Eastern District of Michigan
Press releases recorded for this federal judicial district.
Canadian Man Found Guilty of Committing Act of Terrorism Transcending National Boundaries and Other OffensesRead the Press Release
A federal jury in Flint, Michigan, today found Amor M. Ftouhi, 51, of Quebec, Canada, guilty of three crimes, including an act of terrorism transcending national boundaries, in conjunction with an attack on Bishop Airport officer on June 21, 2017, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Assistant Attorney General for National Security John C. Demers and Timothy R. Slater, Special Agent in Charge, Federal Bureau of Investigation.
“Ftouhi conducted research in Canada and entered our country with a plan to obtain a weapon and kill American police officers. With today’s guilty verdict, he will be held accountable for his brutal knife attack on an airport police officer in Flint,” said Assistant Attorney General Demers. “I want to thank the prosecutors and law enforcement partners who made this result possible. The National Security Division remains committed to holding accountable all who seek to carry out terrorist attacks on our soil and target our men and women in uniform.”
“Investigating and prosecuting terrorists remains the Justice Department’s highest priority,” stated United States Attorney Matthew Schneider. “The Assistant United States Attorneys who prosecuted this case to trial, as well as our federal and state law enforcement partners, worked tirelessly to investigate this case and bring this would-be murderer to justice.”
“Protecting our citizens and nation from terrorist attack remains the top priority of the FBI,” said Special Agent in Charge Timothy R. Slater, Detroit Division of the FBI. “Today’s conviction is the result of hard work conducted by the men and women of the FBI, our partner agencies on the FBI Detroit Joint Terrorism Task Force, and our foreign partners in the Royal Canadian Mounted Police. I would also like to acknowledge the heroic actions of civilian and law enforcement officers who were present on the day of the attack and likely saved Lt. Neville’s life.”
According to evidence presented at trial, Mr. Ftouhi entered the United States from Canada on a “mission” for the purpose of killing American police officers in the United States. Before entering the United States on June 16, 2017, while in Canada, Mr. Ftouhi conducted online research of American gun laws and for gun shows in Michigan. Mr. Ftouhi subsequently traveled to Michigan where he was unsuccessful in repeated attempts to purchase a gun and purchased a knife instead. On June 20, 2017, Mr. Ftouhi walked up to the victim, who is a lieutenant with the Flint Bishop Airport police and was in full uniform, and stabbed the police officer in the neck twice with a knife. Mr. Ftouhi referenced killings in Syria, Iraq, and Afghanistan, and yelled “Allahu Akbar.” After his arrest, Mr. Ftouhi told law enforcement that he was a “soldier of Allah,” subscribed to the ideology of Al Qaeda and Usama bin Laden and that his plan had been to kill the victim, steal his gun, and kill other police officers in the airport.
The charges carry a statutory maximum penalty of up to life in prison. Sentencing is scheduled before Matthew F. Leitman for March 7, 2019 at 9:30 a.m.
This investigation was conducted by the Detroit Joint Terrorism Task Force, which is led by the FBI with the assistance of the FBI Flint Resident Agency, the Michigan State Police and the Royal Canadian Mounted Police. Additional assistance has been provided by the Flint Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Genesee County Sheriff’s Office.
This case is being prosecuted by Assistant U.S. Attorneys Cathleen M. Corken, Jules DePorres and Craig Wininger of the U.S. Attorney’s Office for the Eastern District of Michigan with the assistance of the Counterterrorism Section of the National Security Division of the Department of Justice.
Canadian Man Found Guilty of Committing Act of Terrorism Transcending National Boundaries and Other OffensesRead the Press Release
Amor M. Ftouhi, 51, of Quebec, Canada, was found guilty of three crimes, including an act of terrorism transcending national boundaries, in conjunction with an attack on a Bishop Airport officer in Flint, Michigan on June 21, 2017.
The announcement was made by Assistant Attorney General for National Security John C. Demers, U.S. Attorney Matthew Schneider for the Eastern District of Michigan, and Special Agent Timothy Slater of the FBI’s Detroit field office.
“Ftouhi conducted research in Canada and entered our country with a plan to obtain a weapon and kill American police officers. With today’s guilty verdict, he will be held accountable for his brutal knife attack on an airport police officer in Flint,” said Assistant Attorney General Demers. “I want to thank the prosecutors and law enforcement partners who made this result possible. The National Security Division remains committed to holding accountable all who seek to carry out terrorist attacks on our soil and target our men and women in uniform.”
“Investigating and prosecuting terrorists remains the Justice Department’s highest priority,” stated U.S. Attorney Schneider. “The Assistant United States Attorneys who prosecuted this case to trial, as well as our federal and state law enforcement partners, worked tirelessly to investigate this case and bring this would-be murderer to justice.”
“Protecting our citizens and nation from terrorist attacks remains the top priority of the FBI,” said Special Agent in Charge Slater. “Today’s conviction is the result of hard work conducted by the men and women of the FBI, our partner agencies on the FBI Detroit Joint Terrorism Task Force, and our foreign partners in the Royal Canadian Mounted Police. I would also like to acknowledge the heroic actions of civilian and law enforcement officers who were present on the day of the attack and likely saved Lt. Neville’s life.”
According to evidence presented at trial, Ftouhi entered the United States from Canada on a “mission” for the purpose of killing American police officers in the United States. Before entering the United States on June 16, 2017, while in Canada, Ftouhi conducted online research of American gun laws and for gun shows in Michigan. Ftouhi subsequently traveled to Michigan where he was unsuccessful in repeated attempts to purchase a gun and purchased a knife instead. On June 20, 2017, Ftouhi walked up to the victim, who is a lieutenant with the Flint Bishop Airport police and was in full uniform, and stabbed the police officer in the neck twice with a knife. Ftouhi referenced killings in Syria, Iraq and Afghanistan, and yelled “Allahu Akbar.” After his arrest, Ftouhi told law enforcement that he was a “soldier of Allah,” subscribed to the ideology of Al Qaeda and Usama bin Laden and that his plan had been to kill the victim, steal his gun, and kill other police officers in the airport.
This investigation was conducted by the Detroit Joint Terrorism Task Force, which is led by the FBI with the assistance of the FBI Flint Resident Agency, the Michigan State Police and the Royal Canadian Mounted Police. Additional assistance was provided by the Flint Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Genesee County Sheriff’s Office in Michigan.
This case is being prosecuted by Assistant U.S. Attorneys Cathleen M. Corken, Jules DePorres and Craig Wininger of the Eastern District of Michigan, with the assistance from the National Security Division’s Counterterrorism Section of the Department of Justice.
Statement of United States Attorneys Matthew Schneider and Andrew Birge Regarding the Passage of Proposal OneRead the Press Release
The people of Michigan have voted to legalize – with certain restrictions – the possession, use, and distribution of marijuana under state law. However, marijuana continues to be an illegal drug under federal law. As the chief federal law enforcement officers in Michigan, we are providing this statement regarding the enforcement of federal marijuana laws in light of the passage of Proposal One.
Because we have taken oaths to protect and defend the Constitution and the laws of the United States, we will not unilaterally immunize anyone from prosecution for violating federal laws simply because of the passage of Proposal One.
We will continue to approach the investigation and prosecution of marijuana crimes as we do with any other crime. We will consider the federal law enforcement priorities set by the United States Department of Justice, the seriousness of the crime, the deterrent effect of prosecution, and the cumulative impact of the crime on a community. As we weigh the interests in enforcing a law, we must also consider our ability to prosecute with our limited resources.
Combating illegal drugs is just one of our many priorities. We are also focused on preventing and prosecuting terrorism, violent crime, gangs, corruption, and fraud. Even within the area of drugs, we are increasingly focused on combating the opioid epidemic, which is killing our citizens at an alarming rate.
Our offices have never focused on the prosecution of marijuana users or low-level offenders, unless aggravating factors are present. That will not change. Nevertheless, crimes involving marijuana can pose serious risks and harm to a community. The seriousness of the offense and impact on a community includes a broad range of related activity and concerns for federal law enforcement. These concerns include, for example: adverse effects of interstate trafficking of marijuana; the involvement of other illegal drugs or illegal activity; persons with criminal records; the presence of firearms or violence; criminal enterprises, gangs, and cartels; the bypassing of local laws and regulations; the potential for environmental contamination; and the risks to minors. We, of course, also have an interest in preventing the cultivation, use and distribution of marijuana on federal property.
These are just examples, and this statement does not limit our discretion to enforce the law. We will continue to work closely with our federal, state, local, and tribal law enforcement partners to assess the federal law enforcement interest for every case as it comes in. When we act, we will act in the interests of public health and safety.
Two Former Fiat Chrysler Executives and a Senior UAW Official Sentenced to Prison for Scheme to Bribe Union OfficialsRead the Press Release
Two high-level executives of Fiat Chrysler Automobiles US LLC (“FCA” or “Fiat Chrysler”) and a senior official of the International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (“UAW”) were sentenced to prison today based on their convictions relating to a scheme to bribe UAW officials by Fiat Chrysler, announced U.S. Attorney Matthew Schneider.
Joining in the announcement were Manny Muriel, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations, James Vanderberg, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Timothy Slater, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, and Thomas Murray, District Director, U.S. Department of Labor, Office of Labor-Management Standards.
Jerome Durden, 62, of Rochester, Michigan, was sentenced today to 15 months in prison based on his prior August 2017 guilty plea to conspiracy to defraud the United States before United States District Judge Paul D. Borman. Durden was a former Financial Analyst for Fiat Chrysler, and he had served as the Controller of the joint UAW-Chrysler National Training Center between 2008 and 2015. Durden presented false tax returns on behalf of the National Training Center and a “charitable” organization associated with former UAW Vice President General Holiefield known as the Leave the Light On Foundation in order to conceal over $1.5 million in illegal payments by Fiat Chrysler to senior UAW officials through the National Training Center and the foundation, all done in an effort to affect the labor-management relationship between Fiat Chrysler and the UAW. The senior UAW officials who were bribed included UAW Vice President Holiefield, UAW Assistant Director Virdell King, senior UAW official Keith Mickens, senior UAW official Nancy A. Johnson, who served as the second in command of the UAW’s Chrysler Department from July 2014 through 2016, and others.
The illegal payments included paying off the mortgage on Holiefield’s home, first-class airline travel, designer clothing, furniture, jewelry and custom-made watches.
Keith Mickens, 64, of Clarkston, Michigan was sentenced today to 12 months in prison based on his April 2018 conviction to conspiring with other UAW officials and FCA executives to take illegal payments from Fiat Chrysler. Between 2010 and 2014, Mickens was one of the senior UAW officials responsible for administering the collective bargaining agreements on behalf of tens of thousands of UAW members employed by FCA. Mickens served as a member of the UAW’s National Negotiating Committee in 2011 and was one of the UAW officials responsible for negotiating the collective bargaining agreements between the UAW and FCA. He also served as the co-Director of the National Training Center.
Mickens has admitted to helping transfer over $700,000 from FCA to former UAW Vice President Holiefield using two companies that Holiefield controlled with Monica Morgan, Holiefield’s girlfriend and later wife. FCA executives concealed the illegal payments using the bank account of the UAW-Chrysler National Training Center.
Separate from the illegal activities involving UAW Vice President Holiefield, Mickens admitted that he and other senior UAW officials also accepted thousands of dollars’ worth of clothing, electronics, golf equipment, and other personal items that were paid for by FCA.
Michael Brown, 60, of West Bloomfield, Michigan was sentenced to 12 months in prison based on his felony conviction for providing misleading and incomplete testimony to a federal grand jury. Brown misled the grand jury in a deliberate effort to conceal the existence of the conspiracy to bribe UAW officials by FCA, FCA executives acting in the interest of FCA, the UAW, and UAW officials. Between 2009 and 2016, Brown was employed as a Director for Employee Relations at Fiat Chrysler.
The Court’s sentencings of Durden, Brown, and Mickens mark the third, fourth, and fifth defendants 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 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.
“The Court’s sentences today are further strides forward in our effort to root out corruption in the leadership of the UAW because of illegal payments by Fiat Chrysler and its executives,” said United States Attorney Matthew Schneider. “We want the hard working men and women of the union to know that federal law enforcement will uncover, prosecute, and punish any effort to undermine their collective bargaining process.”
Manny Muriel, Special Agent in Charge of IRS Criminal Investigation’s Detroit office, stated, “Corporate Fraud continues to be a top priority for IRS Criminal Investigation. When executives abuse the power they are given, it undermines our trust in the business sector and compromises the integrity of our economic and political system. Today’s sentencings serve as a warning to those who hold positions of trust and leadership. Muriel continued, “IRS-CI and its law enforcement partners will continue to work together to uncover these schemes and hold the corporate and union executives accountable.”
“Mickens, a former senior UAW official, conspired with former FCA management officials, including Durden, to accept illegal payments and other things of value from FCA in exchange for manipulating the collective bargaining agreement process at the expense of UAW members. We will continue to work with our law enforcement partners and the U.S. Department of Labor’s Office of Labor-Management Standards to safeguard the assets of union members,” said James Vanderberg, Special Agent-In-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
“Today’s sentencings of former FCA executives and a senior UAW official once again demonstrate that those who seek personal gain through deception and fraud will be brought to justice,” said Timothy R. Slater, Special Agent in Charge, Detroit Division of the FBI. “The FBI and our law enforcement partners remain committed to the dogged pursuit of all those responsible for corrupting the collective bargaining process and stealing from the many hardworking and dedicated auto workers in our community.”
“Protecting members against corruption perpetrated by their union leaders is critical to the mission of the Office of Labor-Management Standards (OLMS),” said Thomas Murray, District Director, U.S. Department of Labor, Office of Labor-Management Standards. “OLMS thanks the United States Attorney’s Office for vigorously prosecuting those involved in the conspiracy. We will continue to work cooperatively with our law enforcement partners to ensure that anyone who abuses their union position for personal financial gain will be brought to justice.”
These cases are being prosecuted by Assistant U.S. Attorneys David A. Gardey, Erin S. Shaw, and Adriana Dydell.
Ten Individuals Charged in Drug ConspiracyRead the Press Release
An indictment was unsealed today charging 10 individuals with conspiring to distribute cocaine and cocaine base, announced U.S. Attorney Matthew Schneider. Joining Schneider in the announcement was Federal Bureau of Investigation Special Agent in Charge Timothy Slater. Named in the federal indictment were:
RODNEY DUANE OBRYAN, 52 of Saginaw,
DEMETRIUS TYRONE CHAPPELL, 48 of Redford Township,
DEVITRI DESHAUNE SANTOS, 40 of Saginaw,
CHRISTOPHER LAWRENCE ROY, 46 of Detroit,
MALCOLM DWIGHT OBRYAN, 60 of Grand Rapids,
KEVIN DEWAYNE SHACKS, 52 of Saginaw,
ROBERT EARL BROOKS, 46 of Saginaw,
EDWARD BRYANT JR., 58 of Saginaw,
THOMAS JAMAR MCKINLEY, 44 of Saginaw, and
MACK ADAM MCCLAIN, 32 of Saginaw
"We intend to continue to do all we can to rid our community and our neighborhoods of illegal drugs and the violence and dysfunction that accompany them,” stated United States Attorney Schneider. “I’d like to thank the entire law enforcement team that worked so hard on this case. This case demonstrates cooperation and teamwork at its best.”
“Today’s arrests in metro Saginaw, Grand Rapids, and Detroit highlight the positive impact of collaboration among federal, state, and local law enforcement upon communities throughout Michigan when we use every tool available to combat violent drug trafficking organizations wreaking havoc on our neighborhoods and flooding our communities with dangerous narcotics,” said Timothy R. Slater, Special Agent in Charge, Detroit Division of the FBI. “Everyone deserves to live in a safe environment free from illicit narcotics and the violence that goes hand-in-hand with these criminal activities. Only concerted collaboration – both among law enforcement and with our community members – will safely return our neighborhoods to the families living their lives in these communities each day. The FBI is proud to work side-by-side with each law enforcement agency involved in this investigation and today’s arrests, to include: the FBI Bay City Resident Agency Mid-Michigan Safe Streets Task Force, DEA, and ATF; the Bay Area Narcotics Enforcement Team, Flint Area Narcotics Group, and Western Wayne Narcotics Unit; the Michigan State Police, Bay City Police Department, Saginaw Police Department, and Detroit Police Department; and the Michigan National Guard.”
The indictment alleges that since at least the summer of 2017, the defendants conspired to possess with the intent to distribute and to distribute cocaine and cocaine base. The indictment alleges that over 500 grams of cocaine was involved in the conspiracy.
In conjunction with the unsealing of the indictment, FBI special agents, along with agents and officers from other federal, state, and local law enforcement agencies, executed numerous search warrants at various locations throughout Michigan.
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 Mid-Michigan Safe Streets Task Force along with the DEA, ATF, Michigan State Police, Bay City Police Department, Saginaw Police Department, Western Wayne Narcotics Unit, and the Michigan Army National Guard. The case is being prosecuted by Assistant U.S. Attorney Tim Turkelson.
Detroit Police Officer Indicted for Participation in Drug ConspiracyRead the Press Release
A federal grand jury returned an indictment yesterday charging Detroit Police Officer Christopher Staton, 51, of Detroit, with one count of conspiracy to distribute controlled substances and one count of making a false statement to a special agent of the FBI, 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, Timothy Plancon, Special Agent in Charge of the Detroit Field Division of the Drug Enforcement Administration, Special Agent in Charge Manny Muriel, Internal Revenue Service, Criminal Investigation and Chief James Craig, Detroit Police Department.
According to the Indictment, beginning in 2012, and continuing through 2017, Officer Staton conspired with ten other members of a drug trafficking organization to distribute heroin, fentanyl, and cocaine. The indictment further alleges that Staton agreed to help by providing members of the conspiracy with sensitive law enforcement information, including about a co-conspirator’s arrest and about vehicles’ registrations. Staton was also charged with lying to FBI agents about his disclosure of this information.
“Detroit Police Officers are outstanding public servants, and the corrupt actions of just this one defendant should not undermine the public’s overall trust in law enforcement,” United States Attorney Matthew Schneider said. “Given the magnitude of the opioid crisis, the allegations are especially troubling that this defendant was actively helping drug dealers evade police detection and distribute large quantities of poisonous drugs.”
“The Detroit Police Department is a long standing partner in our efforts to protect the community from drug traffickers and its related violence,” stated DEA Special Agent in Charge Plancon. “The indictment of this single officer in no way diminishes the hard work provided by so many Detroit Police Officers on a daily basis. This indicted officer willingly contributed to the destruction that drug trafficking brings to our neighborhoods. Make no mistake, when any officer crosses the line and becomes a drug trafficker or co-conspirator, the DEA and our law enforcement partners will be relentless in bringing them to justice.”
“When an officer of the law violates the community’s trust and breaks his or her oath to protect and serve, the FBI will ensure they answer for their crimes,” said Special Agent in Charge Timothy R. Slater, Detroit Division of the FBI. “Today’s indictment reflects an individual officer’s betrayal of his oath and his fellow officers. It should not take away from the outstanding work conducted every day by the men and women of the Detroit Police Department.”
“We are disappointed in the actions of Officer Christopher Staton, as they have left a stain on our department,” said Chief of Police James Craig. “However, the actions of this officer does not reflect the values of our department and the men and women who serve honorably in keeping our communities safe. Our focus has been and will continue to be building trust and combating the existence of illegal activity within our communities.”
Staton faces up to life imprisonment and a fine of $10,000,000 for the drug conspiracy count, and up to 5 years imprisonment and a fine of $250,000 for the false statement count.
The investigation of this case was conducted by the Federal Bureau of Investigation, the Drug Enforcement Administration and Internal Revenue Service, Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorneys Steven Cares and Mitra Jafary-Hariri.
Two Detroit Men Convicted in a Drive-By Shooting and Murder Committed Outside a Popular Detroit Restaurant in the Warehouse DistrictRead the Press Release
Two Detroit men were convicted yesterday by a federal jury in Detroit on charges of murder-for-hire, conspiracy to possess with intent to distribute cocaine and oxycodone, and use of a firearm causing death during and in relation to 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 and Chief James Craig, Detroit Police Department.
Convicted were Deaunta Belcher, 35, and Andre Watson, 32, both of Detroit.
The four-week trial was conducted before United States District Judge Avern Cohn.
According to the evidence presented at trial, on September 11, 2015, a drive-by shooting took place outside of They Say restaurant in the Warehouse District of Detroit in which the victim, Devin Wallace, 30, of Novi, Michigan, was killed. The investigation into the shooting determined Deaunta Belcher was part of an intricate drug and fraud scheme throughout Detroit. Belcher and others, including his co-defendant Darnell Bailey and Devin Wallace, obtained cars, apartments, furniture, and other items fraudulently using the identities of drug customers and other victims, and leased those items to drug dealers throughout the city. Belcher and others decided to kill Wallace out of greed so they could assume his role in their fraud and drug conspiracy.
The evidence showed that Belcher and his co-defendant, Darnell Bailey, offered two men, Andre Watson, and Stephen Brown, money, a car, and other compensation to commit the murder. Watson and Brown spent weeks trying to locate Wallace, and on September 11, 2015, Belcher informed Watson and Brown that Wallace would be at They Say. Watson, Brown, and a third man, Billie J. Chambers, drove to They Say where Brown fired toward Wallace twice and Watson shot Wallace 12 times at close range. Nine bullets struck his body, with six bullets entering his head. Wallace died at the scene. Belcher and Bailey told police that Wallace was killed for cooperating with the DEA in a separate drug investigation in an effort to mislead investigators.
The jury also convicted Belcher for obstruction of justice for statements made to Detroit police on September 24, 2015, in which he tried to mislead investigators regarding his relationship with Stephen Brown.
Co-defendants Darnell Bailey, 29, of Roseville, Billie J. Chambers, 33, and Stephen Brown, 27, both from Detroit, previously pleaded guilty to murder-for-hire for their respective involvement in the shooting. Each are awaiting sentencing.
“These defendants carried out a brazen, cold blooded murder in broad daylight near downtown Detroit, and the shooting shocked our community when it was broadcast on the evening news,” United States Attorney Matthew Schneider said. “Thanks to the tireless efforts of the FBI and the Detroit Police Department, the people of Detroit can rest easier knowing these defendants will remain behind bars for the rest of their lives. Eradicating violent crime remains our top priority, and we will continue to work every day so Michiganders can go about their lives without fear of harm.”
“This case demonstrates the violence that accompanies large-scale narcotics trafficking,” said Special Agent in Charge Timothy R. Slater, Detroit Division of the FBI. “With yesterday’s conviction, Deaunta Belcher and Andre Watson have been held accountable for their part in these crimes and the City of Detroit is safer as a result.”
“We certainly appreciate the partnership with the Federal Bureau Investigation Violent Crime Task Force," said Chief James Craig. "This partnership is yet another example of how we can work together to combat violent crimes in our community and bring offenders to justice."
The federal offense of murder-for-hire carries a mandatory sentence of life. The offense of use of a firearm causing death during and in relation to a drug trafficking crime carries a sentence of any term of years or life; however, since a firearm was discharged, there is at least a mandatory minimum of ten years up to life. The offense of conspiracy to possess with intent to distribute cocaine and oxycodone carries a maximum sentence of twenty years, and the offense of obstruction of justice carries a maximum sentence of twenty years.
The investigation was a collaboration between Detroit Police and members of the FBI Violent Crimes Task Force.
The case was prosecuted by Assistant United States Attorneys Shane Cralle and Terrence Haugabook.
Physician Charged in a $32 Million Illegal Opioid Distribution ConspiracyRead the Press Release
An indictment was unsealed today charging the owner and sole practitioner of a medical clinic with conspiracy to illegally distribute prescription drugs, U.S. Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Special Agent in Charge Timothy R. Slater, Federal Bureau of Investigation, 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.
Charged in the indictment is Dr. Afzal Beemath, 42, of Waterford
The indictment alleges that from January 2013 through October 2018, Dr. Afzal Beemath conspired with others to issue a large number of prescription opioids to recruited “patients” who did not have a legitimate medical need for the drugs. Dr. Beemath operated Afzal Beemath, M.D., P.C., in Lathrup Village. Beemath only accepted cash at his clinic, and utilized the clinic to prescribe oxycodone and oxymorphone, two of the most addictive and diverted opioids that have a significant street value. Dr. Beemath, often-prescribed benzodiazepines in conjunction with the opioids, which when used together can be a lethal combination.
Patient recruiters brought supposed “patients” to the clinic to obtain medically unnecessary opioid prescriptions. The recruiters would then fill the prescriptions and sell the opioid pills on the street at a significant profit. According to the indictment, Dr. Beemath, issued more than1 million dosage units of Schedule II opioids during the course of the conspiracy. These controlled substances had a conservative street value in excess of $32,000,000.
“The damage that opioid distribution has done to our community and to the United States as a whole has been devastating,” said U.S. Attorney Schneider. “Our aggressive prosecutions of opioid crimes continues to focus not just on street dealers, but also on medical professionals who choose to violate federal law and their Hippocratic Oath to “first, do no harm’.”
“Dr. Beemath illegally prescribed painkillers for no legitimate medical purpose. Putting corrupt medical professionals like him out of business is one of several steps we are taking to turn the tide on the opioid crisis that has caused so much death and heartbreak in our communities,” said Special Agent in Charge Timothy R. Slater, Detroit Division of the FBI. “The FBI remains committed to working alongside our partners to ensure that those who ignore the law, put people at risk and contribute to this crisis are held accountable.”
“Writing prescriptions without medical necessity and outside the scope of professional medical practice is illegal and further fuels the opioid epidemic” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “The OIG will continue to focus our efforts on identifying and holding accountable those medical professionals who put their patient’s health and tax payer dollars at risk.”
This case is being prosecuted by Assistant United States Attorneys Regina R. McCullough, Brandy R. McMillion, and Andrew J. Lievense. The Eastern District of Michigan is one of the twelve districts included in the Opioid Fraud Abuse and Detection Unit, a Department of Justice initiative created by Attorney General Sessions, that uses data to target and prosecute individuals that are contributing to the nation’s opioid crisis.
The case was investigated by special agents and task force officers of the Federal Bureau of Investigation and the Department of Health and Human Services-Office of the Inspector General.
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.
U.S. Attorney Matthew Schneider Announces Progress in Making our Communities Safer through Project Safe NeighborhoodsRead the Press Release
One year ago, the Department of Justice announced the revitalization and enhancement of Project Safe Neighborhoods (PSN), which Attorney General Sessions has made the centerpiece of the Department’s violent crime reduction strategy.
“Project Safe Neighborhoods has been a long-standing weapon in our fight against violent gangs and gun crimes in Michigan,” United States Attorney Matthew Schneider said. “With this new revitalization of Project Safe Neighborhoods, we now have even more resources to go after violent offenders who seek to wreak havoc in our communities. Our success is a direct result of the hard work and commitment of our state and local law enforcement partners.”
PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Throughout the past year, the U.S. Attorney’s Office has continued to partner with all levels of law enforcement, local organizations, and members of the community to reduce violent crime and make our neighborhoods safer for everyone.
“Project Safe Neighborhoods is a proven program with demonstrated results,” Attorney General Jeff Sessions said. “We know that the most effective strategy to reduce violent crime is based on sound policing policies that have proven effective over many years, which includes being targeted and responsive to community needs. I have empowered our United States Attorneys to focus enforcement efforts against the most violent criminals in their districts, and directed that they work together with federal, state, local, and tribal law enforcement and community partners to develop tailored solutions to the unique violent crime problems they face. Each United States Attorney has prioritized the PSN program, and I am confident that it will continue to reduce crime, save lives, and restore safety to our communities.”
“We are one community. When criminals prey on one of us, it hurts all of us,” said ATF Special Agent in Charge James Deir. “Because we are one community, ATF will never waver in our mission to protect the public from violent criminals.”
“Ensuring the safety and security of our residents in the city of Detroit is our number one priority. With the collaborative efforts of Project Safe Neighborhoods, 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 Assistant Chief James White.
As we celebrate the one-year anniversary of the revitalized PSN program, here are some of the highlights of our PSN actions over the past year:
Enforcement Actions
Detroit is one of the original ten cities that participated in the rollout of Project Safe Neighborhoods in 2001. Since then, the U.S. Attorney’s Office has expanded its PSN efforts to cover the entire Eastern District of Michigan.
Since the revitalization of PSN in October 2017, the U.S. Attorney’s Office has increased its PSN caseload by 14%.
In the last few months, the United States Attorney’s Office has hired 18 new Assistant United States Attorneys to fill vacancies in the office. Six of these Assistant U.S. Attorneys are entirely new positions. Five are focusing on violent crime and gun prosecutions; one is focusing on immigration-related crimes. The office now has 120 full-time Assistant U.S. Attorneys. The Eastern District of Michigan covers 34 counties with a population of over 6.5 million residents
The U.S Attorney’s Office has been working closely with our state and local partners to ensure that federal efforts are focused on the most violent offenders. By incorporating the basic principles of the Detroit One Initiative along with PSN, we have created a unified approach, working in partnership with a large community of stakeholders to reduce violent crime. By utilizing available data and advances in technology, we have been able to identify offenders who are driving violent crime rates in certain areas of Detroit.
Given the success of PSN in the northwest area of Detroit, the Justice Department is providing additional PSN funding to the eastside of Detroit using the nearly $700,000 grant awarded last week. The funding will be utilized to enhance the suppression, prosecutorial and outreach activities identified as best practices to target violent crime and improve the quality of life for the community.
In addition, the Department of Justice announced last week that the City of Detroit was awarded $800,000 to be used to hire personnel to utilize the National Integrated Ballistic Information Network (NIBIN), to purchase technology required to operate a Crime Gun Intelligence Center and ammunition for ballistic tests of recovered weapons.
Information sharing is a key piece in this strategy. Two ways in which information is shared is through Project Green Light and Gun Stat. Project Green Light is a crime-fighting partnership between the City of Detroit, the Detroit Police Department and local businesses whereby real-time cameras are installed and connected directly to the Detroit Police Department headquarters where video feeds are received, monitored and analyzed. Information gathered from the surveillance cameras have proven useful in federal prosecutions. In one instance, the footage from one of the surveillance cameras lead to an indictment of a three-time convicted felon who was arrested and charged with being a felon in possession of a firearm after officers caught him trying to discard a firearm into a dumpster.
Another vital tool in sharing information is Gun Stat. Gun Stat is a partnership between the Detroit Police Department, the U.S. Attorney’s Office, Wayne County Prosecutor’s Office, the ATF, and the FBI. The purpose of GunStat is to focus on benchmarks that lead to an overall reduction of violent gun related crime. Specific emphasis is place on violent offenders and gun related cases. Law enforcement will review citywide gun arrests and look at whether the arrestee has certain characteristics that statistically contribute to violent gun related crimes. Such characteristics include if the arrestee is a gang member or an associate of a gang, has a prior arrest with a firearm, has a violent criminal history, is on probation or parole, was shot or has been a shooter, or has other gun related contacts. Based on these factors, law enforcement will prioritize resources and focus on those individuals who are more likely to engage in violent gun related crimes.
Community Partnerships
Another key component to any successful crime-fighting initiative is community engagement. The United States Attorney’s Office, along with our law enforcement partners and community members are actively involved in outreach programs as part of our prevention strategy. Two of those outreach programs are Ceasefire and Project Sentry.
Operation Ceasefire Detroit is a community based violence prevention partnership aimed at reducing violent crime. Under the program violent street group members on parole or probation are called in to meetings as a condition of their release. Participants include law enforcement officials who explain to the street groups that continued violence will result in prosecution and stiff prison sentences. Social service providers describe services that are available under re-entry programs to help street group members succeed outside of prison and residents of the street group members’ own communities -- clergy, ex-offenders and families of victims of violent crime describe in graphic and personal terms the consequences of violence in their neighborhood, and insist that the street group members help stop the violence. Call-ins occur quarterly at preselected locations within the City of Detroit. Following the hour long presentation, the speakers and participants have dinner and fellowship to reinforce the message: the community will assist every group member who wants to change his life for the better.
Project Sentry is a school-based youth engagement approach to reducing gun violence through prevention and deterrence strategies. The United States Attorney for the Eastern District of Michigan (USAMIE) is committed to educating youth on the dangers and consequences of gun violence. Like many USAMIE outreach efforts, Project Sentry relies on federal, state, and local law enforcement volunteers, along with other first responders to raise awareness about gun violence.
Improvements to Community Safety
• The FBI’s official crime data for 2017 reflects that, after two consecutive, historic increases in violent crime, in the first year of the Trump Administration the nationwide violent crime rate began to decline. The nationwide violent crime rate decreased by approximately one percent in 2017, while the nationwide homicide rate decreased by nearly one and a half percent.
• The preliminary information we have for 2018 gives us reason for optimism that our efforts are continuing to pay off. Public data from 60 major cities show that violent crime was down by nearly five percent in those cities in the first six months of 2018 compared to the same period a year ago.
• Detroit PSN focuses on the 8th precinct of Detroit. The 8th precinct, on Detroit’s west-side, historically has experienced some of the highest levels of violence in the city. According to statistics compiled by the PSN Michigan State University Research Partner, fatal and non-fatal shootings continued a downward trend that began in 2017. The first six months of 2018 experienced a 13% decrease from 2017 and a 28% decrease from 2016. When compared to the average number of fatal and non-fatal incidents that occurred from 2014 to 2016, the first six months of 2018 witnessed a 20% decline.
These enforcement actions and partnerships are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. Learn more about Project Safe Neighborhoods.
Detroit City Council Member Indicted for Taking BribesRead the Press Release
Today a federal grand jury indicted Detroit City Council Member Gabriel Leland, 35, of Detroit, with one count of conspiracy to commit bribery and two counts of bribery, 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.
According to the Indictment, beginning in May 2017, and continuing through August 2017, Councilman Leland conspired with Elisa Grubbs, a campaign worker, to solicit and accept bribes consisting of $15,000 in cash and free auto body work from a local business owner. The indictment further alleges that Leland agreed to help delay or prevent the City’s sale of property that the business owner believed he owned in exchange for the bribes. Leland is charged with taking a $7,500 cash bribe on
August 4, 2017, just four days before the primary election for Detroit City Council.
United States Attorney Schneider stated, “A sitting member of the Detroit City Council engaging in bribery is an extreme breach of the trust of the people of Detroit that badly undermines their faith in local government. As was starkly demonstrated by the prosecution of former Detroit Mayor Kwame Kilpatrick and several corrupt members of his Administration, federal law enforcement is dedicated to rooting out and severely punishing corruption at every level of City governance.”
“The public demands and is entitled to honest public servants. Today’s indictment of Detroit City Council Member Gabriel Leland underscores the fact that individuals who hold a position of public trust - and who betray that trust - will be held accountable,” said Special Agent in Charge Timothy R. Slater, FBI Detroit. “The FBI is committed to aggressively investigating allegations of public corruption. If you are aware of a government official engaging in illegal conduct, I encourage you to notify the FBI’s multi-agency Public Corruption Task Force.”
Leland faces up to 10 years imprisonment and a fine of $250,000 for each bribery count, and up to 5 years imprisonment and a fine of $250,000 for the bribery conspiracy count.
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.
Detroit Doctor Sentenced to more than 11 Years in Prison for $8.9 Million Health Care Fraud SchemeRead the Press Release
A Detroit-area doctor was sentenced to 135 months in prison today for her role in a scheme involving approximately $8.9 million in fraudulent Medicare claims for home health care and other physician services that were procured through the payment of kickbacks, were not medically necessary, were not actually provided or, in some instances, were provided by the defendant, who was not a licensed physician during the relevant time period.
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 David P. Gelios 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.
Millicent Traylor, M.D., 47, of Detroit, Michigan, was sentenced by U.S. District Judge Robert Cleland of the Eastern District of Michigan. Traylor was convicted in May 2018 of one count of conspiracy to commit health care fraud, one count of conspiracy to pay and receive healthcare kickbacks, and five counts of health care fraud following a four-day trial. Traylor’s co-defendant, Muhammad Qazi, 48, of Oakland Township, Michigan, was sentenced to serve 42 months in prison on Aug. 27, her co-defendant Christina Kimbrough, M.D., 39, of Canton, Michigan, was sentenced to serve 27 months in prison on Sept. 26, and her other co-defendant, Jacklyn Price, 34, of Shelby, Michigan, awaits sentencing. Qazi, Price, and Kimbrough each pleaded guilty to one count of conspiracy to commit health care fraud.
According to evidence presented at trial, from 2011 to 2016, Traylor and her co-conspirators engaged in a scheme to defraud Medicare of approximately $8.9 million through fraudulent home health and physician claims. The evidence showed that Traylor, who was unlicensed at the time, acted as a physician for these companies, providing services that were not medically necessary and that were billed to Medicare as if they were provided by a licensed physician. The evidence further showed that Traylor conspired to cause Medicare to be billed for services that were not rendered. To make it appear that these services were medically necessary and actually provided, Traylor and her co-conspirators falsified medical records and signed false documents. Additionally, the evidence at trial showed that Traylor and her co-conspirators paid and received kickbacks in exchange for referring Medicare beneficiaries to serve as patients at the clinics. The trial evidence also revealed that Traylor fraudulently signed the names of licensed physicians on prescriptions for opioid medications, such as oxycodone, as a means of inducing patient participation in the scheme.
The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision by the Criminal Division’s Fraud Section and U.S. Attorney’s Office for Eastern District of Michigan. Trial Attorneys Stephen Cincotta and Steve Scott of the Criminal Division’s Fraud Section are prosecuting the case.
The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in 12 cities across the country, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
Eight Members of Organized Fraud Ring in Detroit IndictedRead the Press Release
A federal grand jury charged eight members of an organized fraud ring based in Detroit with conspiracy to commit wire fraud, conspiracy to commit money laundering, and aggravated identity theft in a twenty-three count indictment, United States Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Timothy R. Slater, Special Agent in Charge, Federal Bureau of Investigation (FBI), Detroit Field Office, Patricia Armstrong, U.S. Postal Inspector in Charge, U.S. Postal Inspection Service, Detroit Division, Reginald DeMatteis, Special Agent in Charge, United States Secret Service, Charlotte Field Office, and Michael Patton, Chief of Police, West Bloomfield Police Department.
Charged were:
Toriano Adams, 32, of Eastpointe
Anthony Adans, 32, of Troy
Devin Simmons, 32, of Sterling Heights
Aatif Brown, 25, of Detroit
OD Williams, 27, of Detroit
Denico Adams. 26, of Detroit
Rodney Gist, 27, of Detroit
Tayan Jackson, 32, of Brooklyn, New York
According to the indictment, the defendants are members and/or associates of an organized fraud ring known as the “Free Band Gang.” Members of the fraud ring obtained stolen credit card accounts in bulk through various sources, including “dump” sites on the internet. The stolen accounts were then pressed on the front of counterfeit cards to create cloned credit cards. Free Band Gang members traveled to Walmart stores throughout the United States where they purchased $500 gift cards using the cloned credit cards without the authorization — or knowledge — of the true accountholder. Free Band Gang members often purchased a hundred thousand dollars or more in gift cards in a single day using the cloned credit cards and returned to Michigan with the gift cards which they sold for cash to launder the proceeds. The scheme lasted for nearly three years and resulted in millions in losses.
“In the span of nine hours, two of these defendants allegedly traveled to ten Walmart stores in and around Bentonville, Arkansas, used three counterfeit credit cards, and made over $100,000.00 in fraudulent purchases,” stated United States Attorney Matthew Schneider. “This was not uncommon for this group. Over three years, the defendants allegedly stole millions of dollars in an organized, calculated scheme. Because Michigan is a national leader in identity theft, we are literally working day and night to break up these fraud rings and put the perpetrators where they belong: in federal prison.”
“This type of identity theft and credit card fraud is not a victimless crime. It has a negative impact not only on the corporations involved but on the individual whose identity is stolen,” said Special Agent in Charge Timothy R. Slater, FBI Detroit. “The FBI will continue to work in close partnership with the members of the Detroit Metro Identity Theft Task Force to identify and disrupt individuals and criminal organizations engaged in these schemes which can result in the loss of millions of dollars a year.”
Schneider commended the substantial assistance of law enforcement agencies around the country as well as the tremendous work by Walmart’s Global Investigations Team, without it the full scope of the fraud would never have been uncovered. Organized fraud rings operate across multiple jurisdictions by design in an attempt to evade detection.
The case is being investigated by the Detroit Metro Identity Theft Task Force, which includes representatives of the FBI, Michigan State Police, U.S. Postal Inspection Service, Auburn Hills Police Department, Birmingham Police Department, and Bloomfield Township Department along with assistance from the West Bloomfield Township Police Department and Ellisville, MO Police Department. The case is being prosecuted by Assistant U.S. Attorneys Shane Cralle and James R. Drabick.
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.
Organized Crime Drug Enforcement Task Force Established to Go After Large Scale Drug Trafficking Organizations Operating in Southeast MichiganRead the Press Release
United States Attorney Matthew Schneider is proud to announce the establishment of the Southeast Michigan Regional Organized Crime Drug Enforcement Task Force (OCDETF) Strike Force. This is an unprecedented step to co-locate so many federal as well as state and local resources to address the unique challenges in the southeast Michigan region.
This multi-agency Strike Force is composed of personnel from the FBI, Homeland Security Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration, Internal Revenue Service-Criminal Investigation, U.S. Border Patrol, U.S. Marshals Service, U.S. Postal Inspection Service, and approximately 26 state, local and Canadian law enforcement agencies.
The Department of Justice recognized that Southeast Michigan had both a significant opioid problem and a violent gang problem. Analysis of investigations in the Region found that domestic cartel and violent street gangs are responsible for distribution of Mexican-sourced heroin, fentanyl-laced heroin and pure fentanyl here. Additionally, DOJ noticed a significant increase in overdose deaths as well as identified over 140 neighborhood-based gangs operating in the Region. These gangs were and are facilitating the drug trade and using violence to control their territories and prevent cooperation with law enforcement.
In response to this problem, the Southeast Michigan Strike Force will coordinate investigations to identify, disrupt, dismantle, and prosecute transnational criminal organizations, violent drug trafficking organizations, firearms trafficking organizations, and their subsidiary organizations, which operate throughout the southeast Michigan region, the United States and the world. The Strike Force will focus cooperative investigations on dissolving these organizations, their financial infrastructures, and the violence and associated deaths they bring to our communities.
“While all of us have been working individually to fight gangs and drugs, our individual efforts were not as effective as we wanted,” stated United States Attorney Matthew Schneider. “We know that gangs and cartels work together. So we’re doing the same thing. We’re going to step up our efforts. We are now communicating immediately, sharing intelligence, and planning our attacks against these criminals together.”
“As a part of the Southeast Michigan OCDETF Strike Force, we are committed to a long-term partnership that allows law enforcement to reduce the illegal drug supply by aggressively targeting criminal organizations operating throughout southeast Michigan,” stated DEA Special Agent in Charge Timothy J. Plancon. “Drug trafficking and violence go hand-in-hand, which is why federal, state and local law enforcement are making these dangerous drug trafficking organizations a top priority. By working with our partners, we are able to bring these violent individuals to justice and improve the safety of our communities. We are focused on the current opioid epidemic, but this initiative is ready to adapt to any future drug threat facing southeast Michigan“
“The Strike Force model, which has proven effective in other areas of the country, will certainly be highly successful in the fight against criminal organizations that are flooding our communities with dangerous narcotics. The influx of these drugs into our communities feeds other illicit activities including human trafficking, carjackings, homicides and other gang-related violent crime.” said Special Agent in Charge Timothy R. Slater, FBI Detroit. “Combining the resources and capabilities of the agencies responsible for investigating and prosecuting these crimes will improve our ability to target, disrupt and ultimately dismantle those organizations distributing drugs and contributing to violence in communities throughout Southeast Michigan.”
“As criminal organizations become increasingly sophisticated in their activities, the law enforcement community must continue to partner to leverage our unique capabilities and combined resources to combat this ever evolving threat,” said Steve Francis, Special Agent in Charge of Homeland Security Investigations (HSI) Detroit.
“Special Agent in Charge Manny Muriel, IRS - Criminal Investigation, stated, “The IRS-CI will utilize our expertise as financial investigators and leverage our domestic and international partnerships to combat national and transnational money laundering organizations.” Muriel continued, “Similarly we will continue to work with our law enforcement and private sector partners to repeatedly assess ongoing and emerging money laundering threats.”
Since its inception in October 2017, the members of the Southeast Michigan Regional Strike Force have been responsible for the seizure or over 35 kilograms of fentanyl, 25 kilograms of heroin, 50 kilograms of cocaine, as well as the seizure of 12 weapons and approximately three million dollars in drug proceeds. The seized fentanyl alone would have exponentially fueled the opioid epidemic in the region and was enough to have killed approximately 15 million people based on the lethal dosage threshold. In addition, over 100 people have been arrested. Some of the people arrested by Strike Force members have been sentenced to extensive terms of incarceration related to the delivery of controlled substances which caused the death of those who developed an addiction to opioids.
The local agencies include Michigan State Police, Michigan National Guard, Canton Township Police Department, Detroit Police Department, Northfield Township Police Department, Washtenaw County Sheriff’s Office, Oakland County Sheriff’s Office, Walled Lake Police Department, Shelby Township Police Department, Southgate Police Department, Livonia Police Department, Livingston County Sheriff’s Department, Milan Police Department, Pittsfield Charter Township Police Department, Plymouth Township Police Department, Brownstown Police Department, Woodhaven Police Department, Allen Park Police Department and the Wayne County Airport Authority. The Canadian law enforcement agencies include the London Police Service, Ontario Provincial Police, Royal Canadian Mounted Police, Windsor Police Service and the Canada Border Services Agency. Also included are the Michigan State Attorney General’s Office and Wayne County Prosecutor’s Office.
Former State Senator Sentenced on Conspiracy and Theft ChargesRead the Press Release
Former state senator Bertram C. Johnson, 44, of Highland Park, was sentenced today to 90 days in prison, followed by two years of supervised release with 90 days of home confinement and 480 hours of community service, and over $23,000 in restitution, after having pleaded guilty to conspiracy to commit theft from a federally funded program, announced United States Attorney Matthew Schneider.
Joining Schneider in the announcement were Timothy R. Slater, Special Agent in Charge, Detroit Division of the FBI and Manny Muriel, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation.
Johnson had previously pled guilty in March 2018 before United States District Judge Matthew F. Leitman. During his guilty plea, Johnson admitted that from March 2014 through January 2, 2015, he employed an unnamed co-conspirator as a community liaison, certifying her bi-weekly timesheets thereby causing the State of Michigan to pay the individual for work she did not actually complete. The indictment alleges that Johnson borrowed thousands of dollars in cash from the unnamed co-conspirator, and placed this “ghost employee” on the public payroll solely to pay off Johnson’s personal loan debt, and that the ghost employee was paid over $23,000 in taxpayer money.
“Public officials, especially those elected by the people, cannot treat the people’s money as their own,” stated United States Attorney Schneider. “The defendant in this case treated taxpayer money as his own, to repay his personal debt. Such an egregious abuse of power will not be tolerated.”
“The FBI, along with our law enforcement partners, will continue to aggressively pursue public officials who engage in criminal conduct at taxpayer expense,” stated Timothy R. Slater, Special Agent in Charge of the FBI Detroit Field Office. “As demonstrated by the criminal actions in this case, the defendant put his own selfish interests above those he served. We ask that anyone with information regarding similar actions by any public official contact the FBI or FBI Detroit.”
“Senator Johnson made a conscious decision to violate the trust and confidence of the constituents that he was elected to represent,” stated Special Agent in Charge Manny J. Muriel, IRS Criminal Investigation. “As today’s sentencing shows, IRS-CI, along with our law enforcement partners will continue to hold those who use fraud and deceit to line their pockets by stealing from our nation’s taxpayers accountable.”
This case was investigated by agents of the FBI and IRS-CI. This case is being prosecuted by Assistant United States Attorneys J. Michael Buckley and Frances Lee Carlson.
Former City of Detroit Employee Sentenced to Prison for Embezzling $265,000 from the CityRead the Press Release
A former City of Detroit employee, Masharn Franklin, 53, of Detroit, was sentenced to 18 months in prison, followed by 3 years supervised release, and ordered to pay $265,573 in restitution to the city of Detroit based on her conviction for embezzlement, United States Attorney Matthew Schneider announced today.
Franklin was employed by the City of Detroit in its audit and payroll department in 2016 and 2017. During that time, Franklin was responsible for overseeing the execution of garnishment orders for the salaries of Detroit city employees. While so employed, Franklin concocted a scheme to embezzle hundreds of thousands of dollars from the city by causing money to be “garnished” from city funds in the names of Franklin’s relatives. Once the city had issued checks in the names of Franklin’s relatives in the amounts dictated by Franklin, Franklin then deposited the checks into bank accounts held jointly by her and her relatives. As a result of her embezzlement scheme, Franklin stole approximately $265,573 from the City of Detroit. The FBI has already seized $58,000 in criminal proceeds from Franklin’s bank accounts.
Besides being sentenced to prison, the Court ordered Franklin to pay restitution to the City of Detroit for the additional $207,000 that she has yet to repay.
Schneider was joined in the announcement by Timothy Slater, Special Agent In Charge of the Detroit Field Office of the Federal Bureau of Investigation.
United States Attorney Schneider said, “Detroit employees who embezzle money from the city steal from all citizens of the city, depriving them of needed public services and projects. The Court’s sentence today vindicates the rule of law and demonstrates that such conduct will not be tolerated as the city continues its comeback.”
“Make no mistake, city employees who exploit their positions of trust in order to enrich themselves at the expense of the taxpayers will be held accountable”, said Timothy R. Slater, Special Agent in Charge, Detroit FBI.
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.
Eastern District of Michigan Announces Record-Setting Hospital Drug Diversion Civil Penalty Settlement with the University of Michigan Health SystemRead the Press Release
The United States Attorney’s Office for the Eastern District of Michigan announced today that the University of Michigan Health System (UMHS) has agreed to pay the United States $4.3 million as part of a settlement resolving allegations that UMHS violated certain provisions of the Controlled Substances Act (CSA), 21 U.S.C. §§ 801-904. The settlement, which is civil in nature, resulted from a years-long Drug Enforcement Administration (DEA) investigation of UMHS’s handling of controlled substances. It is the nation’s largest settlement of its kind involving allegations of drug diversion at a hospital.
DEA began its investigation after two tragic incidents occurred in December 2013 involving two UMHS employees – a nurse and an anesthesiology resident. Both overdosed on opioids, including fentanyl, at a UMHS facility. The nurse’s overdose was fatal.
Following its investigation, DEA concluded that a number of the hospital’s practices concerning controlled substances were in violation of the CSA. For example, UMHS failed to secure DEA registrations for 15 off-site ambulatory care locations throughout Ann Arbor and Southeast Michigan, each of which received narcotics from the main hospital’s pharmacy and dispensed them to patients. The failure to secure DEA registrations rendered unlawful all of the narcotics distributions from the main hospital to the unregistered off-site locations, as well as the unregistered locations’ subsequent dispensing of these narcotics to their patients. DEA also determined that UMHS committed a number of significant recordkeeping violations, some of which included failing to maintain complete and accurate records of certain controlled substances that it received, sold, delivered or otherwise disposed of, and failing to notify DEA in a timely manner regarding certain instances of thefts or significant losses of controlled substances. DEA concluded that UMHS’ deficient recordkeeping negatively impacted UMHS’ ability to guard against the theft and diversion of controlled substances.
“Every professional and every institution throughout our health care system has a responsibility to comply with the laws governing the regulation of controlled substances,” said United States Attorney Matthew Schneider. “Even the University of Michigan Health System, which does great work every single day, has an obligation to its patients, to its employees, and to the public to responsibly control its drug inventory.”
DEA Special Agent in Charge Timothy Plancon stated, “Through rigorous investigation, DEA Diversion Investigators uncovered system-wide violations within the University of Michigan Health System, highlighting the fact that anything short of full compliance can have grave public health consequences. This case should alert all health systems – large or small – that complying with the Controlled Substance Act is not only their legal responsibility but also a matter of public trust.”
As part of the settlement, UMHS has entered into a three-year Memorandum of Agreement with DEA, which prescribes the hospital’s drug-handling responsibilities going forward. That Memorandum also recognizes the substantial steps that UMHS has already taken to address deficiencies in its handling of controlled substances.
A main objective of the CSA is controlling illegitimate traffic in controlled substances. To prevent the diversion of controlled substances, the CSA regulates persons, companies and other entities that manufacture, distribute and dispense controlled substances. The government’s investigation and resolution of this matter illustrates the government’s emphasis on combating the prescription opioid crisis.
This matter was investigated by Diversion Investigator Brian Bishop from DEA’s Detroit Field Division and Assistant U.S. Attorneys Peter Caplan and Caroline Burgunder from the United States Attorney’s Office for the Eastern District of Michigan.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Detroit Man Sentenced to 7 Years in Prison for Involvement in Easter ShootingRead the Press Release
A Detroit man was sentenced to 7 years (84 months) in federal prison on the charge of being a felon in possession of a firearm, announced United States Attorney Matthew Schneider.
Vincent Samuel Hill, Jr., was sentenced yesterday before United States District Judge Arthur J. Tarnow in Detroit, Michigan.
Hill pleaded guilty on July 9, 2018, to one count of being a felon in possession of a firearm. Hill had illegally possessed a stolen firearm on Easter Day when he brandished the firearm at Dane’s Social Club on W. McNichols. Detroit Police Department Officers responded to a shooting at Dane’s Social Club on Easter Day where Hill was shot multiple times. Initial reports were that Hill was shot in the crossfire when with his girlfriend, who rushed him to the hospital. Upon further investigation, Detroit Police Officers learned that those reports were not true. Surveillance video showed that Hill was shot only after brandishing a firearm with a laser sight into the crowd. Detroit Police Department executed a search warrant of Hill’s home following their investigation and recovered the firearm with the laser sight. Hill was arrested at that time. Hill also has a pending domestic violence case in Wayne County and a federal supervised release violation in federal court.
“Keeping guns out of the hands of felons is a priority of our office,” stated United States Attorney Schneider. “Felons and violent offenders should take notice that they will go to prison if they illegally possession firearms.”
“Today’s sentence is another example of ATF’s relentless effort to reduce violent crime in the City of Detroit and we will continue to work with our law enforcement partners to target dangerous individuals,” Special Agent in Charge James Deir said.
Hill’s case signals the commitment by ATF and the United States Attorney’s Office to take violent individuals off the streets. This case was a joint investigation by the Detroit Police Department, Wayne County Prosecutor’s Office, special agents of the ATF and prosecuted by Assistant United States Attorney Mitra Jafary-Hariri in conjunction with the Project Safe Neighborhood initiative.
Purported International Banker Convicted of Investor FraudRead the Press Release
A federal jury convicted a Manhattan Beach, California woman of eight counts of wire fraud yesterday, announced United States Attorney Matthew Schneider. The convictions followed a week-long trial in front of U.S. District Judge Robert H. Cleland.
Schneider was joined in the announcement by Special Agent in Charge Timothy R. Slater, Federal Bureau of Investigation and Special Agent in Charge Manny Muriel, Internal Revenue Service-Criminal Investigation Division.
“Our office aggressively investigates and prosecutes people who defraud our citizens through lies and deceit,” stated United States Attorney Matthew Schneider stated. “When investors entrust their hard-earned money to third parties, they should know that their money won’t be stolen. When investors are lied to and taken advantage of, we’ll hold the swindlers accountable for their crimes.”
Gayle Hassan Al-Said, 68, a purported international banker, was found to have defrauded local Detroit investors and used their investment funds for her own benefit. Among the expenditures that Al-Said made using investor funds were purchases at high-end retail stores in Europe, payment for a plastic surgeon, and cash transfers to herself and her family members. Al-Said also used investor funds to make a down payment on a $4 million home and rented a high-end London flat for $16,000/month. She failed to disclose any of these expenditures to the investors, who had been led to believe that their investments would be placed in risk-free trust accounts.
Al-Said also claimed to have high-level connections to the royal family of Saudi Arabia and represented herself to be the chairwoman and chief executive officer of multiple international banks. Evidence at trial demonstrated that these banks were, in fact, shell companies that did not engage in any banking activity.
In total, Al-Said’s fraudulent scheme caused approximately $1.3 million in losses to investors.
Al-Said faces a maximum possible penalty of 20 years’ imprisonment for each count of conviction. Sentencing has been set for January 8, 2019 at 1:30 p.m..
The case was investigated by special agents of the Internal Revenue Service-Criminal Investigation Division and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys Stephen L. Hiyama and Andrew J. Yahkind.
Detroit Man Sentenced for Aggravated Identity Theft and Defrauding the Michigan Unemployment Insurance AgencyRead the Press Release
A Detroit man was sentenced to 60 months in federal prison after pleading guilty to aggravated identity theft and defrauding the Michigan Unemployment Insurance Agency, United States Attorney Matthew Schneider announced.
Schneider was joined in the announcement by Wanda M. Stokes, Director, Michigan Talent Investment Agency, Unemployment Insurance.
Devin Marquzes Griffin, 25, was sentenced today to 60 months by United States District Judge Mark A. Goldsmith for aggravated identity theft and wire fraud.
According to court records, from June 2016 through November 2017, Griffin conducted a scheme to defraud the Department of Labor through the Michigan Unemployment Insurance Agency. Griffin obtained the personally identifiable information (PII) of several hundred Michiganders, and used that PII to file, access, and modify approximately 447 unemployment insurance claims in the names of other people. Additionally, Griffin used this PII to open credit card accounts in the names of others, and deposited the money derived from his fraudulent unemployment insurance scheme into these credit card accounts.
Griffin received hundreds of fraudulent unemployment insurance payments through his illegal scheme, stealing more than $504,000. Griffin used this money to make cash withdrawals, purchase cars, airline tickets, hotel rooms, shoes, and like items for himself.
“Devin Griffin robbed taxpayers and business owners for his personal use, stealing from the system meant to protect Michiganders. Even worse, Griffin stole the identities of hundreds of people, causing them untold financial, mental, and emotional harm. The people of Michigan deserve better, and we will continue to aggressively prosecute these cases on their behalf,” U.S. Attorney Schneider stated.
Director Stokes said, “ID theft is not a victimless crime. Individuals whose identity is stolen suffer as well as our taxpayers. We are committed to investigating, charging and convicting these criminals. The UI staff along with the U.S. Department of Labor and U.S. Attorney’s office are to be commended for catching this criminal and putting him in prison.”
This case was investigated by Steven Bognar and Andrew Donohue of the U.S. Department of Labor Office of Inspector General, and Kurt Eggly of the State of Michigan Unemployment Insurance Agency. Assistant United States Attorney Hank Moon prosecuted the case.
Four Members of the Seven Mile Bloods Street Gang Convicted of Racketeering and Other Related ChargesRead the Press Release
After a 10-week trial, a federal jury in the Eastern District of Michigan convicted four members of the Seven Mile Bloods Street Gang today for their participation in various criminal acts, including racketeering conspiracy and related firearm offenses.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan and Special Agent in Charge Timothy R. Slater of the FBI’s Detroit Division made the announcement.
“The Seven Mile Bloods and its rival conducted a gang war on the east side of Detroit, leading to an increase in murders and shootings in that part of the city,” said Assistant Attorney General Benczkowski. “We commend our prosecutors and law enforcement partners for their hard work to hold members of the gang accountable for their crimes. Today’s verdict sends a strong message that the Department of Justice and its partners will use every tool available as we continue our work to disrupt and dismantle violent street gangs like the Seven Mile Bloods.”
“These guilty verdicts are a tremendous victory for the Detroit community that was plagued by the violence, drug dealing and mayhem inflicted by this violent street gang,” said U.S. Attorney Schneider. “The jury’s guilty verdicts highlight that our community has no tolerance for the senseless murders and violence spread by gang members.”
“The FBI, our Task Force partners and the U.S. Attorney’s Office, will continue to vigorously combat gang, drug and gun crimes in our neighborhoods so that all residents of the City of Detroit can live in an environment that is safe and free of violence,” said FBI Special Agent in Charge Slater.
The trial was conducted before U.S. District Judge George Caram Steeh in Detroit, Michigan. The jury deliberated approximately seven days before reaching their verdicts. Amongst those convicted are:
- Corey Bailey, aka “Sonny,” “Cocaine Sonny,” 30, of Detroit, was convicted of RICO conspiracy; murder in aid of racketeering; attempted murder in aid of racketeering; and possession of a firearm in furtherance of a crime of violence;
- Arlandis Shy, aka “Grymee,” “Vil,” 29, of Clinton Township was convicted of RICO conspiracy and possession of a firearm in furtherance of a crime of violence;
- Robert Brown II, aka “R.O.,” 36, of Warren, Michigan, was convicted of RICO conspiracy, attempted murder in aid of racketeering; and possession of a firearm in furtherance of a crime of violence; and
- Keithon Porter, aka “KP,” 32, of Detroit; was convicted of RICO conspiracy; murder in aid of racketeering; attempted murder in aid of racketeering; and possession of a firearm in furtherance of a crime of violence.
A fifth defendant, Eugene Fisher, aka “Fes,” 38, of Detroit, was convicted of two counts of felon in possession of a firearm.
According to evidence presented during the trial, the Seven Mile Bloods gang operates on the east side of Detroit, between Gratiot Avenue and Kelly Road and between Seven and Eight Mile Roads. Seven Mile Bloods or “SMB” members have claimed this area as their territory and refer to it as the “Red Zone.” The area is in zip code 48205, which SMB members refer to as “4-8-2-0-Die” in some of their rap lyrics.
Evidence presented at trial showed an ongoing gang war between the Seven Mile Bloods and an alliance of other gangs operating on Detroit’s east side stemming from a murder that occurred in July 2014. These rival gangs have been violently attacking one another and have posted respective “hit lists” on social media. This shooting war has led to increased homicides and non-fatal shootings on Detroit’s east side.
This case was the work of the Detroit One Initiative. Investigators were able to bring together separate probes into various members of this organization and its criminal activities into one encompassing investigation. Partners include the Detroit Police Department Gang Intelligence Unit, the FBI Violent Gang Task Force, which consists of representatives of Detroit Police Department, U.S. Border Patrol, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Customs and Border Protection, Michigan Department of Corrections and Michigan State Police, with the cooperation of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the U.S. Drug Enforcement Administration (DEA).
The investigation further resulted in the seizure of more than 20 firearms, including several high-powered assault rifles.
The case was prosecuted by Trial Attorney Julie A. Finocchiaro of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Justin Wechsler, Mark Bilkovic and Tare Wigod of the U.S. Attorney’s Office for the Eastern District of Michigan.
Rochester Hills Man Convicted of Sexual Abuse on an AircraftRead the Press Release
A federal jury convicted a Rochester Hills man of sexual abuse onboard an aircraft, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Special Agent in Charge Timothy R. Stater, Federal Bureau of Investigation, Detroit Field Division.
Convicted was Prabhu Ramamoorthy, 35. Ramamoorthy is in the United States on a work visa and will be deported once he has served his sentence.
The five-day trial was conducted before United States District Judge Terrence Berg. The jury deliberated approximately 3 1/2 hours before returning the guilty verdict.
The indictment alleged that on January 3, 2018, Ramamoorthy engaged in a sexual act with a female, while she was sleeping. At trial, the government admitted evidence demonstrating that Ramamoorthy digitally penetrated the woman sleeping next to him during an overnight flight from Las Vegas to Detroit. The sexual assault woke her up, she found her pants unbuttoned and unzipped, and she sought help from the flight attendants.
United States Attorney Matthew Schneider stated, ““Everyone has the right to be secure and safe when they travel on airplanes. We will not tolerate the behavior of anyone who takes advantage of victims who are in a vulnerable position, and we are glad the jury agreed. We appreciate the victim in this case for her courage to speak out.”
“The safety and security of all aircraft passengers is a priority for the FBI, our local and federal law enforcement partners, and airline carrier personnel,” said Timothy R. Slater, Special Agent in Charge, Detroit Divison of the FBI. “The federal conviction of Prabhu Ramamoorthy demonstrates the FBI’s commitment to hold individuals accountable for their actions on an aircraft, especially those who commit such a heinous crime. If you, or someone you know, is the victim of a crime during air travel, immediately notify a flight crew member, airport security police, and the FBI. We remain committed to working with our federal, local, and private industry partners to ensure that anyone traveling by air is afforded a safe environment.”
A sentencing date has been set for December 12, 2018. Ramamoorthy faces up to life in prison
This case was investigated by the Wayne County Metropolitan Airport Authority, and Special Agents of the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorneys Amanda Jawad and Maggie Smith.
Justice Department Settles Disability Claims with Two Clinical Psychology Offices Involving Sign Language Interpreters and Service AnimalRead the Press Release
The U.S. Attorney’s Office for the Eastern District of Michigan has reached settlements with two clinical psychology practices: Michael Vredevoogd P.C., and Apex Behavioral Health-Dearborn, P.L.L.C., to resolve allegations that they violated the Americans with Disabilities Act (“ADA”), U.S. Attorney Matthew Schneider announced today.
The ADA requires that places of public accommodation, such as medical offices, provide sign language interpreters or other appropriate auxiliary aids and services to ensure effective communication with individuals who are deaf or hard of hearing. The ADA also requires that public accommodations make reasonable modifications to their policies and practices, such as allowing a service animal in a treatment room, when necessary to afford full and equal services to individuals with disabilities.
Michael Vredevoogd, P.C. is a neuropsychology practice in Clinton Township, Michigan and Apex Behavioral Health-Dearborn P.L.L.C. provides mental and behavioral health services in Dearborn, MI.
These settlements resolve investigations prompted by complaints that Apex Behavioral Health-Dearborn P.L.L.C. failed to provide a sign language interpreter to a patient who is deaf and communicates using American Sign Language, and that Michael Vredevoogd, P.C., refused to provide services to a patient who used a service dog. The investigations confirmed both allegations. It also revealed that Michael Vredevoogd, P.C., had a policy of refusing to provide sign language interpreters for patients who are deaf, thus patients with disabilities at both practices were denied the opportunity to get psychological care and communicate effectively with their therapists
“It is critical for patients to be able to communicate effectively with their mental health care providers, especially clinical psychologists who must understand sensitive details in order to appropriately treat complex psychological issues” said U.S. Attorney Matthew Schneider. “It is also important for patients who use service animals to be able to access the office of mental health providers. The Americans with Disabilities Act ensures that persons with disabilities are given equal access to health care.”
Under the settlement, both medical offices have agreed to update their policies and train their staff to ensure compliance under the ADA. They have also agreed to take steps to ensure that interpreters or other appropriate auxiliary aids and services are provided to individuals who need them in the future. The complainants in the Apex Behavioral Health matter will also receive monetary compensation.
For more information on the ADA and the DOJ’s Barrier Free Healthcare Initiative, visit http://www.ada.gov/usao-agreements.htm. Those interested in finding out more about these settlements or the obligations of public accommodations under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be submitted to the U.S. Attorney’s Office by email at [email protected], or by calling 313-226-9151.
Genesee County Physician and Two Others Charged with Health Care FraudRead the Press Release
A grand jury indictment was unsealed today charging Patrick Wittbrodt, Dr. April Tyler and Jeffrey Fillmore of Genesee County with health care fraud and Patrick Wittbrodt with money laundering, United States Attorney Matthew Schneider announced.
Schneider was joined in the announcement by William P. Conway, Special Agent in Charge, FDA Office of Criminal Investigations’ Chicago 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.
The Indictment charges the defendants with a conspiracy to commit health care fraud and 17 counts of health care fraud. The Indictment specifically charges that between 2014 and 2017, the defendants would attend meetings of the United Auto Workers (“UAW”) union. At those meetings, the defendants touted unnecessary prescription pain cream, scar cream, pain patches and vitamins to UAW members. The prescriptions were unnecessary because Dr. April Tyler did not establish a valid doctor-patient relationship with any of the UAW members and/or did not determine medical necessity for the prescriptions she wrote for the UAW members. Many of the compounded pain and scar creams were billed to the insurance company at over $15,000 per prescription.
Over the course of the conspiracy, the defendants caused fraudulent claims to be submitted to Blue Cross/Blue Shield of Michigan and/or Express Scripts totaling approximately $9,500,000. Over the same period, Medicare paid over $800,000 in fraudulent prescription claims.
Defendant Patrick Wittbrodt is also charged with seven counts of money laundering in connection with the illegal proceeds of the health care fraud conspiracy.
“Health care fraud involving medically necessary prescriptions not only is dangerous to those patients receiving the drugs, but also drives up the cost of health care for everyone,” stated United States Attorney Matthew Schneider. “This indictment demonstrates that our office is committed to stamping out health care fraud in the Eastern District of Michigan.”
“When medical professionals and others scheme to illegally provide unneeded drugs to consumers, they violate the public trust,” said William P. Conway, Special Agent in Charge, FDA Office of Criminal Investigations’ Chicago Field Office. “Our office will continue to pursue and bring to justice those who are criminally involved in the distribution of medicines.”
“Writing medically unnecessary prescriptions for health care items and products and thus causing them to be billed to federal and private health insurance programs is wrong and illegal” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General. “Fraudulent acts such as this threaten vitally important programs such as Medicare and the beneficiaries they serve. The OIG will continue to work with our law enforcement and prosecutorial partners to ensure that individuals that perpetuate these types of fraudulent schemes are held accountable.”
Health care fraud, conspiracy to commit health care fraud and money laundering are each punishable by up to 10 years imprisonment and/or a $250,000 fine on each count.
This case is being prosecuted by Assistant United States Attorney Michael Heesters and Health Care Fraud Chief Wayne F. Pratt.
The case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General and the U.S. Food and Drug Administration.
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.
Towing Titan Gasper Fiore Sentenced to Prison for BriberyRead the Press Release
The owner of multiple towing companies in southeast Michigan, Gasper Fiore, 57, of Grosse Pointe Shores, was sentenced to 21 months in prison, followed by two years of supervised release and a $10,000 fine today based on his conviction for conspiracy to commit bribery, announced U.S. Attorney Matthew Schneider.
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 Manny Muriel, Special Agent in Charge of the Detroit Field Office of the Internal Revenue Service.
Fiore was convicted of conspiring to pay bribes to Clinton Township Trustee Dean Reynolds in order to obtain a municipal towing contract with the township. Clinton Township is the sixth largest municipality in the state. Fiore gave Reynolds cash bribes of $4,000 and $3,000 in March and May of 2016 in order to buy Reynolds’ vote to select Fiore’s company to receive the Clinton Township towing contract. Fiore paid the bribes to Reynolds through Charles B. Rizzo, who was cooperating with federal law enforcement at the time of the bribe payments.
Fiore is one of twenty defendants charged in the government’s wide-ranging corruption investigation centered in Macomb County, Michigan. United States District Judge Robert H. Cleland remanded Fiore into custody following the sentencing.
Information at the sentencing hearing revealed that besides his conviction for paying bribes to Reynolds, Fiore has also paid bribes to former Detroit Deputy Chief of Police Celia Washington, other law enforcement officers, former Mayor Kwame Kilpatrick, and former Detroit City Councilwoman Monica Conyers.
“Big-time contractors like Fiore who pay bribes and corrupt communities in order to maximize their wealth face significant punishment,” stated United States Attorney Matthew Schneider. “The court’s sentence demonstrates that pay-to-play contracting will not be tolerated and will be punished.”
"Public corruption is one of the FBI's top criminal priority," said FBI Detroit Special Agent in Charge Timothy R. Slater. "Corruption of local, state, and federally elected, appointed, or contracted officials - strikes at the heart of government and erodes public confidence."
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 and the Internal Revenue Service. The case is being prosecuted by Assistant U.S. Attorneys David A. Gardey, R. Michael Bullotta, and Adriana Dydell.
Detroit Area Hospital System to Pay $84.5 Million to Settle False Claims Act Allegations Arising from Improper Payments to Referring PhysiciansRead the Press Release
WASHINGTON – William Beaumont Hospital, a regional hospital system based in the Detroit, Michigan area, will pay $84.5 million to resolve allegations under the False Claims Act of improper relationships with eight referring physicians, resulting in the submission of false claims to the Medicare, Medicaid and TRICARE programs, the Justice Department announced today.
The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has an improper financial arrangement, including the payment of compensation that exceeds the fair market value of the services actually provided by the physician and the provision of free or below-market rent and office staff. Both the Anti-Kickback Statute and the Stark Law are intended to ensure that physicians’ medical judgments are not compromised by improper financial incentives and instead are based on the best interests of their patients.
“Offering financial incentives to physicians in return for patient referrals undermines the integrity of our health care system,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Patients deserve the unfettered, independent judgment of their health care professionals.”
“We are very pleased with the outcome of this case. This result should impress on the medical community the fact that we will aggressively take action to recover monies wrongfully billed to Medicare, through the remedies provided in the federal False Claims Act,” said U.S. Attorney Matthew Schneider for the Eastern District of Michigan. “I would like to commend the new leadership at Beaumont Hospital for making things right once its past wrongdoing was brought to its attention by federal investigators.”
The settlement resolves allegations that between 2004 and 2012, Beaumont provided compensation substantially in excess of fair market value and free or below-fair market value office space and employees to certain physicians to secure their referrals of patients in violation of the Anti-Kickback Statute and the Stark Law, and then submitted claims for services provided to these illegally referred patients, in violation of the False Claims Act. The settlement also resolves claims that Beaumont allegedly misrepresented that a CT radiology center qualified as an outpatient department of Beaumont in claims to federal health care programs. As a result of this settlement, Beaumont will pay $82.74 million to the United States and $1.76 million to the State of Michigan.
“Health care providers that offer or accept financial incentives in exchange for patient referrals undermine both the financial integrity of federal health care programs and the public’s trust in medical institutions,” said HHS-OIG Special Agent in Charge Lamont Pugh. “Our agency will continue to protect both patients and taxpayers by holding those who engage in fraudulent kickback schemes accountable.”
The allegations resolved by the settlement were brought in four lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The four qui tam cases are captioned: United States ex rel. David Felten, M.D., Ph.D. v. William Beaumont Hospitals, et al., No. 2:10-cv-13440 (E.D. Mich.), United States ex rel. Karen Carbone v. William Beaumont Hospital, No. 11-cv-12117 (E.D. Mich.), United States ex rel. Cathryn Pawlusiak v. Beaumont Health System, et al., No. 2:11-cv-12515 (E.D. Mich.), and United States ex rel. Karen Houghton v. William Beaumont Hospital, No. 2:11- cv-14312 (E.D. Mich.). The whistleblower shares to be awarded in the cases have not yet been determined.
These matters were investigated by the U.S. Attorney’s Office for the Eastern District of Michigan, the Civil Division’s Commercial Litigation Branch, and the State of Michigan Attorney General’s Office. Investigative assistance was provided by the Office of Inspector General of the Department of Health and Human Services and the Centers for Medicare and Medicaid Services, and the Department of Defense’s Defense Criminal Investigative Service.
In addition to resolving its False Claims Act liability, Beaumont has entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General which includes, among other things, an arrangements review to be conducted by an Independent Review Organization.
The government’s investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Former Manager of Colony Arms Apartment Complex Pleads Guilty to Bribery for Seeking Bribes from the PoorRead the Press Release
Lucresha Frank, 41, of Pontiac, a former manager of the Colony Arms apartments in Detroit, pleaded guilty to bribery, United States Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Brad Geary, Special Agent in Charge, Housing and Urban Development’s Office of Inspector General and Timothy R. Slater, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.
In 2013, Frank worked as a manager of the Colony Arms apartments, a U.S. Department of Housing and Urban Development funded Section 8 housing facility. Frank admitted during her guilty plea that she solicited and accepted cash bribes from prospective tenants in exchange for improperly moving them up on a lengthy waiting list for an apartment. One of the cash bribes she took was from a woman who was then homeless and living in a shelter with her two small children.
“Bribery by those entrusted to provide federally-funded housing to the economically disadvantaged is an atrocity that cannot stand. It is not only a breach of the public trust, it takes advantage of those who are at their financial low point and who are desperate for shelter for themselves and their families,” said U.S. Attorney Matthew Schneider. “As such, this criminal conduct will be uncovered and prosecuted to the fullest extent allowed by federal law.”
“Lucresha Frank’s illegal actions, motivated by her own greed, devastated families experiencing financial distress and prevented those in desperate need from being able to access low cost housing,” said Timothy R. Slater, Special Agent in Charge, Detroit Division of the FBI. “The FBI and our law enforcement partners remain fully committed to investigating and prosecuting anyone who seeks to take advantage of those in our communities through such devious criminal schemes.”
Frank is scheduled to be sentenced on December 6, 2018 before U.S. District Judge Terrence G. Berg. She faces up to 10 years imprisonment and a fine of $250,000.
The investigation of this case was conducted by the U.S. Department of Housing and Urban Development and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney R. Michael Bullotta.
Michigan Man Charged with Providing Material Support to IsisRead the Press Release
WASHINGTON – In a criminal indictment unsealed in the Eastern District of Michigan today, Ibraheem Izzy Musaibli, 28, of Dearborn, Michigan, was charged with providing and attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization.
The indictment was announced by Assistant Attorney General for National Security John C. Demers, U.S. Attorney Matthew J. Schneider of the Eastern District of Michigan and Timothy R. Slater, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation.
Musaibli, a natural-born U.S. citizen, was detained overseas by Syrian Democratic Forces (SDF) and recently transferred into U.S. custody. Musaibli will be arraigned on the indictment at the federal courthouse in Detroit on Wednesday, July 25, 2018, at 1:00 p.m. EDT.
The indictment alleges that from about April 2015 through June 2018, Musaibli knowingly provided and attempted to provide material support to ISIS, in the form of personnel and services, knowing that ISIS is a terrorist organization and that ISIS engages in terrorism.
“The National Security Division will not tolerate threats to our country from terrorist organizations like ISIS—not least of all those that come from our own citizens,” said Assistant Attorney General Demers. “Musaibli’s alleged provision of material support to ISIS put the United States at risk and may have endangered the lives of countless innocent people. I am confident that he will face justice for his crimes, and I hope that his case sends a clear message that we will hold our citizens accountable who are apprehended overseas and tried to join a terrorist organization such as ISIS. I am also grateful to our law enforcement and military partners who made this prosecution possible.”
“The indictment alleges that, for a substantial period of time, defendant Musaibli provided material support to ISIS — one of the most violent terrorist organizations in the world. During that same time, American-backed coalition forces were fighting ISIS in Iraq and Syria,” United States Attorney Matthew Schneider stated. “We will vigorously prosecute anyone who provides, or even attempts to provide, support to terrorists.”
“The indictment in this case serves as a reminder of the danger posed by those who travel overseas to join forces with ISIS,” said Timothy R. Slater, Special Agent in Charge, Detroit Division of the FBI. “The FBI is determined to find these individuals and bring them to justice. Bringing charges in these cases will remind others what can happen if they provide assistance to foreign terrorist organizations.”
An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the FBI’s Joint Terrorism Task Force. The case is being prosecuted by Assistant U.S. Attorneys Cathleen Corken and Kevin Mulcahy of the Eastern District of Michigan with assistance from the National Security Division’s Counterterrorism Section.
Former Senior UAW Official Pleads Guilty to Conspiracy with Fiat Chrysler ExecutivesRead the Press Release
The former second highest official in the UAW’s Chrysler Department pleaded guilty today to conspiring with other UAW officials and Fiat Chrysler executives to make illegal payments to union officials, announced U.S. Attorney Matthew Schneider.
Joining in the announcement were James Vanderberg, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Timothy R. Slater, 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, Acting District Director, U.S. Department of Labor – Office of Labor-Management Standards.
Nancy A. Johnson, 57, of Macomb, Michigan pleaded guilty to conspiring to violate the Labor Management Relations Act by accepting and arranging for illegal payments from Fiat Chrysler executives to high-level UAW officials from 2014 through 2016. After the now-deceased UAW Vice President General Holiefield retired in 2014, Johnson and other UAW officials began running the UAW’s Chrysler Department, responsible for dealing with executives at Fiat Chrysler. During the plea hearing, Johnson admitted to participating in a conspiracy that had existed at least from 2009 through 2016 whereby Fiat Chrysler executives conspired with one another, with Fiat Chrysler, with UAW officials, and with the UAW to funnel money and things of value worth tens of thousands of dollars from Fiat Chrysler to UAW officials and the UAW. The things of value funneled to UAW officials from Fiat Chrysler included personal travel, golf resort fees, lavish meals and parties, limousine services, designer clothing, designer shoes, golf equipment, electronics, and an Italian shotgun.
Johnson’s guilty plea indicated that a high-level UAW official directed other UAW officials to use money supplied from automobile manufacturing companies through joint UAW training centers to pay for travel, including travel solely for purported union business, as well as lavish meal and other entertainment costs of senior UAW officials and their friends, family, and allies. This directive was issued in order to reduce costs to the UAW budget from such expenditures because the UAW’s budget was under pressure.
Johnson’s plea also stated that In 2014, 2015, and 2016, in Palm Springs, California, high-level UAW officials used UAW funds to pay for extravagant meals, premium liquor, multi-month stays at condominiums, and multiple rounds of golf for little, if any, legitimate union-business or labor-management purposes. These expenditures were in addition to other expenses paid for by Fiat Chrysler by way of the training center.
As another part of the conspiracy, Johnson’s plea indicated that during the period 2014 through 2016, 100% of the UAW salaries of a large number of UAW officials and employees, nominally assigned to the NTC, was paid for by FCA through the NTC. FCA paid these salaries for the UAW even though senior UAW officials and FCA executives both knew that these UAW officials and employees “assigned” to the NTC spent most of their work time performing tasks for the UAW, reported to the UAW, and enforced FCA’s compliance with the collective bargaining agreement on behalf of the union and not for the benefit of FCA or the NTC.
Johnson is the seventh defendant to plead guilty in connection with the ongoing criminal investigation into illegal payoffs involving UAW officials and FCA executives. The following individuals have already pleaded guilty to their participation in the scheme: former FCA Vice President for Employee Relations Alphons Iacobelli, former FCA Financial Analyst Jerome Durden, former Director of FCA’s Employee Relations Department Michael Brown, former senior UAW officials Virdell King and Keith Mickens, and Monica Morgan, the widow of UAW Vice President General Holiefield.
“Today’s conviction of yet another senior UAW official further exposes the dishonorable scheme between UAW officials and Fiat Chrysler executives to corrupt the collective bargaining process at the expense of rank and file union members,” said United States Attorney Matthew Schneider. “The conviction reveals that part of this scheme involved the wrongful use of UAW funds for extravagant meals, entertainment, golf, and travel for little, if any, union-business purpose.”
“Nancy Johnson held a high-level position in the UAW and was entrusted to negotiate and implement contracts for the UAW union members she served. Instead, Johnson defrauded the membership by illegally obtaining items worth thousands of dollars, including jewelry, clothing, and other personal items, knowing that FCA was paying the bill. We will continue to work with our law enforcement partners to investigate corrupt union officials who violate their duty to the members they represent for personal gain.” stated James Vanderberg, Special Agent-in-Charge, Chicago Region, United States Department of Labor Office of Inspector General.
“Today’s guilty plea from Nancy A. Johnson, a former senior UAW official, demonstrates the continued efforts of the FBI along with our law enforcement partners to hold those persons misusing funds, whether for personal gain or the enrichment of others, accountable for their actions," said Timothy R. Slater, Special Agent in Charge, Detroit Division of the FBI. "Her actions, depriving the rank and file UAW membership of training money, is intolerable and we remain committed to pursuing all those responsible."
“Protecting members against corruption perpetrated by their union leaders is critical to the mission of OLMS,” said Thomas Murray, acting District Director of the Office of Labor-Management Standards (OLMS) Detroit-Milwaukee District Office. “We will continue to work cooperatively with our law enforcement partners to ensure that anyone who abuses their union position for personal financial gain will be brought to justice.”
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 case is being prosecuted by Assistant U.S. Attorneys David A. Gardey, Erin Shaw, Charles J. Kalil II, and Adriana Dydell.
Man Sentenced for Abusive Sexual Contact on Indian ReservationRead the Press Release
A 35-year-old resident of Mount Pleasant, Michigan, was sentenced yesterday to 72 months in prison for Abusive Sexual Contact, announced U.S. Attorney Matthew Schneider.
United States District Judge Thomas L. Ludington also imposed 5 years of supervised release on Wayne Marshall Acuna who pled guilty on April 9, 2018.
The evidence established that in 2016 or 2017, Acuna entered the room of a minor and rubbed the victim’s vagina through the clothing while the victim was sleeping. This all occurred on the Isabella Reservation.
The case was investigated by the Saginaw Chippewa Tribal Police and the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Roy Kranz.
Six Men Sentenced for Their Roles in an International Child Pornography Production RingRead the Press Release
Six men from around the country were sentenced today and yesterday for participating in an international child pornography production ring, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, United States Attorney Matthew Schneider of the Eastern District of Michigan, and Special Agent in Charge Timothy R. Slater of the FBI, Detroit Division.
- Terry Kovac, 49, a dispatcher of a package delivery company of Las Vegas, Nevada, was sentenced to 37 years in prison, followed by 5 years of supervised release.
- Felipe Dominguez-Meija, 31, a painter of Springdale, Arkansas, was sentenced to 41 years in prison, followed by 5 years of supervised release.
- Noel Eisley, 38, a research scientist of Wappinger Falls, New York, was sentenced to 35 years in prison, followed by 10 years of supervised release.
- Eric Robinson, 42, a restaurant manager of Duluth, Minnesota, was sentenced to 34 years in prison, followed by 10 years of supervised release.
- Bret Massey, 47, a sales coordinator and design specialist of Portland, Maine, was sentenced to 32 years in prison, followed by 10 years of supervised release.
William Phillips, 39, a cook of Highland Park, New York, pleaded guilty to the charge of child exploitation enterprise in two cases for his participation in the above-described group as well as another, similar group with the same objective. Phillips entered guilty pleas on Dec. 21, 2017 and May 11, 2018. On the first case, Phillips was sentenced to 33 years in prison, followed by 5 years of supervised release. On the second case, Phillips was sentenced to 33 years in prison, to run concurrently, followed by 5 years of supervised release.
In addition to their prison sentences and terms of supervised release, all of the defendants were ordered to pay 5,000 dollars in restitution to each of the identified victims, reaching a total of over 1.4 million dollars. U.S. District Judge Stephen J. Murphy III for the Eastern District of Michigan imposed the sentences.
According to court records, these six men worked together from 2013 to April of 2017, with other men both inside and outside of the United States, to lure juvenile girls to two different unmonitored video chat websites and sexually exploit them. The men recruited the victims from common social media platforms by pretending to be teenage boys interested in chatting with the girls in real time. Once the victims arrived in the chatrooms, the group—all pretending to be teenagers—worked together to build trust and convince the child to engage in sexually explicit conduct on web camera. The group members then recorded that activity and shared it with each other. The girls were unaware that the men were making recordings, or what they dubbed “captures,” of the sexual activity.
Through their scheme, the group successfully recorded tens of thousands of sexually explicit videos of minors, some as young as 11 years old. The defendants preyed on more than 100 victims, some of whom were present for the sentencing hearing and made statements to the Court. Still other victims have not been identified. The FBI has so-far identified 48 victims in the United States.
“The six men sentenced today are an example of a disturbing and reprehensible new trend: the ‘crowdsourcing’ of child exploitation,” said Assistant Attorney General Benczkowski. “These highly organized and coldly calculating defendants worked together over the course of several years, pretending to be teenage boys in order to entice more than 100 minor girls—some as young as 11 years old—into producing child pornography which the defendants then shared with each other. Thanks to the outstanding efforts of the agents and prosecutors who worked on this case, these men will spend years behind bars, and their victims—some of whom were present at the sentencing and addressed the Court—have received some measure of justice for the terrible harm done to them.”
“These predators committed truly horrific crimes against innocent girls, and they deserve decades in prison. Shockingly, some of these defendants have young children themselves,” said United States Attorney Schneider. “Parents, please speak with your children about the dangers of chatting online so we can keep all of our children safe.”
“These appalling crimes victimize and exploit innocent children”, said FBI Special Agent in Charge Slater. “The arrest and prosecution of perpetrators who commit these heinous acts of violence will continue to be a high priority of the FBI’s SEMTEC task force.”
Assistant United States Attorneys April N. Russo and Kevin M. Mulcahy of the Eastern District of Michigan, along with Trial Attorney Leslie Fisher of the Child Exploitation and Obscenity Section (CEOS) of the Justice Department’s Criminal Division, prosecuted the case. The FBI’s Detroit Field Office and Southeast Michigan Trafficking and Exploitation Crimes task force investigated the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc.
Former Airport Contractor Pleads Guilty to Paying over $5 Million in Bribes and KickbacksRead the Press Release
William Pritula, 69, of Romulus pleaded guilty to paying co-defendant James Warner, a field inspector at the Wayne County Airport Authority (WCAA), over $5 million in bribes and kickbacks between May of 2010 and August of 2014, United States Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Timothy Slater, Special Agent-in-Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Thomas J. Ullom, Special Agent-in-Charge of the Chicago Field Office of the United States Department of Transportation, Office of Inspector General.
Pritula, who owned and operated Pritula and Sons, a company which sought and entered into contracts for pavement repair and replacement, as well as water main repair and fire hydrant installation and maintenance at the Detroit Metropolitan Airport, participated in a scheme in which Warner, with Pritula’s knowledge, would draft and submit fraudulently-inflated invoices for work which Pritula 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. Thus far, law enforcement has seized $11.4 million in criminal proceeds, including $7.5 million from Pritula and $3.9 million from Warner.
The bribery charge to which Pritula has pleaded guilty carries a maximum sentence of 10 years’ imprisonment and a fine of up to $250,000.
United States Attorney Schneider said, “Today’s guilty plea to one of the largest bribes prosecuted to date in the Eastern District of Michigan, reinforces our continued commitment to protecting our citizens from the fraud, waste, and abuse that stems from bribe-paying contractors who are motivated by greed rather than a desire to improve our public infrastructure.”
“To those who seek advantage in obtaining government contracts by paying kickbacks or bribes, the message should be clear—the collective resources of the FBI and our law enforcement partners will expose your illegal activities and bring you to justice”, said Timothy R. Slater, Special Agent in Charge, Detroit Division of the FBI.
“As evidenced by the guilty plea entered into today by William Pritula, investigating acts of corruption and pursing the individuals who commit them remains a top priority for the Department of Transportation (DOT) Office of Inspector General (OIG),” stated Thomas J. Ullom, Regional Special Agent-In-Charge, DOT-OIG. “Working with our law enforcement and prosecutorial partners, we will continue our vigorous efforts in preventing, detecting and prosecuting infrastructure fraud.”
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.
Wife of Former UAW Vice President Sentenced to Prison for Criminal Tax FraudRead the Press Release
The wife of former UAW Vice President General Holiefield was sentenced to 18 months in prison, followed by one year of supervised release and a fine of $25,000 today based on her conviction for felony tax fraud, announced U.S. Attorney Matthew Schneider.
Joining in the announcement were Manny Muriel, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations, James Vanderberg, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Thomas Murray, Acting District Director, U.S. Department of Labor – Office of Labor-Management Standards, and Timothy R. Slater, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation.
Monica Morgan, 54, of Harrison Township, Michigan had previously pled guilty in February 2018 before United States District Judge Paul D. Borman. During her guilty plea, Morgan admitted to filing fraudulent tax returns whereby she failed to report hundreds of thousands of dollars in income for the years 2011 through 2014. In total, Morgan failed to pay $190,747 in taxes owed.
Morgan is the wife of former UAW Vice President General Holiefield, who died in March of 2015. From 2010 to 2014, Holiefield was the director of the UAW Chrysler Department and acted as the lead negotiator and the lead administrator for the collective bargaining agreements between the UAW and FCA.
According to court records, Morgan owned and operated the companies Monica Morgan Photography and Wilson’s Diversified Products based in Detroit, Michigan. Morgan’s companies received hundreds of thousands of dollars from the UAW-Chrysler National Training Center during the years when Holiefield was a UAW Vice President. Morgan’s companies also received significant payments from Holiefield’s charity, known as the Leave the Light On Foundation. Former FCA Vice President Alphons Iacobelli and former FCA Financial Analyst Jerome Durden each acknowledged using Wilson Diversified Products and the Leave the Light On Foundation to conceal payments made on behalf of FCA to UAW Vice President Holiefield. Both Durden and Iacobelli have previously pleaded guilty to their participation in the criminal conspiracy, along with former FCA executive Michael Brown and former senior UAW officials Virdell King and Keith Mickens. Durden, Iacobelli, Brown, King, and Mickens are all awaiting sentencing before Judge Borman.
Morgan’s various companies received hundreds of thousands of dollars in money funneled by FCA executives to Morgan and Holiefield, all in effort to keep UAW executives like Holiefield “fat, dumb, and happy.” At the hearing today, Morgan’s sentencing guidelines were enhanced based on the fact that the income she failed to report was the proceeds of criminal activity. In addition, her sentence was enhanced because Morgan used sophisticated means and shell companies in order to conceal her tax fraud.
The Court ordered Morgan to pay $190,747 in restitution to the U.S. Treasury Department.
Morgan is the first defendant to be sentenced in the ongoing criminal investigation into illegal payoffs involving UAW officials and FCA executives.
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.
“Morgan was punished for cheating on her taxes and for helping to conceal hundreds of thousands of dollars in illegal payments from FCA executives to Morgan and her husband, General Holiefield, the former UAW Vice President in charge of the Chrysler Department,” stated United States Attorney Matthew Schneider. “The court’s sentence for Morgan vindicates the honest tax payers who properly report their income and pay their taxes, while sending a strong signal to those who would steal from everyone in the community through tax fraud.”
Manny Muriel, Special Agent in Charge of Detroit’s IRS Criminal Investigation stated, “Today’s sentencing of Monica Morgan demonstrates the consequences for enriching oneself with funds designated for the hard working members of the UAW and failing to report the diverted funds as income on your personal tax returns. IRS-CI and our federal partners will continue to aggressively pursue corrupt corporate and union officials who violate federal law and interfere with our nation’s tax laws."
“Monica Morgan filed a false tax return to conceal income she received from her companies. Those companies received hundreds of thousands of dollars from the UAW-Chrysler National Training Center during the years her late husband was a UAW Vice President. We will continue to work with our law enforcement partners to investigate crimes that threaten the integrity of the union collective bargaining process,” said James Vanderberg, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
“The U.S. Department of Labor’s Office of Labor-Management Standards places a high priority on combatting financial malfeasance and safeguarding financial integrity in labor unions,” said acting OLMS Detroit-Milwaukee District Director Thomas Murray. “Morgan’s conviction 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 sentencing of Monica Morgan should serve as a firm reminder that anyone who believes that they can enrich themselves through deception and fraud will be held accountable", said Timothy R. Slater, Special Agent in Charge, Detroit Division of the FBI. "In the process of receiving and concealing ill-gotten funds, Morgan committed tax fraud and squandered training opportunities for many deserving blue-collar auto workers".
The case is being prosecuted by Assistant U.S. Attorneys David A. Gardey, Erin Shaw, Charles J. Kalil II, and Adriana Dydell.
Monroe Area Doctor Charged with Illegal Distribution of Prescription Drugs and Health Care FraudRead the Press Release
DR. POMPY WAS ACQUITTED OF THE CHARGES ALLEDGED IN THE INDICTMENT DESCRIBED IN THE PRESS RELEASE BELOW
A grand jury returned an indictment yesterday charging Dr. Lesly Pompy, 57, of Monroe, Michigan with unlawful distribution of prescription drugs and health care fraud, United States Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Special Agent in Charge Timothy J. Plancon, U.S. Drug Enforcement Administration, Detroit Field 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.
The 37-count Indictment charges that between 2012 and 2016, Dr. Pompy unlawfully distributed more than 4,221,892 dosage units of Schedule II controlled substances and over 6,196,642 total dosage units of all controlled substances outside the course of professional medical practice. During that time frame, he also submitted claims to Medicare, Medicaid and Blue Cross Blue Shield totaling approximately $16,856,683. The majority of these fraudulent claims were seeking reimbursement for the costs of office visits and other services that were not medically necessary and that Dr. Pompy never rendered.
“The damage that the proliferation of opioid distribution has done to our community, like many across the United States has been devastating,” stated United States Attorney Schneider. “It’s particularly disturbing when the distributor is a medical professional
DEA Special Agent in Charge Plancon stated, “This investigation was only possible because of the collaborative efforts of our federal and local law enforcement partners including but not limited to the Monroe Area Narcotics and Investigation Team. The indictment of Pompy reminds the citizens we serve that collectively we are ridding the community of crime one drug dealer at a time.”
Dr. Pompy was arraigned this afternoon in federal court and was released on bond.
This case is being prosecuted by Assistant United States Attorney Brandy R. McMillion and Health Care Fraud Chief Wayne F. Pratt. McMillion serves as the Opioid Fraud Abuse and Detection Unit Prosecutor for the Eastern District of Michigan. This Department of Justice initiative uses data to target and prosecute individuals that are contributing to the nation’s opioid crisis. The Eastern District of Michigan is one of the twelve districts included in the Opioid Fraud Abuse and Detection Unit.
The case was investigated by the U.S. Drug Enforcement Administration and the U.S. Department of Health and Human Services, Office of Inspector General.
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.
Shelby Township Psychologist Charged with Billing for Unperformed Psychological TestsRead the Press Release
An indictment was unsealed today charging psychologist Paul L. Smith, PhD, 54, most recently practicing in Shelby Township, Michigan, with fraudulently billing Blue Cross Blue Shield of Michigan (BCBSM) for neuropsychological and psychological testing that was never performed, U.S. Attorney Matthew Schneider announced today. In total, according to the indictment, BCBSM lost approximately $5,000,000 as a result of Smith’s false claims. Smith is scheduled to be arraigned in federal court tomorrow afternoon.
Schneider was joined in the announcement by Acting Special Agent in Charge Timothy Waters 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.
The indictment alleges that from January 2015 to February of 2018, Smith submitted approximately 1,700 false claims for neuropsychological testing (CPT Code 96118) and 140 false claims for psychological testing (CPT Code 96101). As an example of excessive and unnecessary billing, the indictment alleges that Smith billed BCBSM for allegedly providing neuropsychological testing on 21 occasions for a single patient within a single year, each claim involving 24 hours of professional service. BCBSM paid Smith approximately $61,000 based upon false claims on behalf of that patient. In total, according to the indictment, BCBSM lost approximately $5,000,000 as a result of Smith’s false claims.
An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt. The case was investigated by Special Agents of the FBI and HHS. The case is being prosecuted by Assistant U.S. Attorneys John Engstrom and Shankar Ramamurthy.
Jury Convicts Former Clinton Township Trustee Dean Reynolds on All Fourteen Bribery and Conspiracy ChargesRead the Press Release
This afternoon, a federal jury convicted Dean Reynolds, a former Trustee of Clinton Township, on all fourteen counts of bribery and bribery conspiracy United States Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Special Agent in Charge Timothy R. Slater of the Federal Bureau of Investigation and Manny Muriel, Special Agent in Charge of the Internal Revenue Service.
The jury deliberated for slightly over an hour before reaching its guilty verdicts following a six-day long trial that began on June 13, 2018. The Court remanded Reynolds into custody following entry of the verdicts.
During the trial, the evidence showed that Reynolds demanded and took over $150,000 in bribes in four separate bribery conspiracies involving four different government contracts. The bribes included over $75,000 in cash, $50,000 in free legal services for Reynolds’ divorce, and an all-expenses paid trip to Disney World, including an eight-night stay in a deluxe-level room costing over $600 per night. The jury found that Reynolds demanded bribes in connection with the Clinton Township garbage-hauling contract worth over $16 million, the township engineering contract worth over $500,000 per year, and the township towing contract. In addition, the jury convicted Reynolds of conspiring to pay bribes to former New Haven, Michigan Trustee Brett Harris and to corrupt the garbage contract for New Haven. Reynolds was convicted of taking multiple bribes from convicted garbage executive Chuck Rizzo, from Paulin Modi, a former managing partner of Giffels Webster Engineering, who was also convicted of bribery, and from Gasper Fiore, the owner of multiple towing companies in southeast Michigan, who was also previously convicted of bribery conspiracy.
United States Attorney Schneider said, “Today’s verdict shows both our intolerance for corrupt public officials in Metro Detroit, and the community’s willingness to find them guilty after hearing the evidence. The verdict is a victory for honest government and a blow to those officials who try to subvert it for their own selfish, greedy ends.”
"The pursuit of public officials who abuse their authority for personal gain is one of the highest priorities for the FBI," stated Timothy R. Slater, Special Agent in Charge of the FBI Detroit Field Office. "We are committed to rooting out corruption and graft in southeast Michigan to ensure that our communities get the honest and quality public representation that they deserve."
Based on the jury’s guilty verdicts for conspiring to commit bribery and taking bribes, Reynolds faces a maximum of five years in prison on each of the four bribery conspiracy charges and a fine of up to $250,000. In addition, Reynolds also faces a maximum of ten years in prison and a fine of $250,000 on each of his ten convictions for bribery. A preliminary calculation of the federal sentencing guidelines for Reynolds indicates that he faces a total combined sentencing guideline range of over twenty years in prison.
This case is part of the government’s wide-ranging corruption investigation centered in Macomb County, Michigan. Reynolds was the sixteenth individual convicted as part of this investigation, including public officials, contractors, and other co-conspirators.
The investigation of this case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service. The case is being prosecuted by Assistant U.S. Attorneys R. Michael Bullotta, David A. Gardey, and Adriana Dydell
Four Gang Members Indicted for Vicious Assault on 15-Year Old BoyRead the Press Release
An indictment was unsealed in Flint charging Doniel A. Heard of Canton, Talasha R. Willis of Flint, Kimberly A. Perryman of Mt. Morris, and Alina D. White of Waterford for their involvement in a vicious assault on a 15-year old boy, United States Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Acting Special Agent in Charge Timothy T. Waters, Federal Bureau of Investigation, Detroit Division (FBI), John C. Mullaly, Chief of Police of the Genesee Township Police Department, and David S. Leyton, Genesee County Prosecuting Attorney.
Heard, Willis, Perryman, and White are each charged with a count of assault with a dangerous weapon in aid of racketeering, and a count of interference with commerce by robbery.
According to the indictment, the defendants, Heard, Willis, Perryman, and White, are members of a street gang known as “M.O.B. 662,” which is a set of the Bloods, a national criminal street gang. The defendants beat and robbed the 15-year old victim, then carved “M.O.B. 662” into his chest with a knife. The indictment alleges that the defendants assaulted the victim for the purpose of gaining entrance to and maintaining and increasing position in the gang.
“As alleged in the indictment, this was a brutal attack on a 15-year old boy by a violent street gang,” stated United States Attorney Schneider. “We will continue to vigorously prosecute violent street gangs, especially those who target children.”
“This case is a stark reminder that the influence of violent street gangs extends beyond the big cities and into smaller communities such as our own,” said Genesee County Prosecutor David Leyton. “We must be ever-vigilant in thwarting their activities and stopping them from gaining a foothold in Flint and Genesee County and the prosecution of this case is a part of that effort,” he said.
“The defendants’ vicious attack of a 15-year old child is the type of senseless violence that if left unchecked can eat away at the core of a community,” stated Timothy T. Waters, Acting Special Agent in Charge of the Detroit FBI. “The FBI, in collaboration with our local and state partners, is dedicated to protecting our neighborhoods from violent street gangs and securing safety for our communities.”
“During the Genesee Township Police Department’s investigation, it became obvious that the nature of the robbery and maiming of the juvenile victim was part of a larger organized gang related activity. Our agency worked closely with the United States Attorney’s Office, the Genesee County Prosecutor’s Office, and with our State and Federal law enforcement partners to identify and apprehend the criminal parties responsible for this heinous attack,” said Chief Mullaly.
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The case was investigated by the Genesee Township Police Department and special agents of the FBI, with assistance from the Genesee County Prosecutor’s Office. The case is being prosecuted by Assistant United States Attorneys Chris Rawsthorne, Ann Nee, and Anthony Vance.
Detroit Man Sentenced to 30 Years in Prison for Distribution of Fentanyl Laced Heroin That Resulted in DeathRead the Press Release
A Detroit man was sentenced yesterday to 30 years in prison for the January 2017 sale of fentanyl laced heroin that resulted in the death of a 36 year old Westland man, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Special Agent in Charge Timothy Plancon, Drug Enforcement Administration, Detroit Division and Chief Jeff Jedrusik of the Westland Police Department.
Sentenced was Alxleotold Gordon, 46. Gordon pleaded guilty on September 18, 2017 before U.S. District Judge Robert H. Cleland. Co-defendant Lori Ann Pangborn also pleaded guilty and was sentenced to 108 months in prison last December.
According to court records, the victim in this case was supplied heroin by Lori Ann Pangborn, Gordon’s co-defendant, while the victim was in a recovery house attempting to overcome his heroin addiction. Gordon, who has numerous felony drug convictions, was sentenced following his guilty pleas to Distribution of a Controlled Substance Resulting in Death, Possession of Controlled Substances (Heroin) With the Intent to Distribute, Possession of Firearms by a Previously Convicted Felon and Possession of Firearms in Furtherance of a Drug Trafficking Crime.
“This conviction and sentence is particularly important given Mr. Gordon’s numerous previous felony conviction for narcotics distribution offenses,” stated U.S. Attorney Schneider. “Persons addicted to opiates face nearly insurmountable challenges in beating their addiction. Those who make it available to users guarantee failure in that fight.”
“This sentence is the culmination of numerous hours of dedicated work by Westland Police Officers and DEA Agents” said Special Agent Plancon. “DEA 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 Detroit’s citizens.”
An important component to the federal prosecution was swift and successful investigation and undercover work by officers of the Westland Policed Department.
Chief Jedrusik of the Westland Police stated, “Westland Detectives and Officers from the Special Investigations Unit conducted a thorough and professional investigation, quickly determined the defendants’ identities and orchestrated a seamless undercover operation and search warrant resulting in Gordon and Pangborn’s arrest. Their hard work and dedication is a credit to the Westland Police Department.”
Westland Police Department and the Detroit office of the DEA investigated the case. Assistant U.S. Attorneys Erin Shaw and John O’Brien of the Eastern District of Michigan prosecuted the case.
Detroit Man Pleads Guilty to Unemployment Insurance Fraud, Illegal Gun PossessionRead the Press Release
A Detroit man pleaded guilty today to conspiring to engage in mail fraud and being a felon in possession of a firearm, U.S. Attorney Matthew Schneider announced.
Schneider was joined in the announcement by James Vanderberg, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
According to court records, Charles H. Alexander, 54, of Detroit, participated in a multi-year scheme to fraudulently obtain unemployment insurance benefits. Alexander acknowledged that as part of the scheme, he obtained personal identifying information of third parties and caused unemployment benefits to be issued in the names of those third parties—even though those individuals had no legitimate entitlement to such benefits. Alexander also acknowledged that he impersonated others in order to withdraw fraudulently-obtained unemployment insurance benefits.
Alexander, who has prior convictions for illegal weapons activity, drug activity, and aggravated domestic violence, also admitted that he illegally possessed a loaded firearm.
“Charles Alexander defrauded the Michigan Unemployment Insurance Agency by conspiring with others to falsely obtain and use debit cards containing over $330,000 in unemployment benefits issued in the names of claimants who were not entitled to such benefits. We will continue to work with our law enforcement partners to safeguard the unemployment insurance system from those who exploit these benefit programs,” said James Vanderberg, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
As part of his plea agreement, Alexander has agreed to be held accountable for $330,561 in restitution.
Alexander entered his guilty plea before U.S. District Judge Bernard A. Friedman in Detroit. Sentencing has been set for October 5, 2018.
The case is being investigated by the Department of Labor, Office of Inspector General and the State of Michigan Unemployment Insurance Agency, and is being prosecuted by Assistant United States Attorney Andrew J. Yahkind
Former DPD Officer Sentenced to 26 Months in Prison for ExtortionRead the Press Release
Former Detroit Police Department Officer Charles Wills was sentenced today to twenty-six months’ imprisonment for accepting bribes from an owner of an automobile collision shop in exchange for referring stolen and abandoned vehicles recovered in the City of Detroit to that shop, United States Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Timothy Slater, Special Agent in Charge, Federal Bureau of Investigation, Patricia Armstrong, U.S. Postal Inspector in Charge, U.S. Postal Inspection Service, Detroit Division and Chief James Craig, Detroit Police Department, Patricia Armstrong, U.S. Postal Inspector in Charge, U.S. Postal Inspection Service, Detroit Division and Chief James Craig, Detroit Police Department. The defendant was actively employed with the Detroit Police Department at the time of the offense.
Charles Wills, age 53, was sentenced by U.S. District Judge Robert Cleland. Wills previously pleaded guilty to two counts of extortion.
According to the facts alleged in the superseding indictment and further developed at the plea hearing and in sentencing briefing, Wills accepted cash payments from the owner/operator of a Detroit collision shop in exchange for referring abandoned vehicles to that shop for repairs. Wills also accepted cash from other collision shops, wrote false police reports, and introduced another officer to the scheme of accepting cash in exchange for referring vehicles to collision shops.
This is the fifth defendant to have been sentenced as a result of this investigation. The sixth defendant, Deonne Dotson, is awaiting trial.
All of the Officers were charged with engaging in extortion for using their official positions as Police Officers to refer cars to certain collision shops in exchange for cash payments.
The investigation was conducted by the FBI, the U.S. Postal Inspection Service, Detroit Police Department and the following agencies from the FBI Detroit Area Corruption Task Force: Michigan State Police and U.S. Customs and Border Protection, Office of Professional Responsibility, Investigative Operation Division.
The FBI Detroit Area Corruption Task Force is comprised of personnel from the Detroit Division of the FBI; Michigan State Police; Michigan Department of Attorney General; Detroit Police Department; U.S. Internal Revenue Service, Criminal Investigation Division; U.S. Customs and Border Protection, Office of Professional Responsibility, Investigative Operations Division; U.S. Postal Inspection Service; U.S. Department of Labor, Office of the Inspector General, Office of Labor Racketeering and Fraud Investigations; U.S. Department of Housing and Urban Development, Office of the Inspector General; U.S. Department of Transportation, Office of the Inspector General; U.S. Department of Homeland Security, Office of the Inspector General; U.S. Department of Education, Office of the Inspector General; and U.S. Environmental Protection Agency, Office of the Inspector General.
The case is being prosecuted by Assistant United States Attorneys Sarah Resnick Cohen and Craig A. Weier
Medical Assistant Charged with Stealing Patient Information and Defrauding Michigan Unemployment Insurance AgencyRead the Press Release
A medical assistant was indicted on charges of defrauding the Michigan Unemployment Insurance Agency (UIA) and stealing patients’ Personal Identifying Information (PII) from a doctor’s office in Pontiac, Michigan, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Douglas J. Zloto, Special Agent in Charge of the U.S. Secret Service, Detroit Field Office.
Indicted was Aline Harris, 34, of Detroit, Michigan. The indictment charges wire fraud, wrongful disclosure of health information, and identity theft in relation to unemployment benefits fraud and unauthorized disclosure of patients’ PII.
According to the indictment, Harris, who worked for a doctor’s office in Pontiac, Michigan was fraudulently printing out patients’ profiles which contained PII and giving the information to others who used them to commit other federal crimes. She also lied to the Michigan UIA and collected over $33,000 in unemployment benefits she was not entitled to.
Harris was arrested today and appeared in court the Eastern District of Michigan for arraignment on the indictment. She was released on a personal bond.
The case was investigated by the Southeast Michigan Financial Crimes Task Force led by the United States Secret Service. West Bloomfield, Warren, and Royal Oak Police Departments, Michigan Attorney General’s Office, and the IRS.
The case is being prosecuted by Assistant U.S. Attorney Abed Hammoud with the United States Attorney’s Office for the Eastern District of Michigan in Detroit.
An indictment 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 guilt beyond a reasonable doubt.
Health Care CEO and Four Physicians Charged in Superseding Indictment in Connection with $200 Million Health Care Fraud Scheme Involving Unnecessary Prescription of Controlled Substances and Harmful InjectionsRead the Press Release
A CEO and four physicians were charged today in a superseding indictment as part of an investigation into a $200 million health care fraud scheme that involved a network of Michigan and Ohio pain clinics, laboratories and other medical providers. The superseding indictment returned yesterday charges an additional wire fraud conspiracy, adds an additional count of money laundering, and contains new allegations regarding the distribution of over 4.2 million medically unnecessary dosage units of controlled substances and the administration of medically unnecessary injections that resulted in patient harm.
Attorney General Jeff Sessions, Acting Assistant Attorney General John P. Cronan 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 Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office and Chief Don Fort of IRS Criminal Investigation (IRS CI) made the announcement.
Mashiyat Rashid, 37, of West Bloomfield, Michigan; Spilios Pappas, 61, of Monclova, Ohio; Joseph Betro, 57, of Novi, Michigan; Tariq Omar, 61, of West Bloomfield, Michigan; and Mohammed Zahoor, 51, also of Novi, were each charged with one count of conspiracy to commit health care fraud and wire fraud. Rashid was additionally charged with four counts of health care fraud, one count of conspiracy to defraud the United States and pay and receive health care kickbacks, one count of payment of kickbacks, one count of receipt of kickbacks and two counts of money laundering. Pappas, Betro, Omar, and Zahoor were each additionally charged with one count of health care fraud. All of the defendants were previously charged in an original indictment on July 6, 2017, which charged health care fraud and kickback conspiracies, substantive counts of health care fraud and payment or receipt of kickbacks, and one count of money laundering. The case is pending before U.S. District Judge Denise Page Hood of the Eastern District of Michigan. Trial has been scheduled to begin on July 31 before Judge Hood.
“We are facing the deadliest drug crisis in American history,” said Attorney General Sessions. “Sadly, some corporate executives and medical professionals continue to exploit vulnerable patients and the American taxpayer for profit. With one American dying of a drug overdose every nine minutes, this superseding indictment reflects the Department of Justice’s determination to prosecute those who engage in opioid-related fraud. These cases are extremely important. Since 2017, the Department charged more than 150 doctors for opioid-related crimes. Today’s indictment reflects our continued dedication to these important cases. I want to thank our FBI, HHS-OIG and IRS-CI agents, DOJ attorneys, and everyone else who helped investigate and prosecute this case.”
“This multi-agency investigation has led to one of the largest healthcare fraud and illegal distribution of prescription drugs indictments this district has ever seen,” said U. S. Attorney Schneider. “I commend the hard work and dedication of the Health Care Fraud Strike Force and law enforcement agencies for shutting down this network of individuals whose greed resulted in millions of dosages of opioids to be sold on the streets of our communities and millions of dollars in loss to Medicare.”
“It is a sad day when a physician allows greed to drive their moral compass and willfully violate their Hippocratic Oath to protect and treat their patients,” said IRS CI Chief Fort. “The conduct described in this indictment, particularly the 4.2 million medically unnecessary dosages and administered injections, provides alarming insight into the growing opioid epidemic our nation is facing. IRS CI will continue to provide resources and financial expertise to work with our law enforcement partners to fight this crisis, disrupting any financial benefit received from the sale of dangerous prescription drugs that plague our communities.”
The superseding indictment alleges that Rashid was the CEO of Tri-County Wellness, and owned, controlled and operated numerous pain clinics, laboratories and other providers in Michigan and Ohio. As set forth in the superseding indictment, from 2008 until their arrest in 2017, Rashid, Pappas, Betro, Omar, Zahoor and other physicians working in Rashid’s clinics conspired to obtain patients by prescribing over 4.2 million dosage units of medically unnecessary controlled substances, including oxycodone, hydrocodone and oxymorphone, to Medicare beneficiaries, some of whom were addicted to narcotics. Some of these opioids were resold on the street, the superseding indictment alleges.
The superseding indictment further alleges that Rashid, Pappas, Betro, Omar, Zahoor and others required Medicare beneficiaries who wished to obtain controlled substances to submit to expensive, medically unnecessary and painful injections. Rashid paid Pappas, Betro, Omar, Zahoor and other physicians based on the number of injections that Medicare paid for, regardless of the medical necessity of the injections. In turn, Pappas, Betro, Omar and Zahoor conducted these repetitive and unnecessary injections on patients in order to increase revenue for Rashid, themselves and their co-conspirators.
When Medicare conducted a medical review of the injection claims, it determined that 100 percent of the claims were not eligible for Medicare reimbursement and summarily suspended the medical billing privileges of one of the pain clinics involved in the scheme. In order to conceal the continued billing of these fraudulent claims to Medicare, the superseding indictment alleges, Rashid, Pappas, Betro, Omar, Zahoor and others created new shell companies that they enrolled in Medicare to keep billing the same fraudulent claims, often changing only the name of the company on the door to the medical practice and/or inventing new suite numbers to conceal the continuation of the fraudulent practices at the same location.
Rashid also owned a diagnostic laboratory and caused Pappas, Betro, Omar and Zahoor to order medically unnecessary urine drug testing from the laboratory, the superseding indictment alleges. When Medicare conducted a medical review of claims submitted by the laboratory, it determined that 95 percent of the claims were not eligible for Medicare reimbursement and ordered the diagnostic laboratory to repay in excess of $6.9 million to Medicare, court documents submitted in connection with Rashid’s detention hearing show. In order to conceal the continued billing of these fraudulent urine drug testing claims to Medicare, the superseding indictment alleges, Rashid and others created a new corporate entity that they enrolled in Medicare so that Pappas, Betro, Omar, Zahoor and others could keep ordering the same fraudulent urine drug testing claims through this new entity.
In addition, the superseding indictment alleges that Rashid paid illegal health care kickbacks to obtain patients and solicited illegal kickbacks and bribes for Pappas, Betro, Omar, Zahoor and others to refer Medicare beneficiaries to specific third-party home health agencies, laboratories and diagnostic providers even though those referrals were medically unnecessary.
Finally, the superseding indictment alleges Rashid committed two counts of money laundering in connection with a $6.6 million wire transfer on April 13, 2016, and the withdrawal of $500,000 in cash on July 10, 2017. The superseding indictment alleges that Rashid transferred the proceeds derived from the conspiracy to live an extravagant lifestyle and spend millions of dollars on luxury clothes from retailers like Hermes, rare Richard Mille watches, and exotic automobiles such as a Lamborghini and Rolls Royce Ghost; a mansion and other real estate in the Detroit, Michigan area; and to sit courtside or in the first row of NBA basketball games, including the NBA Finals. Evidence submitted in connection with Rashid’s detention hearing further showed that Rashid attempted to conceal the proceeds of the fraud by withdrawing $500,000 in cash on July 10, 2017 and hiding the cash in plastic bags and handbags in the closet of his house.
Rashid, Pappas, Betro, Omar and Zahoor were charged along with Yasser Mozeb, 35, of Oakland County, Michigan and Abdul Haq, 72, of Ypsilanti, Michigan, in an indictment unsealed on July 6, 2017. Mozeb and Haq have pleaded guilty, along with three other defendants.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the FBI, HHS-OIG and IRS CI. Trial Attorney Jacob Foster 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 HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
Three Pharmacists, a Doctor and Patient Recruiters Charged in a $9.6 Million Illegal Opioid Distribution ConspiracyRead the Press Release
An indictment was unsealed today charging three pharmacists, one doctor and two other individuals with conspiracy to illegally distribute prescription drugs, U.S. Attorney Matthew Schneider announced today.
Attorney General Jeff Sessions joined U.S. Attorney Schneider in the announcement, along with Michael Bouchard, Oakland County Sheriff, Special Agent in Charge Timothy J. Plancon, U.S. Drug Enforcement Administration, Detroit Field Division; Special Agent in Charge Manny Muriel, Internal Revenue Service, Criminal Investigations; and Special Agent in Charge Timothy R. Slater, Federal Bureau of Investigation, Detroit Division.
Charged in the indictment are:
Pharmacist Enitan Sodiya-Ogundipe, 42, of Novi
Pharmacist Amir Rafi, 49, of Farmington Hills
Pharmacist Abiodun Fabode, 56, of Chesterfield Township
Dr. Vasan Deshikachar, 50, of Boca Raton, Florida
Niesheia Tibu, 44, of Canton
Andrei Tibu, 30, of Canton
The indictment alleges that from January 2015 through March 2018, these pharmacists and doctor conspired with the other defendants to issue and dispense a large number of prescription opioids for supposed patients, who did not have a legitimate medical need for the drugs. Deshikachar primarily prescribed oxycodone and oxymorphone, two of the most addictive opioids that have high street value. The Tibus would take the supposed patients to Precare Pharmacy, Global Health Pharmacy and Friendz Pharmacy, where Sodiya-Ogundipe, Rafi and Fabode would dispense the drugs. The Tibus then obtained the drugs and sold them on the street.
According to the indictment, the pharmacies dispensed more than 344,737 dosage units of Schedule II opioid prescriptions during the course of the conspiracy. These controlled substances had a conservative street value in excess of $9,600,000.
“It's incredible but true that we have seen that some of our trusted doctors, pharmacists, and medical professionals have chosen to violate their oaths and exploit our unprecedented drug crisis for profit,” Attorney General Jeff Sessions said. “Last summer, I sent a dozen of our top federal prosecutors to focus solely on the problem of opioid-related health care fraud in places where the epidemic was at its worst—including Eastern Michigan. Under the leadership of U.S. Attorney Matthew Schneider, our prosecutors in the Eastern District of Michigan have already made great progress in this effort—and today we continue that progress. In this case, three pharmacists and one doctor allegedly conspired to distribute nearly $10 million worth of opioids into the community, potentially spreading addiction and causing untold damage to Michigan families. I want to thank the FBI, DEA, our fabulous prosecutors Brandy McMillion and Brant Cook, the IRS, the Oakland County Sheriff’s office and all of our state and local partners for their hard work on this case. As this indictment makes clear, we are determined to reduce opioid fraud and to ultimately end the drug epidemic.”
“Diversion of prescription pills to the street market is a direct cause of the current opioid epidemic facing our country,” U.S. Attorney Schneider said. “We are focusing on charging doctors, pharmacists and the networks that are contributing to the opioid problem in our district.”
“As we are in the midst of the worst opioid epidemic in our lifetime, it is important we team up with our federal partners and target those who peddle this death,” said Sheriff Michael J. Bouchard. “We will go after street dealers, physicians, and pharmacists who choose to violate the law. I am proud of this team who went after this illegal operation and held those responsible accountable for their dangerous criminal behavior.”
“Investigators uncovered the hidden layers of illegal pharmaceutical trafficking conducted by members of the Tibu organization,” stated Special Agent in Charge Plancon. “These dealers illegally prescribed and sold OxyContin and other opioids and will now be held responsible for the devastation caused to families in southeastern Michigan and beyond. The DEA will continue to target all large scale drug traffickers especially those contributing to the opioid epidemic in America.”
“IRS Criminal Investigation contributes our resources and financial expertise working together with our law enforcement partners to fight the opioid epidemic,” stated IRS-Criminal Investigation Special Agent in Charge Manny Muriel. “We will continue to fight this crisis, disrupting any financial benefit received from the sale of dangerous prescription drugs that plague our communities.”
Sodiya-Ogudipe was also charged with money laundering for engaging in monetary transactions with the criminal cash proceeds from her illicit pharmacy business.
This case is being prosecuted by Assistant United States Attorneys Brandy R. McMillion and A. Brant Cook. The Eastern District of Michigan is one of the twelve districts included in the Opioid Fraud Abuse and Detection Unit, a Department of Justice initiative created by Attorney General Sessions, that uses data to target and prosecute individuals that are contributing to the nation’s opioid crisis.
The case was investigated by special agents and task force officers of the DEA, the Oakland Country Sheriff’s Office, the Internal Revenue Service, and the Federal Bureau of Investigation.
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.
Detroit Man Pleaded Guilty to Stealing More than $250,000 in SSA BenefitsRead the Press Release
A Detroit man pleaded guilty yesterday to theft of government funds, U.S. Attorney Matthew Schneider announced.
Schneider was joined in the announcement by Resident Agent in Charge Adam Lowder, Social Security Administration Office of the Inspector General, Office of Investigations, Detroit Field Division.
Pleading guilty was Claude Hopkins, 62.
According to court records, Hopkins’ father passed away in the summer of 1999. He was receiving Social Security retirement insurance benefits at the time and because SSA was never informed of his death, SSA continued to pay those benefits into a bank account in his name. The erroneous payments continued for approximately 17 years—$253,327.00 in total. Hopkins then unlawfully converted those benefit payments by forging his late father’s name on dozens of checks.
In 2016, as part of the Medicare Non-Utilization Project, an SSA initiative designed to fight fraud by contacting elderly beneficiaries who have not used their Medicare in three or more years, SSA made contact with Mr. Hopkins, who reported that his father was “out of town.” Subsequent attempts to reach Hopkins or his father were unsuccessful and a fraud referral was then made to the agency’s Office of the Inspector General. SSA-OIG ultimately confirmed that Hopkins’ father was deceased.
A sentencing hearing is set for September 5, 2018, at 2:00PM in front of U.S. District Judge David M. Lawson. Hopkins faces a statutory maximum of 10 years in prison and will be required to pay full restitution to the Social Security Administration.
This case was investigated by special agents of the Social Security Administration Office of the Inspector General and prosecuted by Special Assistant U.S. Attorney Ryan A. Particka.
Doctor Convicted in $8.9 Million Health Care Fraud SchemeRead the Press Release
A federal jury found a physician guilty today for her role in a scheme involving approximately $8.9 million in fraudulent Medicare claims for home health care and other physician services that were procured through the payment of kickbacks, were not medically necessary, not actually provided or, in some cases, were provided by the defendant, who was not a licensed physician during the conspiracy.
Acting Assistant Attorney General John P. Cronan 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.
Millicent Traylor, 47, of West Bloomfield, Michigan, was convicted of one count of conspiracy to commit health care fraud, one count of conspiracy to pay and receive kickbacks in connection with Medicare beneficiaries, and five counts of health care fraud following a four-day trial. Sentencing has been scheduled for Sept. 27, before U.S. District Judge Robert Cleland of the Eastern District of Michigan, who presided over the trial.
According to evidence presented at trial, from 2011 to 2016, Traylor and her co-conspirators engaged in a scheme to defraud Medicare of approximately $8.9 million through fraudulent home health and physician claims. The evidence showed that Traylor, who was unlicensed at the time, acted as a physician for these companies, providing services that were not medically necessary and that were billed to Medicare as if they were provided by a licensed physician. The evidence further showed that Traylor conspired to cause billing to Medicare for services that were not rendered. To make it appear that these services were medically necessary and were provided, Traylor and her co-conspirators falsified medical records and signed false documents. Additionally, the evidence at trial showed that Traylor and her co-conspirators paid and received kickbacks in exchange for referring Medicare beneficiaries to serve as patients at the clinics. The trial evidence also revealed that Traylor fraudulently signed the names of licensed physicians on prescriptions for opioid medications, such as oxycodone, as a means of inducing patient participation in the scheme.
Four defendants were charged in this matter. Jacklyn Price, 33, of Shelby Township, Michigan, and Muhammad Qazi, 47, of Bloomfield Hills, Michigan, pleaded guilty in April 2017 and are awaiting sentencing. Christina Kimbrough, M.D., 39, of Wayne, Michigan, pleaded guilty in November 2017 and is awaiting sentencing.
This case was investigated by the HHS-OIG and the FBI. Trial Attorneys Stephen Cincotta 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. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
Grosse Pointe Park Man Sentenced on Fraud Scheme Involving Distribution of Infectious Human RemainsRead the Press Release
A Grosse Pointe Park resident was sentenced today to 108 months in federal prison after having been convicted earlier this year by a jury on charges of wire fraud, transportation of hazardous material, and false statements in a scheme involving the distribution of body parts, some that tested positive for diseases, including HIV and hepatitis, 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; Regional Special Agent-in-Charge Thomas J. Ullom, U.S. Department of Transportation - Office of Inspector General; Officer in Charge Elizabeth Harton of the Centers for Disease Control and Prevention, Division of Global Migration & Quarantine and Arizona Attorney General Mark Brnovich.
Sentenced was Arthur Rathburn, 63. Rathburn was convicted on 7 of the 9 wire fraud counts and the count alleging illegal transportation of hazardous material. He was acquitted of the false statement count.
“We hope this sentence brings closure to the victims of Arthur Rathburn,” stated United States Attorney Matthew Schneider. “Rathburn’s disgraceful conduct not only put the health of innocent people at risk, he showed a complete lack of regard for the donors and their families, who are all victims.”
“Arthur Rathburn carried out a long term, complex scheme to increase his personal profits, showing little respect to the donors and risking the welfare of those in the medical and dental community relying on human remains free from hepatitis, HIV, and other dangerous diseases,” said Timothy R. Slater, Special Agent in Charge of the Detroit FBI. “His sentence represents the FBI’s commitment to partner with our federal and state colleagues in the U.S. Department of Transportation, the Centers for Disease Control and Prevention, and the Arizona Attorney General, to ensure the community is protected from fraudulent actions, regardless of how they are undertaken and irrespective of the sophistication of the fraud. The FBI continues to work collectively across the country to find and bring those profiteering in the anatomical donation industry to justice.”
According to evidence presented during the two-week trial, Arthur Rathburn was the owner and operator of International Biological, Inc. (“IBI”). IBI’s primary function was renting human body parts, such as heads and torsos, to customers who used the remains for medical or dental training. Rathburn engineered a scheme to defraud in which IBI obtained donated bodies and body parts from suppliers, which IBI would then typically dismember and rent out to customers for medical or dental training. Rathburn knew that the donors of a number of these bodies had died of an infectious disease, or that the bodies had tested positive for an infectious disease. IBI sometimes obtained diseased remains from their suppliers at a reduced cost, due to the fact that end users of human remains generally reject infectious bodies and body parts for use in medical or dental training.
It was part of the scheme that Rathburn would provide human remains to IBI’s customers, falsely representing to those customers that the remains were free of certain infectious diseases. Rathburn was aware that IBI’s customers would not accept remains infected with certain diseases. The scheme included directly profiting from infectious remains supplied to unwitting customers in violation of contractual agreements and failing to disclose to customers that IBI ignored industry standard precautions to prevent potential cross-contamination between infectious and non-infectious remains.
Evidence further demonstrated that Arthur Rathburn willfully caused to be delivered hazardous material regulated by the Department of Transportation, namely a human head of an individual known to have died from bacterial sepsis and aspiration pneumonia, to Delta Cargo, an air carrier, for transportation in air commerce in violation of federal regulations. In violation of these regulations, the human head was packaged in a trash bag placed within a camping cooler. Seven other human heads were also part of the shipment and packed in the same manner. Large quantities of liquid blood were found within the coolers.
The investigation in this case was handled by the Federal Bureau of Investigation, the Centers for Disease Control and Prevention, the Arizona Attorney General’s Office, and the U.S. Department of Transportation, Office of Inspector General with support from U.S. Customs and Border Protection and Homeland Security Investigations. Special thanks are also due to the Wayne County Medical Examiner’s Office for their critical assistance. The case is being prosecuted by Assistant U.S. Attorneys John K. Neal and Timothy J. Wyse.
Grand Blanc Man and Flint Woman Indicted for Involvement in Fraudulent Investment SchemeRead the Press Release
An indictment was unsealed earlier today charging Larry A. Holley, 61, of Grand Blanc and Patricia Enright, a.k.a. Patricia Gray, 57, of Flint, with conspiracy to commit wire and mail fraud, wire fraud, mail fraud, and money laundering, United States Attorney Matthew Schneider announced today.
Joining Schneider in the announcement was Manny Murial, Special Agent in Charge, Internal Revenue Service – Criminal Investigation Division.
According to the indictment, Enright and Holley, who is a pastor at Abundant Life Ministries in Flint, operated Treasure Enterprise, LLC, which fraudulently purported to provide financial planning and asset management services to investors. Holley and Enright solicited many of the victim investors at financial seminars held at churches throughout Michigan and other states.
The indictment alleges that in order to lure the potential investors, many of whom took their money out of legitimate investments–such as individual retirement accounts (IRAs) and 401Ks–Holley and Enright promised high, guaranteed returns, and the safe return of an investor’s entire principal at the end of the investment period. The money, however, was not invested and did not earn the profits to pay the guaranteed interest payments. Instead, Holley and Enright, and others directed by them, simply deposited the victim investor funds into Treasure’s bank accounts and then used the money for their personal benefit, for the benefit of Abundant Life Ministries, to make interest and principal payments to earlier investors, and to pay other Treasure employees.
The two defendants made their initial appearances in federal court in Flint on Monday.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case is being prosecuted by Assistant United States Attorneys Ann Nee and Anthony Vance.
Michigan Home Health Agency Owner Pleads Guilty to Charges for Role in Medicare Kickback SchemeRead the Press Release
The owner of a Michigan home health agency pleaded guilty today to charges for his role in a scheme involving Medicare claims for home health services that were procured through the payment of illegal kickbacks.
Acting 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, Special Agent in Charge David P. Gelios 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.
Atheir Amarrah, 43, of West Bloomfield, Michigan, the owner of Prompt Care Home Health Services Inc. of Bloomfield Hills, Michigan, pleaded guilty to one count of conspiracy to pay and receive health care kickbacks in connection with Medicare beneficiaries and to four substantive counts of paying health care kickbacks before U.S. District Judge Judith E. Levy of the Eastern District of Michigan. Sentencing is scheduled for Sept. 25, before Judge Levy.
As part of his guilty plea, Amarrah admitted that he paid illegal kickbacks to recruiters in exchange for Medicare beneficiary referrals and billed Medicare for claims procured through these illegal kickbacks. The scheme is alleged to have resulted a loss of up to $1.8 million to the Medicare program by submitting claims to Medicare from 2013 through 2017 related to Medicare beneficiary information that he obtained by paying illegal kickbacks. The loss amount will be determined by the court at sentencing.
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 and the U.S. Attorney’s Office for the Eastern District of Michigan. Trial Attorneys Jacob Foster and Howard Locker of the 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. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
Last of Three Defendants Sentenced in Million Dollar Student Loan Fraud SchemeRead the Press Release
The third, and final defendant, in a wide-ranging identity theft scheme involving fraudulent student loan application and tax returns was sentenced today, announced Untied States Attorney Matthew Schneider.
Schneider was joined in the announcement by Special Agent in Charge Thomas Utz, U.S. Department of Education, Office of Inspector General / Investigations, Special Agent in Charge Timothy R. Slater, Federal Bureau of Investigation, Detroit Division and Special Agent in Charge Manny Muriel, Internal Revenue Service, Criminal Investigations.
Previously, co-defendants Timothy Wilcox, 45 and Paul Adams, 61, both from Jackson, were sentenced to 77 months and 15 months respectively and were ordered to pay restitution in the amount of $1,390,50, all to be paid to the Department of Education as well as the Internal Revenue Service. Meanwhile, earlier today, Katrina Duling, 46, also from Jackson, received one day in custody followed by three years of supervised release and ordered to pay restitution in the amount of $775,312.
According to court records, in December, 2014, defendants Wilcox, Adams and Duling participated a scheme by which they took personal identifying information (PII) of various individuals, including their social security numbers, or recruited other individuals to provide this information to them, which they used to fraudulently apply for and receive federal student financial aid in the name of those individuals. The defendants did not intend to use, nor did they use, the funds obtained for educational purposes as represented in the fraudulent applications In addition, the defendants used the same PII to file false federal income tax returns to claim and receive federal income tax refunds.
The defendants utilized in excess of one hundred individuals’ PII and defrauded the United States Department of Education, in excess of $1,000,000 and defrauded the IRS in excess of $400,000 through fraudulent tax returns.
“Student loan programs are intended to assist students in obtaining a higher education and scams like this harm both students and taxpayers,” Schneider said.
“Federal student aid exists so that individuals can make their dream of a higher education a reality. It’s not a personal slush fund. That’ why ensuring that those who steal student aid or participate in student aid fraud rings are stopped and held accountable for their criminal actions is a big part of our mission,” said Thomas D. Utz, Jr., Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Midwestern Regional Office. “I’m proud of the work of the Office of Inspector General and our law enforcement partners for stopping this fraud ring and look forward to continuing to work together to protect Federal student aid funds from such calculated plunder.”
“The actions of Katrina Duling, along with the other two defendants, undermine the nation’s confidence in the security of their personal information, particularly when used to falsely obtain loans and receive tax returns they are not entitled to,” said Timothy R. Slater, Special Agent in Charge of FBI Detroit. “By prosecuting cases like this, the FBI, The U.S. Department of Education, and the Internal Revenue Service are sending a clear message to those attempting to steal and tarnish the identities of the general public that their actions will not be tolerated.”
IRS-CI Special Agent in Charge Muriel stated, “The defendants in this case defrauded the public and took advantage of a system which is intended to help students obtain a higher education. IRS CI special agents, working with our federal partners, once again outsmarted the criminals who thought they could get away with it. Just know that if you try to game the system, you will be caught and held accountable.”
This case was investigated by agents of the Department of Education, Office of Inspector General, the Federal Bureau of Investigation and the Internal Revenue Service. This case was prosecuted by Assistant United States Attorney Timothy Wyse.
Former DPD Officer Sentenced to 20 Months in Prison for ExtortionRead the Press Release
Former Detroit Police Department Officer Jamil Martin was sentenced yesterday to 20 months’ imprisonment for accepting a bribe from an owner of an automobile collision shop in exchange for referring stolen and abandoned vehicles recovered in the City of Detroit to that shop, United States Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Timothy Slater, Special Agent in Charge, Federal Bureau of Investigation, Patricia Armstrong, U.S. Postal Inspector in Charge, U.S. Postal Inspection Service, Detroit Division and Chief James Craig, Detroit Police Department. The defendant was actively employed with the Detroit Police Department at the time of the offense.
Jamil Martin, age 47, was sentenced by U.S. District Judge Robert Cleland. Martin previously pleaded guilty to one count of extortion.
According to the facts alleged in the indictment and further developed at the plea hearing and in sentencing briefing, Martin accepted cash payments from the owner/operator of a Detroit collision shop in exchange for referring abandoned vehicles to that shop for repairs.
This is the fourth defendant to have been sentenced as a result of this investigation. The others awaiting sentencing or a trial are:
- Charles Wills, age 52, pleaded guilty to two counts of Extortion charged in a Superseding Indictment.
- Deonne Dotson, age 45, is awaiting trial.
All of the Officers were charged with engaging in extortion for using their official positions as Police Officers to refer cars to certain collision shops in exchange for cash payments.
“The vast majority of Detroit Police Officers are courageous, dedicated public servants and should not be overshadowed by the acts of the few officers who accepted these bribes,” U.S. Attorney Schneider said.
"Certainly we appreciate the partnership of the Federal Bureau of Investigations, U.S. Postal Inspection Service, and the United States Attorney’s Office. While the actions of this officer are troubling, we are relieved that this sentencing has brought some closure to a long standing issue that has plague this department." said Chief Craig.
“The actions of former DPD Officer Martin are disheartening to the many men and women in law enforcement, who work hard every day with integrity and commitment,” said Timothy R. Slater, Special Agent in Charge of FBI Detroit. “The FBI will continue to dedicate significant resources to the Detroit Police Department and all law enforcement partners toward investigating anyone who tarnishes their reputation by straying from his or her oath.”
The investigation was conducted by the FBI, the U.S. Postal Inspection Service, Detroit Police Department and the following agencies from the FBI Detroit Area Corruption Task Force: Michigan State Police and U.S. Customs and Border Protection, Office of Professional Responsibility, Investigative Operation Division.
The FBI Detroit Area Corruption Task Force is comprised of personnel from the Detroit Division of the FBI; Michigan State Police; Michigan Department of Attorney General; Detroit Police Department; U.S. Internal Revenue Service, Criminal Investigation Division; U.S. Customs and Border Protection, Office of Professional Responsibility, Investigative Operations Division; U.S. Postal Inspection Service; U.S. Department of Labor, Office of the Inspector General, Office of Labor Racketeering and
Fraud Investigations; U.S. Department of Housing and Urban Development, Office of the Inspector General; U.S. Department of Transportation, Office of the Inspector General; U.S. Department of Homeland Security, Office of the Inspector General; U.S. Department of Education, Office of the Inspector General; and U.S. Environmental Protection Agency, Office of the Inspector General.
The case is being prosecuted by Assistant United States Attorneys Sarah Resnick Cohen and Craig A. Weier.
Michigan Home Health Agency Owner Pleads Guilty to Health Care Fraud Charges for Role in $8 Million Medicare Fraud SchemeRead the Press Release
The owner of a Michigan home health agency pleaded guilty today to fraud charges for his role in a scheme involving approximately $8 million in fraudulent Medicare claims for home health services that were procured through the payment of illegal kickbacks.
Acting 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, Special Agent in Charge Timothy 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.
Zahir Shah, 48, of West Bloomfield, Michigan, pleaded guilty to one count of conspiracy to commit health care fraud and wire fraud and one count of conspiracy to pay and receive kickbacks in connection with Medicare beneficiaries before U.S. District Judge Avern Cohn of the Eastern District of Michigan. Sentencing will be scheduled before Judge Cohn.
As part of his guilty plea, Shah admitted that he submitted false certifications to enroll and stay enrolled as a Medicare provider. Shah further admitted that he paid illegal kickbacks to recruiters in exchange for Medicare beneficiary referrals and billed Medicare for claims procured through these illegal kickbacks. According to court documents, Shah caused a loss of approximately $8 million to the Medicare program by submitting false and fraudulent claims to Medicare from 2007 through 2017.
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 and the U.S. Attorney’s Office for the Eastern District of Michigan. Trial Attorneys Rebecca Szucs and Howard Locker of the 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. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.