Eastern District of Michigan
Press releases recorded for this federal judicial district.
Justice Department Files Lawsuit Against City of Troy, Michigan, for Restrictions on Muslim Religious Group Trying to Establish A Place to WorshipRead the Press Release
The Justice Department today announced that it has filed a lawsuit against the City of Troy, Michigan, alleging that the City violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) by treating places of worship worse than equivalent nonreligious assemblies in its zoning code and denying zoning approval to a Muslim group seeking to establish a place of worship.
“Zoning laws that treat mosques, churches, synagogues, and other religious assemblies less favorably than nonreligious assemblies illegally restrict religious exercise in violation of the Religious Land Use and Institutionalized Persons Act,” said Eric Dreiband, Assistant Attorney General for the Civil Rights Division of the Department of Justice. “The Department of Justice is committed to ensuring that local governments do not discriminate against faith communities in violation of federal law.”
“Troy is obligated to treat religious assemblies and institutions on equal terms with nonreligious assemblies and institutions,” said Matthew Schneider, United States Attorney for the Eastern District of Michigan. “This complaint reflects our commitment to protect the religious liberties of all people in this district.”
The complaint, filed in the Eastern District of Michigan, alleges that in 2018 the City of Troy (City) denied zoning approval to Adam Community Center, an organization of Muslims who live and work in Troy, to operate a place of worship. In 2018, after a nine-year search for a permanent location in Troy, the Center acquired a building in one of the City’s commercial districts to use as a community center and place of worship. The City’s zoning laws allow a nonreligious place of assembly, such as a theater or banquet hall, to use the same building without further approval. But because of zoning restrictions on places of worship, the Center had to overcome an additional hurdle and seek City approval to use the building.
On June 19, 2018, Troy’s zoning board denied the Center’s application. The complaint alleges that the City’s denial of approval for the Center, and its unequal treatment of all places of worship in the City compared to nonreligious uses, violate a provision of RLUIPA that requires religious assemblies to be treated at least as well as nonreligious assemblies. The suit also alleges that the City’s actions imposed a substantial burden on the Center’s religious exercise in violation of another provision of RLUIPA.
RLUIPA is a federal law that protects religious institutions from unduly burdensome or discriminatory land use regulations. In June 2018, the Justice Department announced its Place to Worship Initiative, which focuses on RLUIPA’s provisions that protect the rights of houses of worship and other religious institutions to worship on their land. More information is available at www.justice.gov/crt/placetoworship.
In July 2018, the Department of Justice announced the formation of the Religious Liberty Task Force. The Task Force brings together Department components to coordinate their work on religious liberty litigation and policy, and to implement the Attorney General’s 2017 Religious Liberty Guidance.
Individuals who believe they have been subjected to discrimination in land use or zoning decisions may contact the Civil Rights Division Housing and Civil Enforcement Section at (800) 896-7743, or through the complaint portal on the Place to Worship Initiative website. More information about RLUIPA, including questions and answers about the law and other documents, may be found at http://www.justice.gov/crt/about/hce/rluipaexplain.php.
Former Detroit Police Officer Convicted of Conspiracy to Distribute DrugsRead the Press Release
A former Detroit Police Office was convicted today by a federal jury in Detroit on the charge of conspiracy to distribute controlled substances, U.S. Attorney Matthew Schneider announced today.
Joining Schneider in the announcement were Acting Special Agent in Charge Rainer S. Drolshagen of the Federal Bureau of Investigation’s Detroit Division, and Special Agent in Charge Keith Martin, Drug Enforcement Administration, Detroit Field Division.
The four-day trial was conducted before U.S. District Judge Sean Cox. The jury deliberated approximately one day before convicting Christopher Staton, 52.
According to the evidence presented at trial, Staton, a former officer with the Detroit Police Department, was part of a drug trafficking organization and conspired with Meltwaine Dukes and Sedrick Jackson, both known drug dealers, to distribute and to possess with the intent to distribute controlled substances, including cocaine and fentanyl. Staton used his position as a police officer to assist the drug trafficking organization by running license plates and providing other sensitive law enforcement information. For instance, after a law enforcement officer stopped one of the organization’s drug couriers who was trying to deliver almost one kilogram of fentanyl, Staton provided advice to Dukes about how to handle the situation, and also agreed to find out if the courier was actually arrested. On another occasion, Staton, at the request of Dukes, conducted a staged traffic stop of Jackson, who was transporting drugs or drug proceeds, in order to fool their drug supplier to think that police had taken the drugs / money. Staton was in a police vehicle and armed with a firearm at the time of the stop. Staton was paid $20,000 in cash for performing the staged traffic stop and fake arrest. In addition to using his position as a police officer to assist Dukes and Jackson in running the drug business, Staton was also a drug customer—purchasing drugs from Dukes for re-sale.
“Although the vast majority of police officers in Michigan are fully dedicated to protecting the public, sometimes there is an infrequent example of an officer driven by corruption and greed,” stated United States Attorney Matthew Schneider. “Here, instead of protecting and serving the public, Staton acted at the behest of the drug dealers peddling fentanyl. Nonetheless, former Officer Staton’s actions, while egregious, do not overshadow the outstanding work of so many other great police officers.”
“Christopher Staton turned his back on his oath to serve and protect the citizens of Detroit. He used his position to make it easier for drug traffickers to push controlled substances into our community and now faces justice for his greed,” stated DEA Special Agent in Charge Martin. “I applaud our law enforcement partners and the U.S. Attorney’s Office of Eastern Michigan for their efforts in this investigation.”
“This former officer took illegal advantage of his law enforcement position,” Acting Special Agent in Charge Drolshagen said. “His conviction is a reminder that the laws apply evenly to every Michigan resident, including those who carry badges to uphold them. I extend thanks to our partners at the Drug Enforcement Administration and the Detroit Police Department’s Office of Internal Affairs for their collaboration in removing this individual from his position of authority.”
The case was investigated by the by the FBI Detroit Area Public Corruption Task Force, in collaboration with the Detroit Police Department’s Office of Internal Affairs and the Drug Enforcement Administration. The case is being prosecuted by Assistant U.S. Attorneys Steven Cares and Mitra Jafary-Hariri.
Midland Man Sentenced to 24 Years in Prison for Distribution and Receipt of Child Pornography, and Coercion and Enticement of a MinorRead the Press Release
Seth Ryan Mose, a 35-year-old resident of Midland, Michigan, was sentenced on September 12, 2019, to 290 months in federal prison for one count of Distribution and Receipt of Child Pornography and one count of Coercion and Enticement of a Minor, announced U.S. Attorney Matthew Schneider. Schneider was joined in the announcement by Rainer S. Drolshagen, Acting Special Agent in Charge of the FBI’s Detroit Field Office.
United States District Judge Thomas L. Ludington imposed sentence on Mose following his guilty pleas to Distribution and Receipt of Child Pornography and Coercion and Enticement of a Minor. Ludington also imposed five years of supervised release following his term of imprisonment and restitution payments to identified victims.
According to court documents, between February 2, 2018, and June 12, 2018, Seth Ryan Mose knowingly possessed, distributed, and received approximately 387 photographs and 102 videos containing child pornography through the use of various online social networks and chat rooms. In the fall of 2014, Mose used these social networks and chat rooms to entice a 12-year-old girl to send him nude photographs of herself. Later, Mose traveled from Michigan to Ohio and engaged in sexual contact with the 12-year-old girl, conduct that amounted to rape under Ohio law.
The case was investigated by the FBI and the Michigan State Police’s Computer Crimes Unit and Internet Crimes Against Children Task Force. The case was prosecuted by Assistant United States Attorney Anca Pop.
Former Consultant to Airport Contractor Sentenced for Concealing Scheme to Defraud AirportRead the Press Release
Angelo D’Alessandro, 55, of Shelby Township, was sentenced today to 24 months probation and ordered to pay $73,000 in restitution, as well as a $5,000 fine, after having pleaded guilty to covering up co-defendant Gary Tenaglia’s efforts to defraud the Wayne County Airport Authority (WCAA) of over $1.5 million in 2012 and 2013, United States Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Rainer S. Drolshagen, Acting Special Agent-in-Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Andrea M. Kropf, Special Agent-in-Charge of the Chicago Field Office of the United States Department of Transportation, Office of Inspector General.
According to court records, D’Alessandro, a business associate of Tenaglia’s, owned and operated a construction company, AQD Construction. Beginning in 2012, Tenaglia conceived and executed a scheme to defraud the WCAA by charging for the application of thousands of pounds of deicing salt called, “NAAC,” which was not applied. In order to conceal the fraudulent charges, Tenaglia fabricated invoices showing a purchase of NAAC for the WCAA from D’Alessandro’s construction company, which Tenaglia never purchased. After learning of Tenaglia’s scheme to defraud the airport, and assisting in its concealment, D’Alessandro failed to notify law enforcement of the crime.
The investigation of this case was conducted by the Federal Bureau of Investigation and the Department of Transportation. The case is being prosecuted by Assistant U.S. Attorneys Eaton P. Brown, Paul Kuebler, and R. Michael Bullotta.
UAW International Board Member Arrested and Charged with Embezzling UAW FundsRead the Press Release
A member of the United Auto Workers union’s International Executive Board was arrested today on a federal criminal complaint charging him with conspiring with other UAW officials to embezzle hundreds of thousands of dollars in union money for their own personal benefit along with other crimes, announced U.S. Attorney Matthew Schneider.
Joining in the announcement was Irene Lindow, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Rainer S. Drolshagen, Acting Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, Manny Muriel, 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.
Vance Pearson, 58, of St. Charles, Missouri, was arrested today by federal agents in Missouri after being charged in a federal criminal complaint with taking part in a multiyear conspiracy to embezzle money from the International Union, United Automobile, Aerospace, and Agricultural Workers of America (UAW), to engage in mail and wire fraud, to file false reports with the Department of Labor, and to launder money. Pearson is the UAW’s Director of Region 5, which is headquartered in Hazelwood, Missouri. The UAW’s Region 5 covers the tens of thousands of UAW members from Missouri and the sixteen states to the southwest, including California. As Region 5 Director, Pearson is a member of the UAW’s International Executive Board, which governs the affairs of the union.
Pearson was arrested by federal agents in Missouri on the Detroit criminal complaint, and he is expected to make his initial appearance in federal court in St. Louis before being arraigned in Detroit. The complaint was unsealed after Pearson was arrested.
The Detroit criminal complaint charges Pearson with conspiring with other UAW officials to embezzle UAW money for the personal benefit of Pearson and other senior UAW officials by concealing personal expenditures in the cost of UAW Region 5 conferences held in Palm Springs, California, Coronado, California, and Missouri. Between 2014 and 2018, Pearson and other UAW officials submitted fraudulent expense forms seeking reimbursement from the UAW’s Detroit headquarters for expenditures supposedly incurred in connection with Region 5 leadership and training conferences. In truth, however, Pearson and his co-conspirators used the conferences to conceal the use of hundreds of thousands of dollars in UAW funds to pay for lavish entertainment and personal spending for the conspirators.
For example, Pearson and other senior UAW officials used UAW money to buy sets of golf clubs, individual clubs, and other golf equipment that cost thousands of dollars. In addition, Pearson and other UAW officials spent over $100,000 to purchase golf clothing, shirts, hats, sunglasses, golf balls, jackets, and fashion shorts from various pro shops at golf courses in California and Missouri. Pearson and the conspirators spent tens of thousands of dollars in UAW funds at the Indian Canyons golf course in Palm Springs on green fees for golfing outside of the time periods covered by the UAW Region 5 conferences that were used to conceal the extravagant personal spending of UAW funds.
Pearson and other UAW officials also spent hundreds of thousands of dollars in UAW funds to rent villas with individual pools in gated communities in Palm Springs for senior UAW officials for long periods of time outside of the dates set for the UAW conferences to which they were charged. UAW funds were also used to pay for meals for senior UAW officials at high-end restaurants outside the time periods of the UAW conferences to which they were charged.
The complaint also charges Pearson and his co-conspirators with embezzling over $60,000 for the purchase of boxes of cigars, humidors, cigar cutting equipment, and lighters from 2014 to 2018. The costs of the cigars were hidden within the expenses for the Region 5 conferences. Pearson caused the UAW to file false reports with the Department of Labor wherein the various embezzlement activity was concealed.
During search warrants executed last week in connection with the investigation, agents recovered dozens of cigars, humidors, and other tobacco-related items in the personal residences. In addition, agents seized hundreds of high-end bottles of liquor, hundreds of golf shirts, multiple sets of golf clubs, and tens of thousands of dollars in cash. Agents seized sets of golf clubs from Pearson’s UAW office and from the home of another UAW official that are consistent with the clubs purchased as part of the embezzlement scheme.
Each instance of embezzlement of union funds is punishable by five years in prison and a $10,000 fine. Mail and wire fraud carry a maximum sentence of 20 years imprisonment and a fine of $250,000. Money laundering carries a maximum sentence of 20 years in prison and a fine of up to $250,000.
U.S. Attorney Schneider commended the outstanding work of the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigations, the US Department of Labor – Office of Inspector General and the U.S. Department of Labor – Office of Labor-Management Standards in conducting a comprehensive criminal investigation into labor corruption activities involving a vital sector of the local and national economy.
A criminal complaint is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government's burden to prove guilty beyond a reasonable doubt.
The case is being prosecuted by Assistant U.S. Attorneys David A. Gardey and Steven Cares.
Flint Man Sentenced to 135 Months in Federal Prison for Facebook RobberyRead the Press Release
Rashaaud K. Garrett, 21, of Flint was sentenced on September 12, 2019 to 135 months (11¼ years) in federal prison following his conviction for interference with commerce by robbery and discharging a firearm during a crime of violence, U.S. Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by James Deir, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ Detroit Field Division.
U.S. District Court Judge Matthew F. Leitman imposed sentence on Garrett, a convicted felon, following his guilty pleas to interference with commerce by robbery and discharging a firearm during a crime of violence. Leitman also sentenced Garrett to three years of federal supervised release following his term of incarceration.
According to court documents, in the days leading up to October 7, 2018, Garrett negotiated the sale of his car to the victim using the Facebook Marketplace internet application. On October 7, Garrett picked the victim up in the car and travelled to Pemberton Drive in Flint so Garrett could remove his personal belongings from the car before the sale was finalized. After parking the car, Garrett approached the victim who was seated in the back seat. Garrett brandished his firearm and demanded the victims cash, marijuana, and property. A brief scuffle ensued before the victim was able to escape. The victim fled the scene on foot, leaving behind his cell phone and a quantity of marijuana. As the victim ran from the scene, Garrett discharged his firearm twice. Garrett was arrested several days later following another incident where he discharged his firearm.
When the public and law enforcement work together, violent criminals are held responsible for their actions,” said Special Agent in Charge James Deir. “Rashaaud Garrett’s sentence should serve as a warning. ATF will use every available resource to protect the public from those preying on innocent citizens.”
“Guns in the hands of violent convicted felons is a recipe for disaster. Our office will continue to work with our federal, state, and local law enforcement partners to target violent criminals who use guns to achieve their selfish ends,” said Schneider. Schneider advised the public to be cautious when buying and selling items to strangers they meet online noting that many local police departments allow these transactions to be conducted in their parking lots.
This investigation was conducted by the ATF’s Flint Field Office, the Michigan State Police, and Flint Police Department. The case was prosecuted by Assistant United States Attorney Anthony P. Vance.
Founder of Oakland County Drug Trafficking Organization Sentenced to 36 Years for Distributing Fentanyl-Laced Heroin that Resulted in Dozens of OverdosesRead the Press Release
Kristopher “Flip” Anderson, 43, of Pontiac, was sentenced in United States District Court by the Hon. Robert H. Cleland to 36 years in prison for his role in a multi-year heroin and fentanyl distribution conspiracy that operated from Pontiac and distributed drugs in Oakland and Macomb Counties between 2008 and 2017, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Rainer S. Drolshagen, Acting Special Agent in Charge of the Federal Bureau of Investigation, Detroit Division and Oakland County Sheriff Michael Bouchard made the announcement.
Following a two-week trial in April and May 2019, a jury convicted Anderson of conspiracy to distribute one kilogram or more of heroin and fentanyl that resulted in death and serious bodily injury. The jury also convicted Anderson of distribution of heroin and fentanyl and using a telecommunications device to facilitate drug trafficking.
According to court records and the evidence at trial, Anderson had been convicted of drug offenses in 2008 and 2009, and before reporting to prison, he provided his drug phone to his nephew and co-defendant, Timothy Williams, so Williams could sell heroin to his customers while he was in prison. The conspiracy grew over the next several years as Williams joined forces with friends and other family members to serve an ever-growing customer base. Soon, the group had over 100 daily customers—each buying at least 0.5 to 1 gram of heroin per day at a price of $40 per half gram and $80 per gram. Several members of the group adopted the name, “T.E.A.M.” (To Eat and More) as they expanded the drug business.
Over time, the conspiracy started to sell heroin laced with fentanyl or, in many instances, straight fentanyl. Multiple customers overdosed. Some died. In 2015, Anderson was released from prison and rejoined the group. He sold fentanyl to customers and resumed control of the conspiracy when Williams was arrested. Fentayl sold by Anderson was linked to the fatal overdose of at least one customer.
In addition to Anderson, eleven other members of the conspiracy were charged for their role in distributing heroin and fentanyl. Ten of Anderson’s co-conspirators pleaded guilty, and one died from a heroin overdose awaiting trial.
Pleaded guilty were:
• Timothy Williams, a/k/a “T2,” of 28, of Independent Township, to conspiracy to distribute heroin and fentanyl one kilogram or more of heroin and fentanyl and multiple counts of distribution of heroin and fentanyl resulting in death or serious bodily injury. Awaiting sentence, guidelines range of 360 months to life.
• Deaire Rayford, a/k/a “Mun” and “D-Mun,” of 28, of Auburn Hills, to conspiracy to distribute one kilogram or more heroin and fentanyl. Sentenced to 240 months in prison.
• Christopher Light, 27, of Commerce Township, to conspiracy to distribute one kilogram or more of heroin. Sentenced to 72 months in prison.
• Kourvoisiea Pittman, a/k/a “Kaos,” 28, of Pontiac, to conspiracy to distribute one kilogram or more heroin and fentanyl. Sentenced to 180 months in prison.
• Robert Bell, Jr., a/k/a “Boosha,” 30, of Pontiac, to conspiracy to distribute one kilogram or more heroin and fentanyl. Sentenced to 188 months in prison.
• Deandre Mullen, a/k/a “4-Shot” and “4,” 28, of Pontiac, to conspiracy to distribute one kilogram or more heroin and fentanyl. Sentenced to 225 months in prison.
• Steven Erkins, a/k/a “SQ” and “Kool,” 26, of Pontiac, to conspiracy to distribute one kilogram or more heroin and fentanyl. Sentenced to 211 months in prison.
• Quanzay Milton, a/k/a “Q,” 25, of Pontiac, to conspiracy to distribute one kilogram or more heroin and fentanyl. Sentenced to 121 months in prison.
• Antonio Bell, a/k/a “Tone,” 28, of Pontiac, to conspiracy to distribute one kilogram or more heroin and fentanyl. Sentenced to 166 months in prison.
• James Bellmore, 52, of Pontiac, to conspiracy to distribute one kilogram or more heroin and fentanyl. Sentenced to 74 months in prison.
“This conviction and sentence is particularly important given the breadth of the damage and destruction of lives that this group caused while distributing heroin and fentanyl”, stated US. Attorney Schneider. “Our aggressive prosecution of these offenses and Mr. Anderson’s sentence sends a strong message of deterrence to those who may want to pursue the drug trade as a way of life.”
“This sentence is the culmination of numerous hours of dedicated work by FBI’s Oakland County Violent Gang Task Force members” said Acting Special Agent Rainer S. Drolshagen. “The FBI will continue to aggressively target and prosecute drug trafficking crimes involving heroin as part of the effort to address the ongoing opiate crisis that is threatening the safety of our citizens.”
“I am excited to see this case which was initiated by the Oakland County Sheriff’s Office Narcotic Enforcement Team (NET) have a successful conclusion,” said Sheriff Michael J. Bouchard. “As the case developed, the Oakland County Violent Crime Gang Task Force (VCTGF) joined the investigation and together we were able to successfully identify and prosecute several individuals for federal narcotic crimes. This is a great example of local and federal authorities working together to take down those who pedal this death in our communities.”
Oakland County Sheriff’s Office Sgt. Donald Stevenson and Sgt. Perry Dare of the Oakland County Sheriff’s Narcotics Enforcement Team investigated the case. Assistant U.S. Attorneys Shane Cralle and John O’Brien of the Eastern District of Michigan prosecuted the case.
Former Executive at Adamo Group Sentenced for Conspiracy to Commit Honest Services Fraud in Connection with the Detroit Demolition ProgramRead the Press Release
Anthony Daguanno, 62, was sentenced today to 12 months in prison after having pleaded guilty to charges of conspiracy to commit honest services fraud in connection with the Detroit Demolition Program.
The Honorable Victoria Roberts sentenced Anthony Daguanno to serve 12 months in federal prison following his conviction for conspiracy to commit honest services fraud by taking bribes and kickbacks from a subcontractor while Daguanno was employed as an executive at Adamo Group. Following his release from prison, Daguanno will serve a two year term of supervised release and will complete 72 hours of community service. The court also ordered Daguanno to pay a $10,000 fine and to forfeit $372,750 for the bribes that he took while at Adamo.
The United States Treasury Department created the Blight Elimination Program, which focused on helping communities demolish vacant houses. The program was paid for through the Hardest Hit Fund (HHF), a housing support program intended to protect home values, preserve home ownership and promote economic growth. The City of Detroit was one of the recipients of this HHF money. Approximately $258,656,459 in Hardest Hits Funds have been allocated to the City of Detroit since Oct. 7, 2013.
As stated during Daguanno’s guilty plea, from January 2013 through January 2019, Daguanno was employed as a "Senior Estimator" at Adamo. Daguanno’s responsibilities at Adamo included soliciting bids from subcontractors, assembling bid packages in response to RFPs issued by the City of Detroit and communicating with subcontractors. In assembling the bid packages submitted to the City of Detroit, Daguanno communicated regularly with various subcontractors and kept track of the bids they submitted. "Contractor A" was one of the subcontractors with whom Daguanno communicated. On numerous occasions, Contractor A paid Daguanno money for disclosing confidential information about bids from Contractor A’s competitors. In return for these payments, Daguanno disclosed confidential information about the lowest competitor bid which allowed Contractor A to submit an even lower bid, ensuring that Contractor A was awarded lucrative contracts. In total, Daguanno accepted over $372,000 in bribes and kickbacks on 71 occasions over eight years.
The sentence imposed today demonstrates the Antitrust Division’s commitment to prosecuting conduct that subverts the competitive process and to protecting taxpayer funds.
"The Antitrust Division will aggressively pursue collusion that corrupts the government procurement process," said Assistant Attorney General Makan Delrahim of the Justice Department's Antitrust Division. "The confidential bid information that Daguanno disclosed in exchange for bribes harmed the competitive process on contracts worth millions of dollars. Bid information is confidential for a reason—disclosing it allows a bidder to unlawfully tilt the bidding process in his favor."
"The City of Detroit and its demolition program were entrusted with millions of taxpayer dollars to tear down abandoned houses in Detroit’s neighborhoods. The corruption of the government contracting process by Anthony Daguanno damaged the integrity of the demolition program and broke the public trust. This prosecution serves as a warning to other private sector companies and individuals that soliciting or accepting bribes will be punished and as a promise to the taxpaying public that such violations of the public trust will not be tolerated," said First Assistant U.S. Attorney Saima Mohsin of the Eastern District of Michigan.
"Investigating bribery that harms full and open competition in TARP-funded demolitions is one of SIGTARP’s highest priorities," said Special Inspector General Christy Goldsmith Romero of the Troubled Asset Relief Program (SIGTARP). "Harming competition through bribery is exactly what Anthony Daguanno did in the Blight Elimination Program from its creation in 2013 until charges were brought against him this year. I warn contractors that bribery in this program will be caught and there will be serious consequences."
"Mr. Daguanno was sentenced in federal court today for corrupting the bidding process while seeking contracts through a federally-funded program," said Special Agent in Charge Rainer Drolshagen of the FBI's Detroit Field Office. "The FBI’s Detroit Area Public Corruption Task Force will continue to investigate and fight corruption by those who give illegal, preferential treatment at the expense of honest American business. I would encourage anyone with information about potential public corruption in Michigan to contact FBI Detroit's Public Corruption tipline at 313-965-2222 or our main number at 313-965-2323."
Assistant Attorney General Delrahim and First Assistant U.S. Attorney Mohsin commended the outstanding work of SIGTARP and the FBI in conducting a comprehensive criminal investigation into the demolition program.
The case was prosecuted by Assistant U.S. Attorneys Sarah Resnick Cohen, Karen Reynolds, Adriana Dydell and DOJ Antitrust Trial Attorney Matthew Stegman.
Ypsilanti Man Convicted of Drug Trafficking Resulting in the Death of a VictimRead the Press Release
An Ypsilanti man was convicted today by a federal jury in Detroit on charges of distribution and conspiracy to distribute and to possess with the intent to distribute controlled substances, heroin and fentanyl, resulting in the overdose death of a victim and the serious bodily injury to a second overdose victim, announced United States Attorney Matthew Schneider.
Joining Schneider in the announcement were Keith Martin, Acting Special Agent in Charge of the Detroit Field Division, and Chad Baugh, Deputy Director of Canton Police Department.
Found guilty was Adam Dean Brown, 39. The eleven-day trial was conducted before United States District Judge Sean Cox. The jury deliberated approximately six hours before returning their verdicts. Brown faces mandatory life in prison when he is sentenced on January 8, 2020.
According to the evidence presented at trial, on October 17, 2017, law enforcement responded to a house call where they found an individual deceased in his basement. Officers found a syringe and packet of suspected heroin at the scene and determined the deceased died of an apparent drug overdose. A subsequent investigation revealed that the suspected heroin was actually fentanyl, and that the
22-year old victim died from a fentanyl overdose. Through their investigation, officers learned that the victim purchased the fentanyl from defendant Brown, a previously convicted drug trafficker. Further evidence showed that Brown and co-defendant James Sharp conspired to distribute illegal drugs, including heroin and fentanyl, over a fourteen month period in 2016 and 2017. Co-defendant Terence Robinson connected Brown to the October 17, 2017, overdose victim. Before officers could stop Brown, however, he sold fentanyl to a second local man, leading to his overdose and serious bodily injury. The second victim also overdosed on fentanyl sold by Brown, but the victim’s mother called 911 and first responders worked diligently to revive the victim.
"Overdose deaths from heroin and fentanyl have become a national epidemic, including here in Michigan, and illegal opioid pushers such as Adam Brown are a significant part of our problem,” Schneider said. “Michigan law enforcement is fully committed to battling back against these opioid traffickers and the tremendous pain they are causing to overdose victims and their families.”
“Fentanyl and heroin are causing overdose deaths throughout the state of Michigan in increasing numbers”, stated Acting Special Agent in Charge Martin. “The DEA is committed to aggressively pursuing individuals and Drug Trafficking Organizations who distribute these poisons across the state in order to profit from the destruction of lives and communities.”
“The Canton Police Department is fortunate to be able to partner with the federal government and in this case, provide a voice for the victim and a sense of justice for the family members struggling with the loss of their loved ones,” said Chad Baugh, Deputy Director of Canton Police Department. “We are hopeful this verdict sends a message to drug traffickers in southeast Michigan,” Baugh adds.
James Sharp pleaded guilty to the charge of conspiracy to distribute and possess with intent to distribute controlled substances on January 11, 2019, and was sentenced to 41 months in prison. Terence Robinson pleaded guilty to the charge of conspiracy to distribute and possess with intent to distribute controlled substances, and will be sentenced on October 9, 2019.
This investigation was led by agents of the Drug Enforcement Administration assigned to the Southeast Michigan Regional OCDETF Strike Force along with assistance from the Canton Township Police Department. The case is being prosecuted by Assistant U.S. Attorneys J. Michael Buckley and Hank Moon.
Former Senior UAW Official Pleads Guilty to Taking over $1.5 Million in Bribes and KickbacksRead the Press Release
Michael Grimes, a former high-level official in the UAW’s General Motors Department, pleaded guilty today to conspiring with other UAW officials to engage in honest services fraud by taking over $1.5 million in bribes and kickbacks from UAW vendors and contractors and to conspiring to launder the proceeds of the scheme announced U.S. Attorney Matthew Schneider.
Joining in the announcement were Irene Lindow, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Rainer S. Drolshagen, Acting Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, Manny Muriel, 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.
Michael Grimes, 65, of Ft. Myers, Florida, who is a native of Grand Blanc, Michigan, pleaded guilty to conspiring to engage in honest services wire fraud and to conspiring to launder money between 2006 and 2018. During the plea hearing, Grimes admitted that he conspired with two other high-level UAW officials in the UAW’s GM Department to take millions of dollars in bribes and kickbacks from vendors doing business with the joint UAW-GM Center for Human Resources. The Center for Human Resources is supposed to be a center for training UAW workers employed by GM. Grimes and the other UAW officials served on the Executive Board for the Center for Human Resources, and they were responsible for approving contracts with the vendors. Grimes admitted that over the course of the twelve year conspiracy, he and the other two UAW officials demanded bribes and kickbacks from the vendors in exchange for securing or maintaining contracts with the Center for Human Resources or with the UAW’s GM Department.
Grimes and his co-conspirators took bribes and kickbacks from the vendors in exchange for contracts with the UAW and/or the Center for Human Resources for watches, jackets, backpacks, and UAW stores at GM manufacturing facilities. For example, in 2011, Grimes and two other UAW officials demanded that a vendor give them a $300,000 kickback on a $6 million contract to purchase 50,000 jackets emblazoned with “Team UAW-GM.” Grimes collected the $300,000 kickback and delivered the proceeds to two other UAW officials. In addition, Grimes demanded an additional kickback for $525,000 from the same vendor for the same jacket contract.
In another corrupted contract, Grimes and his UAW co-conspirators demanded kickbacks on a $3.9 million contract for the Center for Human Resources to buy 58,000 watches for all UAW members employed by GM. The UAW officials demanded over $300,000 in kickbacks on the watch contract to be distributed between 2013 through 2016. Some of the kickbacks were distributed in the form of checks disguised as tens of thousands of dollars in payments for “antique furniture.” The majority of the kickbacks were distributed as cash. In 2014, the UAW-GM Center for Human Resources received the 58,000 watches from the vendor. However, the watches were never distributed to UAW members. Instead, the watches have been sitting in storage in a warehouse for over five years.
Besides conspiring with other UAW officials and vendors to the UAW, Grimes also admitted that he conspired to launder the proceeds of the kickback scheme by using various methods to conceal and disguise the bribes and kickbacks through a lengthy and complicated series of financial transactions involving millions of dollars.
Grimes is the ninth defendant to plead guilty in connection with the ongoing criminal investigation into illegal payoffs to UAW officials by FCA executives and corruption within the UAW itself. The following individuals have already pleaded guilty to their participation in the scheme and have been sentenced: 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), and former UAW Vice President Norwood Jewell (15 months in prison).
U.S. Attorney Schneider 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 hard-working members of the UAW deserve to be represented by leaders who give them true leadership — and that means leadership that isn’t driven by corruption and greed,” said United States Attorney Matthew Schneider. “Today’s guilty plea is another step in the right direction of our battle against corruption in the union leadership.”
“Michael Grimes abused his former fiduciary position as an International United Auto Workers Union official by demanding and accepting over $1.5 million in kickbacks from vendors. Grimes chose greed over bargaining in the best interest of UAW members to personally enrich himself. We will continue to work with our law enforcement partners to protect the financial integrity of labor organizations,” stated Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
"Today’s guilty plea highlights a years-long criminal investigation of wrongdoing between high ranking UAW officials and vendors,” said Acting Special Agent in Charge Drolshagen. “The FBI and our federal partners will remain vigilant in our efforts to expose these corrupt fraud schemes that continue to undermine the trust and hard work of union members.”
“For more than a decade Michael Grimes and other UAW officials were part of a corruption club that conspired to launder proceeds generated from the illegal kickback scheme. Grimes and others concealed the source of the money through a series of convoluted transactions totaling millions of dollars. This behavior served one purpose; self-enrichment and this greed became an epidemic throughout the corruption club,” stated Manny Muriel, Special Agent in Charge of Detroit’s IRS Criminal Investigation.
“Michael Grimes betrayed the trust of the union membership who rightfully expected him, as a union official, to protect and safeguard their union’s funds and assets instead of using his position to enrich himself and others within the UAW,” said Thomas Murray, District Director, U.S. Department of Labor, Office of Labor-Management Standards. “The charges filed against Grime leaves no question as to the agency’s commitment to seek justice when anyone puts personal financial gain ahead of the best interests of union members.”
The case is being prosecuted by Assistant U.S. Attorneys Frances Carlson, Eaton Brown and Adriana Dydell.
U.S. Attorney’s Office Reaches Settlement with Roberts Riverwalk Hotel in Detroit to Improve Access for People with DisabilitiesRead the Press Release
The United States Attorney’s Office for the Eastern District of Michigan has reached a settlement agreement with Roberts Hotels Detroit, LLC, owner of the Roberts Riverwalk Hotel in Detroit, Michigan under the Americans with Disabilities Act (ADA), United States Attorney for the Eastern District of Michigan Matthew Schneider announced today. The agreement resolves the U.S. Attorney’s Office’s investigation into a complaint alleging that the hotel was not accessible to individuals who have mobility impairments. Title III of the ADA prohibits businesses who serve the public from discriminating against individuals who have disabilities. The failure to design, construct, or alter facilities in compliance with applicable standards is a form of discrimination under the ADA.
Roberts Hotels Detroit, LLC agreed to make extensive changes to the hotel’s interior and exterior that will improve accessibility for people who have disabilities, including modifications to several guest rooms as well as the hotel’s parking areas. The Roberts Riverwalk Hotel is located at 1000 River Place Drive in the City of Detroit.
“We are thankful to the Roberts Riverwalk Hotel for their willingness to cooperate in our investigation and bring their hotel into legal compliance for people who have disabilities,” United States Attorney Matthew Schneider said. “The Roberts Riverwalk Hotel is part of the revitalization of Detroit, and under this settlement, people with disabilities can continue to share in the City’s revitalization.”
More information about the ADA is available at the Justice Department’s toll free ADA Information line at (800) 514 0301 or (800) 514 0383 (TTY) and on the ADA website at www.ada.gov. ADA 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 Operators of Michigan Adult Foster Care Homes Sentenced for Income and Employment Tax CrimesRead the Press Release
The owners and operators of multiple Michigan adult foster care homes were sentenced today for federal tax crimes. Jeremiah Cheff was sentenced to 27 months in prison, and Nicolette Cheff was sentenced to two years of probation, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Matthew Schneider for the Eastern District of Michigan.
According to court documents and the evidence presented at trial, Jeremiah and Nicolette Cheff (“the Cheffs”) owned and controlled the financial and business operations of 16 foster care homes that cared for individuals with mental illnesses and developmental and physical disabilities. From September 2010 through September 2014, the Cheffs withheld payroll taxes from employees’ paychecks, but failed to timely file payroll tax returns and pay over the withheld funds to the Internal Revenue Service (IRS). Jeremiah Cheff also failed to file several individual income tax returns and, when the IRS attempted to collect unpaid payroll taxes, he sent the IRS a false financial instrument claiming to be worth $80,000 and falsely claimed to a revenue officer that he had paid the taxes due.On April 11, 2017, Nicolette Cheff pleaded guilty to failing to file an Employer’s Quarterly Federal Tax Return and failing to file an Individual Income Tax Return.
On May 20, 2019, a jury found Jeremiah Cheff guilty of 60 counts of willfully failing to account for and pay over payroll taxes. He was also convicted of corruptly endeavoring to obstruct the IRS, and failing to timely file his 2013 through 2015 individual income tax returns.
In addition to the term of imprisonment imposed, United States District Judge Linda V. Parker ordered Jeremiah Cheff to serve two years of supervised release, and ordered both to pay restitution in the amount of $199,647 to the IRS.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Schneider commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Jeffrey A. McLellan and Carl F. Brooker, IV, of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.Man Convicted of Unlawful Imprisonment, Strangulation, Suffocation, and Witness Tampering on Indian ReservationRead the Press Release
A 39-year-old resident of Saginaw, Michigan, Michael Lee Johnson, was convicted today of unlawful imprisonment, assault of a dating partner by strangulation, assault of a dating partner by suffocation, interstate domestic violence, assault by striking, beating, or wounding, and eight counts of witness tampering by a federal jury in Bay City, Michigan, United States Attorney Matthew Schneider announced today.
At the trial before U.S. District Judge Thomas L. Ludington, the evidence established that in October and November of 2018, Johnson held the victim against her will, threatened to kill her, assaulted her numerous time by strangulation, suffocation, and by other means sometimes in front of her children. The evidence also established that after the crimes were committed Johnson attempted to improperly influence or prevent the victim’s testimony in court and her reports to the police. Further two other former intimate partners of defendant testified that he also strangled them in the past and also held them against their will. The crimes occurred on the Isabella Reservation in Mt. Pleasant, Michigan. Under the federal sentencing guidelines, Johnson could be sentenced to over 200 years in prison.”
The case was investigated by the Saginaw Chippewa Police Department and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Roy Kranz and Assistant United States Attorney Tim Turkelson.
Detroit Police Officer Indicted for Taking $15,000 in Cash Bribes from A Drug TraffickerRead the Press Release
City of Detroit Police Officer Michael Mosley, 47, of Detroit, was indicted today by a federal grand jury on two counts of bribery for taking $15,000 in cash bribes from a drug trafficker, United States Attorney Matthew Schneider announced.
Schneider was joined in the announcement by Rainer S. Drolshagen, Acting Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.
According to the indictment, Officer Mosley is a nineteen year veteran of the Detroit Police Department. In April 2019, Mosley was a member of the Police Department’s Major Violators Unit. During an April 3, 2019 search of a drug trafficker’s residence pursuant to a search warrant, Detroit police officers, including Mosley, discovered two kilograms of heroin, one kilogram of cocaine, and six firearms. The drug trafficker then confessed to owning the three kilograms of drugs to Mosley, and the trafficker signed a confession. Subsequent to the April 3 search, Mosley remained in contact with the drug trafficker in an effort to secure the trafficker’s cooperation concerning other criminal activity.
The indictment further alleges that, at a certain point, the drug trafficker offered Officer Mosley a cash bribe of $15,000 in exchange for not pursuing criminal charges based on the three kilogram drug seizure. Officer Mosley agreed to the deal. On May 2, 2019, Officer Mosley collected $10,000 in cash, which the drug dealer had left for Mosley in the backyard of an abandoned house in Detroit. On May 23, Officer Mosley accepted another $5,000 in cash left for him at the abandoned house. In exchange, Officer Mosley gave the trafficker the original copy of the drug trafficker’s signed confession.
Each of the two bribery charges carry a maximum sentence of 10 years imprisonment and a fine of $250,000.
“Although the vast majority of police officers in Michigan are fully dedicated to protecting the public, sometimes there is an infrequent example of an officer driven by corruption and greed,” stated United States Attorney Matthew Schneider. “I am thankful to Detroit Chief of Police James Craig for his commitment to combating corruption, so that the rare example of bribery does not overshadow the outstanding work of so many other great police officers.”
“Officer Mosley allegedly engaged in conduct that betrayed the oath he took to faithfully serve the people of Detroit,” said Acting Special Agent in Charge Rainer S. Drolshagen. “His behavior should not take away from the outstanding work done each day by the vast majority of law enforcement professionals at the Detroit Police Department.”
The investigation of this case was conducted by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney David A. Gardey.
An indictment is only a 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
Three Federal Inmates Charged in Murder of Fellow InmateRead the Press Release
Three inmates at the Milan Correctional Facility in Milan, Michigan, were charged in an indictment unsealed today with first degree premediated murder in the death of a fellow inmate, conspiracy to commit first degree premeditated murder and assault with intent to commit murder, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by FBI Acting Special Agent in Charge Rainer S. Drolshagen and Jason Terris, Warden, Milan Correction Facility.
Charged were:
Alex Albert Castro, 39;
Jason Dale Kechego, 38; and
Adam Taylor Wright, 39. Wright was also charged with assaulting and resisting a law enforcement officer engaged in the performance of his duties.
According to the indictment, beginning in December, 2018, Castro, Kechego and Wright, while incarcerated at the federal detention center in Milan, Michigan, conspired to assault and murder fellow inmates who were thought to be smaller and weaker therefore more vulnerable. It was on January 2, 2019, that the three defendants are alleged to have killed fellow inmate Christian Maire, using a homemade knife commonly referred to as a “shank”. Allegedly, after stabbing Maire several times, the defendants then picked up Maire off the floor and threw his body down a flight of stairs. The defendants are also alleged to have assaulted three other inmates by punching, beating, kicking and stabbing them. Defendant Wright faces additional charges of assaulting a corrections officer and impeding a corrections officer during the assaults on the inmates in order to prevent them from stopping the attacks.
If convicted of the charges, each defendant faces a maximum penalty of life in prison.
An indictment is only a charge and is not evidence of guilt. It will be the government’s burden to prove guilt beyond a reasonable doubt.
This case was investigated by special agents of the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney J. Michael Buckley and Andrew R. Picek.
Macomb Mother Pleads Guilty to Wire Fraud Charges Related to Fraudulent Adoption SchemeRead the Press Release
A Macomb County woman pleaded guilty today on charges of wire fraud in connection to an adoption fraud scheme, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by FBI Acting Special Agent in Charge Rainer S. Drolshagen.
Pleading guilty was Tara Lynn Lee, 38, of New Haven, Michigan.
According to court records, Lee operated in Michigan under the name Always Hope Pregnancy and Education Center. Neither Lee nor her organization were licensed by the State of Michigan to facilitate adoptions or match birth mothers to adoptive families. Yet from 2014 to 2018, Lee repeatedly paired birth mothers with adoptive parents. Lee represented herself to adoptive parents as a licensed social worker with a legitimate adoption agency.
During today’s plea hearing, Lee admitted that on several occasions, she matched more than one set of adoptive parents to a birth mother. Other times, Lee matched adoptive parents with birth mothers that did not exist, were not pregnant, or had not decided to place their child into adoption. Lee requested and received payment from prospective adoptive parents for these fraudulent matches. In her plea agreement, Lee admitted to causing a loss over $250,000.
A sentencing date has been set for November 19, 2019 at 11:30 am before United States District Judge Bernard A. Friedman. Lee’s advisory sentencing guideline range is 97-121 months, and Judge Friedman will determine the ultimate sentence imposed.
A webpage has been created to provide case related information to those affected by the offenses. Please visit www.justice.gov/usaeo-edmi and click the link titled U.S. v. Tara Lee.
The case was investigated by the Detroit FBI, and it is being prosecuted by Assistant U.S. Attorney Sara Woodward.
INNOCENCE LOST NATIONAL INITIATIVE AND OPERATION INDEPENDENCE DAY 2019 FBI Announces New Program Focusing on the Recovery of Child Victims from Commercial Sex TraffickingRead the Press Release
DETROIT – The Department of Justice announced today the FBI-led recovery or identification of 103 child victims and the arrest of 67 sex traffickers through Operation Independence Day. This initiative — a revamping of a previously successful program — was executed during the month of July through 161 operations conducted nationwide.
Operation Independence Day relied on the 86 FBI-led Child Exploitation and Human Trafficking Task Forces (CEHTTFs), which leveraged the resources and intelligence of other federal, state, local, and tribal partners. Overall, more than 400 agencies participate in these task forces.
In Detroit alone, nine juveniles were recovered and identified, two adult victims of sex trafficking were encountered, three pimps/exploiters were arrested and three federal investigations were initiated. Detroit had the third highest number of juveniles recovered and identified in the country. Several local law enforcement agencies participated in the operation which include, Michigan State Police, Detroit Police Department, Romulus Police Department, Canton Police Department, Highland Park Police Department, Madison Heights Police Department, Huron Township Police Department, Livonia Police Department, Roseville Police Department, Southfield Police Department, and the Washtenaw County Sheriff’s Office.
“Child sex traffickers prey on the most vulnerable members of our society – young girls and boys. Through threats, violence and false promises, these traffickers compel their young victims to engage in sex acts for profit”, stated United States Attorney Matthew Schneider. “I commend the hard work and dedication of the FBI, as well as all the state and local law enforcement agencies who took part in this very important operation. We are committed to rescuing victims and putting the perpetrators behind bars.”
"The sale of our children and unsuspecting victims as mere commodities by traffickers is unacceptable and remains one of the highest priorities with the Detroit Division of the FBI," FBI Acting Special Agent in Charge Rainer S. Drolshagen said. “Partnerships established with local, state and federal entities through our Southeast Michigan Trafficking and Exploitation Crimes (SEMTEC) Task Force, it is evident that combating sex trafficking in our communities is of the highest priority and we are honored to be able to lead that charge.”
Operation Independence Day prioritized locating and rescuing missing minors who are at great risk for sexual exploitation, and arresting the traffickers exploiting them. To that end, through its partnership with the National Center for Missing and Exploited Children (NCMEC), FBI special agents and intelligence analysts reviewed information provided through NCMEC’s CyberTipline, to identify missing minor children at risk for sexual exploitation, and then worked with state and local partners to execute law enforcement activity designed to recover those children and arrest traffickers.
The health and welfare of recovered minor and adult trafficking victims was a further priority. To facilitate these efforts, the FBI’s Victim Services Division and victim specialists stationed in each of our 56 field offices also worked closely with the task forces during the operation to ensure recovered children received the help they needed. Victim specialists put internal and external resources in place before the operation to ensure victim assistance was a priority in the aftermath of the law enforcement operations.
In June 2003, the FBI, in conjunction with the Justice Department Criminal Division’s Child Exploitation and Obscenity Section and NCMEC, launched the Innocence Lost National Initiative (ILNI). This combined effort was aimed at addressing the growing problem of domestic sex trafficking of children in the United States. In the years since its inception, the ILNI has expanded to 86 dedicated CEHTTFs. These task forces, with the U.S. Attorney’s Offices and the FBI’s Victim Services Division, have worked successfully to rescue thousands of children.
Through ILNI, the FBI, along with its local law enforcement partners, uses task forces to leverage resources and intelligence to identify and recover child victims and prosecute those responsible for their exploitation. This collaborative effort has led to the recovery or identification of more than 6,600 child victims. The initiative has also led to more than 2,750 convictions, including more than 15 life sentences and many other sentences ranging from 25 years to life.
In 2008, the ILNI initiated Operation Cross Country (OCC)—a focused, national campaign that targeted the venues where children were the victims of commercial sex trafficking. Since 2008, there have been 11 iterations of OCC, recovering more than 900 child victims and arresting nearly 1,400 traffickers. The last operation was held in October 2017 with 78 task forces participating.
The FBI determined that after 11 years of OCC success, it was time to re-evaluate the program. The newly renamed Operation Independence Day was conducted over an entire month, rather than a few days, but continued to focus on the recovery of child victims from commercial sex trafficking.
The FBI’s Crimes Against Children and Human Trafficking Unit and DOJ coordinated the operation. For additional information on Operation Independence Day and the Innocence Lost initiative, please visit: https://www.fbi.gov/oid2019
U.s. Attorney Matthew Schneider to Take Part in 36th Annual National Night OutRead the Press Release
Detroit, MI – U.S. Attorney Matthew Schneider will join law enforcement, community leaders and residents on Tuesday, August 6th at several locations throughout the Detroit to celebrate the 36th annual National Night Out crime and drug prevention event.
National Night Out is a community-building and crime prevention campaign that promotes collaborative law enforcement-community partnerships and neighborhood camaraderie. Thousands of communities nationwide will participate in neighborhood block parties, festivals, cookouts, safety demonstrations, seminars, and activities that heighten crime and drug prevention awareness and generate support for and participation in local anticrime efforts. Events such as these help to strengthen neighborhood spirit, police-community partnerships, and demonstrate a shared commitment for strong and safe communities.
“Reducing violent crime and promoting safety in American communities is a major focus of the Justice Department and U.S. Attorneys across the country,” said Deputy Attorney General Jeffrey A. Rosen. “National Night Out is an opportunity to strengthen the bonds, the respect, and the camaraderie between neighbors and law enforcement officers. These relationships make our country stronger and safer.”
“For 36 years, National Night Out has rallied neighborhood residents, law enforcement and community leaders in the common goal of strengthening relationships to help prevent and deter crime in our local community. I am proud to stand with my colleagues and my neighbors to support safer streets and work together to drive out crime,” said U.S. Attorney Matthew Schneider.
Mr. Schneider will appear at the following Detroit Police precincts throughout the afternoon: 9th Precinct, (Heilmann Recreation Center), 5th Precinct (Jamison Temple), 6th, 8th & 12th Precincts (Peterson Park), 4th Precinct (Patton Park) and 11th Precinct (Neighborhood Policing Unit).
National Night Out organizers are expecting over 16,000 communities and 38 million people nationwide to take part in community events on Tuesday.
Man Gets 15 Years in Federal Prison on Armed Robbery and Gun ChargesRead the Press Release
A 20-year old man from Hawaii was sentenced today to 15 years in federal prison after having pleaded guilty in March to robbing a gun shop and using the stolen firearms to commit armed robberies, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Special Agent in Charge James Deir, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Sentenced was Jeffrey Able.
According to court records, on July 6, 2018, Able broke into the Wicked Trigger Gun Shop in Waterford, Michigan and stole more than 10 firearms. Over the course of approximately four weeks, Able used the stolen firearms to commit armed robberies of several locations in Oakland County.
During his robbery spree, Able would enter the locations brandishing one of the stolen firearms and demand money. Out of fear for their lives, the victims complied and gave Able the money. Able robbed the following locations:
• July 13, 2018 7-Eleven located at 1795 Scott Lake Rd, Waterford;
• July 16, 2018 Mobile Gas Station in Highland Township, Michigan
• July 23, 2018 Alliance Catholic Credit Union in Rochester, Michigan
• August 8, 2018 TCF Bank in Lathrup Village, Michigan
Able took $5,349 from the four locations affected by his robbery spree.
The investigation was led by members of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the FBI Oakland County Gang and Violent Crime Task Force.
The case was prosecuted by Assistant United States Attorney Jihan Williams.
Former UAW Vice President Norwood Jewell Sentenced to Prison for Conspiring with Fiat Chrysler to Accept Illegal PaymentsRead the Press Release
Norwood Jewell, the former Vice President of the International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (“UAW”) and the highest official in the UAW’s Chrysler Department was sentenced to prison today based on his conviction for accepting bribes from high-level executives of Fiat Chrysler Automobiles US LLC (“FCA” or “Fiat Chrysler”), announced U.S. Attorney Matthew Schneider.
Joining in the announcement were Irene Lindow, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Rainer S. Drolshagen, Acting Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, Manny Muriel, 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.
Norwood Jewell, 61, of Swartz Creek, Michigan was sentenced today to 15 months in prison based on his April 2019 conviction for conspiring with other UAW officials and FCA executives to take illegal payments from Fiat Chrysler. Between 2014 and 2016, Jewell was the highest UAW official responsible for administering and negotiating the collective bargaining agreements on behalf of tens of thousands of UAW members employed by FCA. Jewell served as a member of the UAW’s National Negotiating Committee in 2015 responsible for negotiating the collective bargaining agreement between the UAW and Fiat Chrysler.
During the course of the conspiracy, Jewell accepted over $90,000 in illegal payments from Fiat Chrysler for his own personal benefit, for the benefit of his friends, and for the lavish entertainment of the UAW’s senior leadership. Jewell spent tens of thousands of dollars in Fiat Chrysler money to pay for lavish meals, liquor, and cigars for the personal enjoyment of himself and other senior UAW officials. For example, Jewell caused to be spent $6,912.81 in Fiat Chrysler money for liquor and an extravagant meal at the London Chop House in Detroit Michigan in September 2015 for himself and other senior UAW officials, while Jewell and those same UAW officials were negotiating with Fiat Chrysler executives over a new collective bargaining agreement. Jewell also expended thousands of dollars in Fiat Chrysler money to pay for fancy meals, a three bedroom villa with a private pool and hot tub, and twenty-nine rounds of golf for himself and other senior UAW officials in Palm Springs, California. Jewell used Fiat Chrysler money to acquire over $2,000 in tickets and passes at Disney World and Universal Studios in Orlando, Florida for Jewell’s best friend. Finally, Jewell conducted two lavish parties, each costing over $25,000, at the joint UAW/FCA National Training Center for the members of the UAW’s International Executive Board. The parties included thousands of dollars in Fiat Chrysler money spent on twenty boxes of cigars, ultra-premium liquor, personalized bottles of wine, and women paid to light the cigars of senior UAW leaders.
The Court’s sentencing of Jewell marks the eighth defendant to be sentenced in the ongoing criminal investigation into illegal payoffs to UAW officials. On July 13, 2018, defendant Monica Morgan was sentenced to 18 months in prison and ordered to pay $190,747 in restitution for her tax fraud in connection with the receipt of illegal payments by her husband, the now deceased Holiefield, who had served as the Vice President of the UAW in command of the Chrysler Department. On August 27, 2018, Alphons Iacobelli, FCA’s Vice President for Employee Relations, was sentenced to 66 months in prison and ordered to pay $835,523 in restitution for his involvement in the conspiracy to bribe UAW officials and his submission of false tax returns. On November 7, 2018, defendant Jerome Durden, an FCA executive and Controller of the Joint UAW/FCA National Training Center, was sentenced to 15 months in prison and ordered to pay $8,000 in restitution for his involvement in the conspiracy. Also on November 7, 2018, defendant and FCA executive Michael Brown was sentenced to 12 months in prison and ordered to pay a $10,000 fine for lying to and misleading a federal grand jury in order to cover up FCA’s involvement in the conspiracy. Also on November 7, 2018, defendant Keith Mickens, who served as the UAW’s Director of the National Training Center, was sentenced to 12 months in prison and a $10,000 fine for conspiring to take prohibited payments from FCA. On November 13, 2018, defendant Virdell King, a senior UAW official, was sentenced to two months in prison and a fine of $5,500 for her participation in the conspiracy with FCA and other UAW officials. Finally, on December 18, 2018, defendant Nancy A. Johnson, the second highest official in the UAW’s Chrysler Department, was sentenced to 12 months in prison and ordered to pay a $10,000 fine.
“Jewell’s actions as an elected UAW official who took tens of thousands of dollars in illegal payments from Fiat Chrysler amount to a betrayal of the UAW’s members and their families,” said U.S. Attorney Schneider. “Our office will continue to stand up for the men and women of the union by vigorously prosecuting UAW corruption.”
“Mr. Jewell abused his fiduciary position as the former UAW Vice-President by conspiring to accept FCA funds at the expense of the hard working rank and file members of UAW. We will continue to work with our law enforcement partners to protect the integrity of labor unions and their benefit plans,” said Irene Lindow, Special Agent in Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.”
“Mr. Jewell’s criminal conduct was part of a broader pattern of dishonesty and self- enrichment among those convicted as a result of this investigation,” said Rainer S. Drolshagen, Acting Special Agent in Charge, Detroit Division of the FBI. “He chose to take almost $100,000 from FCA for his personal gain instead of looking out for the best interests of UAW members. The FBI and its federal partners will remain vigilant in investigating and exposing anyone – regardless of their position - who violates federal labor laws and betrays the trust of the workers they represent."
“Norwood Jewell betrayed the trust of the union membership who rightfully expected him to protect and safeguard their union’s funds and assets. Instead, Jewell chose to use his elected union position to enrich himself, live a lavish lifestyle, and curry favor with the UAW’s leadership,” said Thomas Murray, District Director, U.S. Department of Labor, Office of Labor-Management Standards. “Jewell’s conviction leaves no question as to the agency’s commitment to root out corruption within the labor community and seek justice when anyone uses their elected position to put their personal financial gain ahead of the best interests of union members.”
These cases are being prosecuted by Assistant U.S. Attorneys David A. Gardey, Erin S. Shaw, and Adriana Dydell.
16 Members of a Violent Gang from Detroit’s Westside Have Been Convicted for Their Roles in a Racketeering ConspiracyRead the Press Release
Sixteen members of the Playboy Gangster Crips, a violent street gang on Detroit’s Westside, have pleaded guilty or were found guilty by a jury, to Racketeer Influenced Corrupt Organization (RICO) conspiracy and other federal offenses in regards to their role in the gang, United States Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Special Agent in Charge James Dier, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Chief James Craig, Detroit Police Department.
Fourteen members of the gang were charged in the fall of 2017 with racketeering conspiracy after an ATF investigation prompted by the murder of two young children in 2016. Two additional defendants were added in a superseding indictment in January 2019. Ultimately, thirteen defendants pleaded guilty, and three elected to go to trial. The three-week trial was conducted in March before United States District Judge Stephen J. Murphy, III. The jury convicted three members of the Playboy Gangster Crips with RICO conspiracy, assault with a dangerous weapon in aid of racketeering, discharging a firearm during and in relation to the assault, and failure to appear.
According to court records and the evidence at trial, the gang operated in northwest Detroit, specifically the area in and around Seven Mile Road between Lahser and Evergreen. Initially, the gang earned money through armed robberies and carjackings, but it focused on drug trafficking and burglaries after several gang members were arrested in 2012 to avoid attention from police. Playboy Gangster Crip members took over a gas station within their territory on Seven Mile Road, which they called the “gang station,” to sell narcotics. Gang members worked in shifts to sell their drugs, but they abandoned the location after police officers from the Eighth Precinct arrested seven different members of the gang fourteen times in 2014 and 2015. Instead, gang members moved to various vacant houses in their territory, including two on the 19000 block of Trinity Street, to conduct many of their illegal narcotics sales. The gang stored handguns and assault rifles in the abandoned houses and in nearby fields to protect their drug sales and their illegal proceeds. Gang members also promoted their drug sales and their firepower on social media, but disputes with rivals still lead to multiple shootings and the arson of one of their drug houses.
In addition to drug trafficking, Playboy Gangster Crips committed several hundred burglaries throughout the westside of Detroit and neighboring communities to earn money for the gang. Gang members would either throw a brick through the window or knock on the door of the targeted house and if no one responded, they would break into the house and steal money, jewelry, and expensive electronics to pawn.
The days surrounding Christmas 2016 illustrate the gang’s violent methods. After a drug customer invited two members of the gang to his house to obtain money to pay for his drugs, the gang members pistol-whipped him and ransacked his home. Later that night, four members of the gang tried to break into a convenience store in Redford, but when they were unsuccessful, they rammed a stolen van through the front of a Boost Mobile Store in an attempt to steal its contents.
Pleaded guilty were:
- Jvon Clements, a/k/a “Toon,” 25, of Detroit, to RICO conspiracy; possession of a firearm in furtherance of a drug trafficking offense; and felon in possession of ammunition. Sentenced to 222 months in federal prison;
- Dawon Taylor, a/k/a “J-9,” 21, of Detroit, to RICO conspiracy;
- Ron Benson Jr., a/k/a “Duke,” 23, of Detroit, to RICO conspiracy. Sentenced to 144 months in federal prison;
- Devante Crockett, a/k/a “TBK,” 22, of Detroit, to RICO conspiracy;
- Davon Moultrie, a/k/a “Blue,” 21, of Detroit to RICO conspiracy. Sentenced to 60 months in federal prison;
- Deondre Casey, a/k/a “Trouble,” of Detroit, to RICO conspiracy. Sentenced to 63 months in federal prison.
- Andre Tinsley, a/k/a “Danger,” 23, of Detroit, to RICO conspiracy. Sentenced to 114 months in federal prison.
- Recharl Boynton, a/k/a “Bear,” “Cee,” 26, of Detroit, to RICO conspiracy. Sentenced to 84 months in federal prison.
- Anthony Marshall, a/k/a “Hitman,” 20, of Detroit, to RICO conspiracy. Sentenced to 70 months in federal prison.
- Nathaniel Brown, a/k/a “Nino,” 23, of Detroit, to RICO conspiracy. Sentenced to 54 months in federal prison;
- Darryl Grizzard, a/k/a “Deezy,” 27, of Detroit, to RICO conspiracy and possession of a controlled substance with intent to distribute. Sentenced to 63 months in federal prison;
- Leslie Winters, a/k/a “Menace”, 21, of Detroit, to RICO conspiracy; and
- Daevon Lowe, a/k/a “Lil’ Dre,” ”Low,” 21, of Detroit to RICO conspiracy
The remaining four defendants face guidelines sentencing ranges between 97 and 262 months in prison.
Found guilty at trial were:
- Winston Hill, a/k/a “Shady Blue,” 23, of Sterling Heights, to RICO conspiracy and failure to appear. Awaiting sentencing.
- Deshaun Tisdale, a/k/a “Havoc,” 23, of Detroit, to RICO conspiracy; assault with a dangerous weapon in aid of racketeering; and using, carrying, and discharging a firearm during and in relation to a crime of violence. Sentenced to 252 months in federal prison; and
- Dangelo Davis, a/k/a “Black,” 27, of Detroit, to RICO conspiracy. Sentenced to 144 months in federal prison.
The defendants convicted at trial face guidelines sentencing ranges between 168 and 413 months in prison.
In addition to the 16 gang members convicted in this case, an associate of the gang, Larry Taylor, 24, of Detroit, has been charged with false declarations before a grand jury or court and obstruction of justice. According to court records, Taylor was convicted of carjacking in March 2016 and told federal agents and a grand jury that Playboy Gangster Crip member Deshaun Tisdale committed the carjacking with him while brandishing a gun. Taylor testified at trial against Tisdale but claimed his accomplice was someone other than Tisdale. If convicted of the offenses, Taylor faces a maximum sentence of life in prison.
“Violent street gangs such as the Playboy Gangster Crips threaten the safety of everyone,” said U.S. Attorney Schneider. “Today’s sentences are an example of how our office is aggressively prosecuting gang members who have wreaked havoc in Detroit.”
“The Playboy Gangster Crips reign of terror on Detroit’s Westside is over,” said ATF Special Agent in Charge James Deir. “We will not tolerate senseless violence in our neighborhoods and with help from our law enforcement partners, ATF will continue to disrupt and dismantle dangerous street gangs and remove them from the community.”
“Ensuring the safety and security of our residents in the city of Detroit is our number one priority. With the collaborative efforts of our federal law enforcement partners, we will continue our efforts to target and dismantle gangs, as well as, other violent offenders that pose a threat to the safety and wellbeing of our City,” said Chief James Craig.
This case was investigated by special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives as well as officers of the Detroit Police Department. The case was prosecuted by Assistant United States Attorneys Jeanine Brunson, Shane Cralle and Michael Heesters.
Fairfield, Ohio Man Was Sentenced on Child Pornography ChargesRead the Press Release
A Fairfield, Ohio man was sentenced yesterday to 250 months’ imprisonment on charges of production of child pornography, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Acting Special Agent in Charge Jeffrey Downey, Federal Bureau of Investigation, Detroit Division.
Sentenced was James Coy Whitaker, Jr., 36.
According to court records, beginning in 2013 and continuing to April 2017, Whitaker enticed and persuaded a minor female to produce images and live stream videos of herself engaging in sexually explicit conduct. Whitaker met the minor female in an online social media chat room and conned the victim into sending him a nude image of herself, which he then used to threaten violence and embarrassment if she did not continue to send sexually explicit photos and videos of herself. This conduct began when the female victim was just 12 years old.
“The images sent to Whitaker are not merely pictures but are a permanent record of the sexual abuse and exploitation of a child,” stated United States Attorney Schneider. “I commend the work of the FBI and Michigan State Police Internet Crimes Against Children Task Force for their dedication to investigating crimes against children.”
This case was investigated by special agents with the FBI and the Michigan State Police Internet Crimes Against Children Task Force, It was prosecuted by Assistant United States Attorneys Christopher Rawsthorne and Ann Nee.
Patient Recruiter Found Guilty in $1.3 Million Medicare Kickback SchemeRead the Press Release
A federal jury in Detroit, Michigan found a patient recruiter guilty today for his role in a scheme involving approximately $1.3 million in fraudulent Medicare claims for home health care that were procured through the payment of kickbacks.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge Timothy Slater of the FBI’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.
Following a six-day trial, Dominic Trumbo, 45, of Lexington, Kentucky, was found guilty of one count of conspiracy to pay and receive health care kickbacks and three counts of receipt of health care kickbacks. Sentencing has been scheduled for Dec. 3, 2019 before Chief U.S. District Judge Denise Page Hood of the Eastern District of Michigan, who presided over the trial.
According to evidence presented at trial, from 2009 to 2017, Trumbo, owner of Trumbo Consulting Agency, engaged in an illegal kickback scheme to defraud Medicare of approximately $1.3 million through fraudulent home health claims. The evidence showed that Trumbo solicited and received kickbacks in exchange for referring Medicare beneficiaries to serve as patients at multiple home health agencies. These home health agencies then submitted claims to Medicare for home health services that were purportedly provided to those beneficiaries.
The FBI and HHS-OIG investigated the case. Trial Attorneys Patrick Suter and Steven Scott of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
Detroit Man Sentenced to 20 Years in Prison for Selling Drugs in A Detroit ParkRead the Press Release
Danny Lee Woods, 46, of Detroit, Michigan, was sentenced on July 23, 2019, to a total of 20 years in federal prison by U.S. District Judge George Caram Steeh, III, for possession with intent to distribute controlled substances and possessing a firearm in furtherance of a drug trafficking crime, announced United States Attorney Matthew Schneider. Woods pleaded guilty on February 27, 2019.
Schneider was joined in the announcement by James M. Deir, Special Agent in Charge of the Detroit Field Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and Detroit Police Department Chief James Craig.
According to court records, Woods, who was on parole at the time, was selling crack cocaine and heroin that was mixed with fentanyl at Sasser Playground, a neighborhood park located in Detroit. While making the sales, Woods had a loaded pistol in his waistband, which Woods later hid behind a tree inside the park. Woods was being surveilled by officers of the Detroit Police Department and was subsequently arrested. The case was adopted for federal prosecution.
As part of his plea, Woods agreed that he qualified as a Career Offender under the Sentencing Guidelines.
"Parks should be a place where families feel safe to gather," said United States Attorney Matthew Schneider. "We will continue to work closely with our local police
partners to prosecute violent offenders who threaten us, so we can protect innocent children and families who just want to enjoy a nice day at the park."
"Danny Lee Woods put innocent lives in danger when he chose to sell drugs and toss a handgun in a public park," said Special Agent in Charge James Deir. "Instead of improving his life following previous felony convictions, Woods continued to break the law. ATF stands with our law enforcement partners to rid our community of dangerous individuals."
"We certainly appreciate the partnership of our federal partners and commend the great work by the men and women of this department," said Detroit Police Chief James Craig. "Our families deserve to have safe and drug free parks and we will not tolerate behavior that will compromise the well-being of our residents. We will continue our efforts in working with our federal agencies in attacking the drug epidemic that plagues our society and dampens the quality of life within our communities."
This case was investigated by special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and officers of the Detroit Police Department. It was prosecuted by Assistant United States Attorneys J. Michael Buckley and Trevor Broad of the United States Attorney’s Office for the Eastern District of Michigan.
Detroit Man Sentenced to 20 Years in Prison for Selling Drugs in A Detroit ParkRead the Press Release
Danny Lee Woods, 46, of Detroit, Michigan, was sentenced on July 23, 2019, to a total of 20 years in federal prison by U.S. District Judge George Caram Steeh, III, for possession with intent to distribute controlled substances and possessing a firearm in furtherance of a drug trafficking crime, announced United States Attorney Matthew Schneider. Woods pleaded guilty on February 27, 2019.
Schneider was joined in the announcement by James M. Deir, Special Agent in Charge of the Detroit Field Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and Detroit Police Department Chief James Craig.
According to court records, Woods, who was on parole at the time, was selling crack cocaine and heroin that was mixed with fentanyl at Sasser Playground, a neighborhood park located in Detroit. While making the sales, Woods had a loaded pistol in his waistband, which Woods later hid behind a tree inside the park. Woods was being surveilled by officers of the Detroit Police Department and was subsequently arrested. The case was adopted for federal prosecution.
As part of his plea, Woods agreed that he qualified as a Career Offender under the Sentencing Guidelines.
“Parks should be a place where families feel safe to gather,” said United States Attorney Matthew Schneider. “We will continue to work closely with our local police partners to prosecute violent offenders who threaten us, so we can protect innocent children and families who just want to enjoy a nice day at the park.”
“Danny Lee Woods put innocent lives in danger when he chose to sell drugs and toss a handgun in a public park,” said Special Agent in Charge James Deir. “Instead of improving his life following previous felony convictions, Woods continued to break the law. ATF stands with our law enforcement partners to rid our community of dangerous individuals.”
“We certainly appreciate the partnership of our federal partners and commend the great work by the men and women of this department,” said Detroit Police Chief James Craig. “Our families deserve to have safe and drug free parks and we will not tolerate behavior that will compromise the well-being of our residents. We will continue our efforts in working with our federal agencies in attacking the drug epidemic that plagues our society and dampens the quality of life within our communities.”
This case was investigated by special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and officers of the Detroit Police Department. It was prosecuted by Assistant United States Attorneys J. Michael Buckley and Trevor Broad of the United States Attorney’s Office for the Eastern District of Michigan.
Detroit Man Sentenced to 20 Years in Prison for Selling Drugs in A Detroit ParkRead the Press Release
Danny Lee Woods, 46, of Detroit, Michigan, was sentenced on July 23, 2019, to a total of 20 years in federal prison by U.S. District Judge George Caram Steeh, III, for possession with intent to distribute controlled substances and possessing a firearm in furtherance of a drug trafficking crime, announced United States Attorney Matthew Schneider. Woods pleaded guilty on February 27, 2019.
Schneider was joined in the announcement by James M. Deir, Special Agent in Charge of the Detroit Field Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and Detroit Police Department Chief James Craig.
According to court records, Woods, who was on parole at the time, was selling crack cocaine and heroin that was mixed with fentanyl at Sasser Playground, a neighborhood park located in Detroit. While making the sales, Woods had a loaded pistol in his waistband, which Woods later hid behind a tree inside the park. Woods was being surveilled by officers of the Detroit Police Department and was subsequently arrested. The case was adopted for federal prosecution.
As part of his plea, Woods agreed that he qualified as a Career Offender under the Sentencing Guidelines.
“Parks should be a place where families feel safe to gather,” said United States Attorney Matthew Schneider. “We will continue to work closely with our local police partners to prosecute violent offenders who threaten us, so we can protect innocent children and families who just want to enjoy a nice day at the park.”
“Danny Lee Woods put innocent lives in danger when he chose to sell drugs and toss a handgun in a public park,” said Special Agent in Charge James Deir. “Instead of improving his life following previous felony convictions, Woods continued to break the law. ATF stands with our law enforcement partners to rid our community of dangerous individuals.”
“We certainly appreciate the partnership of our federal partners and commend the great work by the men and women of this department,” said Detroit Police Chief James Craig. “Our families deserve to have safe and drug free parks and we will not tolerate behavior that will compromise the well-being of our residents. We will continue our efforts in working with our federal agencies in attacking the drug epidemic that plagues our society and dampens the quality of life within our communities.”
This case was investigated by special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and officers of the Detroit Police Department. It was prosecuted by Assistant United States Attorneys J. Michael Buckley and Trevor Broad of the United States Attorney’s Office for the Eastern District of Michigan.
Three Flint Men Charged in Conspiracy to Rob Sanilac County Marijuana Grow OperationRead the Press Release
An indictment was unsealed today charging three Flint men with conspiring to rob a Sanilac County marijuana grow operation, announced U.S. Attorney Matthew Schneider. Joining Schneider in the announcement was Federal Bureau of Investigation Special Agent in Charge Timothy R. Slater. Named in the federal indictment are:
PAUL M. DRINKWINE
a.k.a. Pauli D,JUSTIN D. COOPER,
a.k.a. Just, andJOHN C. WILLIAMS,
a.k.a. Jizzle Will,The indictment alleges that on November 19, 2017, the defendants and others travelled from Flint to a residence in Sanilac County in order steal marijuana and marijuana proceeds. The indictment also alleges that the men covered their faces, put on gloves, and brandished firearms as they approached the home. The men forcibly entered the home and shot the homeowner in the leg. The homeowner survived.
Another resident of the home shot and killed two of the intruders.
The indictment further alleges that the men conspired to distribute the marijuana after the robbery, and that they used their firearms during and in relation to the attempted robbery and conspiracy to distribute the marijuana.
“Drugs are a magnet for violence, and all too often that violence is perpetrated with a gun. Our office will continue to work with our federal, state, and local law enforcement partners to target violent criminals who use guns to achieve their selfish ends,” said Schneider.
“This robbery created an extraordinarily dangerous situation, putting the lives of the residents and the lives of the robbers at risk,” said SAC Slater. “Because of the hard work of the FBI and its law enforcement partners, these men will face the consequences of their reckless actions.”
The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This investigation was conducted by the FBI’s Genesee County Safe Streets Task Force along with the Michigan State Police Crime Laboratory and Sanilac County Sheriff’s Department. The case is being prosecuted by the Flint Branch of the United States Attorney’s Office.
Anyone with information regarding others involved in this incident may contact the FBI Flint Field Office at 810-239-5775.
Former Oakley Police Chief Sentenced to a Year and a Day in Prison for Wire and Tax FraudRead the Press Release
The former police chief of the Village of Oakley, located in Saginaw County, Michigan, was sentenced to a year and a day in prison based on his convictions for wire fraud and filing a false income tax return for 2012, stated United States Attorney Matthew Schneider. Reznick was also ordered to pay $124,078.88 as criminal restitution for unpaid back taxes and $4,553.77 for the costs of prosecution. A civil tax assessment, including penalties and interest, will be made later by the IRS.
Schneider was joined in the announcement by Special Agent in Charge James Dier, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Special Agent in Charge Manny Muriel, Internal Revenue Service, Criminal Investigations (IRS-CI).
Robert J. Reznick, of Swartz Creek, Michigan, was sentenced by United States District Judge Thomas L. Ludington in Bay City, Michigan.
“The vast number of police officers in Michigan are outstanding, dedicated public servants, but unfortunately this case is an exception to that rule,” stated United States Attorney Matthew Schneider. “Former Police Chief Reznick’s prison sentence shows that no one is above the law in Michigan — and that includes those who enforce the law.”
According to court records, Reznick fraudulently used his position as a police chief to obtain reduced prices on firearms, ammunition, and other police equipment from suppliers located both in and outside of Michigan. He then sold the merchandise to his “reserve officers” for his personal profit. Though the population of the Village of Oakley,
located in Saginaw County, was under 300 people, Reznick recruited and maintained a roster of approximately 120 reserve officers for the Oakley Police Department, most of whom were affluent professionals or otherwise prominent individuals who lived outside of, and distant from, the Village of Oakley. Reznick also used his position as police chief to facilitate the sale of assault shotguns, with the capacity to hold 16 rounds, from an out-of-state vendor for some of his customers and thereby enabled the purchasers of those shotguns to evade the federal and state taxes on the transactions.
In addition to the wire fraud charge, Reznick was sentenced for his conviction of willfully filing a false 2012 federal income tax return. Additionally, Reznick acknowledged under-reporting his income on tax returns for additional years and receiving more than $10,000 in criminally-derived income. The criminal tax loss that resulted from Reznick failing to truthfully report all of his personal income totals was approximately $87,702. He had additional unreported income for his business, Due Process of Michigan.
“Instead of protecting and serving his community, Robert Reznick made the decision to break the law for personal gain, and in doing so violated the public’s trust. ATF will never waver in our commitment to protecting the community and we will continue to work with our law enforcement partners to hold all citizens accountable.” said ATF Special Agent in Charge James Deir.
Manny Muriel, Special Agent in Charge of the Detroit’s IRS Criminal Investigation, stated, “Mr. Reznick dishonored his position as police chief and victimized the American taxpayers in the process. IRS‐CI will continue to work diligently with our law enforcement partners to investigate fraudulent tax allegations; no matter who is trying to destroy the integrity of our tax system.”
This case was investigated by special agents from both ATF and IRS-CI and was prosecuted by Assistant U.S. Attorneys from the Flint and Bay City branch offices.
Three Members of Almighty Vice Lords Nation Gang IndictedRead the Press Release
Three members of the Almighty Vice Lords Nation (AVLN) gang were indicted by a federal grand jury in Detroit on charges of conspiracy to distribute and possess with intent to distribute controlled substances such as marijuana, heroin, cocaine, and suboxone; and use of a communication facility to commit the drug conspiracy offense, announced United States Attorney Matthew Schneider. The indictment was unsealed yesterday.
Joining Schneider in the announcement was James M. Deir, Special Agent in Charge of the Detroit Field Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Michigan Department of Corrections (MDOC), Michigan State Police (MSP) and Detroit Police Chief James Craig.
"Our office, along with our State and Federal partners, is committed to aggressively prosecuting members of violent street gangs involved in drug trafficking," stated United States Attorney Matthew Schneider. "We are especially committed to stopping the flow of drugs into the Michigan prison system, especially when it is fueled by gang members of the Vice Lords, and this case is just one example of our teamwork."
"The Michigan State Police, Second District will continue to provide resources to multi-agency task forces consisting of Federal and local partners," stated F/Lt. Michael Shaw, Second District Public Information Officer. "It is through these multi-agency task forces that we can continue to make Michigan a safer place for everyone to work, live and play."
Charged were Johnnie Ross Jr., 47, of Redford, Rishard Collins, 31, of Detroit, and Keith Spann, 39, an inmate currently with the Michigan Department of Corrections.
Collins was separately charged with possession of a firearm in furtherance of the charged drug conspiracy offense.
As alleged in the indictment, the drug conspiracy involved selling drugs in the Detroit area as well as within the MDOC, by smuggling drugs inside the MDOC to Spann who was serving time for two separate 2016 state convictions involving a cocaine possession offense and a marijuana trafficking offense. The indictment alleges that while inside the MDOC, Spann was caught with the drug suboxone and Spann was later convicted in a Jackson county court for the offense of possession of contraband by an inmate.
The Almighty Vice Lords Nation (AVLN) is divided into sub-groups known as "branches" and "decks," including but not limited to the Unknown Vice Lords (UVL), Conservative Vice Lords, (CVL), Traveling Vice Lords (TVL), Renegade Vice Lords (RVL), Insane Vice Lords (IVL), Mafia Insane Vice Lords (MIVL), Imperial Insane Vice Lords (IIVL), Executioner Insane Vice Lords (EIVL), Cicero Insane Vice Lords (CIVL), and 4 Corner Hustler Vice Lords (4CHVL). The indictment alleges that Ross, Collins, and Spann were members of the Vice Lords.
The federal offense of conspiracy to distribute and possess with intent to distribute controlled substances carries a maximum sentence of twenty years. The offense of using a communication facility to commit the drug conspiracy offense carries a maximum sentence of four years. The offense of possession of a firearm in furtherance of a drug trafficking crime carries a mandatory minimum sentence of five years up to a maximum of life; however, it must be served consecutive to any other offense of conviction.
The investigation was a collaboration between the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Michigan Department of Corrections (MDOC), Michigan State Police (MSP), Detroit Police Department (DPD) and members of the Comprehensive Violence Reduction Partnership (CVRP).
An indictment is only a charge and is not evidence of guilt. The defendants are presumed innocent and it is the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant United States Attorneys Terrence Haugabook and Blake Hatlem.
Former Physician Sentenced for Illicit Drug Distribution Activity and Identity TheftRead the Press Release
A Warren man was sentenced today to 64 months in prison for creating and distributing fraudulent controlled substance prescriptions, U.S. Attorney Matthew Schneider announced.
Schneider was joined in the announcement by Special Agent in Charge Timothy R. Slater, Federal Bureau of Investigation, Detroit Division.
According to court records, Dimitar Cvetkoski, 41, posted advertisements on Craigslist illicitly marketing controlled substances. In one advertisement, Cvetkoski wrote: "Have Party favors, Rx, Or whatever you need if you’re interested."
Cvetkoski stole the identities of two local physicians to create the fraudulent prescriptions that he distributed, and attempted to distribute, to third parties. Cvetkoski also created fraudulent prescriptions that he used to obtain controlled substances for himself.
Additionally, Cvetkoski admitted that he engaged in credit card fraud and illicitly possessed approximately 130 credit card numbers belonging to third parties.
Cvetkoski had previously been licensed to practice medicine but his license had lapsed and he was not authorized to prescribe controlled substances while he was engaged in his illicit activity.
Among the controlled substances that Cvetkoski illegally distributed, and attempted to distribute, were numerous opioid-based drugs.
Cvetkoski was sentenced by U.S. District Judge Paul D. Borman.
The case was investigated by the Federal Bureau of Investigation and the Madison Heights Police Department, and was prosecuted by Assistant United States Attorney Andrew J. Yahkind.
Engineering Firm Owner Convicted of Bribing Washington Township OfficialsRead the Press Release
An owner of an engineering firm, Fazullah Khan, 58, of Troy, was convicted today by a jury on all four counts of bribery with which he was charged, United States Attorney Matthew Schneider announced.
Schneider was joined in the announcement by Timothy R. Slater, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.
The five day trial was conducted before United States District Judge Robert H. Cleland in Port Huron, Michigan. The jury deliberated approximately an hour and a half before returning their guilty verdicts.
According to evidence presented at trial, in 2014, Khan bribed one public official of Washington Township with $10,000 in cash in return for a million dollar per year engineering contract, and another public official there with a secret financial interest in a property development deal worth hundreds of thousands of dollars for his assistance with the contract and efforts to get water and sewer lines to Khan’s property. Unbeknownst to Khan, both township officials that he was trying to bribe were working with the FBI.
“Our office is continuing our battle against bribery and corruption every day, and the jury’s guilty verdict shows the people of Michigan won’t stand for this corruption, either,” United States Attorney Matthew Schneider stated.
This case is part of the government’s wide-ranging corruption investigation centered in Macomb County, Michigan. The investigation of this case was conducted by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys R. Michael Bullotta and Steven Cares.
The conviction of Khan brings to 22 the number of individuals convicted in this corruption investigation.
Each of the four bribery charges carries a maximum sentence of 10 years’ imprisonment and a fine of $250,000 Khan is scheduled to be sentenced by Judge Cleland on November 28, 2019
Eastpointe Man Sentenced to 56 Years for Robbing Eight Retail Stores in Armed Robbery SpreeRead the Press Release
An Eastpointe man was sentenced today to 56 years after having been convicted in November, 2018, of robbing eight retail stores at gunpoint between June 26, 2017, and October 18, 2017, and attempting to rob a ninth store, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Special Agent in Charge Timothy R. Slater, Federal Bureau of Investigation.
Sentenced was Mohamed Abdi, 33, of Eastpointe, Michigan.
According to the evidence presented at trial, Mohamed Abdi started his robbery spree on June 26, 2017, when he attempted to rob a Family Dollar located on Nine Mile Road in Eastpointe, Michigan, at gunpoint. That robbery attempt failed when the store clerk was unable to open the register, but undeterred, Abdi drove two miles down the road to a CVS in Warren and robbed it hours later that day.
Abdi proceeded to rob seven other CVS and Rite Aid pharmacies throughout the greater Detroit area. Each time, Abdi walked into the store wearing a baseball hat, sunglasses, and a long sleeve shirt. Abdi waited until the store was empty and then demanded the money from the register while brandishing a handgun tucked in his waistband. In addition to brandishing a gun, Abdi also threatened several of the clerks, including telling the clerk who failed to open her register at the Family Dollar in Eastpointe that she was lucky he did not shoot her.
During his robbery spree, Abdi picked stores that appeared to be empty based on the number of cars in the parking lot and the number of customers in the stores. Abdi robbed the following stores:
- June 26, 2017: CVS Pharmacy, 13608 East Nine Mile Road, Warren
- July 11, 2017: Rite Aid Pharmacy, 15411 Southfield Road, Allen Park
- July 24, 2017: CVS Pharmacy, 27700 Harper Avenue, St Clair Shores
- July 30, 2017: Rite Aid Pharmacy, 35101 East Michigan Avenue, Wayne
- July 31, 2017: CVS Pharmacy, 15051 East Thirteen Mile Road, Warren
- October 16, 2017: CVS Pharmacy, 3647 Dix Avenue, Lincoln Park
- October 17, 2017: CVS Pharmacy, 31240 Harper Avenue, St Clair Shores
- October 18, 2017: CVS Pharmacy, 22515 Mack Avenue, St Clair Shores
Abdi took $2,825.66 from the eight stores affected by his robbery spree.
The investigation was led by members of the FBI Violent Crimes Task Force in conjunction with police departments in Allen Park, Lincoln Park, Livonia, St Clair Shores, Warren, and Wayne.
The case was prosecuted by Assistant United States Attorneys Jeanine Brunson and Shane Cralle.
Bay City Vascular Surgeon Charged in Connection with $60 Million Health Care Fraud & Laundering More Than $49 Million Government Seeks Forfeiture of Approximately $39.9 Million Seized from DefendantRead the Press Release
An indictment unsealed today charges Dr. Vasso Godiali, age 56, vascular surgeon, with orchestrating a $60 million health care fraud scheme. Dr. Godiali is also charged with money laundering, for financial transactions involving approximately $49 million in proceeds he derived from the scheme. The indictment was announced by United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Michigan Attorney General Dana Nessel, Special Agent in Charge Timothy R. Slater of the FBI’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office.
According to the Indictment, Godiali submitted false and fraudulent claims for the placement of stents in dialysis patients and for the treatment of arterial blood clots. The indictment further alleges that Godiali exploited medical billing software to improperly maximize payments from Medicare, Medicaid, and Blue Cross Blue Shield of Michigan. The indictment further alleges Godiali submitted false and fraudulent claims to Medicaid, Medicare, and Blue Cross for services not rendered and that he “unbundled” claims by exploiting modifier-59 to falsely claim he was performing many separate and distinct procedures, when in fact he was entitled to a single reimbursement for a single procedure.
The indictment further alleges that Godiali utilized six corporations through which he laundered approximately $49 million, which he ultimately used to fund investment accounts at multiple financial institutions. In addition, the Indictment alleges that he engaged in money laundering by using proceeds from his scheme to pay property taxes on a Houghton Lake, Michigan, residence.
"This is a large, significant and important prosecution. Health care fraud schemes, such as the one alleged to have been committed by Dr. Godiali, divert millions of dollars from public programs intended to help those in need for the sole purpose of lining the pockets of greedy doctors,” stated United States Attorney Matthew Schneider. “I salute Attorney General Dana Nessel and her staff, along with the entire law enforcement team that labored so tirelessly on this case. The work that culminated in to today’s indictment demonstrates cooperation and teamwork at its best.”
“Flagrant efforts to scam Medicare, Medicaid and Blue Cross Blue Shield of Michigan are despicable in any degree—but particularly so when tens of millions of dollars are involved. Thanks to United States Attorney Matthew Schneider and his team along with the efforts of our own Health Care Fraud Unit and the Michigan Department of Health and Human Services Office of Inspector General staff, which initiated the early investigation into this alleged health care fraud scheme, it has come to a halt,” said Michigan Attorney General Dana Nessel. “Once it became clear that the potential Medicare fraud exposure in this case was ten times what our own Medicaid fraud exposure was, we reached out to the U.S. Attorney’s Office to increase the depth and breadth of the investigation. I am proud of the efforts of everyone involved and look forward to making sure this doctor never sees another dime of taxpayer money.”
“Today’s indictment proves the collective resources of law enforcement and the private sector can successfully combat fraud in our health care system,” said Special Agent in Charge Slater. “Fraud schemes of this type cost tax payers billions of dollars each year and remain a top investigative priority of the FBI, HHS, and insurance companies across the country.”
“Healthcare fraud impacts everyone. The submission of false and fraudulent claims drives up the cost of healthcare and wastes vital taxpayer dollars”, said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General. “The OIG will continue to work with our federal, state, and private sector partners to identify fraud schemes and hold parties that execute these schemes accountable.”
The United States Attorney’s Office also filed a related civil lawsuit seeking the forfeiture of approximately $39.9 million seized from accounts controlled by the defendant or related to four separate real estate transactions.
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.
If convicted of a health care fraud charge, the defendant faces a maximum sentence of imprisonment of ten years, and a maximum fine of $250,000 on each count. If convicted of money laundering, the defendant faces a maximum sentence of twenty years of imprisonment, and a maximum fine of twice the amount laundered.
The case was investigated by Special Agents of the HHS and FBI, with cooperation and assistance from the Michigan Attorney General’s Office, Michigan Department of Health and Human Services - Office of Inspector General.
The case is being prosecuted by Assistant U.S. Attorneys Craig F. Wininger and Philip A. Ross.
Woman Found Guilty of Assaulting Social Security Administration EmployeeRead the Press Release
Latasha Long, 41, of Ann Arbor, Michigan, was found guilty last week of assaulting an employee of the Social Security Administration (SSA), announced U.S. Attorney Matthew Schneider.
Joining Schneider in the announcement was Christopher Kiah, Special Agent in Charge of the Department of Homeland Security, Federal Protective Police.
The two-day jury trial was conducted before U.S. District Judge Judith Levy in Ann Arbor, Michigan. The jury deliberated approximately 90 minutes before returning their verdict.
According to the evidence presented at trial, on August 14, 2018, Long entered the offices of the Social Security Administration in Ann Arbor to discuss issues about her eligibility to continue receiving disability benefits. During her interview, an employee with the SSA informed Long that she had reported income on her tax returns which was too high for her to remain eligible for disability payments. The SSA employee invited Long to provide more evidence of her work and income levels so that SSA could make a determination. Long offered some explanations for her tax returns but the SSA employee explained that the agency already had that information, and that she would need to provide additional evidence. Long became angry and began hurling insults at the employee, calling her a “psycho” and saying that the employee “was the one who should be receiving benefits.” When the employee stood up to close the interview window, Long struck the employee in the face with a large binder, and then grabbed the employee’s shirt, pulling her closer while punching and scratching the employee. The victim sustained bruising and abrasions to her face and arms. The assault was captured on security cameras.
The maximum penalty for assault is 8 years in prison. A sentencing date has been set for November 4, 2019.
The case was investigated by agents of the Department of Homeland Security, Federal Protective Police. The case was prosecuted by Assistant United States Attorneys Thomas Franzinger and Trevor Broad.
Two Men Sentenced to Prison for Their Roles in a Pharmacy RobberyRead the Press Release
Two men from Eastpointe were sentenced today for their role in the robbery of a pharmacy and related drug offenses, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Special Agent in Charge Timothy R. Slater, Federal Bureau of Investigation, Detroit Division.
Sentenced were Larry Baker, III, age 21, and Devin Reed, age 19. Baker was sentenced to 72 months and Reed was sentenced to 60 months today. In addition to the prison sentences, both defendants were ordered to serve 3 years of supervised release. United States District Judge Nancy G. Edmunds of the Eastern District of Michigan imposed the sentences.
According to court records, in the early hours of June 26, 2018, Baker, Reed, and two other individuals broke into a Walgreens pharmacy located in Eastpointe, Michigan and stole two safes filled with prescription medications. They placed the safes in the bed of a stolen truck and drove away. Police encountered the truck and a pursuit ensured. During the pursuit, the safes containing the medications fell from the bed of the truck and broke open. The truck eventually lost control and crashed. Baker, Reed, and the two other individuals then fled on foot. After a foot chase, the police were able to stop and arrest the defendants. The total quantity of drugs taken was over 25,000 pills with a total value of more than $100,000. Many of the pills contained opioids like fentanyl, hydrocodone, and oxycodone.
The investigation of the case was conducted by special agents and task force officers of the Federal Bureau of Investigation. Assistant United States Attorney John Meixner prosecuted the case for the United States.
Leader of Credit Card Fraud Ring SentencedRead the Press Release
A Westland man was sentenced to 60 months in prison today for having organized and executed an elaborate credit card fraud scheme, U.S. Attorney Matthew Schneider announced.
Schneider was joined in the announcement by Special Agent in Charge Timothy R. Slater, Federal Bureau of Investigation, Detroit Division.
According to courts records, Carlton O. Bankhead, 28, designed a scheme to fraudulently purchase, and then resell, merchandise from retailers using stolen credit card information. Bankhead and his crew defrauded retailers throughout the State of Michigan of approximately $90,000 for over a year.
Bankhead, who has over a dozen prior state criminal convictions, including three prior felony convictions for access device fraud, has never previously been sentenced to a term of imprisonment.
“Credit card fraud and identity theft hurt both innocent citizens and local businesses. These crimes throw lives into chaos and cause immense financial damage,” stated United States Attorney Matthew Schneider. “Those who might be tempted to engage in such conduct should know they risk federal prosecution and lengthy imprisonment.”
Bankhead was sentenced by U.S. District Judge Paul D. Borman. Judge Borman also ordered Bankhead to pay restitution to the victims of his fraud.
The case was investigated by the Michigan State Police and the Federal Bureau of Investigation, and was prosecuted by Assistant United States Attorney Andrew J. Yahkind.
Flint Man Receives 200 Months in Prison for Drug-Related Robbery and Drug Dealing While ArmedRead the Press Release
Tavaras Warren, 40, of Flint, Michigan, was sentenced on June 27, 2019 to a total of 200 months in federal prison by United States District Judge Matthew F. Leitman for discharging a firearm during a crime of violence, that is, a drug robbery, and possessing a firearm in furtherance of a drug trafficking crime, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Special Agent in Charge Timothy R. Slater, Federal Bureau of Investigation.
As part of his plea, Warren admitted that on December 3, 2015, he went to the victim’s house after negotiating to sell the victim marijuana. Instead of completing the drug deal, Warren and an accomplice robbed the victim at gun point of approximately $2,500. Warren then shot the victim before fleeing the scene. Warren also admitted that he attempted to obstruct justice by trying to contact the victim through a third party to encourage the victim not to cooperate with law enforcement.
In a separate incident on March 9, 2017, Warren admitted that he possessed crack cocaine with the intent to distribute it while simultaneously being armed with a firearm.
Judge Leitman also ordered Warren to be placed on supervised release following his imprisonment for a period of three years.
The case was investigated by special agents and task force officers with the Federal Bureau of Investigation. This case was prosecuted by Christopher Rawsthorne of the United States Attorney’s Office.
Former Port Huron Pharmacist Pleaded Guilty to Fraudulently Obtaining Powerful PainkillersRead the Press Release
Kyle Wilhelm, 40, a former pharmacist, pleaded guilty yesterday to obtaining controlled substances, including opioids, by fraud U.S. Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Acting Special Agent in Charge Keith Martin of the Drug Enforcement Administration, Detroit Field Division.
Wilhelm pleaded guilty before United States District Judge Mark A. Goldsmith and is scheduled to be sentenced on October 2, 2019.
According to the plea agreement, between February 2015 and February 2018, Wilhelm utilized his position as a hospital pharmacy manager to fill prescriptions for fictitious patients using false birthdates, false addresses, and by the unauthorized use of a medical doctor’s DEA registration number. He failed to compensate his employer for more than $35,000 in controlled substances he fraudulently obtained. In total, he obtained more than 200,000 dosage units of controlled substances such as oxycodone, hydromorphone, and hydrocodone acetaminophen.
Wilhelm faces a maximum sentence of imprisonment of eight years, and a maximum fine of $250,000.
The case was investigated by DEA’s Tactical Diversion Squad. The case is being prosecuted by Assistant U.S. Attorney Philip A. Ross
Michigan Patient Recruiter Sentenced to Prison for $1.5 Million Kickback SchemeRead the Press Release
A Michigan patient recruiter was sentenced to 60 months in prison today for her role in a scheme involving approximately $1.5 million in fraudulent Medicare claims for home health care that were procured through the payment of kickbacks.
Assistant Attorney General Brian A. Benczowski of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge Timothy R. Slater of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office and Special Agent in Charge Manny Muriel of the IRS Criminal Investigation (IRS-CI) Detroit Office made the announcement.
Sophia Eggleston, 57, of Detroit, Michigan, was sentenced by U.S. District Judge Bernard A. Friedman of the Eastern District of Michigan, who also ordered Eggleston to pay approximately $1.5 million in restitution. In November 2018, following a three-day trial, Eggleston was found guilty of one count of conspiracy to receive health care kickbacks and two counts of receipt of health care kickbacks.
According to evidence presented at trial and at the sentencing hearing, from 2009 to 2012, Eggleston and her co-conspirators engaged in an illegal kickback scheme to defraud Medicare of approximately $1.5 million through fraudulent home health claims. The evidence showed that Eggleston solicited and received kickbacks in exchange for referring Medicare beneficiaries to serve as patients at a home health agency owned by her co-conspirators. Eggleston’s co-conspirators then submitted fraudulent claims to Medicare for home health services that were purportedly provided to those beneficiaries.
The court ordered that Eggleston repay as restitution the total amount that the home health agencies received from the Medicare program from her referrals.
The FBI, HHS-OIG and IRS-CI investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. Trial Attorney Howard Locker of the Fraud Section prosecuted the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
The United States Reaches Agreement with Dow Silicones Corporation to Resolve Environmental Violations at Midland Michigan Chemical Manufacturing FacilityRead the Press Release
Today, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced a settlement with Dow Silicones Corporation (DSC), resolving alleged environmental violations at the company’s chemical manufacturing facility in Midland, Michigan, including alleged violations of the Clean Air Act; the Resource Conservation and Recovery Act; the Clean Water Act; the Emergency Planning and Community Right-to-Know Act; and the Comprehensive Environmental Response, Compensation and Liability Act. The alleged violations relate to excess emissions of hazardous air pollutants (HAPs) and volatile organic compounds (VOCs), unauthorized discharges of pollutants, inadequate management of hazardous waste, and untimely reporting of hazardous substance releases.
The consent decree requires DSC to undertake extensive measures that should result in estimated annual emission reductions of 218 tons of HAPs and 43.53 tons of VOCs, as well as estimated annual pollutant reductions of three tons of nitrogen and zinc. In addition, DSC will spend approximately $1.6 million on supplemental environmental projects, including lead abatement projects to protect children from lead-based paint hazards in or near Midland; donation of air monitoring equipment to local responders; and more frequent monitoring and improved repair and replacement procedures for equipment that contains HAPs. DSC will also be required to pay a penalty of $4.55 million.
“This settlement reflects our continued commitment to hold people accountable for violating the nation’s environmental laws,” said Principal Deputy Assistant Attorney General Jonathan Brightbill of the Environment and Natural Resources Division. “The Justice Department is pleased to have worked with our partners at EPA to secure this result, which means improved air and water quality for the people and communities of eastern Michigan.”
“Michigan companies that manufacture, process, and handle dangerous chemicals and substances have a legal and ethical responsibility to ensure that their activities do not pollute our air, our waters, or our ground,” said U.S. Attorney Matthew Schneider for the Eastern District of Michigan. “The United States appreciates the fact that, under this settlement, Dow Silicones Corporation recognizes its responsibilities to both honor federal law and protect the environment.”
“Today’s settlement is one example of how EPA is committed to reducing exposure to hazardous air pollutants and other contaminants in communities across the country,” said EPA Region 5 Administrator Cathy Stepp.
The primary violations alleged in the United States’ complaint consist of DSC’s failure to monitor and repair VOC leaks from thousands of components and properly operate the facility’s thermal oxidizer, which is the facility’s primary HAPs control device, thereby resulting in excess emissions of HAPs; the failure to identify and characterize hazardous waste streams; and the failure to properly manage and monitor stormwater at the facility. Excess emissions of HAPs increase the possibility of exposure to pollutants that are known or expected to cause cancer or other serious health effects, as well as adverse environmental conditions. These health effects can include damage to the immune system, as well as neurological, reproductive (e.g., reduced fertility), developmental, respiratory, and other health problems. Additionally, the failure to properly manage and monitor stormwater may have led to the discharge of pollutants, such as hydrochloric acid, benzene, arsenic and heavy metals, harmful to aquatic species in the Lingle Drain and the Tittabawassee River.
The settlement also requires DSC to: implement a revised benzene sampling plan, a comprehensive leak detection and repair program for equipment, and a compliance plan to remedy all Clean Air Act violations identified through a voluntary audit performed by DSC; implement specified measures to control vent streams that contain HAPs and improve the operation of air pollution control equipment; identify and characterize all hazardous waste streams; implement adequate secondary containment for tanks; evaluate and improve the management and monitoring of stormwater at the facility and update the facility’s Stormwater Pollution Prevention Plan; and implement a revised hazardous substance release reporting policy and training procedures.
The consent decree, lodged in the U.S. District Court for the Eastern District of Michigan, is subject to a 30-day public comment period and approval by the federal court. It is available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html.
Michigan Doctor Sentenced to Prison for His Role in Scheme to Unlawfully Distribute OpioidsRead the Press Release
A Detroit-area doctor was sentenced to 60 months in prison today for his role in a scheme to unlawfully distribute more than 23,000 pills of oxycodone.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge Timothy R. Slater of the FBI’s Detroit Division, Special Agent in Charge Timothy J. Plancon of the U.S. Drug Enforcement Administration (DEA)’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.
Alex Kafi, M.D., 70, of West Bloomfield, Michigan, was sentenced by U.S. District Judge Victoria A. Roberts of the Eastern District of Michigan. Kafi pleaded guilty in August 2018 to one count of conspiracy to distribute controlled substances.
“Betraying his duties as a licensed physician, Alex Kafi, accepted cash in exchange for writing medically unnecessary prescriptions for addictive opioids as part of a scheme that flooded Michigan with thousands of doses of oxycodone,” said Assistant Attorney General Benczkowski. “Holding corrupt doctors accountable is critical to our ongoing efforts to combat the opioid epidemic nationwide and the Department of Justice will continue to aggressively pursue medical professionals like Alex Kafi.”
“Today’s opioid epidemic is fueled, in part, by the greed of certain doctors who knowingly prescribe legitimate pain medications to individuals for no legitimate medical purpose,” said U.S. Attorney Schneider. “Dr. Kafi’s action contributed to Michigan’s opioid crisis for the sole purpose of lining his pockets. We will continue to use every means available to investigate and prosecute these cases.”
“We are committed to investigating medical professionals who use their position to illegally distribute opioids like common drug dealers,” said Special Agent in Charge Slater. “The FBI is unwaveringly committed to working alongside our Strike Force Partners to fight the opioid epidemic and to ensure the deadly practice of over-prescribing highly addictive drugs does not continue unchecked.”
“Today’s sentencing is a reminder of DEA’s determination to bring medical professionals who betray the trust of their community to justice,” said Special Agent in Charge Plancon. “The DEA, through regulation and enforcement, will continue to partner with other law enforcement agencies to identify, investigate, and prosecute licensed Physicians, like Dr. Kafi, who use their medical profession and position to conceal the unlawful diversion and distribution of prescription drugs.”
“Ensuring the appropriate prescribing of opioid medications is essential to protect the health and safety of patients,” said Special Agent in Charge Pugh III. “When physicians act recklessly and in furtherance of their own greed, they only exacerbate the opioid epidemic. The OIG has made combatting the opioid crisis a top enforcement priority and we will continue working with our law enforcement partners to investigate and hold accountable those who act illegally and put patients’ health and safety at risk.”
As part of his guilty plea, Kafi admitted that from 2013 through May 2017, he engaged in a scheme in which he wrote medically unnecessary prescriptions for oxycodone in exchange for cash. Kafi wrote these fraudulent prescriptions often without ever meeting or communicating with the patient. Instead, Kafi conspired with patient recruiters who provided him with lists of patients, along with $300 per prescription of oxycodone, he admitted. Kafi admitted the scheme involved approximately 693,000 mg of oxycodone. He agreed to forfeit $617,208.00, representing proceeds of his criminal activity.
Kafi’s co-defendant Danielle Smith was sentenced by Judge Roberts to serve 32 months in prison on Feb. 7. Additional co-defendant Cheryl Ozoh awaits sentencing. Smith and Ozoh each also pleaded guilty to one count of conspiracy to distribute controlled substances.
The FBI, DEA and HHS-OIG investigated the case. Trial Attorney Steven Scott of the Criminal Division’s Fraud Section is prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and U.S. Department of Health and Human Services (HHS) to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Justice Department Reaches Agreement with City of Eastpointe, Michigan, Under the Voting Rights ActRead the Press Release
The Department of Justice announced today that it has entered into an agreement to settle a voting rights lawsuit with the City of Eastpointe, Michigan. The Department’s lawsuit challenges the method of electing the city council in Eastpointe under Section 2 of the Voting Rights Act. Under this agreement, the city will change its method of electing its city council to ensure compliance with the protections of Section 2.
The agreement, which must be approved by the federal district court in Detroit, was entered into by the parties to resolve the Department’s lawsuit with the City of Eastpointe filed in 2017. The Department’s complaint alleges the current method of election for the Eastpointe City Council results in black citizens in Eastpointe having less opportunity than white citizens to participate in the political process and to elect candidates of their choice to the city council, in violation of Section 2 of the Voting Rights Act.
Subject to court approval, the agreement will alter the method of electing the Eastpointe City Council, from a traditional at-large method of election to one that utilizes ranked choice voting beginning with the November 2019 election. Under the agreement, the city councilmembers will continue to be elected on a citywide basis, but under the new ranked choice voting system, Eastpointe voters will rank city council candidates in their order of preference. The agreement provides that the city will conduct a robust voter education program for the new method of election.
“This agreement reflects the Department’s resolute commitment to vigorous enforcement of the Voting Rights Act to protect the right to vote in all elections,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “We are pleased that the City of Eastpointe has worked cooperatively with the Department to adopt a solution that safeguards the right to vote.”
“Voting is the cornerstone of our Republic, and the Justice Department is committed to protecting and strengthening the right to vote,” stated United States Attorney for the Eastern District of Michigan Matthew Schneider. “This settlement reflects the desire of all of the parties to ensure the citizens of Eastpointe have a meaningful opportunity to choose their elected representatives.”
More information about the Voting Rights Act and other federal voting rights laws is available on the Department of Justice website at https://www.justice.gov/crt/voting-section.
Justice Department Reaches Agreement with City of Eastpointe, Michigan, Under the Voting Rights ActRead the Press Release
The Department of Justice announced today that it has entered into an agreement to settle a voting rights lawsuit with the City of Eastpointe, Michigan. The Department’s lawsuit challenges the method of electing the city council in Eastpointe under Section 2 of the Voting Rights Act. Under this agreement, the city will change its method of electing its city council to ensure compliance with the protections of Section 2.
The agreement, which must be approved by the federal district court in Detroit, was entered into by the parties to resolve the Department’s lawsuit with the City of Eastpointe filed in 2017. The Department’s complaint alleges the current method of election for the Eastpointe City Council results in black citizens in Eastpointe having less opportunity than white citizens to participate in the political process and to elect candidates of their choice to the city council, in violation of Section 2 of the Voting Rights Act.
Subject to court approval, the agreement will alter the method of electing the Eastpointe City Council, from a traditional at-large method of election to one that utilizes ranked choice voting beginning with the November 2019 election. Under the agreement, the city councilmembers will continue to be elected on a citywide basis, but under the new ranked choice voting system, Eastpointe voters will rank city council candidates in their order of preference. The agreement provides that the city will conduct a robust voter education program for the new method of election.
“This agreement reflects the Department’s resolute commitment to vigorous enforcement of the Voting Rights Act to protect the right to vote in all elections,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “We are pleased that the City of Eastpointe has worked cooperatively with the Department to adopt a solution that safeguards the right to vote.”
“Voting is the cornerstone of our Republic, and the Justice Department is committed to protecting and strengthening the right to vote,” stated United States Attorney for the Eastern District of Michigan Matthew Schneider. “This settlement reflects the desire of all of the parties to ensure the citizens of Eastpointe have a meaningful opportunity to choose their elected representatives.”
More information about the Voting Rights Act and other federal voting rights laws is available on the Department of Justice website at https://www.justice.gov/crt/voting-section.
Former Airport Official Convicted in Record Setting Bribe and Kickback SchemeRead the Press Release
A jury convicted a former Wayne County Airport official on ten counts of conspiracy, federal program bribery, federal program theft, money laundering and obstruction of justice, in connection with maintenance and repair contracts for runways and parking structures at Detroit Metropolitan Airport, United States Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Timothy R. Slater, Special Agent-in-Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Andrea M. Kropf, DOT-OIG Regional Special Agent-In-Charge of the Midwestern Region of the United States Department of Transportation, Office of Inspector General.
Convicted was James Warner, 52, of Commerce Township.
The jury deliberated approximately three hours concluding the three-week trial before United States District Judge Victoria Roberts.
According to the evidence provided during trial, from May of 2010, through August of 2014, while employed as a field inspector at the Wayne County Airport Authority (WCAA), Warner engaged in multiple schemes to defraud the WCAA out of millions of dollars. In one scheme, Warner drafted and submitted fraudulently-inflated invoices for work which co-defendant William Pritula, 69, of Romulus, was contracted to perform at the airport. Upon payment by the WCAA to Pritula, Pritula would kickback roughly half of the profits to Warner—a total of over $5 million over four years—the largest bribe prosecuted to date in the Eastern District of Michigan.
In another scheme, Warner drafted and submitted fraudulent invoices on behalf of co-defendant Douglas Earles, 60, of White Late, the owner and operator of North Star Plumbing. In the invoices Warner wrote, he billed the airport for industrial-sized plumbing fixtures which Earles never installed. In exchange, Earles would kickback roughly 40 percent of the profits to Warner--over $100,000 between June of 2010, and August of 2013.
In yet a third conspiracy, Warner demanded money from co-defendant Gary Tenaglia, 65, of Oakland Township. Tenaglia held maintenance and repair contracts for Detroit Metropolitan Airport’s parking structures. Warner both inspected and supervised Tenaglia’s work and concealed any mistakes from the WCAA. In exchange, Warner demanded approximately 10 per cent of each invoice from Tenaglia. In total, Warner paid Tenaglia hundreds of thousands of dollars between May of 2011, and June of 2014. Thus far in the investigation, law enforcement has seized $11.4 million in criminal proceeds including $7.5 million from Pritula and $3.9 million from Warner.
Pritula, Earles, and Tenaglia have been convicted of conspiracy to commit bribery and theft.
Warner left the WCAA in August of 2014. In January of 2017, he began working for the Water and Sewer Department in West Bloomfield Township. Within months, Warner proposed to Tenaglia a continuation of the same scheme the two had at the airport—a demand for 10 percent of each invoice West Bloomfield Township paid Tenaglia.
In addition to the theft, bribery and money laundering offenses, the jury convicted Warner with obstructing justice by altering a document he provided to the FBI during their investigation of this matter.
In total, based on his convictions, Warner is facing a sentencing guidelines range of 292 to 365 months in prison.
United States Attorney Schneider stated, “Today’s conviction reinforces our dedication to prosecuting corrupt public officials who put their own greed over the best interests of the public. This is certainly true here, where the defendant showed little concern for the infrastructure of our very own airport.”
Special Agent-in-Charge Slater stated, "The broad scope of Mr. Warner's crimes demonstrates a profound misappropriation of the public trust. Citizens of the Eastern District deserve integrity and accountability from the officials charged with the operation of all public facilities, including Detroit Metropolitan International Airport. Today's verdict underscores our commitment to holding these officials accountable. I am proud of our investigators and our partners at the Chicago Field Office of the U.S. Department of Transportation, Office of Inspector General, whose collective efforts helped achieve it."
“Today’s conviction of James Warner, whose blatant disregard for his fiduciary responsibility to properly steward taxpayer dollars, sends a clear signal that such gross violations of public trust will not be tolerated,” stated Andrea M. Kropf, DOT-OIG Regional Special Agent-In-Charge. “The professionalism and dedication of the collective law enforcement and prosecutorial team involved in this case is a testament to an effective criminal justice system working tirelessly to protect the taxpayers’ investment in our nation’s infrastructure from fraud and abuse.”
Each theft and bribery charge carries a maximum sentence of 10 years’ imprisonment and a fine of $250,000. Each of the money laundering conspiracy counts carries a maximum sentence of 10 years’ imprisonment and a fine of $250,000. The bribery and theft conspiracy counts carry a maximum sentence of 5 years’ imprisonment and a fine of $250,000. The obstruction of justice count carries a maximum sentence of 20 years’ imprisonment and a fine of $250,000.
A sentencing date has been set for October 8, 2019.
The investigation of this case was conducted by the Federal Bureau of Investigation and the Department of Transportation. The case is being prosecuted by Assistant U.S. Attorneys Eaton P. Brown and Mark Chutkow.
St. Clair Man Sentenced to 40 years for Child Exploitation CrimesRead the Press Release
A St. Clair man was sentenced to 40 years’ imprisonment for convictions of producing child pornography and receiving child pornography online, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Acting Special Agent in Charge Angie Salazar of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Detroit.
According to court records, Thomas Alan Stubbs, 50, pleaded guilty in September, 2018 to sexual exploitation crimes. He admitted that he molested and took sexually explicit photographs of a six year old child. He also admitted to downloading child pornography from the internet. The defendant was apprehended by the Detroit U.S. Marshalls Service in Las Vegas, Nevada, after fleeing the state to avoid prosecution.
This case was investigated by Special Agents of Homeland Security Investigations. The case is part of the Project Safe Childhood initiative, and was prosecuted by Assistant United States Attorney Maggie Smith.
IAV GmbH Sentenced to Pay $35 Million Criminal Fine for its Role in Volkswagen AG Emissions FraudRead the Press Release
IAV GmbH (IAV), a German company that engineers and designs automotive systems, was sentenced in federal court in Detroit today to pay a $35 million criminal penalty.
The penalty is the result of the company’s guilty plea for its role in a long-running scheme for Volkswagen AG (VW) to sell approximately 335,000 diesel vehicles in the U.S. by using a defeat device to cheat on U.S. emissions tests mandated by the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB). During the sentencing hearing, U.S. District Judge Sean F. Cox of the Eastern District of Michigan accepted the parties’ plea agreement, which includes the appointment of an independent corporate compliance monitor for a period of two years.
Principal Deputy Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Matthew J. Schneider of the Eastern District of Michigan, Deputy Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division, Assistant Administrator Susan Bodine of the EPA’s Office of Enforcement and Compliance Assurance and Special Agent in Charge Timothy R. Slater of the FBI’s Field Office made the announcement.
IAV pleaded guilty in December 2018 to participating in a conspiracy to defraud the United States and VW’s U.S. customers and to violate the Clean Air Act by misleading the EPA and U.S. customers about whether certain VW- and Audi-branded diesel vehicles complied with U.S. emissions standards. IAV admitted that it and its co-conspirators knew the vehicles did not meet U.S. emissions standards and worked collaboratively to design, test and implement cheating software to cheat the U.S. testing process. IAV further admitted that it was aware the VW concealed material facts about its cheating from federal and state regulators and U.S. customers. Pursuant to the U.S. Sentencing Guidelines, IAV’s $35 million fine was set according to the company’s inability to pay a higher fine amount without jeopardizing its continued viability.
The case was investigated by the FBI and EPA-Criminal Investigation Division. The prosecution is being handled by Trial Attorneys Philip Trout, Mark Cipolletti and Gary Winters of the Criminal Division’s Fraud Section; Senior Trial Attorney Jennifer Blackwell of the Environment and Natural Resources Division’s Environmental Crimes Section; and White Collar Crime Unit Chief John K. Neal of the U.S. Attorney’s Office for the Eastern District of Michigan. The Criminal Division’s Office of International Affairs also assisted in the case. The Justice Department also extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany.
Michigan Doctor Pleads Guilty to Role in $2.5 Million Medicare Fraud SchemeRead the Press Release
A Southfield, Michigan-based doctor pleaded guilty today for his role in a scheme involving approximately $2.5 million in fraudulent Medicare claims for home health and physician services that were medically unnecessary, not provided and procured through the payment of illegal kickbacks.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Timothy R. Slater of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.
Thomas Mays, M.D., 65, of Farmington Hills, Michigan, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Sean F. Cox of the Eastern District of Michigan. Sentencing has been scheduled for Sept. 20, 2019, before Judge Cox.
As part of his guilty plea, Mays admitted that he offered and provided kickbacks in the form of prescriptions for controlled substances to Medicare beneficiaries who agreed to accept his purported physician services and referrals for home health care services. He further admitted that he prescribed medically unnecessary home health care services to Medicare beneficiaries. The prescriptions, in turn, were used by home health agencies to bill Medicare for home health services purportedly provided to Medicare beneficiaries. Mays billed Medicare for physician services that he purportedly provided to Medicare beneficiaries that were medically unnecessary, never provided and acquired through kickbacks, he admitted.
According to admissions made in connection with his plea, from 2012 to 2018, the intended losses to Medicare as a result of the scheme were approximately $2.5 million.
The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section. Trial Attorneys Jay McCormack and Tom Tynan of the Fraud Section are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Fraudulent Tax Returns Nets Detroit Man Prison TermRead the Press Release
Juan Carlos Pena-Lora, 32 of Detroit, was sentenced to 52 months in prison for negotiating over 2,000 U.S. Treasury income tax refund checks generated from false income tax returns, announced U.S. Attorney Matthew Schneider.
Schneider was joined in the announcement by Manny Muriel, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service - Criminal Investigation.
Imposing the sentenced was U.S. District Judge Sean F. Cox. In addition to the prison time, Judge Cox ordered Pena-Lora to pay $14,286,166.46 in restitution.
According to court records, from 2011 through 2012, Pena-Lora negotiated over 2,000 U.S. Treasury income tax refund checks in the Eastern District of Michigan. As Pena-Lora was well aware, the Treasury checks had been generated through the filing of fraudulent tax returns claiming refunds filed in the names and using the social security numbers of Puerto Rican nationals, but using residential addresses in the United States. Pena-Lora cashed the Treasury tax refund checks at local check cashing stores in the city of Detroit, which Pena-Lora knew were proceeds of illegal activity specifically, Theft of Public Money. Although Pena-Lora is pleading guilty to one count of the indictment, he acknowledges that he was involved in criminal activity which generated losses in the sentencing guideline range of more than $9.5 million.
“The defendant committed crimes of greed by stealing from honest taxpayers,” United States Attorney Matthew Schneider said. “This sentence is a warning to others who would consider committing similar crimes.”
“Pena-Lora bilked the U.S. Treasury and taxpayers out of millions of dollars and because of his actions; he’s going to prison,” said Special Agent in Charge Manny Muriel of IRS Criminal Investigation, adding “IRS CI will continue to devote resources to pursue those who attempt to exploit the tax system.”
The case was investigated by agents of the Internal Revenue Service – Criminal Investigation
Former Owner and Operator of 16 Michigan Adult Foster Care Homes Convicted of Payroll Tax Fraud and Obstructing the IRSRead the Press Release
A Grand Blanc, Michigan, man, who previously operated adult foster care homes, was convicted today of payroll tax fraud, obstructing the Internal Revenue Service (IRS), and failure to file tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Matthew Schneider for the Eastern District of Michigan.
According to court documents and the evidence presented at trial, Jeremiah Cheff owned and controlled the financial and business operations of 16 foster care homes that cared for individuals with mental illnesses and developmental and physical disabilities, including Hunter’s Home, Nico’s Place, Harmony Manor, Hilltop Estates, and Deerwood Manor. From September 2010 through September 2014, Cheff withheld payroll taxes from employees’ paychecks, but failed to timely file payroll tax returns and failed to pay over the withheld funds to the IRS. The jury found Cheff guilty of 60 counts of payroll tax fraud for this misconduct.
Cheff was also convicted of corruptly endeavoring to obstruct the administration of internal revenue laws, and failing to timely file his 2013 through 2015 individual income tax returns. According to court documents and the evidence presented at trial, after the IRS attempted to collect unpaid payroll taxes, Cheff sent an $80,000 false financial instrument to the IRS and falsely claimed to a revenue officer that he had paid the taxes due.
Sentencing is set for Sept. 3. Cheff faces a statutory maximum sentence of five years in prison for each payroll tax fraud count, three years in prison for the corrupt endeavor to obstruct count, and one year in prison for each of the failure to file counts. Cheff will also face a term of supervised release and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Schneider commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Jeffrey A. McLellan and Carl F. Brooker, IV of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Nine Individuals Connected to a Hacking Group Charged with Online Identity Theft and Other Related ChargesRead the Press Release
Six individuals connected to a hacking group known to its members as “The Community” were charged in a fifteen count indictment unsealed today with conspiracy to commit wire fraud, wire fraud and aggravated identity theft, announced United States Attorney Matthew Schneider. In addition, a criminal complaint was unsealed charging three former employees of mobile phone providers with wire fraud in relation to the conspiracy.
Schneider was joined in the announcement by Acting Special Agent in Charge Angie Salazar of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Detroit.
Charged in the indictment were:
Conor Freeman, 20, of Dublin, Ireland
Ricky Handschumacher, 25 of Pasco County, Florida
Colton Jurisic, 20 of, Dubuque, Iowa
Reyad Gafar Abbas, 19, of Rochester, New York
Garrett Endicott, 21, of Warrensburg, Missouri
Ryan Stevenson, 26, of West Haven, Connecticut
Charged in the criminal complaint were:
Jarratt White, 22 of Tucson, Arizona
Robert Jack, 22 of Tucson, Arizona
Fendley Joseph, 28, of Murrietta, California
According to the indictment, the defendants are members of “The Community” and are alleged to have participated in thefts of victims’ identities in order to steal cryptocurrency via a method known as “SIM Hijacking”. Cryptocurrencies, also known as virtual currencies or digital currencies, are online media of exchange. The most famous of these is Bitcoin. Like traditional currency, they act as a store of value and can be exchanged for goods and services. They can also be exchanged for dollars.
“SIM Hijacking” or “SIM Swapping” is an identity theft technique that exploits a common cyber-security weakness – mobile phone numbers. This tactic enabled “The Community” to gain control of victims’ mobile phone number, resulting in the victims’ phone calls and short message service (“SMS”) messages being routed to devices controlled by “The Community”. “SIM Hijacking” was often facilitated by bribing an employee of a mobile phone provider. Other times, SIM Hijacking was accomplished by a member of “The Community” contacting a mobile phone provider’s customer service—posing as the victim—and requesting that the victim’s phone number be swapped to a SIM card (and thus a mobile device) controlled by “The Community”.
The indictment alleges that, once “The Community” had control of a victim’s phone number, the phone number was leveraged as a gateway to gain control of online accounts such as a victim’s email, cloud storage, and cryptocurrency exchange accounts. For example, “The Community” would use their control of victims’ phone numbers to reset passwords on online accounts and/or request two-factor authentication (2FA) codes that allowed them to bypass security measures.
The members of “The Community” charged in the indictment endeavored to gain control of victims’ cryptocurrency wallets or online cryptocurrency exchange accounts and steal victims’ funds. It is alleged in the indictment that the defendants executed seven attacks that resulted in the theft of cryptocurrency valued at approximately $2,416,352.
According to the criminal complaint, defendants White, Jack and Joseph were employees of mobile phone service providers and helped members of “The Community” steal the identities of subscribers to their employers’ services in exchange for bribes.
“Mobile phones today are not only a means of communication but also a means of identification,” stated United States Attorney Matthew Schneider. “This case should serve as a reminder to all of us to protect our personal and financial information from those who seek to steal it.”
“The allegations against these defendants are the result of a complex cryptocurrency and identity theft investigation led by Homeland Security Investigations, which spanned two continents,” said Salazar. “Increasingly, criminal groups are turning exclusively to web-based schemes to further their illicit activities, which is why HSI has developed capabilities to meet these threats head on.”
If convicted on the charge of conspiracy to commit wire fraud, each defendant faces a statutory maximum penalty of 20 years in prison. The charges of wire fraud each carry a statutory maximum penalty of 20 years in prison. A conviction of aggravated identity theft in support of wire fraud carries a statutory maximum penalty of 2 years in prison to be served consecutively to any sentence imposed on the underlying count of wire fraud.
The defendants in this case are presumed innocent. Indictments and criminal complaints are merely charges and it is the government’s burden to prove guilty beyond a reasonable doubt.
This case was investigated by special agents of Immigration and Customs Enforcement with the assistance of Irish law enforcement authorities. The case is being prosecuted by Assistant United States Attorney Timothy Wyse, assisted by Assistant United States Attorney Shankar Ramamurthy and attorneys from the DOJ Office of International Affairs. Special thanks are due to Assistant United States Attorneys and federal agents across the country that provided assistance with arrests and searches conducted on May 9, 2019.