo, United States Secret Service’s Detroit Field Office and Unemployment Insurance Agency Director Julia Dale.
Mykia King, 29, pleaded guilty in January to one count of wire fraud arising out of her submission of 34 fraudulent claims for pandemic unemployment assistance. She also pleaded guilty to one count of aggravated identity theft, which reflected the fact that she used stolen personal identifying information to further her unemployment assistance fraud scheme.
According to the plea agreement, King filed approximately 34 fraudulent UI claims seeking pandemic unemployment assistance (PUA) benefits to which she was not entitled. These fraudulent claims were submitted in the names of multiple individuals without those individuals’ authorization or consent. King submitted adulterated identification documents as proof of identification for her fraudulent PUA claims. Indeed, King submitted identical driver’s license photos and social security cards as proof of identification for multiple claims, although she used different names and addresses for the claims. The funds associated with King’s fraudulent claims were typically loaded onto Bank of America debit cards and mailed to addresses King controlled. King would then withdraw the funds on these cards, usually at ATMs located in the Eastern District of Michigan.
According to the plea documents, one such fraudulent claim was submitted in the name of a victim whose initials were T.R. King filed a fraudulent PUA claim using T.R.’s name and social security number on June 5, 2020. King was not lawfully in possession of T.R.’s social security number and was not authorized to file a PUA claim on T.R.’s behalf. The claim used King’s street address (with a different apartment number). The system requested an Identity Verification (IDV), and King uploaded an adulterated Michigan driver’s license bearing T.R.’s name as proof of identification. Benefits were paid on King’s fraudulent T.R. claim on approximately June 23 and 24, 2020. King accessed the fraudulently obtained benefits by using a Bank of America debit card issued for the T.R. claim at ATMs in the Detroit Metro area on approximately June 25–30, July 1–2, July 6, and July 10–11, 2020, obtaining approximately $11,880. This fraudulent use of T.R.’s identifying information in furtherance of her fraud scheme gave rise to the aggravated identity theft charge to which King pleaded guilty.
United States Attorney Ison stated “Our office has been vigilant in pursuing those who deprived unemployed workers who rightfully needed assistance during the pandemic. We will continue to seek out those who exploited the system and enriched themselves at the public’s expense.”
“Mykia King conspired to file fraudulent unemployment insurance claims, diverting vital taxpayer resources away from those in need of benefits. Protecting the integrity of the unemployment insurance program remains one of our highest priorities, and we will continue to work with our law enforcement partners to safeguard the unemployment benefits for those who need it,” said Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General.
Special Agent in Charge Marengo said, “The U.S. Secret Service is dedicated to working with our federal, state and local law enforcement partners in UIA fraud cases. The U.S. Secret Service continues to focus on criminals exploiting the American people.”
“Today’s sentencing makes clear that we will find and punish anybody who steals taxpayer money from deserving Michigan workers who rely on unemployment benefits when they lose their jobs,” Unemployment Insurance Agency Director Julia Dale said. “It doesn’t matter if you worked within the UIA or conspire from the outside, our investigators – working closely with our federal law enforcement partners – will chase down those who betray the public trust in our Agency. We won’t stop until every criminal is brought to justice.”
The case was prosecuted by Assistant United States Attorneys John K. Neal and Alyse Wu. The investigation was conducted jointly by the Department of Labor-Office of Inspector General and the Secret Service. The Michigan Unemployment Insurance Agency provided valuable assistance in this investigation.
Bay City Man Sentenced to 15 Years in Federal Prison for Possessing Child PornographyRead the Press Release
BAY CITY – On August 4, 2022, Justin William Zube, 34, of Bay City, was sentenced to 15 years in prison following his conviction by a federal jury of possessing child pornography depicting minors under age 12, announced United States Attorney Dawn N. Ison.
U.S. Attorney Ison was joined in the announcement by Special Agent in Charge James A. Tarasca, Federal Bureau of Investigation, Detroit Division.
Zube was convicted in April following a three-day trial before the Honorable Thomas L. Ludington in the United States District Court in Bay City. According to the evidence presented at trial, investigators from the Michigan State Police Computer Crimes Unit, the Internet Crimes Against Children Task Force and the Federal Bureau of Investigation launched an investigation into Zube after receiving a tip from Snapchat and the National Center for Missing and Exploited Children. The investigation culminated in the execution of a search warrant at Zube’s Bay City residence on February 11, 2020. Agents seized multiple digital devices from Zube’s home which were found to contain in excess of 300 images and videos of child pornography.
Zube had been previously convicted of possession of child sexually abusive material in Bay County Circuit Court in 2014.
“Victims depicted in child pornography are not only victimized by their abusers, but also by the individuals who collect and view the images and videos,” stated U.S. Attorney Ison. “My office appreciates the work of the FBI and Michigan State Police Internet Crimes Against Children Task Force and Computer Crimes Unit for their dedication to investigating crimes against children and holding those who possess these images accountable.”
“The possession of child sexual abuse material – images and videos of actual children being horrifically victimized by child predators - is not a victimless crime,” said James A. Tarasca, Special Agent in Charge of the FBI in Michigan. “The children portrayed suffer real and permanent damage for the rest of their lives. With yesterday’s sentence, Zube now faces the consequences necessary to protect the community from this serial offender.”
The case was investigated by the Michigan State Police and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorneys William Vailliencourt and Ann Nee.FCA US LLC Sentenced in Connection with Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
WASHINGTON – FCA US LLC (FCA US), formerly Chrysler Group LLC, was sentenced today in federal court in Detroit and ordered to pay a fine of $96,145,784; and a forfeiture money judgment of $203,572,892. The court also imposed a three-year term of organizational probation.
The conviction results from the company’s conspiracy to defraud U.S. regulators and customers by making false and misleading representations about the design, calibration, and function of the emissions control systems on more than 100,000 Model Year 2014, 2015, and 2016 Jeep Grand Cherokee and Ram 1500 diesel vehicles, and about these vehicles’ emission of pollutants, fuel efficiency, and compliance with U.S. emissions standards.
“This case demonstrates the Criminal Division’s dedication to prosecuting companies that seek to place profits above full candor, good corporate governance, and timely remediation,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today’s sentence shows that companies that engage in misleading U.S. regulators, or their own customers, will be held accountable.”
“Today’s sentence is an appropriate punishment for a company that schemed to defraud regulators and consumers,” said U.S. Attorney Dawn N. Ison. “All corporations should be transparent and honest in dealing with the federal government and the public. This prosecution reflects how seriously my office takes this principle.”
“Today’s sentencing of FCA US, which includes a $300M criminal penalty, is the result of an exhaustive three-year investigation,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. This resolution shows that the Department of Justice is committed to holding corporate wrongdoers accountable for misleading regulators. My sincere thanks go to our investigative partners at EPA-CID and the FBI.”
“Today’s sentencing clearly demonstrates that the EPA and our federal partners will hold major corporations like FCA accountable for complying with vehicle emissions standards,” said Acting Assistant Administrator Larry Starfield for the Environmental Protection Agency’s Office of Enforcement and Compliance Assurance. “Stopping violations of environmental laws and the defrauding of consumers is paramount to the protection of clean air and human health.”
According to the company’s admissions and court documents, beginning at least as early as 2010, FCA US developed a new 3.0-liter diesel engine for use in FCA US’s Jeep Grand Cherokee and Ram 1500 vehicles (the Subject Vehicles) that would be sold in the United States. FCA US designed a specific marketing campaign to market these vehicles to U.S. customers as “clean EcoDiesel” vehicles with best-in-class fuel efficiency. However, according to court documents, FCA US installed software features in the Subject Vehicles and engaged in other deceptive and fraudulent conduct intended to avoid regulatory scrutiny and to fraudulently help the Subject Vehicles meet the required emissions standards, while maintaining features that would make them more attractive to consumers, including with respect to fuel efficiency, service intervals, and performance.
Specifically, FCA US purposely calibrated the emissions control systems on the Subject Vehicles to produce less NOx emissions during the federal test procedures, or driving “cycles,” than when the Subject Vehicles were being driven by FCA US’s customers under normal driving conditions. FCA US then engaged in deceptive and fraudulent conduct to conceal the emissions impact and function of the emissions control systems from its U.S. regulators and U.S. customers by (a) submitting false and misleading applications to U.S. regulators to receive authorization to sell the vehicles, (b) making false and misleading representations to U.S. regulators both in person and in response to written requests for information, and (c) making false and misleading representations to consumers about the Subject Vehicles in advertisements and in window labels, including that the Subject Vehicles complied with U.S. emissions requirements, had best-in-class fuel efficiency as measured by EPA testing, and were equipped with “clean EcoDiesel engine[s]” that reduced emissions.
For example, FCA US referred to the manner in which it manipulated one method of emissions control as “cycle detection” and “cycle beating.” Without the “cycle beating” use of this emissions control software, the Subject Vehicles were unable to pass the emissions portions of the federal test procedures while also receiving a fuel efficiency rating that could be marketed to FCA US’s potential customers as “best-in-class,” consistent with FCA US’s 3.0-liter diesel program’s goals, timing, and marketing strategy. Because FCA US knew that the decision to calibrate the emissions control system used on the Subject Vehicles to perform differently “on cycle” versus “off cycle” would be subjected to significant scrutiny by U.S. regulators, FCA US made false and misleading representations to regulators to ensure that it obtained regulatory approval to sell the Subject Vehicles in the United States.
Under the terms of FCA’s guilty plea, which has been approved by the Court, FCA has agreed to continue to cooperate with the Department of Justice in any ongoing or future criminal investigations relating to this conduct. In addition, FCA US has also agreed to continue to implement a compliance and ethics program designed to prevent and detect fraudulent conduct throughout its operations and will report to the department regarding remediation, implementation, and testing of its compliance program and internal controls.
The government reached this agreement with FCA US based on several factors including, among others, the nature and seriousness of the offense conduct, the company’s failure to voluntarily and timely disclose the conduct that triggered the investigation, and its failure to conduct sufficient, timely, or appropriate remedial action. FCA US received credit for cooperation with the department’s investigation and has enhanced, and committed to further enhance, its compliance program and internal controls.
In the related criminal prosecution, three FCA employees, Emanuele Palma, Sergio Pasini, and Gianluca Sabbioni were indicted for conspiracy to defraud the United States and to violate the Clean Air Act and six counts of violating the Clean Air Act. They await trial. An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI and EPA’s Criminal Investigations Division are investigating the case.
Trial Attorney Michael P. McCarthy and Assistant Chief Michael T. O’Neill of the Criminal Division’s Fraud Section; White Collar Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse of the U.S. Attorney’s Office for the Eastern District of Michigan; and Senior Trial Attorney Todd W. Gleason of the Environment and Natural Resources Division’s Environmental Crimes Section are prosecuting the case.
The Fraud Section uses the Victim Notification System (VNS) to provide victims with case information and updates related to this case. Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing [email protected]. To learn more about victims’ rights, please visit: https://www.justice.gov/criminal-vns/victim-rights-derechos-de-las-v-ctimas. If you believe you are a victim of the conduct described in the Plea Agreement and criminal Information, please visit https://www.justice.gov/criminal-vns/case/united-states-v-fca.Pontiac Man Sentenced to 15 years for Advertisement of Child PornographyRead the Press Release
DETROIT - Judge Denise Page Hood sentenced Jovanni Ramirez, 28, of Pontiac, Michigan, to 15 years’ imprisonment for advertisement of child pornography, announced United States Attorney Dawn N. Ison.
Ison was joined in the announcement by Special Agent in Charge Angie Salazar, Homeland Security Investigations (HSI).
As part of his plea, Ramirez agreed that in June 2019, he collected, advertised, and sold images of child pornography online. Ramirez told one online user that he had over 500 videos, and that he typically sold each video for $50. Ramirez offered to sell an undercover agent child pornography in August 2019, using a PayPal account to receive payment. Subsequently, law enforcement executed a search warrant at Ramirez’s residence and located over 350 images and over 100 videos of child pornography on his cell phone.
“Individuals who advertise and sell child pornography online are responsible for fueling the cycle of abuse that victims of sexual exploitation experience every time their images are distributed to others,” said U.S. Attorney Dawn N. Ison. “Those who engage in this behavior should know that they will be prosecuted and held responsible to the fullest extent under the law.”
"This case shows the outcome of the tireless work of our dedicated law enforcement professionals," said Angie Salazar, special agent in charge of HSI Detroit. "HSI is committed to holding those who sexually exploit our children accountable and will continue to seek significant sentences for anyone who commit these horrendous crimes against children."
This case was prosecuted by Assistant United States Attorneys Jessica Currie and Erin Ramamurthy and was investigated by agents of the office of Homeland Security Investigations (HSI).Birmingham Business Owner Sentenced for Committing Wire FraudRead the Press Release
DETROIT - A Birmingham jewelry buyer, auctioneer, and appraiser was sentenced today to 151 months in prison after having pleaded guilty to devising and executing a scheme to defraud a client out of $12 million, U.S. Attorney Dawn N. Ison announced.
Ison was joined in the announcement by Special Agent in Charge James A. Tarasca, Federal Bureau of Investigation.
Joseph Gregory Dumouchelle, 61, was sentenced by United States District Judge Mark A. Goldsmith.
According to court records, Dumouchelle was the owner of “Joseph Dumouchelle Fine and Estate Jewelry Buyers, Sellers, Appraisers, and Auctioneers,” a company doing business in the State of Michigan and throughout the United States. According to the facts made public at the guilty plea hearing, in late 2018, Dumouchelle began negotiating the purchase and sale of a diamond known as the “Yellow Rose.” Dumouchelle proposed the Yellow Rose as an investment opportunity to a client by claiming the diamond could be purchased by the client for $12,000,000 and sold quickly for substantially more. To lull the client into believing the investment was legitimate, Dumouchelle told the client that he could purchase the diamond by wire transferring $12,000,000 into the seller’s account. Dumouchelle sent the wire transfer directions to his client, falsely representing that the account was the sellers. In fact, as Dumouchelle well knew and intended, the wire transfer instructions were to his own account. After the client unknowingly wired the money into Dumouchelle’s account, Dumouchelle quickly withdrew the funds and used them to pay his personal and business debts and expenses.
It was part of Dumouchelle’s plea agreement that other victims of his fraud scheme and their losses would be used to calculate his sentencing guidelines and the amount of restitution he owed. Judge Goldsmith determined that total fraud loss was $25,308,216 and the restitution Dumouchelle owed was $25,206,401. The Court also ordered Dumouchelle to forfeit $12 Million for the fraud he committed. Following his release from prison, Dumouchelle will serve a three-year term of supervised release.
“White collar criminals may use sophisticated methods and apparently legitimate businesses, but their crimes amount to nothing more than lying to get money. Victims were often targeted
because of their involvement in the jewelry investment, purchase, and auction trade, or were family members and friends of Dumouchelle. Victims were lulled into believing Dumouchelle’s false promises because he held himself out to be an expert with valuable connections that would provide them substantial profits.” said United States Attorney Dawn N. Ison.
“This defendant defrauded investors by convincing them he was buying and selling rare jewelry for big profits,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Division. “Instead of actually conducting those transactions, Dumouchelle used the victims’ money to help maintain his expensive lifestyle. The success of this investigation is the result of a strong partnership between the Birmingham Police Department and the FBI’s Detroit Metropolitan Identity Theft and Financial Crimes Task Force.”
The investigation was conducted by the FBI and prosecuted by Assistant United States Attorney Karen Reynolds.Former UAW Official Sentenced to 57 Months in Prison for Embezzling over $2 Million in Union FundsRead the Press Release
DETROIT- Timothy Edmunds, the former Financial Secretary Treasurer of Local 412 of the United Auto Workers union, was sentenced to 57 months in prison today based on his convictions for embezzling $2.1 million in union funds and for money laundering announced U.S. Attorney Dawn N. Ison.
Joining in the announcement were Irene Lindow, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, James A. Tarasca, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, Sarah Kull, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations, and Thomas Murray, District Director, U.S. Department of Labor – Office of Labor-Management Standards.
Timothy Edmunds, 54, of South Lyon, Michigan, had been convicted after pleading guilty in March 2022 to embezzling union funds and money laundering, before United States District Judge Sean Cox. Besides imposing a sentence of 57 months in prison, Judge Cox also ordered Edmunds to pay $1,963,740.29 in restitution to UAW Local 412 and a fine of $1 million.
Between 2011 and 2021, Edmunds served as the Financial Secretary Treasurer of union Local 412 of the International Union, United Automobile, Aerospace, and Agricultural Workers of America (“UAW”). UAW Local 412 is headquartered in Warren, Michigan, and it represents approximately 2,600 members employed by the automaker FCA US LLC, which is owned by Stellantis N.V. The local union’s members include many of those employed at the following Stellantis facilities located within in the Detroit area: Sterling Stamping Plant, Mack Engine Plant, Warren Truck Assembly Plant, Warren Stamping Plant, and Jefferson Assembly Plant.
As an elected officer of UAW Local 412, Edmunds was responsible to hold its money and property solely for the benefit of the organization and its members and to manage, invest, and expend the funds in accordance with the UAW constitution and Local 412 bylaws. Instead, Edmunds systematically drained the Local 412 accounts of $2.1 million by (1) using Local 412 debit cards for over $142,000 in personal purchases, (2) cashing Local 412 checks worth $170,000 into accounts he personally controlled, and (3) transferring $1.5 million from bona fide Local 412 accounts into accounts that he personally controlled. To conceal his theft from other UAW officers and the Local 412 members, Edmunds created false bank statements and caused false Labor Management reports to be filed with the U.S. DOL. Edmunds supplied the fake bank statements to international UAW auditors in an effort to conceal his embezzlement.
Evidence indicates that Edmunds used portions of the proceeds of his embezzlement to gamble extensively, to purchase firearms, various high-end vehicles, and to purchase cocaine. For example, between 2018 and 2020, Edmunds used the UAW Local 412 debit card to make over $30,000 in unauthorized withdrawals at the Greektown Casino.
“Mr. Edmunds betrayed his union brothers and sisters by stealing their dues money to satisfy his own greed,” said United States Attorney Dawn N. Ison. “Today’s sentence demonstrates our continuing dedication to cleaning out corruption in the UAW.”
“Former UAW 412 Financial Secretary-Treasurer Timothy Edmunds embezzled approximately $2 million at the expense of the dues-paying members he had a duty to serve. We will continue to work with our law enforcement partners and the U.S. Department of Labor’s Office of Labor-Management Standards to protect the integrity of labor organizations,” said Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General.
"The role of IRS Criminal Investigation becomes even more important in embezzlement and fraud cases due to the complex financial transactions that can take time to unravel," said Special Agent in Charge Sarah Kull, Detroit Field Office. “We’re committed to working with our law enforcement partners to hold all corrupt UAW officials accountable for their actions."
“While the vast majority of union officials do their work diligently and without incident, unfortunately criminal violations do occur. When they do, it is the union and its members that are the victims. Timothy Edmunds embezzled over $2 million dollars from UAW Local 412 that should have been used for its members’ benefit. Not only did his theft take hard-earned money away from the workers who earned it and who paid it to their union to help it advance their working conditions, his criminal conduct unfairly undercut union members’ and the public’s confidence in this union and in the important work it and other unions perform,” said Thomas Murray, District Director, U.S. Department of Labor, Office of Labor-Management Standards. “OLMS will continue to work with its law enforcement partners to hold accountable anyone who unlawfully exploits their position for financial gain at the expense of hard-working union members.”
Edmunds is the seventeenth defendant convicted in connection with the ongoing criminal investigation into corruption within the UAW or relating to illegal payoffs to UAW officials by FCA executives. The following other individuals have already pleaded guilty to their participation in the scheme and have been sentenced: former UAW President Gary Jones (28 months in prison); former FCA Vice President for Employee Relations Alphons Iacobelli (66 months in prison), former FCA Financial Analyst Jerome Durden (15 months in prison), former Director of FCA’s Employee Relations Department Michael Brown (12 months in prison), former senior UAW officials Virdell King (60 days in prison), Keith Mickens (12 months in prison), Nancy A. Johnson (12 months in prison), Monica Morgan, the widow of UAW Vice President General Holiefield (18 months in prison), former UAW Vice President Norwood Jewell (15 months in prison), former senior UAW official Michael Grimes (28 moths), former UAW Midwest CAP President Edward “Nick” Robinson (12 months in prison), former UAW Vice President Joseph Ashton (30 months), former UAW President Dennis Williams (21 months) and former UAW Region 5 Director UAW Board member Vance Pearson (12 months in prison). The company, FCA US LLC, now known as Stellantis, pleaded guilty in January 2021 to conspiring to violate the Taft-Hartley Act, and was ordered to pay a fine of $30 million and be subject to an outside Monitor for three years. Former senior UAW official Jeffrey Pietrzyk passed away before being sentenced.
In December 2020, the United States filed a civil lawsuit against the International UAW under the Anti-Fraud Injunction Act based on the criminal investigation of the UAW, FCA US LLC, and FCA’s executives. Subsequently, the United States and the International UAW entered into a Consent Decree to settle the lawsuit that was approved by the U.S. District Court. The Court has appointed attorney Neil Barofsky to serve as the Independent Monitor of the UAW for six years. The Monitor is tasked with providing federal oversight of the UAW concerning fraud, corruption, and misconduct within the UAW.
U.S. Attorney Ison commended the outstanding work of the Internal Revenue Service – Criminal Investigations, the U.S. Department of Labor – Office of Labor-Management Standards and Office of Inspector General, and the Federal Bureau of Investigation in conducting a comprehensive criminal investigation into labor corruption activities involving a vital sector of the local and national economy.
The case is being prosecuted by Assistant U.S. Attorney David A. Gardey.
Detroit Man Convicted of Sex Trafficking ChargesRead the Press Release
DETROIT - A Detroit resident was convicted by a federal jury yesterday on charges of producing, transporting, and possessing child pornography, and sex trafficking using force and coercion, announced United States Attorney Dawn N. Ison.
Ison was joined in the announcement by Special Agent in Charge James C. Harris, Homeland Security Investigations, Detroit Division (HSI).
Ryon Travis, 38, of Detroit, was convicted following a 3-day jury trial before United States District Judge Bernard A. Friedman. The jury deliberated approximately 3 hours before returning their verdicts.
“This defendant exploited a child and an adult victim in brutal ways. He targeted a vulnerable woman and took advantage of her for his own profit,” stated U.S. Attorney Ison. “Combatting human trafficking remains one of our office’s top priorities, and we will continue to use every tool in our law enforcement arsenal to combat the sexual exploitation of vulnerable victims in our communities and ensure that predators are held accountable.”
Evidence presented at the trial established the investigation began when the West Bloomfield Police Department searched Travis’s residence in connection with a fraud investigation. A search of Travis’s phone recovered explicit images depicting the sexual abuse of a young child. The case was referred to HSI, who returned to the home in search of sheets depicted in the child pornographic images. When they entered the home, they found an adult woman chained at the neck to a stripper pole in the living room. Subsequent investigation confirmed that Travis was prostituting this adult woman and three others out of his home. When the adult woman attempted to leave, Travis restrained her with a chain.
Sentencing is set for November 23, 2022. Travis faces a mandatory-minimum sentence of 15 years in prison, and up to life.
The case was investigated by HSI and the West Bloomfield Police Department. The case was prosecuted by Assistant United States Attorneys Sara Woodward and Andrea Hutting.
Former Claims Manager for Michigan Unemployment Insurance Agency Sentenced in COVID-19 Fraud SchemeRead the Press Release
DETROIT - Jermaine Rose, a former lead claims examiner for the Michigan Unemployment Insurance Agency (MUIA), was sentenced to two years in federal prison today arising from his participation in a $1.5 million pandemic-related unemployment insurance fraud scheme, announced United States Attorney Dawn N. Ison.
Joining in the announcement were Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General and Special Agent in Charge John Marengo of the United States Secret Service’s Detroit Field Office.
Jermaine Rose pleaded guilty on April 22, 2022, to one count of conspiracy to commit wire fraud arising out of his participation in a wide-ranging fraud scheme designed to provide Rose’s co-conspirators with pandemic unemployment insurance benefits to which they were not entitled.
United States Attorney Ison stated “Corrupt public servants compromise the ability of the government to function effectively and undermine confidence in all public programs. This prosecution reflects the seriousness with which my office takes corruption and fraud in the public sector as well as our commitment to prosecuting those who used a national crisis as an opportunity to defraud the public.
“Jermaine Rose, while employed as a State of Michigan Unemployment Insurance Agency lead claims examiner, abused his authority to allow the payment of more than $920,000 in fraudulent Pandemic Unemployment Assistance claims. Rose exploited his position to release payment on the claims in exchange for kickbacks from his co-conspirators. We will continue to work with our law enforcement and state partners to investigate those who exploit the unemployment insurance system, “stated Special Agent-in-Charge Irene Lindow, Chicago Region, U.S. Department of Labor, Office of Inspector General.
According to court documents, Rose was working as a lead claims examiner for the MUIA in April 2020, and as such, had electronic access to the MUIA claims database. Rose could use his credentials to access and approve specific UI claims submitted to the agency.
Court documents indicate that beginning in approximately April 2020, Rose entered into an agreement with various individuals to defraud the MUIA by obtaining UI benefits through the submission of false UI claims. Rose’s co-conspirators would electronically submit fraudulent claims to MUIA in the names of various individuals, some of whom would be victims of identity theft and some of whom were entirely fictitious people. These co-conspirators made false statements in the applications attesting to the eligibility of these purported claimants, and would upload fictitious documentation to support those fraudulent claims. The co-conspirators would then communicate with Rose, either directly or through intermediaries, and identify the claims that they had submitted. Rose would then use his insider access to the MUIA system to approve the claims and release benefits. Most of the time, benefits would be electronically loaded onto Bank of America debit cards and mailed to addresses controlled by Rose’s co-conspirators. Rose was often paid for his services, typically in amounts between $50 and $150 per claim he touched.
While some of the individuals who approached Rose had legitimate UI claims and worked with him solely to receive benefits on an accelerated schedule, many of the individuals with whom Rose conspired submitted fraudulent UI claims in bulk. In his plea agreement, Rose acknowledged that he was well aware that many of the claims that he authorized were fraudulent.
Court documents indicate that while it is difficult to provide precise loss figures associated with Rose’s criminal scheme, a conservative estimate of the actual loss in this case is approximately $1,011,000.
The case is being prosecuted by Assistant United States Attorneys John K. Neal and Alyse Wu. The investigation is being conducted jointly by the Department of Labor-Office of Inspector General and the Secret Service, with substantial assistance from the Michigan Unemployment Insurance Agency.
U.S. Attorney’s Office Resolves Investigation into Allegations of Race Discrimination by Hartland Community School DistrictRead the Press Release
DETROIT - The United States Attorney’s Office for the Eastern District of Michigan has resolved its investigation into allegations of race discrimination by the Hartland Consolidated School District, United States Attorney Dawn N. Ison announced today. The United States Attorney’s Office initiated an investigation under Title IV of the Civil Rights Act based on a complaint filed by a then-student in the district and her guardian, which alleged that the District failed to address pervasive race-based harassment of the student and other Black students in the district. Title IV authorizes the Department of Justice, of which the United States Attorney’s Office is a component, to address complaints that a school is depriving students of equal protection based on race, color, and other protected characteristics.
The District cooperated fully with the investigation and voluntarily took a number of steps to address concerns that were raised during the investigation, including creating a School Board-level Diversity Equity and Inclusion Committee, instituting training for staff and students, revising internal policies and practices regarding the investigation process for allegations of harassment, and adding counseling and social work staff. The District agreed to take additional steps during the 2022-23 school year, such as conducting a district-wide climate survey to assess the presence and effect of harassment based on race, developing a plan to address the concerns identified by the survey, and increasing measures to learn of, investigate, and respond to complaints of racial harassment.
“Students deserve a safe school environment where they can learn and grow without facing racial harassment. In districts like Hartland, where students of color are only a small percentage of the student body, schools must make an extra effort to ensure that all students are comfortable reporting harassment and other forms of discrimination and be confident that the adults in the building will keep them safe,” said Ison. “We commend the Hartland Consolidated School District for acknowledging their obligations to remove barriers to ensure that all students can fully engage in the educational process.”
The U.S. Attorney’s Office will review the District’s compliance with the terms of the resolution during and at the end of the 2022-23 school year, and if the terms are found to have been satisfied, it will close its investigation. The case was handled by AUSAs Susan K. DeClercq and Luttrell Levingston.
The Civil Rights Unit of the U.S. Attorney’s Office for the Eastern District of Michigan was established in 2010 with the mission of prioritizing federal civil rights enforcement. For more information on the Office’s civil rights efforts, including a copy of the Letter of Resolution with the Hartland Consolidated School District, please visit https://www.justice.gov/usao-edmi/programs/civil-rights. Civil rights complaints may be emailed to [email protected] or by contacting the U.S. Attorney's Office’s civil rights hotline at (313) 226-9151.
Former Highland Park Police Detective Sentenced to 2 Years in Federal Prison for Conspiring to Distribute Fentanyl-laced HeroinRead the Press Release
DETROIT - A former Detective with the Highland Park Police Department was sentenced to two years in prison for conspiring to distribute fentanyl-laced heroin, United States Attorney Dawn N. Ison announced today.
Ison was joined in the announcement by Special Agent in Charge James A. Tarasca, Federal Bureau of Investigation, Detroit Division.
Tiffany Lipkovitch, 47, of Grosse Pointe, was convicted of conspiring to distribute controlled substances. Lipkovitch was a detective with the Highland Park Police Department, where she had been a police officer since 2011. Federal agents recorded numerous calls and meetings between Lipkovitch and a confidential source about a drug transaction. Lipkovitch gave the source samples of the drugs that were available from her associate and explained the price of each mixture. Lipkovitch explained that her associate was getting “a package of fentanyl . . . from overseas” to mix the drugs. Lipkovitch’s associate later sold the confidential source 45 grams of a fentanyl / heroin mixture. Afterwards, the confidential source met with Lipkovitch—who was on duty and in her police uniform—and gave her $300 for facilitating the drug deal.
“This officer broke the law she swore to enforce by putting dangerous drugs like heroin and fentanyl on the streets of our community,” said U.S. Attorney Ison. “This sentence should send a clear message to any officer who crosses the line and betrays his or her oath of office. If an officer engages in criminal conduct, our office will respond accordingly.”
“This case is an example of the law enforcement community’s joint effort to ensure that police officers who abuse their authority and abandon their oath to serve and protect are held accountable,” said Special Agent in Charge James A. Tarasca, Detroit Division of the FBI. “We appreciate the cooperation of the Highland Park Police Department during this investigation. This defendant’s actions should not diminish the exemplary work conducted every day by the men and women of the HPPD.”
The case was investigated by the FBI Detroit Area Public Corruption Task Force, in collaboration with the Drug Enforcement Administration. The case was prosecuted by Assistant U.S. Attorney Steven Cares.
Northern Michigan Man Pleads Guilty to Leaving Pipe Bombs at Cell Phone StoresRead the Press Release
BAY CITY – A Whittemore, Michigan, resident pleaded guilty today to two separate criminal cases related to the placement of explosive packages outside cellphone stores in Cheboygan, and Sault Ste Marie, Michigan, announced Eastern District of Michigan United States Attorney Dawn N. Ison and Western District of Michigan United States Attorney Mark Totten. Whittemore and Cheboygan are in the Eastern District and Sault Ste. Marie is in the Western District.
Ison and Totten were joined in the announcement by Special Agent in Charge James A. Tarasca, Federal Bureau of Investigation, Detroit Division.
John Douglas Allen, 76, pleaded guilty before United States District Judge Thomas Ludington in Bay City, Michigan. Allen faces up to 20 years in prison when he is sentenced on November, 9, 2022.
During the plea hearing, Allen admitted that on September 15, 2021, at approximately 7:36 pm, he placed a United States Postal Service (USPS) box with black tape on it and a wire coming out of it outside an AT&T Store in Sault Ste. Marie, Michigan. Later that evening, Allen placed another USPS box with black tape on it and a wire coming out of it outside of a Verizon Store in Cheboygan, Michigan. The two devices were examined by the FBI laboratory Explosive Unit, which concluded that the two devices were improvised explosive devices (IEDs), also commonly referred to as pipe bombs. Both pipe bombs contained shrapnel and a threat note demanding $5 million. Based on video footage taken from the cell phone stores and other nearby businesses, as well as an exhaustive investigation by law enforcement, agents were able to determine that Allen was the person who left the packages outside of the stores.
In addition, Allen pleaded guilty to placing letters containing threats aimed at telecommunications providers at cell towers located in the Upper Peninsula.
“The actions of this defendant could have resulted in significant bodily harm or death to citizens in the area,” stated U.S. Attorney Ison. “Thanks to the hard work of our law enforcement partners and prosecutors, we were able to find and remove these dangerous devices before the defendant could cause serious harm.”
U.S. Attorney Totten added, “Allen’s actions in placing pipe bombs in front of commercial businesses in Sault Ste. Marie and Cheboygan endangered the lives of innocent citizens, first responders, and the bomb technicians who rendered those devices safe. Grievances and disputes cannot be communicated or resolved through threats of violence or extortion.”
This case was investigated by special agents, intelligence analysts, troopers, deputies, and officers from the FBI, Michigan State Police, Cheboygan County Sheriff's Office, Cheboygan Police Department, Sault Ste. Marie Police Department, Sault Ste. Marie Tribal Police, the US Coast Guard Investigative Service, US Border Patrol and ATF.
Assistant U.S. Attorneys J. Michael Buckley, Jerome Gorgon, Christopher O’Connor and Theodore Greeley are prosecuting the case in their respective districts.
Former President of the Madison District Public Schools Board of Education and a Local Contractor Charged in $560,000 Bribery SchemeRead the Press Release
DETROIT - Albert Morrison, the former President of the Madison District Public Schools Board of Education and local school district contractor, John David, have been charged in a superseding indictment with conspiracy to commit bribery arising out of David’s payments of over $560,000 in bribes to Morrison in exchange for $3.1 million in school contracts to David, U.S. Attorney Dawn N. Ison announced today. The bribery charges were added to the indictment filed on April 6, 2022, that charged Morrison with tax evasion and failure to file tax returns in connection with his failure to report over $500,000 in income from David.
Ison was joined in the announcement by James A. Tarasca, Special Agent in Charge of the Federal Bureau of Investigation, Michigan Division, Sarah Kull, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division, and John Woolley, Special Agent in Charge of the Department of Education, Office of Inspector General.
Albert Morrison, age 60, and John David, age 64, are charged in the superseding indictment as co-conspirators in a bribery conspiracy count, and they are each separately charged with three counts of bribery concerning programs receiving federal funds. According to the indictment, Morrison was the elected President of the Madison District Public Schools Board of Education from 2012 through 2018. While Morrison was President, John David was one of the owners of a building maintenance and reconstruction company, Emergency Restoration (a/k/a Emergency Reconstruction), that was awarded over $3.1 million maintenance and construction projects in the Madison District Public Schools.
David, who was a long-time friend of Morrison, wrote checks from his company to Morrison’s solely owned company, Comfort Consulting, from 2014 through 2018. Morrison deposited the checks from David into his solely owned bank account. David, through his company, made at least $561,667 in payments to Morrison. David admitted he had to “pay to play” in the school district, and David’s companies received approximately $3,167,275 from the Madison District during the bribery conspiracy. Morrison spent the money from David on personal luxuries such as vacations in Florida and a boat slip.
To keep the payments secret from the school board and the community in the Madison Schools, Morrison, when publicly confronted at a Madison District school board meeting, denied having any financial ties to David or Emergency Restoration. Morrison and David also failed to disclose to State of Michigan auditors the payments Morrison received from David.
Morrison did not declare to the IRS David’s payments to Comfort Consulting as income in 2014, 2015, 2016, 2017, or 2018. In a further effort to conceal the payments from David, Morrison did not file a federal income tax return in 2015, 2016, 2017, and 2018. By not declaring to the IRS the payments from David as income, Morrison avoided paying approximately $118,200 in taxes.
“Children and their parents deserve a school system free of corruption,” said United States Attorney Dawn N. Ison. “Today’s indictment demonstrates our commitment to ensure that our educational systems put the interests of our kids first.”
“It is important that contracts funded by our school systems be awarded through a fair and transparent process, not through deals funded by bribes to those in positions of power,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Field Office. “The FBI prioritizes efforts to expose corruption and we will continue to aggressively investigate these allegations alongside our partners at the IRS and Department of Education Office of Inspector General.”
“Honest and law-abiding citizens are fed up with the likes of those who use deceit and fraud to unfairly line their pockets," said Special Agent in Charge Sarah Kull, Internal Revenue Service, Detroit Field Office. "Those individuals who engage in this type of financial fraud should know they will not go undetected and will be held accountable."
An indictment is merely an accusation and is not evidence of guilt. The defendants are presumed innocent unless and until proven guilty in a court of law. If convicted, Morrison and David face the following statutory maximum penalties: 5 years in prison for the conspiracy count and 10 years in prison for each of the three bribery counts against each of them. Morrison faces a statutory maximum penalty of 5 years in prison for each count of tax evasion and 1 year in prison for each count of failure to file tax returns. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The investigation of this case was conducted by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, and the Department of Education. It is prosecuted by Assistant U.S. Attorneys Sarah Resnick Cohen, Karen Reynolds, and Gjon Juncaj.
U.S. Attorney’s Office partners with City of Detroit to host Peacenic in O’Hair Park.Read the Press Release
DETROIT - More than thirty community organizations and state, and federal law enforcement agencies participated in the first Peacenic held in O’Hair Park on Saturday, July 9 from 11-2.
The event was part of the Safe Summer Streets Initiative where federal law enforcement agencies including the U.S. Attorney’s Office, the Federal Bureau of Investigation (FBI), and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) partnered this summer with the City of Detroit, Detroit Police Department, and the Wayne County Prosecutor’s Office to strategically focus resources on the most dangerous neighborhoods in the city, which are two sections in the City’s 8th precinct and two sections in the 9th precinct. The strategy is designed to significantly reduce violence by narrowly focusing on those who are committing violence and to give these neighborhoods back to the majority of residents who want peace. The City of Detroit committed to address blight, ensure access to city services, and replenish community resources in the neighborhoods that were targeted for enforcement. The partners also agreed to hold community engagement events, Peacenics, where residents could have fun, engage with law enforcement, and obtain resources to improve the quality of their lives.
Saturday’s Peacenic held in O’Hair Park in the 8th Precinct was the first of these community engagement events. It featured vendors offering a variety of resources including job training, literacy programs, mental health and medical screenings, utility assistance, educational and vocational opportunities, tutorial and career development programs, and more. Several law enforcement agencies were also present to engage with the community and recruit to fill vacancies in their organizations. The event also included a panel discussion of Returning Citizens who discussed how they could collaborate to reduce violence in their communities. In addition to the resources, there were bounce houses, face painting, cookie decorating and free throw tournament for kids. Hooper from the Detroit Pistons also made an appearance and took photographs with attendees. Adults were also able to join in the fun with Hustle Dance lessons, chess games, and a Spades tournament. There was also pizza, hot dogs, sliders, and ice cream available for residents at the Peacenic.Gail Tubbs, President of the O’Hair Park Neighborhood Association, stated "The message of unity was on full display this past Saturday, July 9th at O'Hair Park. The community came together with law enforcement agencies to bring about a culture of peace in our neighborhoods and in the city of Detroit.”
Alvin R. Stokes, President, Citywide Citizens Police Community Relations, stated, “I would like to take this opportunity to thank U.S. Attorney Mrs. Dawn Ison and her team, for the great event that was held July 9th, 2022, at O'Hair park in the 8th precinct. With the help of several agencies, a great time was had by all. I applaud the Attorney and her team for showing the community the love and support that we need. It is such a pleasure to see the community and other agencies coming together for a good cause. I would love to see more.”
“The Peacenic was a day of empowerment filled with life-saving resources. Free food, job opportunities and plenty of activities for the family. Can’t wait for the next one," said Darryl Woods, Sr., President and CEO, Fighting the Good Fight.
The second Peacenic will be held on July 17, 2022, from 11-4 at Heilmann Park, which is in the 9th Precinct and will feature most of the same community and law enforcement partners. The Peacenic is designed for the residents of the 9th Precinct. Media is welcome to attend the event and should contact Gina Balaya at the above email address or contact her directly at (313)226-9758.
Participating Organizations
Bates Academy • Brilliant Detroit • Detroit at Work • Detroit Chess Club • Detroit Health Department • Detroit Public Schools Community District • Detroit Reconnect • Detroit Training Center • Detroit Wayne Integrated Health Network • Downtown Boxing Gym • Drug Enforcement Administration • Goodwill Industries • Homeland Security • I Teach Chess • Matrix Human Services • Michigan Army National Guard • Michigan Department of Corrections • Michigan Secretary of State • Michigan State Police • O’Hair Park Neighborhood Association • Project Clean Slate • Pure Heart Foundation • Team Wellness Center • 27th Letter Books • United States Marshals Services • Wayne County Community College District • Wayne County Sheriff’s Department •Wayne Metro Community Action Agency • Youthbuild
Taylor Man Sentenced to 25 Years in Prison for Sexual Exploitation of MinorsRead the Press Release
DETROIT – A Taylor man was sentenced today to 25 years in federal prison on charges of sexual exploitation of children and possession of child pornography, announced United States Attorney Dawn N. Ison.
Ison was joined in the announcement by Special Agent in Charge James A. Tarasca, Federal Bureau of Investigation, Detroit Division.
Kenneth Hartley, 53, was sentenced before United States District Judge Victoria Roberts.
During his plea hearing, Hartley admitted that in 2010 he pretended to be a teenage female on the Skype internet messaging platform and tricked a male minor born in 1995 into providing sexually explicit images of himself to Hartley. As part of his plea agreement, Hartley also acknowledged that he used the Kik social media application to obtain sexually explicit images of a 13-year-old male in 2014 and another 13-year-old male in 2015. In all, Hartley victimized over 100 minors over the course of a decade until law enforcement executed a search warrant at his residence in December 2020. Agents identified 29 of those victims, 17 of those victims were minors under 12 years of age at the time Hartley exploited them. Hartley’s youngest victim was eight. Hartley was found responsible for possessing 46,153 images of child pornography for the purposes of sentencing guidelines.
“This investigation and subsequent prosecution ended this offender’s decade-long sexual exploitation of children. This significant sentence demonstrates that those who seek to harm our children through online exploitation will be held responsible. We will continue to work to make the Internet a safer place for our children.” stated Dawn N. Ison, United States Attorney.
“In addition to possessing child pornography, Mr. Hartley actively created it for himself and others by exploiting vulnerable children around the world,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Division. “The FBI considers the investigation and prosecution of predators like this defendant to be of the highest priority. Today’s sentence serves as a warning to others like him the FBI will aggressively pursue anyone who victimizes and exploits children.”
The case was investigated by the Southeast Michigan Trafficking and Exploitation Crimes Task Force (“SEMTEC”) of the Federal Bureau of Investigation. case was prosecuted by Assistant United States Attorney Christopher Rawsthorne.
Massachusetts Man Sentenced to 128 Months for Attempted KidnappingRead the Press Release
DETROIT – A Massachusetts man was sentenced yesterday to 128 months’ imprisonment on a charge of attempted kidnapping, announced United States Attorney Dawn N. Ison.
Ison was joined in the announcement by Special Agent in Charge James Tarasca, Federal Bureau of Investigation, Detroit Division.
Sentenced was Damon Burke, 49, of Vineyard Haven, Massachusetts.
Burke admitted in his plea agreement that on March 23, 2021, he had attempted to kidnap the victim—an ex-girlfriend from approximately 20 years ago with whom he had no recent contact. Burke had previously stalked the victim and restrained her in a vehicle without her consent after their relationship ended. That episode led to a conviction on state charges of criminal possession of a firearm in New York in 2002. In March 2021, Burke resumed his harassment of the victim. After driving from Massachusetts to Michigan, Burke assaulted the woman’s housemate and tried to steal a key to the victim’s home. Burke then attempted to go to the victim’s home. Police later stopped Burke near that location. In his car, Burke had a note to the victim, a stun gun, and a variety of kidnapping tools, including zip ties, handcuffs, smoke grenades, and other items.
United States Attorney Dawn N. Ison said that “This conviction is a result of a joint effort between local and federal law enforcement to apprehend our most violent offenders and hold them accountable. The swift action of law enforcement at the outset of this case surely prevented what could have been a far more serious crime. And the offender’s sentence will serve to protect the victim and our community going forward.”
“Mr. Burke terrorized his victims both physically and emotionally, and while that harm cannot be undone, today’s sentence is a first step towards getting justice,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Field Office. “We are grateful to the Northville and West Bloomfield Police Departments for working alongside the FBI to pursue those who seek to harm members of our community.”
Burke has also pleaded guilty in the Third Judicial Circuit Court to armed robbery and was sentenced to serve 12 – 25 years in prison for his robbery and assault of the victim’s roommate.
The case was the result of a joint investigation by the Northville Police Department, the West Bloomfield Township Police Department, and the Federal Bureau of Investigation, as well as a cooperative effort between the Wayne County Prosecutor’s Office and the United States Attorney’s Office.
This case was prosecuted by Assistant United States Attorneys Erin Ramamurthy and Christopher Rawsthorne.
Bingham Farms Physician Convicted of Drug and Health Care Fraud ChargesRead the Press Release
DETROIT - Bingham Farms physician David Jankowski, 62, was convicted today by a federal jury in Detroit on thirty charges related to the unlawful distribution of Schedule II, III and IV controlled substances and health care fraud, announced United States Attorney Dawn N. Ison.
Joining Ison in the announcement were James A. Tarasca, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Mario Pinto, Special Agent-In-Charge, United States Department of Health and Human Services – Office of Inspector General.
The trial began on May 10, 2022,held before United States District Judge Bernard A. Friedman in Detroit. Jankowski will be sentenced on November 15, 2022, at 1:30 pm.
The charges on which he was convicted stemmed from Jankowski’s operation of Summit Medical Group, a purported medical clinic formerly located in Dearborn Heights and Southfield, MI. According to the evidence presented at trial, Dr. Jankowski wrote medically unnecessary prescriptions for controlled substances such as Oxycontin, Oxycodone, morphine, hydrocodone, and Xanax. He also prescribed controlled substances after receiving cash from patient recruiters who brought patients to his practice. The evidence demonstrated that Jankowski issued or authorized the issuance of more than 1.7 million Schedule II controlled substances to individuals outside the course of professional medical practice and for no legitimate medical purpose in exchange for compensation. As part of this scheme, Dr. Jankowski also issued or authorized the issuance more than 800,000 Schedule III controlled substances and more than 870,00 Schedule IV controlled substances. The evidence also showed that Jankowski used his access to controlled substances to lure patients into his health care fraud scheme. Patients were attracted to his practice by the easy access to controlled substances. Many of these patients had no need for the drugs. Instead, the controlled substances were sold on the streets to feed the addictions of opioid addicts. Trial testimony and exhibits showed that Jankowski then submitted false and fraudulent insurance claims asserting that he had provided necessary treatment to these patients. The claims were submitted to Michigan auto insurance companies, private health care insurers, Medicare and Medicaid. Based upon these fraudulent claims, Dr. Jankowski received more than $29.3 million from the auto and private insurance companies and more than $6 million from Medicare and Medicaid.
Dr. Jankowski was convicted of thirty of the thirty-two counts with which he was charged and faces a statutory maximum penalty of 20 years in federal prison.
“The improper distribution of prescription drugs outside the course of ordinary medical practice causes significant harm. It is in everyone’s best interests to keep these highly addictive substances off the street, and it is particularly disturbing when a trusted physician is the vehicle for the illegal distribution of opioids,” stated U.S. Attorney Ison. “My office is dedicated to stemming the tide of opioid addiction and the resulting consequences to families in the Eastern District. Law enforcement investigators are aggressively investigating health care fraud and detecting abuses by doctors, and we hope that prosecutions like this one will deter medical professionals from illegally distributing controlled substances and stealing taxpayer funds.”
“This defendant exploited vulnerable patients and the health care system by prescribing and billing for medically unnecessary prescription medications. By doing so, he violated his oath to do no harm, and defrauded health care insurance programs. This type of crime puts patients at risk and makes medical care more costly for all of us,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Field Office. “Thanks to the diligent work of the FBI and our law enforcement partners, we are able to address this important aspect of health care fraud and continue our mission of bringing those who operate these criminal schemes to justice.”
“Doctors and other medical providers engaged in the overprescribing of opioids for profit places patients at risk and underscores the significance of this investigation,” said Special Agent in Charge Mario M. Pinto of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “In conjunction with our law enforcement partners, we will continue to work to protect beneficiaries and investigate fraudulent conduct related to our Federal health care programs.”
The investigation was conducted by the FBI and the Department of Health and Human Services – Office of Inspector General.
The case was prosecuted by Assistant United States Attorneys Regina R. McCullough, Wayne F. Pratt, and Philip A. Ross.
Detroit Man Charged with the Illegal Purchase of a FirearmRead the Press Release
DETROIT – A criminal complaint was filed today charging a Detroit man with the illegal straw purchase of a firearm that was later used in the fatal shooting of a Detroit police officer, announced United States Attorney Dawn N. Ison.
Ison was joined in the announcement by Special Agent in Charges Paul Vanderplow, Bureau of Alcohol, Tobacco, Firearms and Explosives and Chief James E. White, Detroit Police Department.
The United States Attorney’s Office in Detroit charged Sheldon Avery Thomas, 26, with making a false statement in the acquisition of the firearm. Thomas made a virtual appearance in federal court this afternoon and was ordered temporarily detained pending a detention hearing on Tuesday, July 12.
According to the criminal complaint filed today, on the evening of July 6, 2022, officers from the Detroit Police Department responded to a call of shots fired in the area of Joy Road and Marlow Street on the city’s west side. Upon arriving at the scene, an individual, later identified as Ehmani Davis, fired at the responding officers and fatally struck Officer Loren Courts. ATF agents conducted an urgent trace of the Romarm/Cigir, Draco, 7.62 caliber pistol Davis possessed during the shooting and learned that on June 7, 2022, Sheldon Avery Thomas purchased the firearm from a gun store in Eastpointe, Michigan. A review of records and surveillance video from that day shows that Thomas purchased the Draco firearm and later met with Davis in a nearby parking lot. Thomas is alleged to have made false statements in the acquisition of the firearm by stating he was the actual purchaser of the firearm and was not buying it for another person.
“The tragic death of Officer Courts is one more terrible example of what happens when guns are supplied to those who are prohibited from possessing them. Purchasing a gun for someone who is legally prohibited from possessing it can land you in prison for 10 years,” stated U.S. Attorney Ison. “Our office will continue to focus on the drivers of violence, which includes both those who commit violent crimes using firearms and those who help them obtain firearms illegally. This case should serve as a warning to those thinking about straw purchasing firearms – you will face federal charges.”“Straw purchases “lying and buying” is not a victimless crime. The men and women at the AFT will find and remove those individuals from the community who enable violent criminals terrorizing our State,” said ATF Special Agent in Charge Paul Vanderplow. “ATF stands proudly with our Federal, state and local law enforcement partners within the State of Michigan to prosecute these individuals. As promised, commit crimes with firearms, find out the ATF will be at your door.”
“As we all grieve the shocking and devastating loss of our hero, Officer Courts, Detroit Police
Department (DPD) remains steadfast in its mission to serve and protect,” Chief James E. White said. “We will continue to collaborate with our local and federal partners to stop these dangerous individuals from victimizing our community. We sincerely appreciate the efforts and commitment of the ATF and the US Attorney’s Office in this matter.”A criminal complaint is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law. Trial cannot be held on felony charges in a complaint. When the investigation is completed, determinations will be made whether to seek a felony indictment.
This case is being investigated by agents of the ATF and officers of the Detroit Police Department.
The case is being prosecuted by Assistant United States Attorney Barbara Lanning.
# # #Registered Nurse Pleads Guilty in Covid-19 Vaccination Record Card FraudRead the Press Release
DETROIT – A registered nurse from the Veteran’s Hospital in Detroit, pleaded guilty yesterday to charges related to Covid-19 Vaccination Record Cards fraud, announced United States Attorney Dawn N. Ison.
Joining in the announcement were Special Agent in Charge Gregory Billingsley with the Department of Veterans Affairs Office of Inspector General’s Central Field Office and Special Agent in Charge Mario Pinto of the U.S. Department of Health & Human Services, Office of Inspector General (HHS-OIG) – Chicago Region.
Pleading guilty was Bethann Kierczak, 37, of Southgate. The plea took place before United States District Judge David M. Lawson. Kierczak pleaded guilty to theft of government funds.
According to court records, Kierczak admitted to stealing or embezzling authentic Covid-19 Vaccination Record Cards from the VA hospital—along with vaccine lot numbers necessary to make the cards appear legitimate—and then reselling those cards and information to individuals within the metro Detroit community. Kierczak’s theft of Covid-19 Vaccination Record Cards began at least as early as May 2021 and continued through September 2021. Kierczak sold the cards for $150-$200 each and communicated with buyers primarily via Facebook Messenger.
“The defendant abused her position of trust as a medical provider to line her own pockets and sell fraudulent COVID-19 vaccination cards,” said U.S. Attorney Dawn N. Ison. “My office is committed to protecting the citizens of Michigan from individuals who used the global pandemic as an opportunity to commit fraud as evidenced by this case and many other prosecutions we have brought against those that have used this national crisis as an opportunity to commit crimes.”
“Stealing and selling fraudulent COVID-19 vaccination cards threatens the safety of VA medical center patients and employees as well as the general public,” said Special Agent in Charge Gregory Billingsley with the Department of Veterans Affairs Office of Inspector General’s Central Field Office.
“For personal enrichment, this nurse committed fraud using COVID-19 vaccination record cards, which undermined public health measures during the pandemic and violated the all-important trust the public extends to healthcare professionals,” said Special Agent in Charge Mario M. Pinto of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Working closely with our law enforcement partners, our agency will continue to investigate those who recklessly and intentionally disregard efforts to protect the health of those in our country.”
This case is being prosecuted by Assistant United States Attorney Ryan A. Particka. The investigation was conducted by the U.S. Department of Veterans Affairs-Office of Inspector General (VA-OIG), VA Police Detroit and the Medicare Fraud Strike Force (MFSF) partners, a partnership among the Criminal Division, U.S. Attorney’s Offices, and U.S. Health and Human Services-Office of Inspector General (HHS-OIG).
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Former Detroit Police Department Officer Sentenced to Prison for Taking BribesRead the Press Release
DETROIT - A former Detroit Police Department officer was sentenced to prison today for taking $3,200 in cash bribes over an almost two-year period, United States Attorney Dawn N. Ison announced.
Ison was joined in the announcement by James A. Tarasca, Special Agent in Charge, Federal Bureau of Investigation, Detroit Division.
During a hearing today before U.S. District Court Judge George Caram Steeh, Alonzo Jones, 55, of Detroit, Michigan, was sentenced to 15 months in prison and two years of supervised release based on his plea of guilty to accepting bribes. Jones, an officer with the Detroit Police Department for over 30 years, corruptly accepted cash bribes on five separate occasions, totaling $3,200, with the intent to be influenced and rewarded in connection with his duties overseeing and running the Detroit Police Vehicle Auction. The last bribe he took was right before he retired from DPD in May 2021.
United States Attorney Ison said, “Every new police officer takes an oath to uphold our laws and act with integrity. This officer broke that oath and his crimes are an affront to the citizens of Detroit and the honest officers of the Detroit Police Department who put their lives on the line to protect those citizens. This sentence shows our office’s commitment to aggressively pursuing police officers who use their trusted positions of authority to enrich themselves.”
“The public expects law enforcement officers to do their work with honesty and integrity. Instead, Mr. Jones exploited his official position, accepting bribes in exchange for favors related to the Detroit Vehicle Auction. Today, he was held accountable for his criminal conduct,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Division. “Thank you to Chief James White for his cooperation during this investigation and to the men and women of the Detroit Police Department who serve with honor day in and day out. And thank you to the members of the Detroit Area Corruption Task Force for their continued work on Operation Northern Hook."
Jones was charged as part of the government’s investigation known as “Operation Northern Hook.” Northern Hook is an investigation of corruption within the government and the Police Department of the City of Detroit relating to the towing industry and other matters.
The investigation of this case was conducted by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Frances Lee Carlson.
The Detroit Area Corruption Task Force member agencies include the FBI, State of Michigan Attorney General's Office, Michigan State Police, Detroit Police Department, U.S. Customs and Border Patrol-Office of Professional Responsibility, Internal Revenue Service, and U.S. Department of Homeland Security.
United States Attorney Announces Enhanced Enforcement Strategy Targeting Designated High Crime Areas in DetroitRead the Press Release
DETROIT – Today, United States Attorney Dawn N. Ison, along with Detroit Mayor Mike Duggan, Wayne County Prosecuting Attorney Kym Worthy and Detroit Police Chief James E. White announced a targeted law enforcement initiative that is designed to reduce gun violence in Detroit’s neighborhoods with the highest incidence of violent crime.
Joining in the announcement were Special Agent in Charge James A. Tarasca, Federal Bureau of Investigation, Detroit Division, Special Agent in Charge Paul Vanderplow, Bureau of Alcohol, Tobacco, Firearms and Explosives.
Studies have shown that violent crime is commonly driven by a small number of actors and is highly concentrated within communities. And we know that as temperatures rise, so too does violent crime in these neighborhoods. With the summer now upon us, the United States Attorney’s Office, along with the Wayne County Prosecutor’s Office, the Detroit Police Department, the ATF, and the FBI, has launched an effort to strategically focus resources on the most dangerous neighborhoods of the city. These neighborhoods in the 8th and 9th Precincts lead the city in fatal and non-fatal shootings, robberies, and aggravated assaults with a gun in 2022.
The strategy is a part of the United States Attorney’s Office’s Project Safe Neighborhoods (PSN) initiative. PSN continues to be the centerpiece of the Department of Justice’s violent crime reduction efforts. Through PSN, a broad spectrum of stakeholders works together to identify the most pressing violent crime problems and develop comprehensive solutions to address them. PSN is an evidence-based program that focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs to pursue lasting reductions in crime.
The unified approach to reducing gun violence announced today includes enhanced federal, state, and local law enforcement collaboration and coordinated prosecution efforts to boost existing and ongoing partnerships to address violent crime across the city. Under the strategy,
felons arrested in one of the designated areas in possession of a firearm will be immediately prosecuted federally. In addition, any individual who uses a firearm to commit a crime of violence or drug trafficking crime will also be considered for federal prosecution. The “hot spot” strategy for federal enforcement began on Memorial Day and will last until Labor Day in September.
Importantly, this enforcement strategy will be paired with enhanced efforts from the City of Detroit to address blight and other quality of life issues for residents living in the designated enforcement areas.
“Through this partnership, we will focus strategically on the drivers of violence in our most dangerous communities. This strategy is designed to significantly reduce violence by narrowly focusing on those who are committing it and to give these neighborhoods back to the majority of the residents who want to live in peace,” stated U.S. Attorney Dawn N. Ison. “Along with our enforcement strategy, my office is committed to working with community leaders in these neighborhoods and the City of Detroit to improve the quality of life in the areas that we have targeted for enhanced enforcement,” continued Ison.
Mayor Duggan stated, “The two areas Detroit Police have been intensely focused on are the 8th and 9th Precincts, where we typically see the highest rate of gun-related crimes, especially during the summer months. I'm deeply appreciative to the US Attorney's Office for implementing the new policy of having cases of felons found in possession of a gun in these precincts go immediately to federal prosecution. Federal law enforcement agencies in Detroit have worked very closely with DPD and the community. This new initiative makes it clear they will remain strong community partners in making neighborhoods safer for Detroit residents.”
Prosecutor Worthy stated, “The proliferation of gun violence in Detroit is staggering. We must not be deterred from attacking this problem. People with previous records in the 8th and 9th Precinct will be prosecuted federally if they are in possession of weapons. We are hopeful that our collaboration with the U.S. Attorney’s Office will have an impact on this important issue. “
Chief White stated, “Detroiters deserve policing excellence. The continued collaboration provides another layer of protection for our community. The relationship between DPD and the US Attorney’s Office plays an instrumental role in keeping Detroiters safe. I would like to thank US Attorney Dawn Ison for her commitment and leadership to our community.”
“Through information sharing, strategic enforcement efforts, and federal prosecutions, law enforcement agencies across Detroit continue to work together to combat crime in the most violent areas of our city,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Field Office. “The FBI will contribute to this initiative by targeting those who commit armed robberies of businesses, along with the leadership of gangs and criminal enterprises that drive the violence in our communities. By doing so, we will ensure our neighborhoods and communities are safer places to live and work.”
“Regardless of the time of year, ATF has no tolerance for criminals who continue to terrorize our communities’ by utilizing firearms as a tool of violence,” said, ATF Special Agent in Charge Paul Vanderplow. “The men and women of ATF are dedicated to identifying and apprehending those who choose violence. ATF stands proudly with our Federal, State, and Local law enforcement partners within the State of Michigan to prosecute these individuals.”
FCA US LLC Enters Guilty Plea to Fraud ConspiracyRead the Press Release
FCA US LLC (FCA US), formerly Chrysler Group LLC, pleaded guilty to one criminal felony count and has agreed to pay approximately $300 million in criminal penalties as a result of the company’s conspiracy to defraud U.S. regulators and customers by making false and misleading representations about the design, calibration, and function of the emissions control systems on more than 100,000 Model Year 2014, 2015, and 2016 Jeep Grand Cherokee and Ram 1500 diesel vehicles, and about these vehicles’ emission of pollutants, fuel efficiency, and compliance with U.S. emissions standards.
FCA US entered a guilty plea to a criminal information charging the company with one count of conspiracy to defraud the United States, commit wire fraud, and violate the Clean Air Act. Pursuant to the plea agreement, FCA US has agreed to pay a criminal fine of $96,145,784 and to forfeit $203,572,892.
“FCA US engaged in a multi-year scheme to mislead U.S. regulators and customers,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today’s guilty plea demonstrates the department’s dedication to prosecuting all types of corporate malfeasance and holding accountable companies that seek to place profits above candor, good corporate governance, and timely remediation.”
“We expect all corporations to deal with regulators and the public openly and honestly,” said U.S. Attorney Dawn N. Ison for the Eastern District of Michigan. “Unfortunately, one of our district’s biggest corporations fell far short of that standard, resulting in today’s guilty plea. My office is committed to holding accountable anyone who engages in fraud and deceit that violates federal law, from an individual to one of the world’s largest automakers.”
“FCA’s attempts to circumvent pollution standards undermine the laws in place to protect human health, the environment, and consumers,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Today’s actions reflect the Justice Department’s continued and steadfast commitment to enforcing the Clean Air Act and holding individuals and companies accountable for corporate wrongdoing.”
“FCA’s engagement in this criminal scheme deceived both their regulators and consumers,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “These regulations have been put in place to protect the health and wellbeing of our citizens and environment. This guilty plea reflects the commitment of the FBI and our local, state, and federal partners to investigate and bring to justice those who engage in fraudulent and harmful practices.”
“Emissions testing is an important requirement of the Clean Air Act because it protects our nation’s air quality,” said Acting Assistant Administrator Larry Starfield for the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance. “Today’s guilty plea demonstrates EPA’s commitment to hold companies like Fiat Chrysler accountable for violating environmental regulations that protect public health and the environment.”
According to the company’s admissions and court documents, beginning at least as early as 2010, FCA US developed a new 3.0-liter diesel engine for use in FCA US’s Jeep Grand Cherokee and Ram 1500 vehicles (the Subject Vehicles) that would be sold in the United States. FCA US designed a specific marketing campaign to market these vehicles to U.S. customers as “clean EcoDiesel” vehicles with best-in-class fuel efficiency. However, according to court documents, FCA US installed software features in the Subject Vehicles and engaged in other deceptive and fraudulent conduct intended to avoid regulatory scrutiny and fraudulently help the Subject Vehicles meet the required emissions standards, while maintaining features that would make them more attractive to consumers, including with respect to fuel efficiency, service intervals, and performance.
Specifically, FCA US purposely calibrated the emissions control systems on the Subject Vehicles to produce less NOx emissions during the federal test procedures, or driving “cycles,” than when the Subject Vehicles were being driven by FCA US’s customers under normal driving conditions. FCA US then engaged in deceptive and fraudulent conduct to conceal the emissions impact and function of the emissions control systems from its U.S. regulators and U.S. customers by (a) submitting false and misleading applications to U.S. regulators to receive authorization to sell the vehicles, (b) making false and misleading representations to U.S. regulators both in person and in response to written requests for information, and (c) making false and misleading representations to consumers about the Subject Vehicles in advertisements and in window labels, including that the Subject Vehicles complied with U.S. emissions requirements, had best-in-class fuel efficiency as measured by EPA testing, and were equipped with “clean EcoDiesel engine[s]” that reduced emissions.
For example, FCA US referred to the manner in which it manipulated one method of emissions control as “cycle detection” and “cycle beating.” Without the “cycle beating” use of this emissions control software, the Subject Vehicles were unable to pass the emissions portions of the federal test procedures while also receiving a fuel efficiency rating that could be marketed to FCA US’s potential customers as “best-in-class,” consistent with FCA US’s 3.0-liter diesel program’s goals, timing, and marketing strategy. Because FCA US knew that the decision to calibrate the emissions control system used on the Subject Vehicles to perform differently “on cycle” versus “off cycle” would be subjected to significant scrutiny by U.S. regulators, FCA US made false and misleading representations to regulators to ensure that it obtained regulatory approval to sell the Subject Vehicles in the United States.
Under the terms of the guilty plea, which remains subject to court approval, FCA US has agreed to continue to cooperate with the Department of Justice in any ongoing or future criminal investigations relating to this conduct. In addition, as part of the guilty plea, FCA US has also agreed to continue to implement a compliance and ethics program designed to prevent and detect fraudulent conduct throughout its operations and will report to the department regarding remediation, implementation, and testing of its compliance program and internal controls.
The government reached this agreement with FCA US based on several factors including, among others, the nature and seriousness of the offense conduct, the company’s failure to voluntarily and timely disclose the conduct that triggered the investigation, and its failure to conduct sufficiently timely or appropriate remedial action. FCA US received credit for cooperation with the department’s investigation and has enhanced, and committed to enhance, its compliance program and internal controls.
Sentencing is scheduled for July 18.
In the related criminal prosecution, three FCA employees, Emanuele Palma, Sergio Pasini, and Gianluca Sabbioni were indicted for conspiracy to defraud the United States and to violate the Clean Air Act and six counts of violating the Clean Air Act. They await trial. An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI and EPA’s Criminal Investigations Division are investigating the case.
Trial Attorneys Jason M. Covert, Kyle W. Maurer, Michael P. McCarthy, and Assistant Chief Michael T. O’Neill of the Criminal Division’s Fraud Section; White Collar Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse of the U.S. Attorney’s Office for the Eastern District of Michigan; and Senior Trial Attorney Todd W. Gleason of the Environment and Natural Resources Division’s Environmental Crimes Section are prosecuting the case.
The Fraud Section uses the Victim Notification System (VNS) to provide victims with case information and updates related to this case. Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing [email protected]. To learn more about victims’ rights, please visit: https://www.justice.gov/criminal-vns/victim-rights-derechos-de-las-v-ctimas. If you believe you are a victim of the conduct described in the plea agreement and criminal information, please visit https://www.justice.gov/criminal-vns/united-states-v-FCA.
Former Treasurer of the Detroit Fire Fighters Union Sentenced to Prison for Stealing over $200,000 in Union FundsRead the Press Release
DETROIT - Verdine Day, the former Treasurer of the Detroit Fire Fighters Union (DFFA), was sentenced to one year in federal prison for embezzling over $200,000 in union funds, announced U.S. Attorney Dawn N. Ison today.
Joining Ison in the announcement were James A. Tarasca, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation and Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
Verdine Day, age 62, was sentenced to one year in prison, $220,043.65 in restitution to the DFFA, and two years of supervised release by United States District George Caram Steeh based on her conviction for bank fraud as charged in an information filed by the U.S. Attorney’s Office.
Day was hired by the Detroit Fire Department in 1986. She worked as a firefighter, engineer, and held other positions in the union before she was elected by her peers to Treasurer of the DFFA in November 2015. She was Treasurer from December 2015 until her retirement from the DFFA and the City of Detroit in September 2019.
During the four years Day was Treasurer of the DFFA, she fraudulently obtained approximately $167,900.00 of union funds by (1) issuing checks in her name and then changing the name of the payee in the Union’s Quickbooks software; (2) cashing checks which were voided by her in Quickbooks; (3) writing checks made payable to cash; and (4) withdrawing cash from DFFA bank accounts. Day also fraudulently obtained money by diverting funds intended by the DFFA to be a donation to the NAACP.
Day also used DFFA credit cards as her own personal credit cards while she was Treasurer and after she retired. In total, she charged approximately $49,116.17 in personal expenses using DFFA credit cards. Her purchases on DFFA credit cards included flights, hotel rooms, cruises, car insurance premiums, satellite and cable TV service, national and state parks fees, and furniture. For example, Day used a DFFA union credit card to charge $9,553 for a cruise with Royal Caribbean cruise lines in 2017. Day also used a union credit card to pay for another Royal Caribbean cruise costing $8,975 on the Liberty of the Seas in 2019. She used the union’s credit card to pay her bar bill at a casino in Ohio in May 2019 and for a meal at a Bubba Gump Shrimp Co. restaurant in Cozumel, Mexico in 2019.
U.S. Attorney Dawn Ison commended the work of the FBI and the Department of Labor in conducting this criminal investigation of a corrupt union officer and said, “Day’s embezzlement was particularly egregious because she stole from the first responders in our community. We will continue to work with our law enforcement partners to root out corruption and fraud involving unions and prosecute union officers who abuse their authority and line their own pockets at the expense of the union’s membership.”
“As treasurer of the Detroit Fire Fighters Association, Verdine Day had a duty to safeguard the dues paid by men and women who put their lives on the line every day to protect our community,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Field Office. “Today’s sentencing makes it clear anyone who attempts to use their union position for personal financial gain will be held accountable by the FBI and our law enforcement partners.”
“Verdine Day embezzled more than $200,000 in union funds in order to personally enrich herself at the expense of the dues-paying Detroit Fire Fighters Association members she was supposed to serve. We will continue to work with our law enforcement partners to pursue union-affiliated corruption investigations,” said Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
The case was prosecuted by Assistant U.S. Attorney Sarah Resnick Cohen. The investigation of this case was conducted by the Federal Bureau of Investigation and the Department of Labor.