Eastern District of Michigan
Press releases recorded for this federal judicial district.
Macomb Township Trustee Dino Bucci Charged with Bribery, Extortion, Fraud, Theft and Money LaunderingRead the Press Release
Macomb Township Trustee and former Macomb County official Dino Bucci, 58, of Macomb Township, was indicted today by a federal grand jury on eighteen counts of conspiracy, bribery, embezzlement, extortion, mail fraud, and money laundering, in connection with public contracts in Macomb Township and the Macomb County Department of Public Works, Acting United States Attorney Daniel L. Lemisch announced.
Lemisch was joined in the announcement by David P. Gelios, 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.
Count One of the indictment charges Bucci with participating in a nine-year long bribery conspiracy with other public officials and with various contractors. As part of the conspiracy, Bucci directed contractors to give him tens of thousands of dollars in cash, checks, and gift cards in exchange for work and contracts with Macomb Township and Macomb County. Bucci also directed the contractors to give him hundreds of thousands of dollars in checks and cash as part of political fundraising events, including golf outings and dinners, in exchange for county and township contracts. During the course of the conspiracy, Bucci served as an elected Trustee of Macomb Township and as the Operations Manager, among other positions, at the Macomb County Department of Public Works.
As part of the conspiracy, engineering and other contractors knew that they had to “pay-to-play” in order to get county and township contracts by giving money to Bucci and buying tickets to political fundraisers for Bucci and his political allies. One contractor decided to “get in the game” by purchasing thousands of dollars in fundraising tickets in order to get engineering contracts.
In addition to bribery, Bucci is charged with engaging in extortion over the course of at least five years. In this regard, Bucci used his official positions at the county and the township to threaten to withhold permits on development work and home construction in order to force them to pay him tens of thousands of dollars in cash and kickbacks.
Other counts of the indictment charge Bucci with embezzling and conspiring to embezzle tens of thousands of dollars from Macomb Township through a variety of criminal and fraud schemes. For example, Bucci got one contractor awarded a job to pave the Macomb Township Hall parking lot for over $250,000. Unbeknownst to the township, however, Bucci had gotten another contractor to do the work for just over $180,000, with Bucci collecting a kickback of $66,000 in cash in a bag at the headquarters of the Macomb County Department of Public Works.
Bucci also is charged in the indictment with stealing from Macomb County by using county employees and equipment to do personal work for Bucci. For example, for years, Bucci forced county employees to plow the snow at Bucci’s residence and at his mother’s residence every time it snowed. When there was a heavy snowfall, Bucci would force county employees to plow the snow for other relatives and friends. Bucci ensured that his home was plowed before county facilities were taken care of by the employees. County employees also did lawn and other maintenance work at Bucci’s home, and one employee was forced to drive Bucci’s child to a school about 25 minutes away. Bucci threatened to dock the pay of county employees, take away overtime opportunities, and send them to undesirable work locations if they refused to do this personal work for him.
Portions of today’s indictment against Bucci charge him with offenses that involve Charles B. Rizzo, Clifford Freitas, Christopher Sorrentino, and Paulin Modi. Each of these men have already pleaded guilty to federal corruption felonies involving Macomb County contracting.
Each of the nine bribery and embezzlement charges carry a maximum sentence of 10 years imprisonment and a fine of $250,000. Each of the six mail fraud, extortion, and money laundering counts carry a maximum sentence of 20 years imprisonment and a fine of $250,000. The three bribery conspiracy counts each carry a maximum sentence of 5 years imprisonment and a fine of $250,000.
Acting United States Attorney Lemisch said, “Today’s sweeping indictment of Mr. Bucci, who was a public official of both Macomb County and Macomb Township, embodies our unbending resolve to unwind long established pay-to-play politics and call to task corrupt officials no matter where they seek to violate the public trust.”
“The crimes as alleged in today’s indictment highlight a pervasive pattern of past corrupt and illegal practices in Macomb County”, said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “As such, the FBI and the IRS will continue in the foreseeable future to dedicate investigative resources in Macomb County and elsewhere until the public’s trust in elected officials is bolstered, and honest and responsible government is the order of the day.”
“The eighteen-count indictment handed down today should reassure the public that the investigative team will not leave any rock unturned in the Macomb County corruption investigation,” stated Special Agent in Charge Manny Muriel, IRS-Criminal Investigation. “Bringing to justice those involved in this near decade long scheme should send a loud and clear message to others that abusing your position as a public official and stealing from the taxpayers will not be tolerated.”
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.
An indictment is only a charging document and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt
Garbage Company Executive Charles B. "Chuck"Rizzo Pleads Guilty to Bribery and FraudRead the Press Release
The former CEO of garbage hauler Rizzo Environmental Services (RES), pleaded guilty today to conspiring to commit bribery and wire fraud, in connection with millions of dollars of municipal garbage contracts in Macomb County and with the embezzlement of hundreds of thousands of dollars from RES, Acting United States Attorney Daniel L. Lemisch announced.
Lemisch was joined in the announcement by David P. Gelios, 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.
Charles B. “Chuck” Rizzo, 46, of Bloomfield Hills, pleaded guilty before United States District Judge Robert H. Cleland in Port Huron, Michigan.
Rizzo admitted at the plea hearing that he conspired to pay bribes to Clinton Township Trustee Dean Reynolds and Macomb Township Trustee Clifford Freitas in order to secure and maintain favorable municipal garbage contracts for RES. Rizzo admitted giving Reynolds over $50,000 in cash bribes, plus free legal services in order to get a garbage contract extension from Clinton Township. He also admitted to offering to pay Freitas a bribe of $35,000, plus a salary increase, if Freitas voted to put the RES garbage bill on the Macomb Township water bill, which would reduce RES’s cost of doing business.
Besides pleading guilty to bribery, Rizzo also pleaded guilty to conspiring to commit wire fraud. Rizzo admitted to embezzling hundreds of thousands of dollars from RES while Rizzo served as the CEO of the company. The fraud conspiracy took place between 2014 and 2016, when the majority owner of RES was a New York based private equity firm. During the conspiracy, Rizzo used a variety of schemes to steal money from RES for his own enrichment. Rizzo used a fake legal settlement agreement, fraudulent consulting deals, cash kickbacks, shell companies, and methods to defraud the other owners of RES, who owned over 80% of the company, while Rizzo owned a small minority share. As one part of the embezzlement scheme, Rizzo received weekly envelopes containing thousands of dollars in cash kickbacks from a company that submitted fraudulently inflated invoices to RES.
The Rule 11 Plea Agreement provides that the sentencing guideline range that Rizzo faces at sentencing based on his criminal activity is 168-210 months, with a statutory maximum of ten years in prison.
As part of the plea today, Rizzo agreed to forfeit $4 million to the United States government. This money represents the proceeds of Rizzo’s criminal activity in securing municipal garbage contracts by paying bribes and embezzling money.
Each of the two conspiracy charges carries a maximum sentence of 5 years imprisonment and a fine of $250,000. Because of the charges to which he pleaded guilty, Rizzo faces a maximum of 10 years in prison.
Acting United States Attorney Lemisch said, “The plea today demonstrates that bribe payers face significant penalties for spreading corruption through municipal government—penalties just as severe as those faced by the public officials who take the bribes.”
"The actions of Mr. Rizzo and others implicated in this wide ranging Macomb County corruption investigation erodes our trust and confidence in public officials" said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. "Today's guilty plea represents another significant step towards reinforcing to the public that honest government is essential to our way of life and the FBI and our partners will continue to prioritize the prosecution of both corrupt elected officials and those that would endeavor to bribe them."
“IRS - Criminal Investigation is working vigorously with our partners in the Macomb County corruption investigation,” said Special Agent in Charge Manny Muriel, IRS- Criminal Investigation. “The investigators sifted through volumes of evidence to unravel the multiple and complex schemes which this group employed to conceal the scent of their illegal activity. Today’s guilty plea is the result of the diligent work of the investigation team to hold those involved accountable.”
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 One Collaboration Leads to Racketeering Indictment of Violent Gang Members from Detroit's EastsideRead the Press Release
The collaboration of local, state, and federal law enforcement under the Detroit One program has led to the investigation and racketeering indictment involving thirteen members of the violent eastside Detroit street gang, Smokecamp, a/k/a Original Paid Bosses (or OPB), Acting United States Attorney Daniel L. Lemisch announced.
According to the indictment unsealed today, the gang operates on the east side of Detroit, specifically the area in and around Albion Street and Seven Mile, an area Smokecamp/OPB members refer to as “ABlock.” This area is within a larger territory on Detroit’s east side claimed by the Bloods street gang known as the “Red Zone.” The gang has modified its name multiple times throughout the years going from “Runyon Boys” to “Original Paid Bosses” to “Paid Bosses Inc.” to “Smokecamp.”
While known to engage in robberies and extortion, the gang makes its money predominantly through the sale of narcotics, including cocaine, crack cocaine, heroin, marijuana, ecstacy, and other prescription pills. According to the indictment, the gang regularly sold these controlled substances on the “ABlock,” outside of vacant houses known as “trap houses,” and businesses in the area of Seven Mile and Albion. Additionally, between approximately 2014 – 2015, Smokecamp/OPB members regularly sold controlled substances from an apartment complex on East Seven Mile, which they branded the “Plaga,” sharing workers and firearms to distribute and protect their narcotics. However, this activity was not confined only to Detroit with some of their members traveling to Kentucky, West Virginia, and Ohio to sell their narcotics.
Under the Detroit One Initiative, and through the lead efforts of the ATF and Detroit Police Department Gang Intelligence Unit, along with the efforts of the Federal Bureau of Investigation, the Drug Enforcement Administration, and the Michigan Department of Corrections, investigators were able to identify the members of this particular gang while investigating a similar gang on Detroit’s westside and piece together the varied criminal misconduct of the Smokecamp/OPB organization.
Charged today are:
- Korey Sanders, a/k/a “No Loan Corleon,” “Stax,” 26, of Detroit, with RICO conspiracy and willful engagement in firearms business without a license;
- Jerray Key, a/k/a “Chino,” “Dre,” 28, of Canton, with RICO conspiracy and willful engagement in firearms business without a license;
- Deshawn Langston, a/k/a “Pook,” “Slips,” 26, of Detroit, with RICO conspiracy;
- Richard Langston, a/k/a “Dub,” “Rich,” “Blow,” 27, of Detroit, with RICO conspiracy;
- Hakeem Bunnell, a/k/a “LB Dub,” 24, of Detroit, with RICO conspiracy, assault with a dangerous weapon in aid of racketeering, and possession of a firearm during, and in relation to, a crime of violence;
- Keenan Nielbock, a/k/a “Dolla,” “Keno” 30, of Taylor, with RICO conspiracy and willful engagement in firearms business without a license;
- Caraun Key, a/k/a “Luch,” “Ron,” “Slick,” 26, of Detroit with RICO conspiracy;
- Darryl Key, a/k/a “DB,” “Big Baby,” 27, of Detroit, with RICO conspiracy;
- Tyree Williams, a/k/a “Snoop,” 24, of Detroit, with RICO conspiracy, assault with a dangerous weapon in aid of racketeering, and possession of a firearm during, and in relation to, a crime of violence;
- Romale Gibson Jr., a/k/a “Santana,” 24, of Detroit, with RICO conspiracy;
- Cary Dailey, a/k/a “Cease,” 28, of Detroit, with RICO conspiracy;
- Antonio Langston, a/k/a “Tone,” 29, of Detroit, with RICO conspiracy; and
- Carlos Davis, a/k/a “Los,” “Loso,” 24, of Detroit with RICO conspiracy, assault with a dangerous weapon in aid of racketeering, possession of a firearm during, and in relation to, a crime of violence, and willful engagement in firearms business without a license.
Acting U.S. Attorney Daniel L. Lemisch said, “This indictment is the latest in a string of cases charging violent gang members in the City of Detroit. We are grateful to the Detroit One collaborative of law enforcement, who are all dedicated to improving the lives of the residents of Detroit.”
“ATF remains relentless in the effort to disrupt violent gangs operating in Detroit neighborhoods so law-abiding citizens can live in peace,” said ATF Detroit Acting Special Agent in Charge Marcus Watson. “This investigation is another example of how by working together, the Detroit One Initiative is making a difference.”
"Ensuring the safety and security of our residents in the city of Detroit is our number one priority. With the collaborative efforts of Detroit One partnership, we will continue our efforts to target and dismantle gangs, as well as, other violent offenders that pose a threat to the safety and wellbeing of our city," said Chief James Craig.
Detroit One is a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. By working collaboratively, local, state, and federal law enforcement is striving to maximize its ability to identify and arrest the persons and groups initiating the violence in Detroit. This indictment is the latest in a string of indictments or informations from the United States Attorney’s Office and Wayne County Prosecutor’s Office over the last five years involving violent street gangs in the city of Detroit, including:
- Fourteen members of the Playboy Gangster Crips street gang for federal racketeering conspiracy;
- Twenty members of the Seven Mile Blood street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
- Nine members of the Bounty Hunter Bloods street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
- Fourteen members of the Rollin’ 60s Crips street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
- Thirteen members of the Latin Counts street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
- Fourteen members of the Phantom Outlaw Motorcycle Club / Vice Lords street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
- Four Vice Lord members in state court for armed robbery and a Vice Lord leader charged under the federal street gang statute for his role in that armed robbery;
- Nine Vice Lords members for racketeering charges stemming from the shooting of four individuals at their family residence on Detroit’s northwest side;
- Three members of the Band Crew street gang charged under the state of Michigan gang felony statute for violent acts in furtherance of their gang activities and eight members of the Band Crew for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
- Ten members of the RTM street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
- Four members of the Bandgang street gang charged under the state of Michigan gang felony statute for conspiracy to commit murder and assaults with intent to commit murder and eighteen members/associates of Bandgang in federal court for access device fraud, aggravated identity theft, firearms, and obstruction of justice;
- Three members of the A1Killers street gang for federal narcotics offenses;
- Eleven members of the 6Mile Chedda Grove street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering; and
- Four members of the HNIC street gang for violent acts in aid of racketeering.
These charges are just some more of the tangible and significant results of this joint effort. The charges and allegations contained in the indictment are merely accusations. The defendants are presumed innocent until and unless proven guilty.
Michigan Doctor and Owner of Medical Billing Company Sentenced to 15 Years in Prison for $26 Million Health Care Fraud SchemeRead the Press Release
A Detroit-area doctor was sentenced to 180 months in prison today for his role in a $26 million health care fraud scheme that involved billing Medicare for nerve block injections that were never provided and efforts to circumvent Medicare’s investigation of the fraudulent scheme. A co-conspirator who owned a medical billing company was previously sentenced to 10 years in prison.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan, Special Agent in Charge David P. Gelios 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 Special Agent in Charge Manny Muriel of Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.
Johnny Trotter M.D., 42, of Bloomfield Hills, Michigan, was sentenced today by U.S. District Judge George C. Steeh of the Eastern District of Michigan. The owner of the medical billing company, Elaine Lovett, 61, of Detroit, was sentenced by Judge Steeh on Sept. 26. Judge Steeh also ordered each defendant to pay $9,199,946 in restitution and scheduled a hearing tomorrow on forfeiture. Trotter and Lovett were convicted in April 2017 after a four-week jury trial of one count of conspiracy to commit health care fraud and wire fraud, and three counts of health care fraud. Trotter was remanded to custody pending a detention hearing tomorrow.
According to the evidence presented at trial, from May 2008 until May 2014, Trotter and Lovett knowingly submitted fraudulent bills for services that they knew had not been provided, mainly nerve block injections. Additionally, after Medicare imposed a requirement in 2009 that required Trotter’s claims to undergo a medical review prior to payment, Trotter and Lovett conspired to circumvent Medicare’s fraud investigation of Trotter by creating sham medical practices, the evidence showed. To continue to receive payment for services that were not provided, Trotter and Lovett concealed their involvement with these practices from Medicare, and instead recruited their family members and employees to serve as straw owners of the companies, the evidence further showed.
The FBI, HHS-OIG and IRS-CI investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. Fraud Section Assistant Chiefs Malisa Dubal and Allan Medina, as well as Trial Attorneys Tom Tynan and Jacob Foster, prosecuted 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.
U.S. Attorney's Office Resolves ADA Investigation of Polling Sites in Isabella County, MI to Ensure Voting Access for People with DisabilitiesRead the Press Release
The U.S. Attorney’s Office for the Eastern District of Michigan today announced that it has reached a resolution under the Americans with Disabilities Act with 11 municipalities in Isabella County, MI to ensure access for individuals with disabilities at polling places. The case was commenced under the U.S. Justice Department’s compliance review authority.
Under the terms of the resolution, 11 cities and townships within Isabella County agreed to make temporary and permanent changes to all of their polling places to make them accessible on Election Day before the next 2018 election. The participating municipalities are:
Broomfield Township,
Chippewa Township,
Coldwater Township,
Deerfield Township,
Gilmore Township,
Isabella Township,
Nottawa Township,
Sherman Township,
Union Township,
City of Clare, and
City of Mt. Pleasant.
“A vibrant democracy requires that all voices are heard. People with disabilities should not be discouraged from voting by physical obstacles at their polling place. We are pleased that so many Townships and Cities in Isabella County are making changes to their polling places to make it easier for people with disabilities to exercise their right to vote,” said Daniel L. Lemisch, Acting U.S. Attorney for the Eastern District of Michigan.
Title II of the ADA prohibits public entities, such as cities and townships, from discriminating against people with disabilities in their programs, services and activities. With respect to polling places, public entities are required to select and use polling places that are accessible. More information about this resolution and the ADA is available at the Justice Department’s toll-free ADA Information line at (800) 514-0301 or (800) 514-0383 (TTY), via the ADA website at http://www.ada.gov, or the U.S. Attorney’s Office’s civil rights hotline at (313) 226-9151, or email at [email protected].
Second Man Pleads Guilty in Kidnapping CaseRead the Press Release
A Flint man pleaded guilty on October 25, 2017, to kidnapping and being a felon in possession of ammunition, Acting U.S. Attorney Daniel L. Lemisch announced today.
Lemisch was joined in the announcement by David P. Gelios, Special Agent in Charge of the Detroit Division of the Federal Bureau of Investigation (FBI), and George N. Sippert, Chief of Police of the Flint Township Police Department.
James M. Elbert, III, 28, of Flint, entered the guilty plea before United States District Court Judge Matthew F. Leitman. Elbert’s co-defendant, Steven J. Bridges, Jr. previously pleaded guilty to kidnapping and brandishing a firearm before Judge Leitman on July 17, 2017.
According to court documents, Elbert, a drug dealer, traveled from Arkansas to Michigan to collect a drug debt from the victim. Elbert and Bridges, who were both armed with firearms, kidnapped the victim from a Flint Township apartment complex. Elbert and Bridges then tied the victim up, placed a plastic bag over his head, and transported him to a vacant house in Flint. Once at the vacant house, Elbert and Bridges took the victim to the basement where they tied him to a chair and placed a gag in his mouth, which they secured by wrapping tape around the victim’s head and neck. During the kidnapping, Elbert made telephone calls to the victim’s family threatening to kill to the victim if his debt was not paid. Officers with the Flint Township Police Department ultimately learned of the victim’s location and rescued him before he was subjected to further harm. The victim was transported to a local hospital for treatment and was later released in good condition.
“We are focusing our resources on the most violent offenders in the Flint area in hopes of improving the quality of life for residents,” Lemisch said. “Armed kidnapping is one of the most serious violations of public safety, making people feel vulnerable in their own neighborhoods and communities. We will bring strong federal penalties against those who prey on citizens in the Eastern District of Michigan.”
“The FBI is pleased to have assisted the Flint Township Police Department in bringing Mr. Elbert to justice,” said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “This incident once again underscores the dangers we face from illegal drugs and the violent crimes that often accompany drug trafficking activities. While dangers remain so long as illegal drugs are on our streets, the public should know that these criminals will not escape the reach of law enforcement, even when they come from hundreds of miles away.”
“This case once again demonstrates the commitment to cooperation between local police agencies and their Federal partners. Law enforcement is most often successful when combining resources. We are grateful for the support of the FBI and the commitment and dedication to our community’s safety exhibited by the efforts of the United States Attorney’s Office,” Chief Sippert said.
Elbert, who has been designated as an Armed Career Criminal because of his prior record, faces at least 15 years and up to life imprisonment for the kidnapping and felon in possession of ammunition charges. Sentencing has been scheduled for February 15, 2018 at 10:00 a.m. before Judge Leitman.
Bridges faces at least 7 years and up to life imprisonment for the kidnapping and brandishing a firearm charges. Sentencing has been scheduled for February 26, 2018 at 10:00 a.m. before Judge Leitman.
The case was investigated by the Flint Township Police Department with assistance from special agents of the FBI. The case is being prosecuted by Assistant United States Attorney Anthony P. Vance.
Oakland County Drug Trafficking Organization Charged with Drug Distribution Causing DeathRead the Press Release
An indictment was unsealed today charging 12 individuals with selling heroin mixed with fentanyl in Oakland County and elsewhere, announced Acting U.S. Attorney Daniel L. Lemisch. Seven of the defendants were charged with distributing fentanyl and heroin resulting in overdose death and serious bodily injury.
Joining Lemisch in the announcement were Special Agent in Charge David P. Gelios, Federal Bureau of Investigation and Oakland County Sheriff Michael Bouchard.
The drug-trafficking organization, known as the “TEAM”, is alleged to have been selling heroin in Oakland County, as well as Livingston, Macomb and Wayne counties since 2010. “TEAM” was formed when members of the “Hustle Boys” and the “Wall Street Gorillaz” joined together to distribute heroin.
According to the indictment, “TEAM” customers contacted members of the conspiracy and arranged heroin sales by phone. Customers called one of several drug phones and a member of “TEAM” would deliver the heroin either to the buyer’s house or to a neutral location, including parking lots in various strip malls throughout Pontiac. “TEAM” members also sold heroin from two “trap” houses located at 595 Granada Drive in Pontiac and 380 West Hopkins Avenue in Pontiac. “TEAM” informed their customers of heroin for sale by sending individual and group text messages with the word “FIRE.”
Charged were Timothy Williams, 26, of Pontiac, Kristopher Anderson, 40, of Pontiac, Deaire Rayford, 26, of Auburn Hills, Christopher Light, 25, of Commerce, Kourvoisiea Pittman, 27, of Keego Harbor, Robert Bell, Jr., 28, of Pontiac, Deandre Mullen, 26, of Pontiac, Steven Erkins, 24, of Pontiac, Anthony Lee, 27,of Pontiac, Quanzay Milton, 32, of Pontiac, Antonio Bell, 26, of Waterford and James Bellmore, 50, of Waterford. All twelve were charged with conspiracy to distribute and to possess with intent to distribute over one kilogram of heroin and heroin mixed with fentanyl.
“TEAM” was led by Timothy Williams, who went by the name “T2.” Williams was also charged with distribution of heroin resulting in serious bodily injury to four victims.
Anderson and another man, Marlon McCallum,35, of White Lake, were charged with distribution of heroin and fentanyl resulting in the death of one victim.
The law defines serious bodily injury as an injury that involves a substantial risk of death. The charges of distribution causing death or serious bodily injury, or the conspiracy to commit the offence each carry a mandatory minimum penalty of 20 years’ imprisonment.
In an effort to combat the growing epidemic of opioid and fentanyl related overdoses and deaths, the United States Attorney’s Office, along with our federal, state, and local law enforcement partners, have been going after individuals who distribute dangerous narcotics and who are profiting off this crisis. To date, we have charged 30 such individuals. Drug dealers are making the drugs stronger, and more deadly, by lacing heroin with fentanyl – a drug 30 to 50 times more powerful than heroin.
In August of this year, the Attorney General selected the United States Attorney’s Office for the Eastern District of Michigan as one of 12 offices across the country to participate in a Department of Justice pilot project to pursue opioid-related health care fraud. The three-year program will focus specifically on opioid-related health care fraud using data to identify and prosecute individuals that are contributing to this prescription opioid epidemic. Experienced Assistant United States Attorneys will focus solely on investigating and prosecuting health care fraud related to prescription opioids, including pill mill schemes and pharmacies that unlawfully divert or dispense prescription opioids for illegitimate purposes.
In addition to our prosecutions, the United States Attorney’s Office, along with the FBI and DEA have been participating in outreach efforts around the state that educate communities about the dangers of heroin, opioids, and synthetic opioids like fentanyl. One such outreach program is the DEA 360 Strategy. The 360 Strategy takes an innovative three-pronged approach to combating heroin/opioid use through: (1) coordinated law-enforcement actions against drug cartels and heroin traffickers in specific communities; (2) diversion-control actions against DEA registrants operating outside the law and long-term engagement with pharmaceutical-drug manufacturers, wholesalers, pharmacies, and practitioners; and (3) community outreach through local partnerships that empower communities to take back affected neighborhoods after enforcement actions and prevent the same problems from cropping up again.
Since 2016, Michigan’s FBI, DEA, and United States Attorney Offices have joined community groups to host over 50 proactive opioid prevention events which showcase the documentary film “Chasing the Dragon: The Life of an Opiate Addict.”
The film tells the raw truth of how deadly this problem is in our country. People going through opioid and prescription drug abuse each tell a similar story – from how they became dependent on Opioids and how quickly their lives spiraled out of control as addiction took hold of their lives. The FBI and DEA created this documentary, which is at times raw and uncomfortable, to help educate the public about the growing opioid epidemic in the United States.
"Chasing the Dragon: the Life of an Opiate Addict" aims to educate the public, especially students and young adults, about the dangers of Opioid use and addiction. The path to addiction for many begins with their first use of Opioids. Because the use of heroin is increasingly deadly, the FBI, DEA, and the USAO have collaborated to educate the public and to deliver a compelling message of deterrence and prevention to those exposed to these deadly drugs.
To view the film in its entirety, click on the hyperlink “Chasing the Dragon: The Life of an Opiate Addict”.
"Overdose deaths from heroin and fentanyl have become a national epidemic, including here in Michigan, as people addicted to prescription pills become desperate to feed their addictions," Lemisch said. "Law enforcement agencies are banding together to prosecute traffickers who are exploiting these addictions and risking lives for profit."
The trafficking of heroin and fentanyl by neighborhood gangs continues to cause significant harm and death in our communities”, said Maureen Reddy, Assistant Special Agent in Charge, Detroit Division of the FBI. "Today’s indictments and arrests are a result of the hard work of the FBI’s Oakland County Gang and Violent Crime Task Force (OCGVCTF) along with the Oakland County Sheriff’s Narcotics Enforcement Team (NET). The FBI will continue to prioritize the dismantlement of violent gangs and their networks responsible for the distribution of fentanyl and heroin”.
“It is due to the incredible work of the Oakland County FBI Violent Crime and Gang Task Force, the Oakland County Narcotic Enforcement Team, the work of the Sheriff’s Office Pontiac Substation Directed Patrol Unit and our local police chiefs and their departments that we can bring justice to those who have been a victim of these death dealers,” said Sheriff Michael J. Bouchard. “This is a clear message to those who prey on members of our community. We will not tolerate drug dealers in Oakland County. We are coming for you, and will take you off our streets for good.”
The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This investigation was conducted the FBI’s Oakland County Gang and Violent Crime Task Force (OCGVCTF) along with the Oakland County Sheriff’s Narcotics Enforcement Team (NET). . The case is being prosecuted by Assistant U.S. Attorneys John O’Brien and Shane
US Attorney's Office and Michigan Department of Civil Rights Reach Agreement with Macomb County Prosecutor's Office to Ensure Effective Communication for Persons Who are Deaf or Hard of HearingRead the Press Release
The U.S. Attorney's Office for the Eastern District of Michigan and the Michigan Department of Civil Rights have reached an agreement with the Macomb County Prosecutor’s Office under the Americans with Disabilities Act (“ADA”) and the Michigan Persons with Disabilities Civil Rights Act (“MPWDCRA”), Acting U.S. Attorney Daniel L. Lemisch and Agustin V. Arbulu, Director of the Michigan Department of Civil Rights, announced today. Under the terms of the agreement, the Prosecutor’s Office will provide sign language interpreters and other aids and services, free of charge, to members of the public who are deaf or hard of hearing.
The settlement resolves a complaint that the Prosecutor’s Office failed to provide a sign language interpreter to an individual who is deaf and communicates primarily in American Sign Language (ASL). The complainant alleged that the Prosecutor’s Office asked the complainant to provide information and sign a summons and complaint in a child support matter, but she was unable to communicate effectively with employees without an interpreter.
The ADA and MPWDCRA require that public entities provide effective communication to all individuals with disabilities who seek to participate in or benefit from their services, programs or activities. “Effective communication” means that communication with persons who are deaf or hard of hearing should be as effective as communication with others. Entities must provide auxiliary aids and services, including qualified and certified ASL interpreters, when necessary to give persons with disabilities equal access.
Under the settlement, the Macomb County Prosecutor’s Office agreed to modify its policies and train its staff to ensure that members of the public who are deaf are able to effectively communicate with the office, provide appropriate auxiliary aids and services at no cost, and post signs notifying the public of the availability of these services.
“Government offices have an obligation under the Americans with Disabilities Act to ensure that people with disabilities are able to access their programs and services,” said Acting United States Attorney Daniel L. Lemisch. “We are pleased that the Macomb County Prosecutor’s Office is updating its policies to ensure that individuals who are deaf or hard of hearing will have access to the tools they need to communicate with its employees. We hope this case will remind other government offices to ensure they have the tools in place to provide effective communication to the public that they serve.”
“Access for all to our justice system is a fundamental aspect of our democracy,” said Agustin V. Arbulu, Director of the Michigan Department of Civil Rights. “People who are Deaf, DeafBlind or Hard of Hearing must be able to communicate effectively within our justice systems, whether as a defendant, a witness, a victim of a crime or a party to a proceeding. The Macomb County Prosecutor’s Office deserves our thanks for providing a simple, cost-effective model for other Michigan Prosecutor offices to follow in ensuring access for Deaf, DeafBlind and Hard of Hearing citizens.”
“The right to effective communication is a core right for Michigan citizens who are Deaf, DeafBlind and Hard of Hearing, and the ability to fully access programs and services in our courts must be protected,” said Annie Urasky, Director of MDCR Division on Deaf, DeafBlind and Hard of Hearing. “I thank the Macomb County Prosecutor’s Office for recognizing the need to review and update their policies with regards to sign language interpreters.”
Those interested in finding out more about this settlement or the obligations of public entities under the ADA may call the U.S. Attorney’s Office Civil Rights Hotline at 313-226-9151, or send an email to [email protected].
Those interested in learning more about the Michigan Department of Civil Rights, the Division on Deaf, DeafBlind and Hard of Hearing and the laws they enforce can visit www.michigan.gov/mdcr or call 800-482-3604; via Video Phone at 313-437-7035; or send email to [email protected].
Information is also available at the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or at www.ada.gov.
St. Clair Shores Restaurant and Shopping Center Works with U.S. Attorney's Office to Improve Access for People with DisabilitiesRead the Press Release
The Red Olive Restaurant in St. Clair Shores and ANK Enterprises, Inc., the owner of the Harper/Little Mack Shopping Center, have taken steps to improve physical accessibility for individuals with disabilities, Acting U.S. Attorney Daniel L. Lemisch announced today.
This resolution concludes an investigation under the Americans with Disabilities Act, alleging that the restaurant was not accessible to individuals with disabilities. The complaint was filed by a restaurant patron who uses a wheelchair.
After discussions with the U.S. Attorney's Office, the Red Olive Restaurant made changes to the restaurant’s interior, improving accessibility for people with disabilities. The Red Olive Restaurant is located within the Harper/Little Mack Shopping Center in St. Clair Shores. The U.S. Attorney's Office also worked with the owner of the shopping center, ANK Enterprises, Inc., who renovated accessible parking spaces and a sidewalk curb cut as a part of this investigation.
“The Americans with Disabilities Act ensures that people who have disabilities have the same access to public accommodations as all other Americans,” said Lemisch. “This case is a reminder that businesses must comply with federal requirements that enable individuals with disabilities to fully participate in their communities.”
This resolution was reached under Title III of the ADA, which prohibits discrimination against individuals with disabilities by businesses that serve the public.
More information about the ADA is available at the Justice Department's toll free ADA Information line at (800) 514 0301 or (800) 514 0383 (TTY) and on the ADA website at www.ada.gov. ADA complaints may be emailed to [email protected] or by contacting the U.S. Attorney's Office’s civil rights hotline at (313) 226-9151.
Former Detroit Deputy Chief of Police and Legal Advisor Charged with Bribery and Bribery ConspiracyRead the Press Release
A former Deputy Chief of Police for the Detroit Police Department was indicted today for bribery and conspiracy to commit bribery, in connection with the corruption of towing permits in Detroit, Acting United States Attorney Daniel L. Lemisch announced.
Lemisch was joined in the announcement by David P. Gelios, 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.
Charged was Celia Washington, 57, of Detroit.
According to the indictment, while serving as a Deputy Police Chief and the legal advisor to the Chief of Police, Washington’s responsibilities included overseeing the Detroit Police Department’s permitting, licensing, and use of private towing companies. As a Deputy Police Chief, Washington conspired to commit bribery with the owner of several towing companies to assist the owner with the placement of his various companies on the Detroit Police Department’s towing rotation. Under the city’s towing rotation, private towing companies are called by the police to tow cars that are seized by the police or had been stolen. Washington was aware that the owner of the towing companies was violating the City of Detroit’s rules prohibiting a towing company owner from having more than one company in the rotation for a particular police precinct or district. As part of the conspiracy, Washington accepted at least $3,000 in cash as a bribe from the owner of the towing companies in February 2016. In June 2016, Washington assisted in issuing a police towing rotation that continued to allow the owner to violate the city’s towing rules. During the conspiracy, Washington directed the owner and his associate and relative to communicate with her concerning the towing rotations that he wanted using Washington’s private e-mail account.
The bribery charge carries a maximum sentence of 10 years’ imprisonment and a fine of $250,000. The bribery conspiracy count carries a maximum sentence of 5 years’ imprisonment and a fine of $250,000.
Acting United States Attorney Lemisch said, “Given her role and importance to the operation of the Detroit Police Department, it is critical that the activities of Ms. Washington are free of corruption and bribery. We thank Chief of Police James Craig for his assistance in this investigation.”
"Today's indictment establishes that former Deputy Police Chief Celia Washington betrayed the men and women of the Detroit Police Department and the citizens of Detroit when she prioritized personal gain over policing excellence which will always place neighborhoods and people first", said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. "The FBI wants the public to know that this conduct is not representative of the Detroit Police Department and we remain grateful for the support of Chief Craig and our law enforcement partners to address corrupt practices wherever those practices exist".
"This is extremely troubling, stated Detroit Police Chief Craig. “It’s certainly a betrayal, not only to the men and women of this police department and my office, but the citizen of this city. We want to acknowledge both the work of the FBI and US Attorney Office in bringing closure to this matter. This was certainly a team effort and we applaud their work. The stain is present and a significant betrayal to this organization."
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 and R. Michael Bullotta.
An indictment is only a charging document and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt
Doctor Pleads Guilty to Health Care Fraud Conspiracy for Role in $19 Million Detroit Area Medicare Fraud SchemeRead the Press Release
A physician pleaded guilty today to conspiracy to commit health care fraud for his role in an approximately $19 million Medicare fraud scheme involving three Detroit area providers.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan, Special Agent in Charge David P. Gelios 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 Special Agent in Charge Manny Muriel of Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.
Abdul Haq, 72, of Ypsilanti, Michigan, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Denise Page Hood of the Eastern District of Michigan. Sentencing has been scheduled for May 29, 2018 before Judge Hood.
As part of his guilty plea, Haq admitted that he conspired with the owner of the Tri-County Network, Mashiyat Rashid, and his co-defendants and others to prescribe medically unnecessary controlled substances, including Oxycodone, Hydrocodone and Opana, to Medicare beneficiaries, many of whom were addicted to narcotics. He further admitted that in furtherance of the conspiracy, Rashid and others also directed physicians, including Haq and others, to require Medicare beneficiaries to undergo medically unnecessary facet joint injections if the beneficiary wished to obtain prescriptions for controlled substances.
In furtherance of the conspiracy, Haq and others referred Medicare beneficiaries to specific third party home health agencies, laboratories and diagnostic providers even though those referrals were medically unnecessary, he admitted. Haq also served as the straw owner of various pain clinics owned and/or controlled by Rashid, and submitted false and fraudulent enrollment materials to Medicare that failed to disclose the ownership interest of Rashid, as it was illegal for Rashid – a non-physician – to own medical clinics under Michigan law. In total, Haq admitted that he submitted or caused the submission of approximately $19,322,846.60 in false and fraudulent claims to Medicare.
Haq was charged along with Mashiyat Rashid, 37, of West Bloomfield, Michigan; Yasser Mozeb, 35, of Madison Heights, Michigan; Spilios Pappas, 61, of Monclova, Ohio; Joseph Betro, 57, of Novi, Michigan; Tariq Omar, 61, of West Bloomfield, Michigan; and Mohammed Zahoor, 51 of Novi, Michigan, in an indictment unsealed on July 6. Rashid, Mozeb, Pappas, Betro, Omar and Zahoor are awaiting trial.
An indictment is merely an allegation and all defendants are presumed innocent unless and 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.
White Lake Township Woman Sentenced to 30 Years in Prison on Production of Child Pornography ChargesRead the Press Release
A White Lake Township woman was sentenced today to 30 years in federal prison on charges of producing child pornography, announced Acting United States Attorney Daniel L. Lemisch.
Lemisch was joined in the announcement by David P. Gelios, Special Agent in Charge of the Federal Bureau of Investigation (FBI).
Anngela Boyle, 27, was sentenced this afternoon before United States District Judge Gershwin Drain in Detroit, Michigan.
Boyle pleaded guilty on April 3, 2017, to conspiring with her husband and co-defendant Colin Boyle, to producing child pornography of four minor victims, ranging in age from 1 year to 9 years of age. Colin Boyle received 60 years’ imprisonment for his role in the offenses.
The case was investigated by special agents of the FBI and prosecuted by Assistant United States Attorney Maggie Smith.
Former Chief Engineer for Macomb County Public Works Department Pleads Guilty to Bribery ConspiracyRead the Press Release
A former Chief Engineer for Macomb County’s Public Works Department, James Pistilli, 68, of Holly, pleaded guilty today to conspiracy to commit bribery, Acting United States Attorney Daniel L. Lemisch announced.
Lemisch was joined in the announcement by David P. Gelios, 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.
The charge to which Pistilli pleaded guilty occurred in 2014. At that time, Pistilli worked for a private engineering firm. Pistilli conspired with fellow engineer Paulin Modi and others to pay a $2,000 cash bribe to Steven Hohensee, who was then the Superintendent of the Department of Public Works for Washington Township. Unbeknownst to Pistilli, Hohensee was cooperating with the FBI.
Pistilli is scheduled to be sentenced on January 30, 2018 at 1:30 p.m., and faces up to 5 years’ imprisonment and a fine of $250,000.
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 and R. Michael Bullotta
Michigan Man Sentenced to over 28 Years for Possessing Crystal MethRead the Press Release
A Greenbush, Michigan man was sentenced yesterday to 340 months in federal prison on charges that he possessed with the intent to distribute methamphetamine, also known as crystal meth, announced Acting United States Attorney Daniel L. Lemisch.
Lemisch was joined in the announcement by was Timothy Plancon, Special Agent in Charge of the Drug Enforcement Administration, Detroit Division.
Daniel Harrington, 45, was sentenced by United States District Judge Thomas Ludington in Bay City, Michigan.
Harrington pleaded guilty on February 7, 2017, to one count of a superseding indictment which charged him with possessing more than five grams of methamphetamine, also known as crystal meth. Harrington, assisted by others, obtained meth from sources in California then transported it to northern Michigan for distribution. Some of the meth seized during the investigation test as 100% pure.
This case was jointly investigated by special agents with the Drug Enforcement Administration and the Michigan State Police. The prosecution was handled by the United States Attorney’s Office in Bay City, Michigan.
White Lake Township Man Sentenced to 60 Years in Prison on Production of Child Pornography ChargesRead the Press Release
A White Lake Township man was sentenced today to 60 years in federal prison on charges of producing child pornography, announced Acting United States Attorney Daniel L. Lemisch.
Lemisch was joined in the announcement by David P. Gelios, Special Agent in Charge of the Federal Bureau of Investigation (FBI).
Colin Boyle, 31, was sentenced this afternoon before United States District Judge Gershwin Drain in Detroit, Michigan.
Boyle pleaded guilty on April 4, 2017, to conspiring with his wife and co-defendant Anngela Boyle, to producing child pornography of four minor victims, ranging in age from 1 year to 9 years of age. Colin Boyle has two prior sex related convictions out of Oakland and Macomb Counties.
The case was investigated by special agents of the FBI and prosecuted by Assistant United States Attorney Margaret Smith.
Four Men Sentenced for Engaging in Child Exploitation EnterpriseRead the Press Release
The last four men in a six-defendant conspiracy were sentenced yesterday for their role in a child exploitation enterprise, announced Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan.
Justin Fuller, 37, of Modesto, California, was sentenced to 35 years. On April 13, a jury found Fuller guilty of one count of engaging in a child exploitation enterprise; one count of conspiracy to produce child pornography; five counts of production of child pornography; one count of conspiracy to receive child pornography; one count of conspiracy to access with intent to view child pornography; and five counts of enticement of a minor to engage in illegal sexual activity.
According to trial evidence, between Nov. 16, 2013 and March 10, 2016, Fuller and his five co-conspirators located in different states worked together to lure juvenile girls to a video chat website in order to get them to engage in sexually explicit conduct. The group members predominantly targeted prepubescent girls and would, unbeknownst to the girls, record the lured young girls performing the sexually explicit conduct. The group was active for approximately two years and communicated with each other through “base” chatrooms that were password-protected. In the base chat rooms, Fuller and co-conspirators strategized how to convince minor females to produce child pornography, including pretending to be teenage boys or girls to help convince the minor females to engage in sexual activity.
Three other co-conspirators were also sentenced today. Virgil Napier, 54, of Waterford, Michigan, pleaded guilty on June 21, 2016, and was sentenced to 20 years. John Garrison, 52, of Glenarm, Illinois, pleaded guilty on July 11, 2016, and was sentenced to 35 years. Thomas Dougherty, 54, of Vallejo, California, pleaded guilty on February 24, and was sentenced to 26 years.
Additionally, on Sept. 23, 2016, Dantly Nicart, 39, a citizen of the Philippines residing in Las Vegas, pleaded guilty, and, on March 2, was sentenced to 20 years imprisonment followed by five years of supervised release and was ordered to pay $150,000 in restitution. On June 21, 2016, Brandon Henneberg, 31, of Diller, Nebraska, pleaded guilty in the District of Nebraska, and, on Sept. 14, 2016, he was sentenced to 35 years imprisonment, followed by a lifetime term of supervised release and order to pay $60,000 in restitution.
Trial Attorney Austin M. Berry of the Child Exploitation and Obscenity Section (CEOS) of the Justice Department’s Criminal Division and Assistant U.S. Attorney April N. Russo of the Eastern District of Michigan are prosecuting the case. The FBI’s Detroit Field Office and Southeast Michigan Trafficking and Exploitation Crimes task force investigated the case with assistance from CEOS’s High Technology Investigative Unit.
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
Engineering Firm Owner Charged with Bribery of Washington Township OfficialsRead the Press Release
An owner of an engineering firm, Fazullah Khan, 56, of Troy, was indicted today by a grand jury with four counts of bribery, Acting United States Attorney Daniel L. Lemisch announced.
Lemisch was joined in the announcement by David P. Gelios, 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.
The indictment alleges that in 2014, Khan bribed public officials of Washington Township with $11,000 in cash, a free fishing trip and a secret financial interest in a property development deal. Unbeknownst to Khan, the township officials he was attempting to bribe were working with the FBI.
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 and R. Michael Bullotta.
Each of the four bribery charges carries a maximum sentence of 10 years’ imprisonment and a fine of $250,000.
An indictment is only a charging document and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Vice Lords Leader Sentenced for Gang-Related Shooting in DetroitRead the Press Release
A leader of the Vice Lords street gang was sentenced today to 146 months for his role in various criminal gang-related activities, including the May 7, 2015, shooting of four people with an AK-47 assault rifle.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan, Acting Special Agent in Charge Thomas L. Chittum of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Detroit Field Division, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division and Chief James Craig of the Detroit Police Department made the announcement.
Kenneth Smith, 36, of Detroit, pleaded guilty on Feb. 22, 2016, before U.S. District Judge David M. Lawson of the Eastern District of Michigan, to one count of RICO conspiracy and one count of failure to appear in court.
In connection with his plea, Smith admitted that the Vice Lords is a national gang broken down into various “sets,” “decks,” or “branches,” which includes the Detroit-based Traveling Vice Lords (TVL), and that these sets operate in a hierarchical chain of command, answering to the gang’s leaders in Chicago, Illinois and Detroit, Michigan. Vice Lords members engage in a variety of racketeering crimes in furtherance of the gang’s activities, including shootings of rivals, armed robberies and narcotics trafficking. In addition, gang members impose punishment on members for violations of the gang’s rules, including for attempts to leave or withdraw from the gang, which often result in a physical beating or a “green light” order to kill.
Pursuant to his plea agreement, Smith admitted that he was a leader of the TVL, and that, in May 2015, he directed other members of the TVL to search for two individuals who had attempted to leave the gang in order to harm them. Smith further admitted that on May 7, 2015, members of the TVL traveled in multiple cars to the intended victims’ house, including a car owned by Smith’s girlfriend, where TVL members shot four victims with an AK-47.
As part of his plea, Smith also admitted that, while on pretrial release for a prior indictment in this case, he sent numerous text messages threatening harm to a potential witness and that witness’s children if the witness continued “telling” on the Vice Lords. Smith also admitted that, when the government filed a motion to revoke his pretrial release, he removed the GPS tether he had been ordered to wear as a condition of pretrial release and willfully failed to appear in court.
Smith is the last of nine defendants charged in connection with the May 7, 2015, shooting to be sentenced. Eight other members and leaders of the TVL previously pleaded guilty to charges related to the shooting and received sentences ranging from 36 to 240 months in prison for their respective roles. In addition, a tenth defendant previously pleaded guilty and was sentenced to 48 months in prison for witness tampering stemming from his role in accessing the shooting victims’ medical records to provide identifying information to Vice Lords gang members who wished to prevent the victims from cooperating in the investigation.
The arrests and convictions in this case are, in part, the result of the Detroit One Initiative, a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. Through the lead efforts of the Comprehensive Violence Reduction Partnership Task Force, which consists of representatives of the ATF, Detroit Police Department, Michigan State Police, Michigan Department of Corrections and FBI, law enforcement authorities linked various acts of violence in Detroit to the Vice Lords street gang, and identified the leaders and key members of the gang, who now have been held accountable.
The ATF, FBI and Detroit Police Department are investigating the case. Assistant U.S. Attorneys Christopher Graveline and Mark Bilkovic of the Eastern District of Michigan and Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section are prosecuting the case.
Former UAW Official Pleads Guilty in Scheme to Accept Illegal Payments from Fiat Chrysler AutomobilesRead the Press Release
A former Assistant Director of the UAW Chrysler Department pleaded guilty today to committing violations of the Labor Management Relations Act, announced Acting U.S. Attorney Daniel L. Lemisch.
Joining in the announcement was James Vanderberg, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Ian Burg, District Director, U.S. Department of Labor – Office of Labor-Management Standards, David P. Gelios, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, and Manny Muriel, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations,
Virdell King, 65, of Detroit, Michigan, pleaded guilty before United States District Judge John Corbett O’Meara for her role in a multiyear conspiracy in which UAW officials accepted money and things of value from Fiat Chrysler Automobiles US (FCA) between 2011 and 2015.
According to court documents, Virdell King was one of the senior UAW officials responsible for negotiating and administering the national collective bargaining agreements with FCA on behalf of tens of thousands of UAW members. Virdell King was also a member of the UAW’s National Negotiating Committees in 2011 and 2015 that negotiated the collective bargaining agreements between the UAW and FCA.
According to the Superseding Information Virdell King accepted thousands of dollars in designer shoes, clothing, jewelry, luggage and other personal items, all of which were purchased using credit cards issued through the UAW-Chrysler National Training Center. According to court documents, FCA Vice President Alphons Iacobelli told senior UAW officials that they could use their NTC credit cards to make personal purchases, stating “if you see something you want, feel free to buy it.”
Beyond the purchases for herself, the Superseding Information charges Virdell King with making over $40,000 of additional purchases between December of 2012 and August of 2015 at the direction and for the benefit of other senior UAW officials. Those additional purchases included a shotgun, golf equipment, luggage, concert tickets, theme park tickets and other personal items. All of the credit card purchases were paid for with funds provided by FCA.
“Union rank and file members deserve the undivided loyalty of their leadership. Collusion between management and labor, that serves to line the pockets of corrupt individuals, is a breach of trust and will be prosecuted”, said Daniel L. Lemisch, Acting U.S. Attorney.
Today's guilty plea is another step towards ending a culture of corruption between some leaders at the UAW and FCA responsible for collective bargaining agreements, said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI."
“Virdell King’s plea casts a dark shadow on UAW contracts negotiated while she was a member of the International Union’s collective bargaining team. As a high ranking official, she was entrusted to negotiate contracts and implement them to serve the union members she represented, but instead she traded away their trust for more than $40,000 in shoes, jewelry, clothing and other things that were ultimately paid for by Fiat Chrysler Automobiles. We will continue 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.
Sentencing of King is set for January 3, 2018.
Acting U.S. Attorney Lemisch commended the outstanding work of the US Department of Labor – Office of Inspector General and Office of Labor-Management Standards, the Federal Bureau of Investigation, and the Internal Revenue Service – Criminal Investigations for continuing to conduct a comprehensive criminal investigation into labor corruption activities involving a vital sector of the local and national economy
Former Executive Director of St. Clair Housing Commission Pleads Guilty to Federal Program FraudRead the Press Release
The former executive director of the St. Clair Housing Commission, pleaded guilty today to conspiring to commit federal program fraud, Acting United States Attorney Daniel Lemisch announced.
Lemisch was joined in the announcement by Brad Gary, Special Agent in Charge of the U.S. Department of Housing and Urban Development and David P. Gelios, Special Agent in Charge, Federal Bureau of Investigation.
Lorena Loren, 55, of Nicholls, Georgia admitted to conspiring with several family members to steal federal funds provided to the Commission by the U.S. Department of Housing and Urban Development (‘HUD”) to administer HUD’s low-income housing programs within St. Clair County. Loren admitted to engaging in various fraudulent schemes to unlawfully obtain over $336,000 in federal funds.
According to court records, Loren stole approximately $162,000 earmarked for HUD’s Housing Choice Voucher program, commonly known as Section 8 housing, which allows low-income families to lease privately owned rental properties with the assistance of HUD rental subsidies administered by the Commission. As part of this fraudulent scheme, between August of 2008 and August of 2016, Loren fraudulently entered into Section 8 contracts from which, at various times, she and nearly all of her immediate family members directly benefitted, in violation of HUD’s regulations and guidelines. In addition to falsifying Section 8 housing contracts and lease agreements by using nominees for lease agreements for Loren’s son, Loren and several relatives falsely claimed they owned rental properties which were, in fact, owned by others; where former Section 8 tenants resided; and, owned by Loren herself. Loren, as executive director, then fraudulently issued Section 8 rental subsidy payments to relatives, in some instances, even in the names of former Section 8 tenants who were no longer in the program. Loren also directed family members to establish joint bank accounts to facilitate access to the ill-gotten funds by various members of her family. In addition, between 2010 and 2016, Loren used the Commission’s two credit cards to make unauthorized purchases of personal items for herself and relatives from Amazon.com, Walmart and Sam’s Club stores. Loren purchased, among other things, adult and infant clothing, furniture, food, beauty supplies, medications, other household items, and alcoholic beverages on the Commission’s cards. Loren had some of those purchases, totaling approximately $60,000, shipped to some of the same relatives involved in the Section 8 housing scheme at their residences in Georgia and Florida. Loren used the Commission’s operating budget, provided by HUD to maintain the Commission’s public housing facility, Palmer Park Manor, to pay for all the unauthorized purchases, which totaled nearly $166,000. Lastly, Loren also pocketed approximately $8,500 of the Commission’s petty cash funds.
HUD Special Agent in Charge Gary stated, ““At such a critical time for the Department of Housing and Urban Development, with programs that are vital to the well-being of so many in our communities, it is critical that those entrusted to public service are completely dedicated to those in need. The HUD Office of Inspector General is committed to partnering with Federal prosecutors and fellow law enforcement to aggressively pursue those engaged in activities that harm HUD’s Public Housing programs.”
As part of her guilty plea, Loren agreed to pay $336,240.62 in restitution to HUD.
A sentencing date has been set for January 23, 2018 at 2:00 p.m.. Loren faces a maximum of five years in prison and a fine of up to $250,000.
The case was investigated by agents of U.S. Department of Housing and Urban Development-Office of Inspector General and the Macomb Resident Agency of the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Dawn N. Ison.
Contractor Charged in Relation to Cash Kickbacks of Macomb Township OfficialRead the Press Release
An owner of a contracting firm, Christopher Sorrentino, 51, of Macomb Township, was charged today in an information with one count of structuring financial transactions to avoid currency reporting requirements, Acting United States Attorney Daniel L. Lemisch announced.
Lemisch was joined in the announcement by David P. Gelios, 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.
The information alleges that in November of 2014, Sorrentino, at the direction of an elected official of Macomb Township, accepted a check from Macomb Township in payment for work Sorrentino did not perform. Sorrentino deposited the township check into his bank account. The elected official directed that Sorrentino pay him a cash kickback of $66,000. In order to accomplish this without creating a currency transaction report, Sorrentino wrote seven checks in amounts slightly less than $10,000. Sorrentino then caused all of the checks to be cashed and provided $66,000 in cash to the elected official.
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 and R. Michael Bullotta.
The charge carries a maximum sentence of 5 years’ imprisonment and a fine of $250,000
An information is only a charging document and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Volkswagen Engineer Sentenced for His Role in Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
A Volkswagen engineer was sentenced today by U.S. District Judge Sean F. Cox of the Eastern District of Michigan to 40 months in federal prison, and two years of supervised release, for his role in a nearly 10-year conspiracy to defraud U.S. regulators and Volkswagen customers by implementing software specifically designed to cheat emissions tests in hundreds of thousands of Volkswagen “clean diesel” vehicles sold in the U.S., the Justice Department announced today. During the hearing, the Court noted that the sentence took into consideration the defendant’s cooperation in the investigation and prosecution of the company and others.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division, and Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan made the announcement.
James Robert Liang, 63, of Newbury Park, Calif., pleaded guilty last year to one count of conspiracy to defraud the U.S., commit wire fraud and violate the Clean Air Act.
In connection with his guilty plea, the defendant admitted that he was employed by Volkswagen AG (VW) from 1983 until May 2008, working in its diesel development department in Wolfsburg, Germany. Beginning in about 2006, he and his co-conspirators began to design a new “EA 189” diesel engine for sale in the U.S. When Liang and his co-conspirators realized that they could not design a diesel engine that would meet the stricter U.S. emissions standards, they designed and implemented software to recognize whether a vehicle was undergoing standard U.S. emissions testing on a dynamometer, versus being driven on the road under normal driving conditions (the defeat device), in order to cheat U.S. emissions tests. VW tasked Liang with making the defeat device work by calibrating it to recognize specific U.S. emissions tests’ drive cycles. In May 2008, Liang moved to the U.S. to assist in the launch of VW’s new “clean diesel” vehicles in the U.S. market. While working at VW’s testing facility in Oxnard, California, he held the title of Leader of Diesel Competence.
Liang further admitted that, for over eight years, employees of VW and its U.S. subsidiary met with the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) to seek the certifications required to sell each model year of its vehicles to U.S. customers. During these meetings, some of which Liang personally attended, Liang’s co-conspirators lied to the regulators by telling them that the VW diesel vehicles complied with U.S. emissions standards. Instead, these diesel vehicles were cheating the U.S. emissions test through use of the defeat device.
Liang admitted that for each new model year from 2009 through 2016, Liang’s co-conspirators continued to falsely and fraudulently certify to EPA and CARB that VW diesel vehicles met U.S. emissions standards and complied with the Clean Air Act. Liang further admitted that he and his co-conspirators knew that VW falsely marketed VW diesel vehicles as “clean diesel” and environmentally-friendly, while, at the same time, promoting the vehicles’ increased fuel economy, a result achieved by using the defeat device. At the same time, Liang and his co-conspirators also continued to improve and refine the defeat device to better recognize when the VW diesel vehicles were being tested versus being driven on the road.
Liang also admitted that he helped his co-conspirators continue to lie to the EPA, CARB and VW customers even after the regulatory agencies started raising questions about the vehicles’ on-road performance following an independent study commissioned by the International Council on Clean Transportation, which showed that the diesel vehicles’ emissions on the road were more than 30 times higher than shown on the dynamometer.
The FBI’s Detroit Office and EPA-CID are investigating the case. Deputy Chief Benjamin D. Singer and Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section, Senior Trial Attorney Jennifer L. Blackwell of the Environment and Natural Resources Division, and Criminal Division Chief Mark Chutkow and Economic Crimes Unit Chief John K. Neal of the U.S. Attorney’s Office of the Eastern District of Michigan are prosecuting the case.
Volkswagen Engineer Sentenced for His Role in Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
DETROIT, Michigan – James Robert Liang, a Volkswagen engineer, was sentenced today by U.S. District Judge Sean F. Cox of the Eastern District of Michigan to 40 months in federal prison for his role in a nearly 10-year conspiracy to defraud U.S. regulators and U.S. Volkswagen customers by implementing software specifically designed to cheat U.S. emissions tests in hundreds of thousands of Volkswagen “clean diesel” vehicles, the Justice Department announced today.
Liang, 63, of Newbury Park, California, pleaded guilty last year to one count of conspiracy to defraud the United States, to commit wire fraud, and to violate the Clean Air Act. According to court records, from 1983 until May 2008, Liang was an employee of Volkswagen AG (VW), working in its diesel development department in Wolfsburg, Germany.
Acting United States Attorney Daniel L. Lemisch stated, “This sentence sends a strong message of deterrence to automotive engineers and executives who should think twice before knowingly breaking United States laws for the benefit of their employer.”
“The actions of James Robert Liang and others with which he conspired to fraudulently represent that Volkswagen AG was in compliance with regulatory emissions standards significantly impacted thousands of victim consumers”, said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “Today’s sentencing is significant as it demonstrates there is and will be personal culpability for corporate executives who knowingly cheat American consumers, violate federal laws, and purposely utilize technologies that further endanger our environment."
"As this case demonstrates, the U.S. Environmental Protection Agency is committed to ensuring a level playing field for companies that follow the rules and pursuing individuals whose actions create an unfair competitive advantage for their employer," said Larry Starfield, Acting Assistant Administrator for EPA's Office of Enforcement and Compliance Assurance.
Beginning in about 2006, he and his co-conspirators started to design a new “EA 189” diesel engine for sale in the United States, according to the plea agreement. When Liang and his co-conspirators realized that they could not design a diesel engine that would meet the stricter U.S. emissions standards, they designed and implemented software to recognize whether a vehicle was undergoing standard U.S. emissions testing on a dynamometer or being driven on the road under normal driving conditions (the defeat device), in order to cheat U.S. emissions tests. VW tasked Liang with making the defeat device work by calibrating it to recognize specific U.S. emissions tests’ drive cycles. In May 2008, Liang moved to the United States to assist in the launch of VW’s new “clean diesel” vehicles in the U.S. market. While working at VW’s testing facility in Oxnard, California, he held the title of Leader of Diesel Competence.
According to Liang’s plea agreement, for over eight years, employees of VW and its U.S. subsidiary met with the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) to seek the certifications required to sell each model year of its vehicles to U.S. customers. During these meetings, some of which Liang personally attended, Liang and his co-conspirators lied to the regulators by telling them that the VW diesel vehicles complied with U.S. emissions standards, when, in fact, they did not. Instead, these diesel vehicles were cheating the U.S. emissions test through use of the defeat device.
For each new model year from 2009 through 2016, Liang’s co-conspirators continued to falsely and fraudulently certify to EPA and CARB that VW diesel vehicles met U.S. emissions standards and complied with the Clean Air Act, according to the plea agreement. Liang admitted that during this time, he and his co-conspirators lied to the U.S. public by marketing VW diesel vehicles as “clean diesel” and environmentally-friendly, while, at the same time, promoting the vehicles’ increased fuel economy, a result achieved by using the defeat device. At the same time, Liang and his co-conspirators also continued to improve and refine the defeat device to better recognize when the VW diesel vehicles were being tested versus being driven on the road.
In connection with pleading guilty, Liang admitted that he helped his co-conspirators continue to lie to the EPA, CARB, and VW customers even after the regulatory agencies started raising questions about the vehicles’ on-road performance following an independent study commissioned by the International Council on Clean Transportation, which showed that the diesel vehicles’ emissions on the road were more than 30 times higher than shown on the dynamometer.
The FBI’s Detroit Office and EPA-CID are investigating the case. Deputy Chief Benjamin D. Singer and Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section, Senior Trial Attorney Jennifer L. Blackwell of the Environment and Natural Resources Division, and Criminal Division Chief Mark Chutkow and Economic Crimes Unit Chief John K. Neal of the U.S. Attorney’s Office of the Eastern District of Michigan are prosecuting the case.
Former Union Boss of Operating Engineers Local 324 Pleads Guilty to ExtortionRead the Press Release
John Hamilton, the former top elected official of the 18,000 member Operating Engineers Local 324, International Union of Operating Engineers, pleaded guilty today to conspiring to commit extortion, Acting United States Attorney Daniel L. Lemisch announced.
Hamilton, 62, of Rivera Beach, Florida, admitted to conspiring to violate the Hobbs Act with at least two other former top Local 324 officials. Hamilton admitted forcing business agents and other employees of Local 324 to each pay kickbacks of over $5,000 from their salaries per year into what was called the “Team Hamilton Slate Fund.” Ostensibly, the slate fund was to be used for union election campaign expenses. However, Hamilton instead used a significant portion of the money that was forced from union business agents for his own personal benefit. Hamilton threatened union employees with termination if they complained about the payments to his slate fund. In fact, in 2010, Hamilton fired one business agent who had complained about the payments to Hamilton’s fund. Hamilton used some of the money that he extorted to pay for meals and liquor, as well as $5,000 to his daughter as a wedding present. After losing re-election in an August 2012 membership vote, Hamilton then proceeded to pocket for himself $71,000 from his slate fund, as well as distributing over $35,000 each to Steven Minella and David Hart, two other top Local 324 officials.
As part of his guilty plea, Hamilton agreed to pay $250,000 in restitution to the victims of his crime.
In 2015, Minella, the former Local 324 President, and Hart, the former Local 324 Financial Secretary, both pleaded guilty to felonies for helping to conceal Hamilton’s scheme. Both Minella and Hart are scheduled to be sentenced on October 10, 2017.
Local 324 represents heavy equipment and crane operators throughout Michigan. Hamilton served as the Business Manager of the union, its top elected official, from 2003 through 2012. The union is headquartered in Bloomfield Township, Michigan.
Lemisch was joined in the announcement by James Vanderberg, the Special Agent in Charge of the Department of Labor, Office of Investigations—Labor Racketeering and Fraud, Special Agent in Charge David P. Gelios of the Federal Bureau of Investigation’s Detroit Division, Ian Burg, District Director of the Department of Labor, Office of Labor Management Standards, Manny Muriel, Special Agent in Charge of the Detroit Field Office of the Internal Revenue Service, Criminal Investigation, and L. Joe Rivers, Regional Director, Cincinnati Regional Office, Employee Benefits Security Administration.
“Union officials should be dedicated to promoting the best interests of their rank and file members, not their own personal enrichment,” Acting United States Attorney Lemisch said. “This prosecution demonstrates that union officials will be held to account if they abuse their positions of trust to force their employees, under threat of termination, to pay kickbacks to their union bosses.”
"John Hamilton was the top elected representative of more than 18,000 members of the International Union of Operating Engineers Local 324. Hamilton conspired to extort fellow union officers and members of $250,000, under the threat of being fired, and used much of the money to personally enrich himself. We will continue to work with our law enforcement partners to stop extortion plots that victimize American workers," stated James Vanderberg, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General.
"John Hamilton selfishly abused his position by extorting and bullying union members into contributing money for his own benefit, and, in the process, destroyed the trust of those he was elected to represent,” said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “The FBI is committed to fight all forms of corruption. As evidenced in this investigation, today' guilty plea demonstrates collaboration among law enforcement partners makes it far more likely that leaders in the labor union movement who illegally profit at the expense of their membership will be held to account for their crimes."
“Protecting financial integrity and combatting corruption in labor unions is a very high priority for OLMS,” said Ian Burg, Director of the Office of Labor-Management Standards (OLMS) Detroit-Milwaukee District Office. “This information and plea agreement send a clear message that OLMS will fully investigate and seek justice when anyone attempts to use their union position for personal financial gain.”
“This is yet another example of Union Officials abusing the power and responsibilities entrusted on them,” stated Manny Muriel, Special Agent in Charge of IRS Criminal Investigation Detroit Field Office. “John Hamilton acted no differently than a school yard bully, when he threatened the members of Local 324 with termination of their union jobs if they did not make weekly payments into the fund. The IRS and its partners will continue to work to protect the integrity of the unions.”
“This defendant abused his position for his own benefit and jeopardized the trust of many individual workers. EBSA is committed to holding employee benefit plan officials accountable for their actions,” stated L. Joe Rivers, Regional Director, Cincinnati Regional Office, Employee Benefits Security Administration.
Upon conviction for a violation of Title 18, United States Code, Section 371, conspiracy to interfere with commerce, Hamilton faces a maximum of five years in prison and a fine of up to $250,000.
The case was investigated by agents of the Department of Labor, Office of Investigations—Labor Racketeering and Fraud, the Office of Labor Management Standards, the Employee Benefits Security Administration, the Internal Revenue Service—Criminal Investigations, and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys David A. Gardey and Dawn N. Ison.
Former UAW Official Charged in Scheme to Accept Illegal Payments from Fiat Chrysler AutomobilesRead the Press Release
A superseding information was filed in federal court charging the former Assistant Director of the UAW Chrysler Department with criminal violations of the Labor Management Relations Act, announced Acting U.S. Attorney Daniel L. Lemisch.
Joining in the announcement was James Vanderberg, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Ian Burg, District Director, U.S. Department of Labor – Office of Labor-Management Standards, David P. Gelios, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, and Manny Muriel, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations,
Virdell King, 65, of Detroit, Michigan, was charged with taking part in a multiyear conspiracy for UAW officials to accept money and things of value from Fiat Chrysler Automobiles US (FCA) between 2011 and 2015.
According to court documents, Virdell King was one of the senior UAW officials responsible for negotiating and administering the national collective bargaining agreements with FCA on behalf of tens of thousands of UAW members. Virdell King was also a member of the UAW’s National Negotiating Committees in 2011 and 2015 that negotiated the collective bargaining agreements between the UAW and FCA.
The Superseding Information charges Virdell King with accepting thousands of dollars in designer shoes, clothing, jewelry, luggage and other personal items, all of which were purchased using credit cards issued through the UAW-Chrysler National Training Center. According to court documents, FCA Vice President Alphons Iacobelli told senior UAW officials that they could use their NTC credit cards to make personal purchases, stating “if you see something you want, feel free to buy it.”
Beyond the purchases for herself, the Superseding Information charges Virdell King with making over $40,000 of additional purchases between December of 2012 and August of 2015 at the direction and for the benefit of other senior UAW officials. Those additional purchases included a shotgun, golf equipment, luggage, concert tickets, theme park tickets and other personal items. All of the credit card purchases were paid for with funds provided by FCA.
“This alleged conspiracy among several union and corporate officials to abuse their positions for personal gains at the expense of hard-working Chrysler employees is highly alarming,” said Ian Burg, Director of the Office of Labor-Management Standards (OLMS) Detroit-Milwaukee District Office. “OLMS remains committed to fulfilling its mission of protecting the rights of union members and maintains a zero tolerance policy regarding financial misconduct by union officials. OLMS will continue to partner with other law enforcement agencies to investigate allegations of corruption by union officials whose members have placed their work lives in their trust.”
"Years of fraud and corruption within a select group of the FCA and UAW hierarchy continue to be eroded through the diligence and collaboration of law enforcement in the Detroit metropolitan area, said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. The superseding information against Virdell King highlights the FBI's commitment to end the abusive practice of using union training finances for personal gain. As evidenced, these efforts make it far more likely that leaders in the labor union movement who illegally profit at the expense of their membership will be held to account for their crimes."
Acting U.S. Attorney Lemisch commended the outstanding work of the US Department of Labor – Office of Inspector General and Office of Labor-Management Standards, the Federal Bureau of Investigation, and the Internal Revenue Service – Criminal Investigations for continuing to conduct a comprehensive criminal investigation into labor corruption activities involving a vital sector of the local and national economy.
An information is only a charging document and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Oak Park Doctor Pleads Guilty to Unlawful Distribution of Prescription PillsRead the Press Release
A physician who practiced in Oak Park pleaded guilty yesterday to writing prescriptions for oxycodone without medical justification, acting United States Attorney Daniel L. Lemisch announced today.
Lemisch was joined in the announcement by Timothy Plancon, Special Agent in Charge of the Drug Enforcement Administration and Manny Muriel, Special Agent in Charge of the Detroit Field Office of the Internal Revenue Service, Criminal Investigation.
Jennifer Franklin, 40, of Harrison Township, entered the guilty plea before U.S. District Judge George Caram Steeh.
As part of the plea agreement, Franklin, admitted that between the latter part of 2013 and April 2015, she conspired with Boris Zigmond, to prescribe medically unnecessary oxycodone. Franklin acknowledged that she earned approximately $200,000 from the scheme to distribute oxycodone. She also acknowledged that the street value of the oxycodone she prescribed without justification exceeded $2 million.
Boris Zigmond, Dr. Carlos Godoy, and six other codefendants have previously pleaded guilty for their roles in the conspiracy.
"More people die from overdoses of prescription drugs in America than from overdoses of all other drugs combined,” Lemisch said. “We hope that prosecuting the doctors who are putting these drugs on the streets will deter others from contributing to this epidemic.”
IRS-CI Special Agent in Charge Muriel, stated “It is unfortunate that greed and the desire for financial gain overpowers a physician’s Hippocratic Oath to use treatment to help the sick, but never with a view to injury and wrong-doing. The medically unnecessary prescribing of Oxycodone continues to be a contributing factor to the Opioid epidemic that is facing Michigan. IRS and its partners will continue to work to identify those who look to gain financial reward from medically unnecessary prescriptions.”
As part of their plea agreements, Zigmond, Franklin, and Godoy could receive a maximum sentence of 20 years imprisonment.
Sentencing is scheduled for December 18, 2017.
Individual Convicted Overseas of Being Terrorist Who Participated in the 1969 British Consulate, Supermarket Bombings in Jerusalem SentencedRead the Press Release
Rasmieh Yousef Odeh, 70, was sentenced today, lost her United States citizenship, and will be deported from the United States for having obtained her United States citizenship unlawfully, Daniel L. Lemisch, acting United States Attorney announced.
Joining Lemisch in the announcement was Steve Francis, Special Agent in Charge of Immigration and Customs Enforcement, Homeland Security Investigations.
Odeh, a Chicago-area resident, was sentenced by United States District Judge Gershwin A. Drain. During the sentencing hearing, Judge Drain indicated that he would sign an order, today, revoking Odeh’s United States citizenship. As a result of that order, Odeh will no longer have legal status in the United States, will be deported to her nation of citizenship, Jordan, and is barred for life from reentering the United States. Judge Drain said Odeh intentionally falsified her U.S. citizenship documents and this sentence should be a deterrent to others thinking of lying to gain admission into the United States and citizenship.
Before immigrating to the United States, Odeh had been convicted overseas for participation in two terrorist bombings and for having been a member of the Popular Front for the Liberation of Palestine (PFLP), which has been designated a Terrorist Organization by the United States.
Acting U.S. Attorney Lemisch stated, “In 1969, the Popular Front for the Liberation of Palestine conducted two bombings in Jerusalem, Israel. One was at a Supersol supermarket, in which two individuals were killed and many more wounded. The second bombing was at the British Consulate. Defendant Odeh was arrested and charged with participation in the bombings, and in 1970 was convicted. She was sentenced to life imprisonment, but was released in 1979 after ten years’ imprisonment, as part of a prisoner exchange. In numerous television and video interviews throughout the years, other admitted participants in the bombings named Odeh as the person who chose the supermarket as a target, scouted the location and placed the bomb.”
“Today’s court action clears the way for this defendant’s removal from the United States and should serve as an unequivocal message that the U.S. will never be a haven for those seeking to distance themselves from their past atrocities,” said Steve Francis, HSI special agent in charge.
Odeh obtained a United States immigrant visa in 1994 and has lived in the United States for the last 22 years. In 2004, she obtained United States citizenship. She unlawfully failed to disclose her arrest and convictions regarding the bombings in both her application for her visa and her separate application for United States citizenship.
According to the plea agreement signed by Odeh and accepted by the court, Odeh admitted that in those applications, she lied about her criminal history by falsely denying that she ever had been arrested, charged with a crime, convicted, or imprisoned. In her plea, Odeh also admitted that “At the time she made the false statements, Defendant knew the statements were false, and that she made the false statements intentionally and not as a result of any mistake, Post-Traumatic Stress Disorder or any other psychological issue or condition, as she had previously claimed in court proceedings, or for any innocent reason. Odeh also admitted that at the time she made the false statements, she knew that it was unlawful for her to provide false information to the United States government in connection with her application for Immigrant Visa and her application for naturalization. Had Odeh revealed the truth about her criminal history, as she was required to by law, she never would have been granted an immigrant visa, admitted to the United States, allowed to live here for the last 22 years, or granted United States Citizenship.”
Acting U.S. Attorney Lemisch commended Immigration and Customs Enforcement, Homeland Security Investigations, and particularly Special Agent Stephen A. Webber, for the outstanding investigation which led to Odeh’s conviction. The prosecution was conducted by Assistant U.S. Attorneys Jonathan Tukel and Michael Martin.
Former FCA Executive Pleads Guilty in Scheme to Pay Off UAW OfficialsRead the Press Release
A former financial analyst at Fiat Chrysler Automobiles US LLC (FCA) entered a guilty plea today, announced Acting U.S. Attorney Daniel L. Lemisch.
Joining in the announcement was Manny Muriel, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations, David P. Gelios, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, James Vanderberg, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General and Ian Burg, District Director, U.S. Department of Labor – Office of Labor-Management Standards.
Jerome Durden, 61, of Rochester, Michigan pleaded guilty before United States District Court Judge John Corbett O’Meara in Ann Arbor, Michigan.
According to court records, Durden admitted that he and his co-conspirators used the UAW-Chrysler National Training Center as a conduit to conceal over a million dollars in prohibited payments and things of value paid to UAW Vice President General Holiefield and other UAW officials.
Durden admitted to preparing and filing numerous false tax returns on behalf of the tax-exempt UAW-Chrysler National Training Center and on behalf of a purported charity called the Leave the Light On Foundation as part of a conspiracy to obstruct and impair the Internal Revenue Service. Durden acknowledged that the false tax returns concealed compensation paid to Holiefield and others and caused over $1,000,000 in tax losses to the United States.
“Mr. Darden's criminal conduct was part of a broader pattern of dishonesty and collusion among those implicated in this investigation,” said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “Top level executives at FCA and the UAW chose to misappropriate over a million dollars directly from the NTC at the expense of the FCA workforce. The FBI and its federal partners will remain vigilant in exposing and prosecuting anyone, regardless of their position within an organization, who violates federal laws.”
“Investigating the abuse of tax exempt organizations and charities is a priority for IRS Criminal Investigation (CI),” said Manny Muriel, Special Agent in Charge, IRS Criminal Investigation, Detroit Field Office. “IRS-CI is committed to hold trustees, directors and officers of exempt organizations responsible for filing false tax returns or any other attempts to interfere with our nation’s tax system.”
"Jerome Durden conspired to divert over $4.5 million in NTC funds intended for UAW member training and education, and failed to report related taxable income. We will continue to work with our law enforcement partners to combat crimes that deprive American workers of training opportunities," stated James Vanderberg, Special Agent in Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General.
Durden is scheduled to be sentenced on December 12, 2017 at 9:30 p.m. in Ann Arbor.
Acting U.S. Attorney Lemisch commended the outstanding work of the Internal Revenue Service – Criminal Investigations, the Federal Bureau of Investigation, the US Department of Labor – Office of Inspector General and the U.S. Department of Labor – Office of Labor-Management Standards in conducting a comprehensive criminal investigation into labor corruption and tax fraud activities involving a vital sector of the local and national economy.
Claims for Restitution by Victims of Former Oncologist Farid Fata's Cancer Treatments Scheme Are Being ApprovedRead the Press Release
Farid Fata, a former hematologist-oncologist, pleaded guilty to health care fraud, money laundering, and conspiracy to pay or receive kickbacks. As part of the defendant’s scheme, he deliberately administered medically unnecessary injections and infusions to patients, including chemotherapy, iron, cancer treatment drugs, and other medications. The district court judge imposed a sentence of 45 years in prison. During the prosecution, the government seized approximately $11.9 million. In an effort to return the money seized from Fata to his patients and their heirs, the Department of Justice has voluntarily instituted a restitution process and retained a Facilitator to assist the Department of Justice in the process.
As described in the Report of the Facilitator, which can be found at https://www.justice.gov/usao-edmi/us-v-farid-fata-court-docket-13-cr-20600 (1/12/2017 posting), the Department of Justice has always been on victims’ side in an effort to make the complicated process of federal restitution as easy as possible for patients who we know are suffering emotionally, physically, and financially.
At the end of July, those former patients and heirs who submitted claims for restitution received a “Provisional Decision Letter” from the Facilitator, Ms. Randi Ilyse Roth, describing her preliminary recommendation regarding their claims. Ms. Roth has preliminarily approved 74% of the claims submitted in part or in full. For those who received a preliminary denial of any part of their claim, the “Provisional Decision Letter” explains, “If you do not agree with this outcome, you may request reconsideration.” Reconsideration allows each claimant who was denied all or any portion of their claim to submit any missing paperwork and ask the Facilitator to reconsider their claim. Any requests for reconsideration must be postmarked on or before August 23. Once the reconsideration process by the Facilitator is complete, claimants will have an opportunity to request review by a magistrate judge if they believe a mistake has been made regarding the recommendation by the Facilitator. Ultimately, final restitution decisions will be made by the Court.
We are urging claimants, who do not understand why all or a portion of their claims were denied, to call the Facilitator’s toll-free number to get their questions answered: 1-877-202-3282. Highly trained, phone agents are there to assist victims. The Justice Department’s goal continues to be the distribution of Fata’s assets to every former patient or heir who submits an eligible claim for restitution. The Department recognizes that the prosecution and now the process of federal restitution has been difficult for victims and their families and that is why we have attempted to assist the former patients and family members of patients every day since August of 2013. We continue to be available to assist by having the toll-free line available every business day from 9:00am to 8:00pm
Volkswagen Senior Manager Pleads Guilty in Connection with Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
The former general manager of Volkswagen AG’s (VW) U.S. Environment and Engineering Office, who was a senior aide to VW’s head of engine development, pleaded guilty today for his role in violating the Clean Air Act in connection with VW’s sales of “clean diesel” vehicles in the U.S.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division, and Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan made the announcement.
Oliver Schmidt, 48, a citizen and resident of Germany, pleaded guilty to one count of conspiracy to defraud the U.S., to commit wire fraud and to violate the Clean Air Act; and to one count of violating the Clean Air Act. He was indicted by a federal grand jury on January 11, along with five other VW executives and employees. The case is assigned to U.S. District Judge Sean F. Cox of the Eastern District of Michigan, who accepted Schmidt’s plea today. Sentencing has been scheduled for December 6.
“Today’s guilty plea by a VW senior manager follows the successful prosecution of the company earlier this year and of another VW engineer in 2016,” said Acting Assistant Attorney General Blanco. “The Criminal Division is committed to holding both corporations and individuals accountable to the rule of law, and to protecting U.S. consumers and the environment. This case is a great example of this important commitment.”
“Schmidt participated in a fraudulent VW scam that prioritized corporate sales at the expense of the honesty of emissions tests and trust of the American purchasers,” said Deputy Assistant Attorney General Williams. “Schmidt along with each and every official involved in this emissions scandal will be held fully accountable for their actions by the Department of Justice as this investigation continues.”
“We hope this prosecution sends a message of the importance the U.S. Attorney’s Office places on protecting the environment,” said Acting U.S. Attorney Lemisch. “Where criminal charges are appropriate, we will prosecute both corporations and individual employees who pollute and illegally evade our clean air laws.”
As part of his guilty plea, Schmidt admitted that he agreed with other VW employees to mislead and defraud the U.S. and domestic customers who purchased diesel vehicles, and to violate the Clean Air Act. In the spring of 2014, a non-governmental organization in the U.S. published results of a study that showed substantial discrepancies in nitrogen oxide (NOx) emissions from certain VW vehicles when measured on the road compared to standard drive cycle tests. During the summer of 2015, Schmidt was told of the existence of cheating software in certain VW diesel vehicles that had been in place for years that would cause the vehicles to emit substantially higher amounts of NOx when the software detected that the car was not being tested, he admitted.
Schmidt admitted that he participated in discussions with other VW employees in the summer of 2015 to determine how to respond to questions from U.S. regulators about VW’s diesel vehicles without revealing the defeat device. After a meeting with VW management in July 2015, VW management instructed Schmidt to seek a meeting with a senior employee of the California Air Resources Board (CARB) and to obtain approval from CARB for the sale of additional VW diesel vehicles in the U.S. without disclosing the fact that VW was cheating on emissions tests. Schmidt admitted following VW management’s instructions. During two meetings in August 2015, Schmidt attempted to obtain approval for the sale of additional VW diesel vehicles by responding to questions from CARB without revealing what he knew was the truth – that the real cause for the vehicles’ substantially higher emissions on the road was that VW had intentionally installed software designed to cheat and evade emissions testing, he admitted.
Schmidt further admitted that he knew that in August 2015 VW employees submitted to the U.S. Environmental Protection Agency (EPA) two reports pursuant to the Clean Air Act that were fraudulent and misleading. Moreover, Schmidt knew that VW was falsely marketing diesel vehicles to the U.S. public as being environmentally friendly and compliant with U.S. environmental regulations, including by promoting increased fuel economy, he admitted.
As part of his guilty plea, Schmidt agreed that during his participation in the scheme, he and his co-conspirators caused losses to victims of more than $150 million and that he obstructed justice.
The case is being investigated by the FBI’s Detroit Field Office and the EPA’s Criminal Investigation Division, with assistance from Homeland Security Investigations. Securities and Financial Fraud Unit Chief Benjamin D. Singer and Trial Attorney David M. Fuhr of the Fraud Section of the Justice Department’s Criminal Division; Senior Trial Attorney Jennifer Blackwell of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division; and White Collar Chief John K. Neal of the U.S. Attorney’s Office of the Eastern District of Michigan are prosecuting the case.
Volkswagen Senior Manager Pleads Guilty in Connection with Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
The former general manager of Volkswagen AG’s (VW) U.S. Environment and Engineering Office, who was a senior aide to VW’s head of engine development, pleaded guilty today for his role in violating the Clean Air Act in connection with VW’s sales of “clean diesel” vehicles in the U.S.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division, and Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan made the announcement.
Oliver Schmidt, 48, a citizen and resident of Germany, pleaded guilty to one count of conspiracy to defraud the U.S., to commit wire fraud and to violate the Clean Air Act; and to one count of violating the Clean Air Act. He was indicted by a federal grand jury on January 11, along with five other VW executives and employees. The case is assigned to U.S. District Judge Sean F. Cox of the Eastern District of Michigan, who accepted Schmidt’s plea today. Sentencing has been scheduled for December 6.
“Today’s guilty plea by a VW senior manager follows the successful prosecution of the company earlier this year and of another VW engineer in 2016,” said Acting Assistant Attorney General Blanco. “The Criminal Division is committed to holding both corporations and individuals accountable to the rule of law, and to protecting U.S. consumers and the environment. This case is a great example of this important commitment.”
“Schmidt participated in a fraudulent VW scam that prioritized corporate sales at the expense of the honesty of emissions tests and trust of the American purchasers,” said Deputy Assistant Attorney General Williams. “Schmidt along with each and every official involved in this emissions scandal will be held fully accountable for their actions by the Department of Justice as this investigation continues.”
“We hope this prosecution sends a message of the importance the U.S. Attorney’s Office places on protecting the environment,” said Acting U.S. Attorney Lemisch. “Where criminal charges are appropriate, we will prosecute both corporations and individual employees who pollute and illegally evade our clean air laws.”
As part of his guilty plea, Schmidt admitted that he agreed with other VW employees to mislead and defraud the U.S. and domestic customers who purchased diesel vehicles, and to violate the Clean Air Act. In the spring of 2014, a non-governmental organization in the U.S. published results of a study that showed substantial discrepancies in nitrogen oxide (NOx) emissions from certain VW vehicles when measured on the road compared to standard drive cycle tests. During the summer of 2015, Schmidt was told of the existence of cheating software in certain VW diesel vehicles that had been in place for years that would cause the vehicles to emit substantially higher amounts of NOx when the software detected that the car was not being tested, he admitted.
Schmidt admitted that he participated in discussions with other VW employees in the summer of 2015 to determine how to respond to questions from U.S. regulators about VW’s diesel vehicles without revealing the defeat device. After a meeting with VW management in July 2015, VW management instructed Schmidt to seek a meeting with a senior employee of the California Air Resources Board (CARB) and to obtain approval from CARB for the sale of additional VW diesel vehicles in the U.S. without disclosing the fact that VW was cheating on emissions tests. Schmidt admitted following VW management’s instructions. During two meetings in August 2015, Schmidt attempted to obtain approval for the sale of additional VW diesel vehicles by responding to questions from CARB without revealing what he knew was the truth – that the real cause for the vehicles’ substantially higher emissions on the road was that VW had intentionally installed software designed to cheat and evade emissions testing, he admitted.
Schmidt further admitted that he knew that in August 2015 VW employees submitted to the U.S. Environmental Protection Agency (EPA) two reports pursuant to the Clean Air Act that were fraudulent and misleading. Moreover, Schmidt knew that VW was falsely marketing diesel vehicles to the U.S. public as being environmentally friendly and compliant with U.S. environmental regulations, including by promoting increased fuel economy, he admitted.
As part of his guilty plea, Schmidt agreed that during his participation in the scheme, he and his co-conspirators caused losses to victims of more than $150 million and that he obstructed justice.
The case is being investigated by the FBI’s Detroit Field Office and the EPA’s Criminal Investigation Division, with assistance from Homeland Security Investigations. Securities and Financial Fraud Unit Chief Benjamin D. Singer and Trial Attorney David M. Fuhr of the Fraud Section of the Justice Department’s Criminal Division; Senior Trial Attorney Jennifer Blackwell of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division; and White Collar Chief John K. Neal of the U.S. Attorney’s Office of the Eastern District of Michigan are prosecuting the case.
Three Men Indicted for Bribing Garden City OfficialsRead the Press Release
An indictment was unsealed charging three Dearborn Heights men with bribing officials from Garden City, announced Acting U.S. Attorney Daniel L. Lemisch.
Joining in the announcement was David P. Gelios, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation.
Charged are Mike Baydoun, 54, Ali Baydoun, 52, and Jalal Baydoun, 38.
The indictment charges that in 2016, the Baydouns conspired with each other to bribe the Mayor of Garden City, Police Chief, and three council members to obtain authorization to open a medical marijuana dispensary in Garden City, and to obtain authorization for a medical marijuana plant grow.
The indictment also charges that in furtherance of this conspiracy, on December 2, 2016, the Baydouns delivered to a Garden City official an envelope containing $15,000 cash, representing three individual bribes in the amount of $5,000 each for three Garden City Council members. The indictment also contains a forfeiture count pertaining to the $150,000 the Baydouns conspired to place into escrow to fund future bribes of officials.
Acting United States Attorney Daniel L. Lemisch said, “Citizens deserve elected officials to make decisions in the best interests of their constituents, not on who’s lining their pockets. Public servants who sell their votes will be held accountable to the fullest extent of the law.”
This prosecution is being handled by Assistant United States Attorneys J. Michael Buckley and Frances Lee Carlson.
Gang Members Convicted of Racketeering ChargesRead the Press Release
A federal jury convicted William Steele, a member of the Detroit branch of the Rollin’ 60s Crips street gang, of RICO conspiracy and possession of a firearm in furtherance of a drug trafficking crime. This verdict, which was announced yesterday, wrapped up a trial that began July 12, 2017. During the trial, two co-defendants of Steele, Jermell Coleman and Martel Strong, pleaded guilty to RICO conspiracy. These three individuals were the final remaining defendants of a fourteen-defendant indictment against the Rollin 60s Crips street gang and are the result of the collaborative efforts of law enforcement and the community to reduce homicide and other violent crime under the Detroit One program, announced Acting U.S. Attorney Daniel L. Lemisch.
Joining in the announcement was Thomas Chittum, Acting Special Agent in Charge of the Detroit Field Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives, David P. Gelios, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Chief James Craig of the Detroit Police Department.
According to the indictment, the Rollin’ 60s Crips is a national street gang founded in Los Angeles, California, in the mid-1970s. In 2008, Jerome Hamilton, who previously pleaded guilty, started a Detroit line of the Rollin’ 60s, which now boasts approximately 150 members and who operate primarily on the west side of Detroit in the vicinity of Seven Mile and Tracey.
Testimony and documentary evidence in the trial demonstrated how the Rollin’ 60s Detroit chapter is a violent organization responsible for numerous murders, assaults, robberies, carjackings, and the unlawful possession and trafficking of firearms and narcotics in and around the Detroit metropolitan area over the last nine years. The gang uses violence as a means of retribution for acts done by rival gang members, to intimidate witnesses, to control their territory, and as a means for individuals to maintain or advance their position within the gang. Specifically, the evidence revealed that Steele, 26, of Detroit, distributed marijuana, crack cocaine, and ecstasy, possessed weapons, and aided and abetted retaliatory shootings on behalf of the gang.
Other Rollin’ 60s Crips members have previously pleaded guilty to racketeering conspiracy for acts involving murders, carjackings, armed robberies, firebombing, unarmed robberies, and distributing narcotics on behalf of the gang. Those members are:
- Jerome Hamilton, 24, of Southfield, pleaded guilty to racketeering conspiracy and use of a firearm during and in relation to a crime of violence causing death;
- Darriyon Mills, 25, of Detroit, pleaded guilty to RICO conspiracy and using a firearm during and in relation to a crime of violence;
- Roderek Perry, 22, of Detroit, pleaded guilty to racketeering conspiracy, assault with a dangerous weapon in aid of racketeering, and use and carry of a firearm during and in relation to a crime of violence;
- Jonathan Barber, 26, of Detroit, pleaded guilty to RICO conspiracy;
- Deaires Foster, 23, of Irondale, Alabama, pleaded guilty to RICO conspiracy;
- Timothy Price, 27, of Detroit, pleaded guilty to RICO conspiracy;
- Sadeisha Johns, 32, of West Bloomfield, pleaded guilty to RICO conspiracy;
- Soumo Kennedy, 23, of Detroit, pleaded guilty to RICO conspiracy;
- Brandon Kennedy, 23, of Detroit, pleaded guilty to RICO conspiracy;
- Charles Anthony Smith, 32, of Windsor, Ontario, Canada, pleaded guilty to RICO conspiracy; and
- Tre Tigner, 23, of Detroit, pleaded guilty to RICO conspiracy.
The case is being investigated by the ATF’s Comprehensive Violence Reduction Program, which includes representatives of the Detroit Police, Michigan State Police, and Michigan Department of Corrections, in coordination with the FBI Violent Crime Task Force, and Detroit Police Department. The case is being prosecuted by Assistant U.S. Attorneys Shane Cralle and Michael Heesters.
Former FCA Executive and Wife of Former UAW Vice President Charged in Scheme to Pay Off UAW OfficialsRead the Press Release
A federal grand jury returned a superseding indictment today charging the former Vice President for Employee Relations for Fiat Chrysler Automobiles US LLC (FCA) with criminal violations of the Labor Management Relations Act, announced Acting U.S. Attorney Daniel L. Lemisch.
Joining in the announcement was David P. Gelios, 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, James Vanderberg, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General and Ian Burg, District Director, U.S. Department of Labor – Office of Labor-Management Standards.
Alphons Iacobelli, 57, of Rochester Hills, Michigan was charged with taking part in a multiyear conspiracy to pay and deliver prohibited money and things of value to officers and employees of the International Union, United Automobile, Aerospace, and Agricultural Workers of America (UAW).
Monica Morgan, 54, of Harrison Township, Michigan was charged with conspiring with Iacobelli and others to violate the Labor Management Relations Act. Morgan is the wife of former UAW Vice President General Holiefield, who died in March of 2015.
The superseding indictment charges Iacobelli and others acting in the interest of FCA with making over $1.2 million in prohibited payments to Morgan and then-UAW Vice President General Holiefield and others. The prohibited payments and things of value included designer clothing, jewelry, furniture, and paying off the $262,219 mortgage on Holiefield and Morgan’s residence in Harrison Township, Michigan. The payments were made using the bank account and credit card accounts of the UAW-Chrysler National Training Center located in Detroit, Michigan. The UAW-Chrysler National Training Center was established to provide for the education, training, and retraining of workers.
The prohibited payments were charged to have occurred between 2009 and 2014 during which time FCA Vice President Alphons Iacobelli and UAW Vice President General Holiefield had primary responsibility for negotiating and administering the collective bargaining agreements between FCA and the UAW.
Alphons Iacobelli was also charged with tax violations related to diverting for his own personal benefit over $1 million in funds from the UAW-Chrysler National Training Center. Iacobelli was charged with diverting those funds to pay for: a Ferrari 458 Spider automobile costing more than $350,000; leasing a private jet; two limited edition Mont Blanc pens costing $37,500 each; a pool and hundreds of thousands of dollars in improvements to his residence; and hundreds of thousands of dollars in personal credit card expenses, among other purchases.
Monica Morgan was also charged with using the companies Monica Morgan Photography, Wilson’s Diversified Products, and a third company to conceal payments made by Iacobelli and others acting in the interest of FCA to UAW Vice President General Holiefield and with failing to report the income she received through those companies on her individual tax returns.
Acting U.S. Attorney Lemisch also announced that a separate information was unsealed charging Jerome Durden, 61, of Rochester, Michigan with conspiracy to defraud the United States by impairing, impeding, and obstructing the Internal Revenue Service. Durden was a Financial Analyst in the FCA Corporate Accounting Department who served as the Controller of the UAW-Chrysler National Training Center from 2008 through 2015. The information charges Durden with preparing and filing tax returns for the UAW-Chrysler National Training Center which falsely concealed millions of dollars in payments directed to General Holiefield, Alphons Iacobelli and others.
"Today's indictment exposes a disturbing criminal collaboration that was ongoing for years between high ranking officials of FCA and the UAW", said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. "The funds misapplied deprived working men and women of critical workforce and professional development opportunities and calls into question the integrity of contracts negotiated during the course of this criminal conspiracy. The FBI and our federal partners will remain vigilant in our efforts to expose those who participate in corrupt fraud schemes which jeopardize our region's economic vitality and our faith in honest business practices."
"Today's indictment alleges an outrageous abuse of power and misuse of this Chrysler executive's position of trust. The diverted funds from the NTC could have and should have been used to benefit Chrysler employees," said Special Agent in Charge Manny Muriel. "IRS Criminal Investigation and our law enforcement partners are particularly committed to stopping those individuals who use double fraud schemes to defraud corporate funds, bribe others for their own gains and cushion their personal wallets."
“An important mission of the Office of Inspector General is to investigate allegations relating to Labor Racketeering and prohibited payments between union and company officials. We will continue to work with our law enforcement partners to investigate these types of allegations,” stated James Vanderberg, Special Agent in Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General.
“OLMS places a high priority on combatting financial malfeasance and safeguarding financial integrity in labor unions,” said Ian Burg, Detroit-Milwaukee District Director of the Office of Labor-Management Standards. “This indictment 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.”
Acting U.S. Attorney Lemisch commended the outstanding work of the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigations, the US Department of Labor – Office of Inspector General and the U.S. Department of Labor – Office of Labor-Management Standards in conducting a comprehensive criminal investigation into labor corruption activities involving a vital sector of the local and national economy.
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 guilty beyond a reasonable doubt.
West Bloomfield Pharmacist Pleads Guilty to Unlawful Distribution of Prescription Pills to Patient Who DiedRead the Press Release
A pharmacist, who formerly practiced in Mt. Clemens, pleaded guilty yesterday to unlawfully distributing prescription drug controlled substances to a patient who took the drugs and died, announced Acting United States Attorney Daniel Lemisch.
Lemisch was joined in the announcement by Special Agent in Charge Timothy Plancon, Drug Enforcement Administration, Detroit Field Division.
Richard Messerly, 72, of West Bloomfield, entered a guilty plea to one count of unlawful distribution of methadone and one count of unlawfully distributing Xanax (alprazolam), before United States District Judge George Caram Steeh.
During a hearing Messerly admitted that on November 9, 2015, he unlawfully provided a patient with both methadone and Xanax, without having a valid prescription for the drugs. The patient took the drugs and died later that same day. The government contends that the patient’s death was caused by the methadone unlawfully distributed by the defendant. Under the terms of the plea agreement, the defendant reserves the right to argue at sentencing that the patient’s death did not result from the methadone.
In addition, Messerly admitted responsibility in his plea agreement to unlawfully distributing over 60,000 dosage units of controlled drugs such as oxycodone, hydrocodone and morphine sulfate. All of these drugs are in the opiate class of drugs.
Based on his guilty plea Richard Messerly is facing a maximum of twenty-five years in prison and a fine of up to $1,250,000. The plea agreement projects that the advisory sentencing guidelines for his offenses will range from 108-135 months.
Sentencing of Masserly was set for November 20, 2017 at 2:30 pm.m..
The case was investigated by agents with the Drug Enforcement Administration and prosecuted by Assistant United States Attorney Michael Heesters.
Michigan Real Estate Businessman Sentenced to Prison for Obstructing the Internal Revenue Laws and Bank FraudRead the Press Release
A Michigan business owner was sentenced to serve a year and a day in prison today for obstructing and impeding the internal revenue laws and committing bank fraud, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to documents filed with the court, Richard Pierce filed fraudulent 2004 through 2013 individual income tax returns. Those returns failed to report more than $9 million in gross business receipts that several of his real estate businesses earned, including Phoenix Real Estate Company, Phoenix Preferred Properties LLC, Detroit Matrix, First Metro Properties LLC, First Metro Real Estate Services LLC, Phoenix Office Plaza-II LLC, Rosedale/Grandmont Properties LLC, and RFP Ventures LLC. As a result of those fraudulent filings, Pierce caused a tax loss of more than $400,000.
In 2007, Pierce also committed bank fraud by submitting a fraudulent loan application to a mortgage lender on which he failed to disclose that the buyer of a residential property was receiving a kickback from the seller.
In addition to the term of prison imposed, Pierce was ordered to serve two years of supervised release and to pay restitution to the Internal Revenue Service (IRS), the amount of which will be determined at a later date. Pierce pleaded guilty in February 2015.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorneys Mark McDonald and Christopher O’Donnell of the Tax Division, who prosecuted the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Eastern District of Michigan for their substantial assistance.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Mallinckrodt agrees to pay record $35 million settlement for failure to report suspicious orders of pharmaceutical drugs and for recordkeeping violationsRead the Press Release
SYRACUSE, NEW YORK – Mallinckrodt LLC, a pharmaceutical manufacturer and one of the largest manufacturers of generic oxycodone, agreed to pay $35 million to settle allegations that it violated certain provisions of the Controlled Substances Act (CSA) that are subject to civil penalties, Acting United States Attorney Grant C. Jaquith announced today.
This is the first settlement of its magnitude with a manufacturer of pharmaceuticals resolving nationwide claims that the company did not meet its obligations to detect and notify DEA of suspicious orders of controlled substances such as oxycodone, the abuse of which is part of the current opioid epidemic. These suspicious order monitoring requirements exist to prevent excessive sales of controlled substances like oxycodone in Florida and elsewhere. The settlement also addressed violations in the company’s manufacturing batch records at its plant in Hobart, New York. Both sets of alleged violations impact accountability for controlled substances, and the compliance terms going forward are designed to help protect against diversion of these substances at critical links in the controlled substance supply chain.
The government alleged that Mallinckrodt failed to design and implement an effective system to detect and report “suspicious orders” for controlled substances— orders that are unusual in their frequency, size, or other patterns. From 2008 until 2011, the United States alleged, Mallinckrodt supplied distributors, and the distributors then supplied various U.S. pharmacies and pain clinics, an increasingly excessive quantity of oxycodone pills without notifying DEA of these suspicious orders. Through its investigation, the government learned that manufacturers of pharmaceuticals offer discounts, known as “chargebacks,” based on sales to certain downstream customers. Distributors provide information on the downstream customer purchases to obtain the discount. The groundbreaking nature of the settlement involves requiring a manufacturer to utilize chargeback and similar data to monitor and report to DEA suspicious sales of its oxycodone at the next level in the supply chain, typically sales from distributors to independent and small chain pharmacy and pain clinic customers.
The government also alleged that Mallinckrodt violated record keeping requirements at its manufacturing facility in Upstate New York. Among other things, these violations created discrepancies between the actual number of tablets manufactured in a batch and the number of tablets Mallinckrodt reported on its records. Accurate reconciliation of records at the manufacturing stage is a critical first step in ensuring that controlled substances are accounted for properly through the supply chain.
In addition to the significant monetary penalty, this settlement includes a groundbreaking parallel agreement with the DEA that the company will analyze data it collects on orders from customers down the supply chain to identify suspicious sales. The resolution advances the DEA’s position that controlled substance manufacturers need to go beyond “know your customer” to using otherwise available company data to “know your customer’s customer” to protect these potentially dangerous pharmaceuticals from getting into the wrong hands. DEA’s Memorandum of Agreement with Mallinckrodt also sets forth specific procedures it will undertake to ensure the accuracy of batch records and protect loss of raw product in the manufacturing process.
By entering into these agreements, elements of which Mallinckrodt is already implementing, the company is becoming part of the solution to this public health epidemic.
Acting U.S. Attorney Jaquith said: “This settlement reflects our commitment to use all of the tools at our disposal to address the opioid problem impacting our nation. We will continue to apply the civil penalty provisions of the Controlled Substances Act to enforce regulations designed to protect the public from the diversion of oxycodone and other addictive substances.”
DEA Special Agent in Charge James Hunt stated, “Cooperation between law enforcement and opioid manufacturers is paramount to ensuring that the legitimate supply of pain medication gets into the right hands for the right reasons. The diversion of pain medication into the wrong hands, for the wrong reasons, has resulted in record overdose deaths across the nation. Through this investigation, and the resulting settlement, the building blocks have been laid to ensure industry accountability and compliance with federal regulations, to safeguard the public from the danger of diverted opioids.”
This lengthy investigation was led by DEA’s Detroit Field Division on the suspicious order issues and the New York Field Division on the manufacturing record keeping issues.
U.S. Attorneys’ Offices for the Eastern District of Michigan, the Northern District of New York along with DEA Office of Chief Counsel and Diversion Control Division, led the civil settlement negotiations. The Criminal Division’s Narcotic and Dangerous Drug Section (NDDS) also coordinated and assisted in negotiating the settlement.
Mallinckrodt Agrees to Pay Record $35 Million Settlement for Failure to Report Suspicious Orders of Pharmaceutical Drugs and for Recordkeeping ViolationsRead the Press Release
DETROIT – Mallinckrodt LLC, a pharmaceutical manufacturer and one of the largest manufacturers of generic oxycodone, agreed to pay $35 million to settle allegations that it violated certain provisions of the Controlled Substances Act (CSA) that are subject to civil penalties, Acting United States Attorney Daniel Lemisch and Tim Plancon, Special Agent in Charge, Drug Enforcement Administration, Detroit Division (DEA) announced today.
This is the first settlement of its magnitude with a manufacturer of pharmaceuticals resolving nationwide claims that the company did not meet its obligations to detect and notify DEA of suspicious orders of controlled substances such as oxycodone, the abuse of which is part of the current opioid epidemic. These suspicious order monitoring requirements exist to prevent excessive sales of controlled substances, like oxycodone in Florida and elsewhere. The settlement also addressed violations in the company’s manufacturing batch records at its plant in Hobart, New York. Both sets of alleged violations impact accountability for controlled substances, and the compliance terms going forward are designed to help protect against diversion of these substances at critical links in the controlled substance supply chain.
Acting United States Attorney Lemisch stated, “We're grateful for the work of the DEA who have invested countless hours investigating this first of its kind case. This settlement continues our fight against the opioid epidemic by requiring all in the supply chain not to participate in suspicious orders: physicians, pharmacies, distributors and now - manufacturers.”
DEA Special Agent in Charge Plancon stated, “This settlement reflects DEA’s commitment to the public health and safety by holding DEA registered manufacturers accountable and requiring them to do their due diligence by knowing the downstream customer. This investigation let’s all DEA registrants know that they need to use all of their resources and tools to detect and report suspicious orders.”
The government alleged that Mallinckrodt failed to design and implement an effective system to detect and report “suspicious orders” for controlled substances – orders that are unusual in their frequency, size, or other patterns. From 2008 until 2011, the U.S. alleged, Mallinckrodt supplied distributors, and the distributors then supplied various U.S. pharmacies and pain clinics, an increasingly excessive quantity of oxycodone pills without notifying DEA of these suspicious orders. Through its investigation, the government learned that manufacturers of pharmaceuticals offer discounts, known as “chargebacks,” based on sales to certain downstream customers. Distributors provide information on the downstream customer purchases to obtain the discount. The groundbreaking nature of the settlement involves requiring a manufacturer to utilize chargeback and similar data to monitor and report to DEA suspicious sales of its oxycodone at the next level in the supply chain, typically sales from distributors to independent and small chain pharmacy and pain clinic customers.
The government also alleged that Mallinckrodt violated record keeping requirements at its manufacturing facility in upstate New York. Among other things, these violations created discrepancies between the actual number of tablets manufactured in a batch and the number of tablets Mallinckrodt reported on its records. Accurate reconciliation of records at the manufacturing stage is a critical first step in ensuring that controlled substances are accounted for properly through the supply chain.
In addition to the significant monetary penalty, this settlement includes a groundbreaking parallel agreement with the DEA, as a result of which the company will analyze data it collects on orders from customers down the supply chain to identify suspicious sales. The resolution advances the DEA’s position that controlled substance manufacturers need to go beyond “know your customer” to use otherwise available company data to “know your customer’s customer” to protect these potentially dangerous pharmaceuticals from getting into the wrong hands. DEA’s Memorandum of Agreement with Mallinckrodt also sets forth specific procedures it will undertake to ensure the accuracy of batch records and protect loss of raw product in the manufacturing process.
By entering into these agreements, elements of which Mallinckrodt is already implementing, the company is becoming part of the solution to this public health epidemic.
This lengthy investigation was led by DEA’s Detroit Field Division on the suspicious order issues and the New York Field Division on the manufacturing record keeping issues.
U.S. Attorneys’ Offices for the Eastern District of Michigan and the Northern District of New York, along with DEA Office of Chief Counsel and Diversion Control Division, led the civil settlement negotiations. The Criminal Division’s Narcotic and Dangerous Drug Section (NDDS) also coordinated and assisted in negotiating the settlement.
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Former Audi Manager Charged in Connection with Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
A former Audi manager has been charged via criminal complaint for his role in the long-running conspiracy to defraud U.S. regulators and customers by implementing software specifically designed to cheat U.S. emissions tests in thousands of Audi “clean diesel” vehicles.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Jean E. Williams of the Department of Justice’s Environment and Natural Resources Division, and Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan made the announcement.
Giovanni Pamio, 60, an Italian citizen, is charged with conspiracy to defraud the U.S., wire fraud, and violation of the Clean Air Act. Pamio was formerly head of Thermodynamics within Audi’s Diesel Engine Development Department in Neckarsulm, Germany. According to the complaint, from in or about 2006 until in or about November 2015, Pamio led a team of engineers responsible for designing emissions control systems to meet emissions standards, including for nitrogen oxides (“NOx”), for diesel vehicles in the U.S.
According to the complaint, after Pamio and coconspirators realized that it was impossible to calibrate a diesel engine that would meet NOx emissions standards within the design constraints imposed by other departments at the company, Pamio directed Audi employees to design and implement software functions to cheat the standard U.S. emissions tests. Pamio and coconspirators deliberately failed to disclose the software functions, and they knowingly misrepresented that the vehicles complied with U.S. NOx emissions standards, the complaint alleges.
Audi’s parent company, Volkswagen AG (VW), previously pleaded guilty to three felony counts connected to cheating U.S. emissions standards. The company was ordered to pay a $2.8 billion criminal fine at its sentencing on April 21, 2017.
A complaint is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI and EPA-CID investigated the case. This case is being prosecuted by Securities and Financial Fraud Chief Benjamin D. Singer and Trial Attorneys David Fuhr and Christopher Fenton of the Criminal Division’s Fraud Section, Senior Trial Attorney Jennifer Blackwell and Trial Attorney Joel La Bissonniere of the Environment and Natural Resources Division’s Environmental Crime Section, and White Collar Crime Unit Chief John K. Neal and Assistant United States Attorney Timothy J. Wyse of the U.S. Attorney’s Office for the Eastern District of Michigan. The Criminal Division’s Office of International Affairs also assisted in the case.
Former Audi Manager Charged in Connection with Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
A former Audi manager has been charged via criminal complaint for his role in the long-running conspiracy to defraud U.S. regulators and customers by implementing software specifically designed to cheat U.S. emissions tests in thousands of Audi “clean diesel” vehicles.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Jean E. Williams of the Department of Justice’s Environment and Natural Resources Division, and Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan made the announcement.
Giovanni Pamio, 60, an Italian citizen, is charged with conspiracy to defraud the U.S., wire fraud, and violation of the Clean Air Act. Pamio was formerly head of Thermodynamics within Audi’s Diesel Engine Development Department in Neckarsulm, Germany. According to the complaint, from in or about 2006 until in or about November 2015, Pamio led a team of engineers responsible for designing emissions control systems to meet emissions standards, including for nitrogen oxides (“NOx”), for diesel vehicles in the U.S.
According to the complaint, after Pamio and coconspirators realized that it was impossible to calibrate a diesel engine that would meet NOx emissions standards within the design constraints imposed by other departments at the company, Pamio directed Audi employees to design and implement software functions to cheat the standard U.S. emissions tests. Pamio and coconspirators deliberately failed to disclose the software functions, and they knowingly misrepresented that the vehicles complied with U.S. NOx emissions standards, the complaint alleges.
Audi’s parent company, Volkswagen AG (VW), previously pleaded guilty to three felony counts connected to cheating U.S. emissions standards. The company was ordered to pay a $2.8 billion criminal fine at its sentencing on April 21, 2017.
A complaint is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI and EPA-CID investigated the case. This case is being prosecuted by Securities and Financial Fraud Chief Benjamin D. Singer and Trial Attorneys David Fuhr and Christopher Fenton of the Criminal Division’s Fraud Section, Senior Trial Attorney Jennifer Blackwell and Trial Attorney Joel La Bissonniere of the Environment and Natural Resources Division’s Environmental Crime Section, and White Collar Crime Unit Chief John K. Neal and Assistant United States Attorney Timothy J. Wyse of the U.S. Attorney’s Office for the Eastern District of Michigan. The Criminal Division’s Office of International Affairs also assisted in the case.
Detroit Area Medical Biller Sentenced to 50 Months in Prison for Her Role in a $7.3 Million Dollar Healthcare Fraud SchemeRead the Press Release
A Detroit-area medical biller was sentenced today to 50 months in prison for her role in a $7.3 million Medicare and Medicaid fraud scheme involving medical services that were billed to Medicare and Medicaid but not rendered as billed.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Daniel L. Lemisch 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.
Dawn Bentley, 56, of Oakland County, Michigan, was sentenced by U.S. District Judge Sean F. Cox of the Eastern District of Michigan, who also ordered Bentley to pay $3,253,107 in restitution jointly and severally with her co-defendants. After a one-week jury trial in January 2017, Bentley was convicted of one count of conspiracy to commit health care fraud, wire fraud and mail fraud, as well as one count of mail fraud. Bentley was sentenced to 50 months in prison on each of the two counts, to run concurrently, followed by one year of supervised release.
According to the evidence presented at trial, from June 2014 through June 2015, Bentley knowingly submitted fraudulent bills on behalf of a co-conspirator physician for services she knew could not have been rendered, and for services she knew had not been rendered as billed. In exchange, Bentley was paid 6% of the total billings paid to the physician from Medicare, the evidence showed. Bentley’s largest client was Waseem Alam, who pleaded guilty to a $33 million Medicare fraud scheme in March 2016. Bentley billed $1.9 million of this fraud from June 2014 to June 2015, and was paid 6% of Alam’s receipts for the fraudulent billings, the evidence showed. Bentley’s company received over $100,000 from Alam’s practices between June 2014 and June 2015, the evidence showed.
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. Fraud Section Trial Attorneys Tom Tynan and Jessica Collins prosecuted the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,000 defendants who have collectively billed the Medicare program for more than $11 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Canadian Man Arrested for Committing an Act of Violence at Bishop International AirportRead the Press Release
A 49-year old man from Quebec, Canada, was arrested this morning on charges of committing an act of violence at an airport, announced Acting United States Attorney Daniel Lemisch. Lemisch was joined in the announcement by David P. Gelios, Special Agent in Charge, Federal Bureau of Investigation.
Arrested was Amor M. Ftouhi. Mr. Ftouhi will be making an initial appearance in federal court in Flint today.
According to the criminal complaint, Mr. Ftouhi walked up to the victim, who is a lieutenant with the Bishop Airport Authority and was in full uniform, and stabbed the police officer in the neck with a knife. As he did so, Ftouhi referenced killings in Syria, Iraq, and Afghanistan, and yelled “Allahu Akbar.”
The charges carry a statutory maximum penalty of up to 20 years in prison. Any sentence would ultimately be imposed under the United States Sentence Guidelines according to the nature of the offense and the criminal background, if any, of the defendant.
A complaint is only a charge and is not evidence of guilt.
Monroe Businessman Pleads Guilty to Tax ChargeRead the Press Release
David Wandell, of Monroe, owner and operator of Wandell’s Working Crew, pleaded guilty to an information charging him with one count of filing a false 2010 federal tax return, signed under penalties of perjury, Acting United States Attorney Daniel L. Lemisch announced today.
Mr. Lemisch was joined in the announcement by Manny Muriel, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division.
According to court records, Wandell filed a joint 2010 federal tax return with the IRS, signed under penalties of perjury, reporting only $175,000 in gross income and paying $4,400 in taxes, while materially underreporting his gross income from his Schedule “C” business, Wandell’s Working Crew. Wandell continued this pattern in 2011 and 2012, causing a total tax loss for all three years of over $186,303. As part of the plea agreement, Wandell has agreed to allow seized U.S. collectible coins and currency, valued at over $74,000, to be applied directly to the IRS in payment for his outstanding tax debt.
"The vast majority of Americans recognizes their legal responsibilities, properly report, and pay over their tax obligation,” stated Special Agent in Charge Muriel. “But for those who willfully cheat, you will get the full attention of IRS Criminal Investigation, which may lead to serious and costly consequence.”
Filing a false federal tax return, signed under penalties of perjury, carries a maximum penalty of 3 years imprisonment and a fine of $250,000.
Sentencing has been scheduled for October 24, 2017 at 1:30 p.m. in front of United States District Court Judge Robert H. Cleland.
Acting United States Attorney Lemisch thanked the IRS Criminal Investigation for the investigation of the case.
Former Doctor Sentenced to 23 Years in Prison for Distributing Prescription Drugs, Health Care Fraud and Money LaunderingRead the Press Release
Sardar Ashrafkhan of Ypsilanti, Michigan, was sentenced today to 23 years in prison for participating in a conspiracy to distribute prescription pills, conspiracy to commit health care fraud, and money laundering, Acting U.S. Attorney Daniel Lemisch announced.
Ashrafkhan, also known as “Dr. Khan,” 59, was sentenced by U.S. District Judge Robert H. Cleland.
Lemisch was joined in the announcement by Timothy Plancon, Special Agent in Charge of the Drug Enforcement Administration; David P. Gelios, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation; Robin Shoemaker, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives; Lamont Pugh, Special Agent in Charge of the Inspector General of the Department of Health and Human Services; and Manny Muriel, Special Agent in Charge of the Detroit office of the Internal Revenue Service, Criminal Investigation.
Sardar Ashrafkhan was found guilty, along with two co-defendant doctors, after a seven week jury trial. Ashrafkhan was convicted on felony counts of conspiracy to illegally distribute prescription drugs, conspiracy to commit health care fraud, and two counts of money laundering. The convictions arose from the operation of the defendant’s fraudulent medical practice known as Compassionate Doctors. The medical practice purported to be a visiting physician’s practice, but was actually a scheme that involved patient marketers bringing paid “patients” to residences to obtain fraudulent prescriptions for controlled substances. Medicare was billed for medical examinations and tests that were not conducted properly or were not conducted at all. Marketers filled the controlled substance prescriptions at cooperating pharmacies and sold the drugs on the street market.
According to evidence submitted at trial and at sentencing, Ashrafkhan operated Compassionate and related health care corporations from 2006 until 2013.
Ashrafkhan was responsible for participating in illegally distributing over 200,000 dosage units of oxycodone (including Oxycontin) and opana, powerful Schedule II opiates. He was responsible for over 1 million dosage units of another opiate, hydrocodone (Vicodin, lortab), and over 3 million dosage units of controlled substances of all kinds. He was responsible for over $8 million in health care fraud.
Oxycontin, oxycodone, and hydrocodone are controlled substances that may be prescribed by a doctor only for a legitimate medical purpose. A doctor must act in good faith in prescribing these medications. These powerful and addictive drugs in the opioid class are easily abused, and can lead to addiction and eventual heroin use.
“More people die in America every year from prescription drug overdoses than from overdoses of all other drugs combined,” Lemisch said. “In addition, prescription drug addiction has led to resurgence in heroin use. Licensed professionals who participate in the diversion of prescription drugs to the street market are contributing to this epidemic, and we are focusing our enforcement efforts on stopping them.”
“Dishonest and unethical Doctors and Pharmacists who provide prescription drugs, especially Opioids, to individuals with no medical need are fueling a national crisis which has resulted in alarming levels of addiction, overdose deaths, and violence at the hands of criminal enterprises competing to flood our streets with illegal drugs,” said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “To those prioritizing profit over their pledge to honestly service the health needs of the public, the message should be clear that the collective resources of local, state and federal law enforcement will expose your illegal activities and bring you to justice.”
“When you exploit every business principle to enrich your pocket with illegal proceeds,” stated Special Agent in Charge Manny Muriel, “IRS Criminal Investigation will use their financial expertise to shut you down.”
Ashrafkhan was one of 44 defendants named in a multi-count second superseding indictment unsealed in March of 2013. Six doctors and five pharmacists were convicted, either by guilty plea or at trial, and all received custodial sentences. The longest custodial sentence imposed on a pharmacist was 78 months, and the longest custodial sentence imposed on a doctor was 228 months. As the owner and manager of the fraudulent clinic, Sardar was the leader of the activity and obtained the largest share of the profits from this illegal activity.
Ashrafkhan is a citizen of Pakistan who came to the United States in approximately 1991 to study medicine. He no longer has legal status in the United States, and is subject to deportation after service of his sentence.
Acting United States Attorney Lemisch thanked the agents of the Drug Enforcement Administration, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals, the Internal Revenue Service Criminal Investigation, the U.S. Immigration and Custom’s Enforcement’s Department of Homeland Security Investigations, the Department of Health and Human Services Office of Inspector General, the Detroit Police Dept., Portsmouth, Ohio, Police Dept., Scioto County Sheriff’s Office, and the Detroit Violent Crimes Task Force and Michigan State Police for their successful investigation of the case.
Detroit Resident Sentenced to 15 Months in Custody for Threatening to Blow up Murdered Detroit Police Sargent’s FuneralRead the Press Release
A Detroit man was sentenced today to 15 months in prison after having pleaded guilty to false information and hoaxes by threating to blow up the funeral procession of a slain Detroit Police Department Sargent, announced Acting United States Attorney Daniel L. Lemisch.
Lemisch was joined in the announcement by Special Agent in Charge David P. Gelios, Federal Bureau of Investigation, Detroit Division.
Deshawn Maurice Lanton, 21, was sentenced by United States District Judge Sean Cox.
According to court records, Lanton wrote a threatening message to Channel 7’s Facebook live stream of the funeral of Detroit Police Department Sargent Kenneth Steil. Sargent Steil’s was murdered in the line of duty in September 2016. During the funeral procession at St. Joan of Arc Church in St. Clair Shores, Lanton wrote “Maybe I should drop a bomb on tha building to get rid of the rest of y’all” on the Facebook live page as hundreds of officers marched into the church to pay their respects to the fallen officer. Also at the church were Sargent Steil’s widow and two children. Other Facebook live viewers read Lanton’s post and contacted the police.
Lanton has several felony convictions, including crimes of violence and theft.
This case was investigated by the Federal Bureau of Investigation and the Detroit Police Department. The case was prosecuted by Assistant United States Attorneys Kevin M. Mulcahy and Hank Moon.
Detroit One Collaboration Leads to Lengthy Sentences for Detroit Gang MembersRead the Press Release
The collaboration of local, state, and federal law enforcement under the Detroit One program continued its aggressive pursuit of local street gangs by obtaining a 30- year sentence for Victor Vasquez, a/k/a “Vic,” a leader of the Latin Count street gang and a 20-year sentence for Michael Gardner, a/k/a "Sosa," a member of the Vice Lord street gang announced Acting United States Attorney Daniel L. Lemisch.
Lemisch was joined in the announcement by David Gelios, Special Agent in Charge of the Federal Bureau of Investigation (FBI), S. Robin Shoemaker, Special agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Steve Francis, Special Agent in charge of Homeland Security Investigations (HSI), and Detroit Police Chief James Craig whose departments led the collaborative investigation into these violent street gangs.
Over the past several years, FBI, ATF, HSI agents, Detroit Police detectives and officers, other law enforcement agents, the Wayne County Prosecutor’s Office, and the United States Attorney’s Office have worked collaboratively to bring to justice members of both of these gangs for their varied criminal misconduct, including murders, racketeering activity, armed robberies, drive-by-shootings, assaults with dangerous weapons and narcotics distribution.
On May 31, 2017, Victor Vasquez, 26, of Detroit, was sentenced to 30 years in federal prison on his conviction for Racketeer Influenced and Corrupt Organizations (RICO) conspiracy. As part of his plea to RICO conspiracy, Vasquez took responsibility for causing the death of Mustafa Al-Yasiry at the Big Apple Market in southwest Detroit on April 18, 2014. According to the indictment, several Latin Counts assaulted Al-Yasiry, at Vasquez’s direction, while another Latin Count came up from behind and shot and killed Al-Yasiry. Four other gang members have also pleaded guilty for their roles in this murder.
According to the racketeering indictment, the Latin Counts gang operates in southwest Detroit and the downriver communities of Lincoln Park and Ecorse. The indictment alleges that eleven defendants committed assaults, murder, selling illegal narcotics and stolen firearms, breaking and entering homes and businesses and robbery. The indictment alleges that the gang uses violence to stake out its “turf” and intimidate both rival gang members and the citizens of southwest Detroit.
On June 1, 2017, Michael Gardner, 21, of Detroit and Radcliff, Kentucky, was sentenced to 20 years in federal prison on his convictions for sex trafficking a minor (using force, fraud and coercion) and production of child pornography. Evidence produced during his trial in October 2016 showed that Gardner used violence to force a minor victim to engage in commercial sex acts. Gardner also published explicit photographs of the minor in the prostitution advertisements that he created. Moreover, Gardner used his status as a Vice Lord gang member to intimidate the minor to continue to engage in prostitution and to put her in fear of reporting the activity. These convictions are just one component of the federal government’s prosecution of the Vice Lords street gang, which has led to the arrests and convictions of over two dozen Vice Lords leaders and members over the last few years.
These investigations stem from the Detroit One initiative—a combined effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. By working collaboratively, local, state and federal law enforcement are striving to maximize their ability to identify and arrest the persons and groups initiating the violence in Detroit. Since Detroit One started in 2013, this effort has had led to significant indictments, convictions, and sentences against a number of street gangs who are responsible for much of the violent crime in Detroit, including members of the Latin Counts, Vice Lords, and many others. The current convictions and sentences are a tangible and significant result of this joint effort.
Victor Vasquez was prosecuted by Assistant United States Attorneys Matthew Roth, Andrea Hutting, and Louis Crisostomo. Michael Gardner was prosecuted by Sara Woodward and Benjamin Coats.
Former Detroit Public Schools Principal Sentenced on Bribery ChargesRead the Press Release
A former Detroit Public Schools principal was sentenced to 24 months in federal prison and was ordered to pay restitution to the Detroit Public Schools in the amount of $45,775, as a result of having been convicted by a federal jury in an illegal bribery and kickback scheme, announced Acting United States Attorney Daniel L. Lemisch.
Joining Lemisch in the announcement were David P. Gelios, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Manny Muriel, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation.
Josette Buendia, 51, of Garden City, Michigan, the principal at Bennett Elementary School, was found guilty on all three charges of conspiracy to commit bribery and bribery charges, after a five-day jury trial before U.S. District Judge George Caram Steeh.
According to the evidence presented at trial, Buendia conspired with Norman Shy, 75, owner of Allstate Sales, a vendor of school supplies. From November 2011 through January 2015, Buendia knowingly certified and submitted fraudulent invoices to DPS, causing DPS to pay Shy for materials that the school did not receive, or that the school only received a portion of the materials. Invoiced supplies included supplemental teaching materials and raised line paper. In exchange, Shy paid bribes and kickbacks to Buendia in the form of gift cards and cash, using a portion of the payments he received from DPS from the fraudulent invoices. The bribes and kickback Buendia received totaled approximately $46,000.
"Following years of investigation, the FBI’s Detroit Area Public Corruption Task Force was able to expose and end a disturbing culture of corrupt activity involving 13 Detroit Public School Principals to include an Assistant Superintendent, said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “These principals, including an Assistant Superintendent, used their positions as educators and leaders to enrich themselves at the expense of their students and the Detroit Public Schools system. Today’s sentencing of Principal Josette Buendia, the last in this investigation, should provide a sense of closure for the parents, students and the honest and dedicated DPS employees and underscores this community’s commitment to integrity in the operation of our schools”.
Manny Muriel, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation stated, “No matter what your position, it is unacceptable to help yourself to other people’s money and violate their trust. If you commit a crime, status as an educator or leader will not protect you from federal prosecution. Today's action demonstrates our collective efforts to enforce the law and ensure public trust.”
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 Carlson.
The FBI Detroit Area Corruption Task Force (DACTF) is led by the FBI Detroit Field Office, and consists of Special Agents and law enforcement officers with the FBI Detroit; the Detroit Police Department; the Michigan State Police; the Michigan Attorney General’s Office; the Internal Revenue Service – Criminal Investigation Division; the U.S. Department of Housing and Urban Development–Office of Inspector General; the U.S. Environmental Protection Agency–Office of Inspector General; the U.S. Department of Transportation–Office of Inspector General; the U.S. Department of Homeland Security–Office of Inspector General; the U.S. Department of Education–Office of Inspector General; and the U.S. Department of Labor–Office of Inspector General, Office of Labor Racketeering and Fraud Investigations
Ferndale Man Convicted of Conspiracy, Mail Fraud, Identity Theft and Money LaunderingRead the Press Release
A resident of Ferndale, Michigan, was convicted by a jury last month on numerous counts of conspiracy, mail fraud, aggravated identity theft, and engaging in illegal monetary transactions, Acting U.S. Attorney Daniel L. Lemisch announced today.
Joining Lemisch in the announcement was Manny Muriel, Special Agent in Charge of the Detroit Office of the Internal Revenue Service – Criminal Investigation.
Durand L. Micheau, aka Durand Micheau-El and Gamba Mwenye El, 47, was convicted following a one-week trial conducted before U.S. District Judge Judith Levy. Micheau is scheduled to be sentenced on October 11.
At an earlier trial, Micheau’s wife and two brothers-in-law, Sharon Gandy-Micheau, Anthony Gandy, and Christopher Gandy, were convicted by a jury on the same charges. Sharon is scheduled to be sentenced on August 28, and Anthony and Christopher, her brothers, are scheduled to be sentenced on August 21.
The evidence presented at the trials established that the defendants participated in a scheme to defraud the federal government that centered on the filing of over 20 fraudulent Forms 1041, U.S. Income Tax Returns for Estates and Trusts. The returns requested over $1.4 million in refunds based on tax withholdings that never occurred. The returns resulted in the IRS’s mailing 14 income tax refund checks to the defendants that were payable to the trusts and totaled $940,000. To facilitate the scheme, the defendants obtained employer identification numbers (EINs) for the trusts from the IRS, opened post office boxes, and opened bank accounts in the names of the trusts. The trusts did not exist. The U.S. Treasury refund checks were either deposited into the bank accounts, followed shortly thereafter by large cash withdrawals, or cashed at local check-cashing stores.
In addition, the scheme used the names and identification information of a number of individuals whose purses or wallets had been lost or stolen, and it depended on the assistance of some of the defendants’ friends.
“These defendants attempted to steal taxpayer money, and they did so by using the identities of innocent victims,” Lemisch said. “This case should signal the ability of IRS investigators to detect fraud and bring offenders to justice.”
IRS-Criminal Investigation Special Agent in Charge Manny Muriel said, “Investigating refund fraud and identity theft remains a priority for IRS Criminal Investigation. Today’s guilty verdicts should send a clear message to would-be criminals that IRS – Criminal Investigation will continue to pursue those who prey on innocent victims and steal from the American tax system.”
The case was investigated by agents of the Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant U.S. Attorneys Stephen Hiyama and Ross MacKenzie, with the assistance of paralegal Carol Oliver.
Chesterfield Township Supervisor and Macomb Township Trustee Plead Guilty to Demanding and Taking BribesRead the Press Release
Two elected officials pleaded guilty today on charges of demanding and taking bribes in exchange for their official acts in connection with a municipal contract, Acting United States Attorney Daniel Lemisch announced.
Lemisch was joined in the announcement by FBI Special Agent in Charge David P. Gelios and Manny J. Muriel, Special Agent in Charge, Internal Revenue Service-Criminal Investigation, Detroit Field Office.
Pleading guilty were former Chesterfield Township Supervisor Michael Lovelock, 57, of New Baltimore, and former Macomb Township Trustee Clifford Freitas, 43, of Macomb Township.
According to court records Lovelock, from approximately 2010 through 2016, demanded and accepted money from a municipal vendor in exchange for using his official position as Chesterfield Supervisor to (1) secure an extension of a contract the vendor had with the township, (2) put past due accounts of the vendor on the Chesterfield tax rolls so as to assist the vendor in getting paid by township residents, (3) obtain payment from Macomb County for the vendor for its work on flood damage that occurred in August 2014; and (4) provide a favorable reference for the vendor for other municipalities and so that Lovelock would not speak negatively about the vendor. In total, Lovelock accepted over $30,000 in cash from the vendor’s representative. In addition, Lovelock accepted two other bribe payments totaling $4,000 in cash from an undercover agent of the FBI and an individual cooperating in the investigation.
Clifford Freitas pleaded guilty to demanding and accepting money in exchange for his official acts as a Macomb Township Trustee. According to court records, Freitas demanded and accepted money from a municipal vendor in exchange for using his official position as a Trustee to get the vendor a municipal contract and to secure favorable terms for the company. In July 2015, Macomb Township put out a request for proposal for a municipal contract. Soon thereafter, Freitas approached a representative of a prospective vendor, and Freitas demanded money in return for Freitas’ support as a Trustee. Freitas agreed to accept $7,500 from the vendor in return for his assistance in getting the contract. Through his position as a Trustee, Freitas obtained sensitive bid information on the municipal contract in order to help the vendor, telling the vendor what bid was needed to beat out competing contractors. After the vendor was awarded the contract by Macomb Township, Freitas demanded an additional $35,000 from the company representative for his additional assistance as a public official relating to the contract.
Each face a statutory maximum penalty of ten years in prison and a fine of up to $250,000. Sentencing has been set for October 5, 2017 at 1:30 pm in Port Huron
This investigation is being conducted by the FBI Detroit Area Corruption Task Force, a multiagency task force led by the FBI Detroit Division and comprised of the Internal Revenue Service – Criminal Investigation Division, Michigan State Police, Michigan Attorney General’s Office, and several other local and federal law enforcement agencies. It is being prosecuted by Assistant United States Attorneys R. Michael Bullotta and David A. Gardey.
Garbage Executive and Tow Company Owner Charged with Bribery and FraudRead the Press Release
The former CEO of garbage hauler Rizzo Environmental Services (RES), Charles B. “Chuck” Rizzo, 46, of Bloomfield Hills, was indicted today on five counts of bribery and three counts of conspiracy to commit bribery, in connection with garbage contracts in Clinton, Macomb, and Chesterfield townships, Acting United States Attorney Daniel L. Lemisch announced.
Lemisch was joined in the announcement by David P. Gelios, 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.
Also charged with bribery is towing company owner Gasper Fiore, 56, of Grosse Pointe Shores. The superseding indictment charges Fiore and former Clinton Township trustee Dean Reynolds, 50, of Clinton Township, with multiple counts of bribery and conspiring to commit bribery in order to secure a towing contract with Clinton Township sought by Fiore. In March 2016, Fiore paid a $4,000 cash bribe to Reynolds, and then another $3,000 in cash to Reynolds in May 2016. The bribes were paid by Fiore to Reynolds through Charles B. Rizzo.
The superseding indictment also charges Charles B. Rizzo and Fiore, as well as Rizzo’s father, Charles P. Rizzo, 70, of New Baltimore, and Derrick Hicks, 47, of Bloomfield Hills, with conspiracy to commit mail and wire fraud. In addition, Charles P. Rizzo is charged with seven counts of mail and wire fraud, and his son, Charles B. Rizzo, is charged with twelve counts of mail and wire fraud. The fraud charges are based on the defendants’ conspiracy involving at least ten different schemes to steal money from RES between 2013 and 2016, a time when the majority owner of RES was a New York based private equity firm. At the time, Charles B. Rizzo, Charles P. Rizzo, Fiore, Hicks, and others schemed to steal hundreds of thousands of dollars from RES using a fake legal settlement agreement, fraudulent consulting deals, cash kickbacks, shell companies, and the stealing of money to pay for part of the construction costs of Charles B. Rizzo’s Bloomfield Township mansion. Charles B. Rizzo and other conspirators then used some of the stolen money to pay bribes to public officials in order to maintain and secure additional municipal garbage contracts. In conducting the embezzlement scheme, Charles B. Rizzo referred to the money embezzled and stolen from RES as “OPM”—“other people’s money.” The indictment contains forfeiture provisions regarding more than $4 million that has thus far been seized by the government in the investigation, as well as seeking the forfeiture of the proceeds of the sale of the Rizzos’ minority interest in RES.
The superseding indictment also adds new bribery charges against Reynolds in connection with another municipality. indictment alleges that Reynolds conspired to commit bribery with former New Haven trustee Brett Harris, 57, of New Haven. According to the indictment, Reynolds introduced Harris to an individual who, unbeknownst to Reynolds and Harris, was an undercover federal agent. Reynolds introduced Harris as a politician willing to take bribes. undercover agent proceeded to pay Harris $9,000 in cash bribes in return for Harris’ promise to help secure a garbage contract with New Haven.
Furthermore, the superseding indictment charges Reynolds with accepting multiple bribes from engineering contractor, Paulin Modi. In this regard, Reynolds took an $8,000 bribe from Modi in 2009 and another $8,000 bribe from Modi in 2013 in connection with securing the engineering contract for Modi for Clinton Township.
Each bribery charge carries a maximum sentence of 10 years imprisonment and a fine of $250,000. of the mail and wire fraud counts carry a maximum sentence of 20 years imprisonment and a fine of $250,000. The bribery conspiracy counts carry a maximum sentence of 5 years imprisonment and a fine of $250,000.
Acting United States Attorney Lemisch said: “This indictment demonstrates our commitment to bring to justice all participants in bribery schemes, including both the corrupt public officials and the bribe payers seeking to profit from public contracts. Our citizens are entitled to decisions based on the best interests of the public, not the best interests of politicians who accept bribes and bribe-paying contractors.”
"The public understandably is skeptical when public officials and municipal contractors in southeast Michigan conspire with one another to line their own pockets and illegally scheme to obtain advantages over their competitors," said Special Agent in Charge David P. Gelios, Detroit Division of the FBI. "Today's indictments reflect the FBI's continued resolve to root out public corruption and to work with honest community leaders to restore the public's trust in their government officials and institutions. Unfortunately, though, corrupt activity such as this continues. Until that is no longer the case, I would urge anyone who has information about this case or other allegations of corruption to call the FBI Public Corruption Task Force at (313) 965-2323."
“Bribery regardless of how you disguise it, is illegal”, stated Special Agent in Charge Manny Muriel for IRS Criminal Investigation. “Parties who profit and those who pay the bribe will be charged and held accountable for breaking the law. All Americans have a duty to pay their fair share in taxes. IRS – Criminal investigation helps to ensure that all Americans including public officials and contractors, are held to the same standards.”
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 and R. Michael Bullotta.
An indictment is only a charging document and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt