Eastern District of Michigan
Press releases recorded for this federal judicial district.
Engineering Contractor Charged with Conspiracy to Commit BriberyRead the Press Release
An engineering contractor, Paulin Modi, 48, of Troy, was charged today in an information with one count of conspiracy to bribe a public official of Washington Township in connection with public contracts, 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 May of 2014, Modi paid a $1,000 cash bribe to an official with Washington Township with respect to Modi’s contract. It also alleges that between June and October of 2014, Modi helped facilitate a $2,000 cash bribe by another contractor.
The United States Attorney’s Office and the FBI wish to acknowledge the extraordinary assistance of Washington Township Supervisor Daniel O’Leary, who brought the criminal conduct to the attention of federal law enforcement and has been a valuable asset to the investigation since its inception.
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
Identity Theft Ring Convicted for Unemployment Fraud and ConspiracyRead the Press Release
Three individuals were convicted following a five-day jury trial in Ann Arbor on charges relating to identity theft, Acting United States Attorney Daniel L. Lemisch announced today.
Lemisch was joined in the announcement by Special Agent in Charge James Vanderberg, Department of Labor - Office of Inspector General, and Wanda Stokes, Director, Michigan Talent Investment Agency, Unemployment Insurance.
Convicted were Kenneth Dixon, Nakita Washington, and Jamela Washington, all from Warren, Michigan. The defendants were charged with use of counterfeit access devices, aggravated identity theft, theft of government money, and conspiracy to commit those offenses.
Evidence presented at trial established that between October 2009 through April 2012, the defendants systematically engaged in a conspiracy to obtain the personal identification information of unsuspecting victims, and then used that information to submit fraudulent on-line claims for unemployment compensation benefits. Over 100 individuals were victimized.
“The guilty verdicts of Kenneth Dixon, Jamela Washington, and Nakita Washington are the culmination of an extensive investigation into a conspiracy that victimized individuals by stealing their identities and defrauded the Michigan Unemployment Insurance Agency of over $400,000”, stated James Vanderberg, Special Agent in Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General. “We will continue to work with our law enforcement partners to safeguard the Unemployment Insurance Program.”
Sentencing for all three has been set for September 19, 2017. Each face a statutory maximum penalty of ten years in federal prison.
The case was investigated by special agents of the Department of Labor, Office of Inspector General with the assistance of the State of Michigan Unemployment Insurance Agency. The case was prosecuted by Assistant U.S. Attorney C. Barrington Wilkins
Former Program Director of Supplemental Educational Services Provider to Detroit Public Schools Sentenced to 37 MonthsRead the Press Release
The former program director of Priority: My Education, a supplemental educational service provider, was sentenced to 37 months in federal prison after previously pleading guilty to federal program fraud, Acting United States Attorney Daniel Lemisch announced today.
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 Bernadette Kakooza, Inspector General of the Detroit Public Schools.
TheodoreThomas Pride, III, 38 of Detroit was sentenced by United States District Judge Bernard A. Friedman.
According to court records, Pride obtained at least $684,644 from Detroit Public Schools by submitting fraudulent invoices for tutorial services that DPS students never received. Pride’s scheme ran from 2011-2012, while he served as the resident agent and program director of Priority: My Education, a company approved by the State of Michigan to provide supplemental educational services to eligible students.
This case was investigated by agents of the FBI and the Office of Inspector General for the Detroit Public Schools. This case was prosecuted by Assistant United States Attorney Dawn N. Ison.
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.
Farmington Hills Doctor Sentenced to 19 Years in Prison for Distributing Prescription Drugs and Health Care FraudRead the Press Release
A Farmington Hills, Michigan, doctor was sentenced yesterday to 19 years in prison for participating in a conspiracy to distribute prescription pills and conspiracy to commit health care fraud, Acting U.S. Attorney Daniel Lemisch announced.
Adelfo Pamatmat, 71, was sentenced by U.S. District Judge Robert H. Cleland.
Dr. Pamatmat was found guilty, along with two co-defendants, after a seven-week jury trial. Dr. Pamatmat was convicted on two felony counts, conspiracy to illegally distribute prescription drugs and conspiracy to commit health care fraud. The convictions arose from the operation of a 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 would be billed for medical examinations and tests that were not conducted properly or were not conducted at all. The marketers would fill the controlled substance prescriptions at cooperating pharmacies and sell the drugs on the street market.
According to evidence submitted at trial and at sentencing, Dr. Pamatmat was employed at Compassionate from 2007 until 2009. He then continued his illegal behavior in cooperation with other conspirators until he was arrested in 2013. While on bond, he was ordered not to prescribe controlled substances. Evidence submitted in connection with sentencing showed that he continued to prescribe controlled substances, in violation of conditions of bond, in 2014 and 2015.
Dr. Pamatmat was personally responsible for illegally prescribing over 200,000 dosage units of oxycodone (including Oxycontin) and opana, powerful Schedule II opiates. He illegally prescribed 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 $4 million in health care fraud.
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.”
Dr. Pamatmat was one of 44 defendants named in a multi-count second superseding indictment unsealed in March of 2013. Five other doctors and five pharmacists were convicted, either by guilty plea or at trial.
Dr. Pamatmat has already surrendered his federal DEA license to prescribe controlled substances, and will face state action against his medical license as a result of his convictions.
The investigation in this case was handled by the Drug Enforcement Administration, the Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation, and the Department of Treasury Internal Revenue Service.
Detroit One Collaboration Leads Gang Leader Sentenced to Nearly 20 Years in Prison for Gang-Related Violence and Shootings in Northwest DetroitRead the Press Release
A leader of the Band Crew street gang was sentenced to nearly 20 years in prison for his role in gang-related attempted murders, robberies, and shootings. An associate of the Band Crew street gang was also sentenced yesterday to nearly seven years in prison for his role in the gang’s criminal activities. Corey Deandre Mapp, a/k/a Lil Corey, 23, and Mario Perkins, a/k/a Rio, both of Detroit, were sentenced following their guilty pleas to RICO 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. Mapp and Perkins both pleaded guilty in late 2016, before Chief U.S. District Judge Denise Page Hood of the Eastern District of Michigan.
Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan, Special Agent in Charge Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Detroit Field Division, and Chief James Craig of the Detroit Police Department made the announcement.
“These convictions and sentences are particularly important since Mr. Mapp was a leader of the gang, participated in shootings, and encouraged this violence to occur, which included Mr. Perkins participation in gang-related shootings and violence” said Acting U.S. Attorney Lemisch. “We believe these sentences send a strong message of deterrence to those who may want to pursue the gang lifestyle.”
“These sentences are the culmination of countless hours of dedicated work by ATF agents and our law enforcement partners,” said Special Agent in Charge Shoemaker. “ATF will continue to aggressively target and dismantle criminal enterprises threatening the safety of Detroit’s citizens.”
According to court documents, Band Crew was an association comprised of smaller gangs, including Constantly Making Hundreds (CMH), Young N Crispy (YNC), Pushit (or Pusha) Boy Family (PBF), and Family Over Everything Love is Forever (FOE Life). Band Crew operated in northwest Detroit, and the gang’s members claimed this area as their territory by “tagging” buildings with gang-related graffiti, including markings such as “#22 BandCrew,” “BAND CREW,” “22 BAND CREW,” “YNCMH” and “PBF.” Band Crew members and associates worked to defend their territory, to promote and maintain the status and reputation of the gang, and to engage in or threaten violence in retaliation for perceived wrongs. Band Crew’s specific base of operation in northwest Detroit was in the area in and around Seven Mile Road, with Southfield Freeway to the west, West McNichols Road to the south, Eight Mile Road to the north, and Greenfield Road to the east. The gang members claimed this area as “Band Crew Territory.”
Mapp, Perkins, and their co-defendants were responsible for a multitude of crimes that took place in and around Northwest Detroit. Mapp and Perkins, according to plea agreements and court documents, directly participated or encouraged acts of assault with intent to murder, home invasions, aggravated assaults, shootings in public places, drug dealing, and robberies. Mapp’s criminal conduct spanned the duration from Band Crew’s inception until he and his co-defendants were arrested in the fall of 2015.
All defendants charged in the indictment have been convicted. In addition to Mapp and Perkins, six other members, leaders, and associates of the Band Crew, all of Detroit, have pleaded guilty to charges related to racketeering, assault a dangerous weapon in aid of racketeering, or other weapons offenses. The remaining Band Crew members are scheduled to be sentenced over the next three months.
A very important component to the federal prosecution was earlier successful state prosecutions by the Wayne County Prosecutor’s Office of a number of Band Crew members for specific violent state felony offenses that served as a foundation to the federal Racketeering Conspiracy.
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 Band Crew street gang, and identified the leaders and key members of the gang, who now have been held accountable. This prosecution was also part of a larger coordinated effort to address ongoing gang violence in Northwest Detroit. During the time of the Band Crew investigation, federal law enforcement and the U.S. Attorney’s Office also investigated, prosecuted, and convicted members of the RTM street gang, chief rival to the Band Crew.
The ATF and Detroit Police Department investigated the case. Assistant U.S. Attorney John N. O’Brien of the Eastern District of Michigan and Assistant U.S. Attorney Jeremy R. Jehangiri of the District of South Dakota prosecuted the case.
Five Members of Violent Detroit Street Gang Charged with Racketeering, Narcotics and Firearms OffensesRead the Press Release
Detroit, MI - The collaboration of local, state, and federal law enforcement under the Detroit One program has led to the indictment of five members of a northwest Detroit street gang, Young and Skantless or YNS, on various racketeering offenses in a federal superseding indictment unsealed today. The charges are the result of the Detroit One initiative, a collaborative effort between law enforcement and the community to reduce violent crime in Detroit.
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 Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Detroit Field Division; and Police Chief James E. Craig of Detroit made the announcement.
The indictment charges five YNS members with a variety of crimes including a murder, robberies that turned into murders, shootings, a home invasion, arson and narcotics distribution. Specifically:
• Corey Toney, 36, of Detroit, is charged with RICO conspiracy and possession with intent to distribute a controlled substance;
• Edward Tavorn, 30, of Detroit, is charged with RICO conspiracy and felon in possession of a firearm;
• Andre Chattam, 27, of Detroit, is charged with RICO conspiracy, murder in aid of racketeering and use and carry of a firearm during and in relation to a crime of violence causing death;
• Kevin Pearson, 25, of Detroit, is charged with RICO conspiracy, murder in aid of racketeering and use and carry of a firearm during and in relation to a crime of violence causing death; and
• Sontez Wells, 23, of Detroit, is charged with murder in aid of racketeering, and use and carry of a firearm during and in relation to a crime of violence causing death.
According to the indictment, the defendants were members and associates of YNS, a criminal organization that operates in northwest Detroit, specifically the Brightmoor neighborhood. The indictment alleges that YNS purposefully developed a reputation for ruthless violence in order to facilitate the successful commission of crimes by YNS members and associates. The further indictment alleges that the gang has become known as the most dangerous group in Brightmoor and one of the most dangerous in the city of Detroit by engaging in various violent acts including: seeking to intimidate, injure and kill rival drug dealers to eliminate competition; attempting to instill fear in the community in order to discourage cooperation with police and witnesses from reporting YNS-related crime; and posting numerous intimidating photographs and videos to social media.
Through collaborative effort, law enforcement has been able to identify some of the most violent members of this gang and charge them in both state and federal court. 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 over the last four years involving violent street gangs in the city of Detroit, including:
- 18 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;
- 14 members of the Rollin’ 60s Crips street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
- 13 members of the Latin Counts street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
- 14 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;
- 10 members of the RTM street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
- Four members of the Band Gang street gang charged under the state of Michigan gang felony statute for conspiracy to commit murder and assaults with intent to commit murder and 11 members/associates of Bang Gang 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;
- 11 members of the 6Mile Chedda Grove street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
- 24 individuals on drug conspiracy charges for their use of sixteen different houses in the east side Ravendale neighborhood of Detroit, many of them abandoned homes, for distributing heroin, cocaine, and crack cocaine between 2013 – 2015; and
- 14 individuals on criminal enterprise, drug distribution, or weapons offense for drug distribution in the west side Warrendale neighborhood of Detroit.
These charges are just some more of the tangible and significant results of this joint effort. Most significantly, Detroit has seen a reduction in the overall violent crime rate every year since the Detroit One collaboration began in 2013.
The charges and allegations contained in the indictment are merely accusations. The defendants are presumed innocent until and unless proven guilty.
This case is being investigated by the ATF’s CVRP Task Force (Comprehensive Violence Reduction Partnership), consisting of representatives of the ATF, Detroit Police Department, Michigan State Police and Michigan Department of Corrections,
The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office of the Eastern District of Michigan.
The charges and allegations contained in the indictment are merely accusations. The defendants are presumed innocent until and unless proven guilty.
This case is being investigated by the ATF’s CVRP Task Force (Comprehensive Violence Reduction Partnership), consisting of representatives of the ATF, Detroit Police Department, Michigan State Police and Michigan Department of Corrections. The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office of the Eastern District of Michigan.
Five Members of Violent Detroit Street Gang Charged with Racketeering, Narcotics and Firearms OffensesRead the Press Release
Five members of a northwest Detroit street gang, Young and Skantless or YNS, have been indicted on various racketeering offenses in a federal superseding indictment unsealed today. The charges are the result of the Detroit One initiative, a collaborative effort between law enforcement and the community to reduce violent crime in Detroit.
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 Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Detroit Field Division; and Police Chief James E. Craig of Detroit made the announcement.
The indictment charges five YNS members with a variety of crimes including a murder, robberies that turned into murders, shootings, a home invasion, arson and narcotics distribution. Specifically:
- Corey Toney, 36, of Detroit, is charged with RICO conspiracy and possession with intent to distribute a controlled substance;
- Edward Tavorn, 30, of Detroit, is charged with RICO conspiracy and felon in possession of a firearm;
- Andre Chattam, 27, of Detroit, is charged with RICO conspiracy, murder in aid of racketeering, and use and carry of a firearm during and in relation to a crime of violence causing death;
- Kevin Pearson, 25, of Detroit, is charged with RICO conspiracy, murder in aid of racketeering, and use and carry of a firearm during and in relation to a crime of violence causing death; and
- Sontez Wells, 23, of Detroit, is charged with murder in aid of racketeering, and use and carry of a firearm during and in relation to a crime of violence causing death.
According to the facts alleged in the indictment, the defendants were members and associates of YNS, a criminal organization that operates in northwest Detroit, specifically the Brightmoor neighborhood. The indictment alleges that YNS purposefully developed a reputation for ruthless violence in order to facilitate the successful commission of crimes by YNS members and associates. The indictment further alleges that the gang has become known as the most dangerous group in Brightmoor and one of the most dangerous in the city of Detroit by engaging in various violent acts including: seeking to intimidate, injure and kill rival drug dealers to eliminate competition; attempting to instill fear in the community in order to discourage cooperation with police and witnesses from reporting YNS-related crime; and posting numerous intimidating photographs and videos to social media.
By working collaboratively under the Detroit One program, 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. Detroit has seen a reduction in the overall violent crime rate every year since the Detroit One collaboration began in 2013.
The charges and allegations contained in the indictment are merely accusations. The defendants are presumed innocent until and unless proven guilty.
This case is being investigated by the ATF’s CVRP Task Force (Comprehensive Violence Reduction Partnership), consisting of representatives of the ATF, Detroit Police Department, Michigan State Police and Michigan Department of Corrections. The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office of the Eastern District of Michigan.
YNS Superseding IndictmentThird Detroit-Area Physician Convicted in $17.1 Million Health Care Fraud SchemeRead the Press Release
A third Detroit-area physician was convicted today for his role in a $17 million Medicare fraud scheme involving medically unnecessary physician visits.
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.
Gerald Daneshvar, M.D., 40, of West Bloomfield, Michigan, was convicted of one count of conspiracy to commit health care fraud after a jury trial lasting approximately two weeks. Daneshvar was a physician for Lake MI Mobile Doctors, a home visiting physician service based in Chicago, with an office in Southfield, Michigan, from 2012 to 2013. Daneshvar was also acquitted of two counts of health care fraud today.
The evidence at trial showed that Daneshvar visited patients who did not qualify for visiting physician services, and these visits were then billed to Medicare at the highest billing codes. For example, the evidence showed that Daneshvar billed Medicare for home visits that required complex, 40- or 60- minute examinations, but would instead rush through as many as 22 home visits per day, averaging about 15 minutes or less with each patient, so he could make more money. The evidence also showed that he ordered unnecessary tests, in order to receive larger bonuses.
In connection with this case, Leonard Van Gelder, M.D., 69, of Caledonia, Michigan, and Stephen Mason, M.D., 46, of Indianapolis, each pleaded guilty to one count of conspiracy to commit health care fraud in March 2017 and December 2016, respectively. As part of their guilty pleas, Van Gelder and Mason admitted to seeing patients who did not need their services and for whom bills were submitted to Medicare at the highest billing codes. Both Van Gelder and Mason testified at trial.
Lake MI Mobile Doctors billed Medicare approximately $17.1 million as a result of the scheme in which these doctors participated, 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 Amy Markopoulos and Stephen Cincotta 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.
Gang Members Plead Guilty to Racketeering ChargesRead the Press Release
Two members, including the top leader, of the Detroit branch of the Rollin 60s Crips street gang pleaded guilty yesterday to various racketeering and firearms offenses based on their roles in gang-related murders, shootings, and drug distribution. The guilty pleas 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 S. Robin Shoemaker, 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 pleaded guilty yesterday, started a Detroit line of the Rollin 60s, which now boasts approximately 150 members and who operated primarily on the west side of Detroit in the vicinity of Seven Mile and Tracey. The Rollin 60s Detroit chapter is a violent organization responsible for numerous 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, and as a means for individuals to maintain or advance their position within the gang.
The leader, 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. As part of the underlying racketeering activity, Hamilton took responsibility for the August 8, 2011 homicide of Kionte Atkins during a drive-by shooting and being involved in the distribution of marijuana as part of his membership with the Rollin 60s Crips. plea agreement calls for a sentence of 30 to 35 years in prison.
Another gang member, Roderek Perry, 22, of Detroit, also 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. According to his plea documents, Perry was a member of the Rollin 60s Crips from 2011 to 2016. Perry admitted to participating in the drive-by shooting of Kionte Atkins on August 8, 2011, as well as a June 20, 2012 attempted robbery that left Perry’s fellow gang member dead after Perry inadvertently killed him during the robbery. In addition, Perry sold narcotics to fund activities of the gang. Perry’s plea agreement calls for a sentence of 30 to 35 years in prison.
"Violence in our communities will not be tolerated and this investigation should serve as a warning to others threatening the safety of our citizens," said ATF Special Agent in Charge Robin Shoemaker. "ATF will continue to partner with our law enforcement partners to protect our neighborhoods from violent organized street gangs."
"Violent Gangs should have no place or acceptance in our communities. It should be clear from today's outcome that gang members cannot avoid responsibility for their crimes and law enforcement will not stop going after them,” said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI.
Hamilton and Perry are the tenth and eleventh members of the Rollin 60s Crips to plead guilty in this investigation. Other Rollin 60s Crips members have pleaded guilty to racketeering conspiracy for acts involving carjackings, armed robberies, firebombing, unarmed robberies, and distributing narcotics on behalf of the gang. Those members are:
- Darriyon Mills, 25, of Detroit, pleaded guilty to RICO conspiracy and using a firearm during and in relation to a crime of violence;
- Jonathan Barber, 25, 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.
Three other alleged members of the gang are scheduled to begin trial on July 11, 2017, before Chief Judge Denise Page Hood.
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 Eaton Brown and Shane Cralle.
Detroit Resident Pleads Guilty to Illegally Acquiring a FirearmRead the Press Release
A 30-year-old Detroit man pleaded guilty today to a charge of buying a firearm through a straw purchaser, Acting United States Attorney Daniel L. Lemisch announced today.
Lemisch was joined in the announcement by Special Agent in Charge David P. Gelios, Federal Bureau of Investigation, Detroit Division.
Sebastian Gregerson pleaded guilty before United States District Judge Arthur J. Tarnow in Detroit.
According to court records, on February 16, 2014, defendant Gregerson purchased a Glock 31 .357 caliber gun through a straw purchaser in Virginia. The defendant accompanied another individual to a gun show in Virginia where the individual purchased the gun for Gregerson. Gregerson gave cash to the individual to make the gun purchase and identified the gun he wanted the individual to purchase. At the time of the transaction, the individual completed a federal firearms form indicating that he was the buyer of the gun, when, in fact, Gregerson was the actual buyer. Gregerson was present during the transaction and took possession of the gun after the purchase. The gun was recovered from defendant Gregerson’s residence at the time of his arrest in July, 2016.
Defendant Gregerson previously pled guilty, on March 17, 2017, to possession of unregistered destructive devices based on his purchase, through an FBI employee acting in an undercover capacity (UCE), of grenade bodies containing high explosives, as well as grenade fuses. Those components constituted a combination of parts that were designed or intended for use in M67 fragmentation grenades and from which M67 fragmentation grenades could be readily assembled. The destructive devices were not registered to defendant Gregerson in the National Firearms Registration and Transfer Record.
According to the court records, Gregerson’s social media site, as well as conversations with an undercover FBI employee, indicated his support for the Islamic State of Iraq and Levant (ISIL), a designated foreign terrorist organization and statements relating to committing violent acts.
Gregerson was arrested on August 1, 2016, by FBI agents and remains in custody pending his sentencing which has been scheduled for June 30, 2017 in both cases. Gregerson faces a term of up to 10 years in federal prison for the straw purchase of the firearm.
U.S. Attorney’s Office Obtains ADA Settlement with Dayton Township to Ensure Civic Access for People with DisabilitiesRead the Press Release
The U.S. Attorney's Office for the Eastern District of Michigan has reached a settlement with Dayton Township in Tuscola County to ensure full access to township services for individuals with disabilities.
The agreement, under the Americans with Disabilities Act (ADA), resolves a complaint filed with the U.S. Attorney’s Office alleging that many township services were inaccessible to individuals with disabilities. The complaint, filed by a local resident, alleged that Dayton Township’s government offices were located in the private homes of its elected officials, and that because of physical barriers present in those homes, the government services provided in them were inaccessible to individuals with disabilities.
The settlement agreement requires Dayton Township to adopt an ADA policy, and to establish a mechanism to provide township services in an alternative location or in an alternate manner to ensure that all Dayton Township residents have access to township services.
“Access to public facilities and services are essential to meaningful participation in civic life, and individuals with disabilities are entitled to the opportunity to participate in local government programs, services, and activities on an equal basis with their neighbors,” said Acting U.S. Attorney Daniel L. Lemisch.
For more information on the ADA or today’s agreement with Dayton Township, visit www.ada.gov or call the United States Justice Department’s toll-free ADA Information line at (800) 514-0301 or (800) 514-0383 (TTY) or the U.S. Attorney’s Civil Rights hotline at (313) 226-9151.
Three Indicted for Female Genital MutilationRead the Press Release
Two Detroit doctors and one co-conspirator were charged in an indictment today for their alleged participation in a scheme to perform female genital mutilation (FGM) on minors, to transport these minors across state lines, and to obstruct justice.
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 Acting Special Agent in Charge Steve Francis of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Detroit Field Office made the announcement.
Jumana Nagarwala, M.D., 44, of Northville, Michigan, Fakhruddin Attar, M.D., 53, and his wife, Farida Attar, 50, both of Livonia, Michigan, are charged with performing FGM on minor girls out of Fakrhuddin Attar’s medical office in Livonia, Michigan. According to the indictment, some of the minor victims allegedly traveled interstate to have Nagarwala perform the procedure. The indictment alleges that Nagarwala performed FGM on girls who were approximately six to eight years old. All three are also charged with a conspiracy to obstruct the federal investigation, and Nagarwala and Fakhruddin Attar are charged with giving false statements to a federal agent. This is believed to be the first case brought under 18 U.S.C. 116, which criminalizes FGM.
“Female Genital Mutilation has serious implications for the health and well-being of girls and women,” stated Acting United States Attorney Daniel Lemisch. “This brutal practice is conducted on girls for one reason, to control them as women. FGM will not be tolerated in the United States. The federal government is continuing this investigation to ensure those responsible are brought to justice.”
"Today's indictments represent the continued commitment of the FBI and our law enforcement partners to protect the most vulnerable of victims, our children, from those that would do them harm. The practice of Female Genital Mutilation (FGM) cannot be defended in any context and we will identify and bring those responsible for conducting or participating in this disturbing crime to justice", said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. "I would urge anyone who has information about those involved in FGM or can assist with identifying victims to report it to the FBI or HSI. Information can be reported by calling 1-800-CALL-FBI or by sending an e-TIP to FBI.GOV/FGM".
"As the first federal indictment in the U.S., these charges will hopefully deal a critical blow to stamping out this inhumane practice in the United States and around the world," said Francis. "HSI and our partners are committed to the difficult but necessary work of supporting victims and bringing everyone involved in this practice to justice."
An indictment is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s Detroit Division and HSI investigated the case with support of the Criminal Division’s Fraud Section, the U.S. Attorney’s Office of the Eastern District of Michigan and the FBI’s International Human Rights Unit, Criminal Investigative Division. Deputy Chief Sara Woodward of the General Crimes Unit, Eastern District of Michigan and Fraud Section Assistant Chief Nick Surmacz and Trial Attorneys Amy Markopoulos and Malisa Dubal are prosecuting the case
Individual Convicted Overseas of Being Terrorist Who Participated in the 1969 British Consulate, Supermarket Bombings in Jerusalem Pleads Guilty to Lying to Obtain U.S. CitizenshipRead the Press Release
A naturalized United States citizen, who was convicted overseas 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 government, and also was convicted for participation in two terrorist bombings, pleaded guilty today to having obtained her United States citizenship unlawfully, acting U.S. Attorney Daniel Lemisch announced.
Joining Lemisch in the announcement was Steve Francis, Special Agent in Charge of Immigration and Customs Enforcement, Homeland Security Investigations.
Entering the guilty plea was Rasmieh Yousef Odeh,69, a Chicago-area resident.
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.”
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. A
According to the plea agreement signed by Odeh and accepted by the court, Odeh admitted that she lied about her criminal history, by falsely denying that she ever had been arrested, charged with a crime, convicted, or imprisoned. Odeh admitted today that she had omitted her Israeli arrest, charge, conviction and imprisonment from her United States naturalization application even though she knew she was required to disclose them. 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.
As a result of her conviction for having obtained naturalization unlawfully, Odeh will be stripped of her United States citizenship when she is sentenced by U.S. District Judge Gershwin A. Drain. Sentencing was set for August 17, 2017 at 2pm. As part of the plea agreement, Odeh agreed to a judicial order of removal, under which she will be deported to her nation of citizenship, Jordan, and will not be allowed to reenter the United States.
“The United States will never be a safe haven for individuals seeking to distance themselves from their pasts,” said Steve Francis, Special Agent in Charge for HSI Detroit. “When individuals lie on immigration documents, the system is severely undermined and the security of our nation is put at risk.”
The maximum sentence for the offense is ten years, of which Odeh already has served about five weeks. Under the terms of the plea agreement, Odeh will not face additional imprisonment but will be removed from the United States following sentencing.
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 C. Martin.
United States Settles Health Care Fraud Action Involving Allegations that Hospital Billed for Medically Unnecessary Lab TestsRead the Press Release
Crittenton Hospital Medical Center and the Crittenton Cancer Center, together with their current owners Ascension Michigan and Ascension Health, have agreed to pay $791,047 to resolve allegations that they violated the False Claims Act by billing for medically unnecessary laboratory testing for patients who had been referred to Crittenton by Dr. Farid Fata and physicians in his office. In an earlier unrelated criminal matter, Fata pleaded guilty to health care fraud, conspiracy to pay and receive kickbacks, and promotional money laundering, and was sentenced to a term of 45 years in prison.
False Claims Act allegations against Fata and Crittenton were brought to the government by a whistleblower, known as a relator, under the qui tam provisions of the False Claims Act. From September 2011 until August 7, 2013, Fata’s medical practice, Michigan Hematology-Oncology P.C., employed relator as an office administrator. Among other allegations, relator questioned the medical necessity of services that Crittenton and other hospital subsidiaries of Ascension Health had provided to patients treated by Fata.
Crittenton and Ascension voluntarily disclosed to the government the lack of medical necessity regarding the laboratory testing. Relator will receive $158,209.40 out of the $791,047 settlement for his role in filing the qui tam action.
This case was investigated jointly by the U.S. Attorney’s Office for the Eastern District of Michigan and the Department of Health and Human Services, Office of Inspector General.
Volkswagen AG Sentenced in Connection with Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
Volkswagen AG (VW) was sentenced in federal court in Detroit today after pleading guilty on March 10, 2017, to three felony counts of: (1) conspiracy to defraud the United States, engage in wire fraud, and violate the Clean Air Act; (2) obstruction of justice; and (3) importation of merchandise by means of false statements. During the sentencing hearing, the court accepted the parties’ plea agreement, which requires VW to pay a $2.8 billion penalty stemming from the company’s decade-long scheme to sell diesel vehicles containing software designed to cheat on U.S. emissions tests.
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, Deputy Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division, Acting Assistant Administrator Larry Starfield of the EPA’s Office of Enforcement and Compliance and Special Agent in Charge David Gelios of the FBI’s Detroit Field Office made the announcement.
U.S. District Judge Sean F. Cox of the Eastern District of Michigan accepted the plea agreement, resulting in VW’s conviction on three felony charges. VW was convicted, first, of participating in a conspiracy to defraud the United States and its U.S. customers and to violate the Clean Air Act by lying and misleading the EPA and U.S. customers about whether certain VW, Audi and Porsche branded diesel vehicles complied with U.S. emissions standards. Moreover, the company used cheating software to circumvent the U.S. testing process, and concealed material facts about its cheating from U.S. regulators. Second, VW was convicted of obstruction of justice for destroying documents related to the scheme. And third, VW was convicted of importing these cars into the United States by means of false statements about the vehicles’ compliance with emissions limits.
As part of the plea agreement, VW will pay a $2.8 billion criminal penalty to the U.S. and fully cooperate in the government’s ongoing investigation and prosecution of individuals responsible for these crimes. The parties also announced that the government had selected Larry D. Thompson as an independent corporate compliance monitor who will oversee the company during its three-year term of probation. Thompson is a former Deputy U.S. Attorney General. His team includes experts in automotive regulatory compliance, as well as the corporate monitors for Deutsche Bank in the London Interbank Offered Rate (LIBOR) manipulation prosecution and Duke Energy in the coal ash environmental prosecution.
“The sentencing of Volkswagen marks a significant milestone in this historic case,” said Acting U.S. Attorney Lemisch. “Volkswagen has been punished for its scheme to defeat U.S. environmental standards and cheat U.S. consumers. This prosecution sends a strong message to Volkswagen and others that we take our environmental laws seriously and that federal prosecution awaits those who defraud the EPA.”
“The Criminal Division will continue to be vigilant in assuring that all companies – foreign and domestic – that choose to benefit from our valuable economy and consumers abide by our laws, said Acting Assistant Attorney General Blanco. “The sentencing of VW vindicates the rights of U.S. consumers who for over a decade were victims of the calculated corporate decisions of VW and its senior management to fraudulently employ a device intended to deceive U.S. consumers and to defeat our environmental laws.”
“With today's sentence, VW is being held fully accountable for its deception and fraud perpetrated against American consumers and the environment, as well as the deliberate obstruction of the criminal investigation into its wrongdoing,” said Deputy Assistant Attorney General Williams. “We also hope this sends a message around the world that those who violate American environmental laws will be vigorously investigated and prosecuted.”
“Today's strong sentence recognizes the egregious nature of VW’s violations, and VW’s attempt to gain an unfair competitive advantage over automakers that follow the law,” said Acting Assistant Administrator Starfield. “Vehicle emissions standards help protect clean air and ensure a level playing field for companies that play by the rules. When those standards are broken, violators can expect to be held accountable.”
“Americans expect corporations doing business in the United States to conduct their business honestly,” said Special Agent in Charge Gelios. “Today's sentencing sends a clear message that the FBI, along with its federal partners, will continue to hold corporations, like Volkswagen AG, accountable when they defraud consumers and violate federal laws.”
Along with the January 2017 plea agreement, the United States also announced separate civil resolutions of environmental, customs and financial claims, in which VW agreed to pay an additional $1.5 billion to settle EPA’s claim for civil penalties in connection with the importation and sale of these cars, as well as U.S. Customs and Border Protection (CBP) claims for customs fraud. In addition, that agreement requires injunctive relief to prevent future violations. The agreements also resolved alleged violations of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).
The FBI and EPA investigated the case. This case is being prosecuted by members of the Department of Justice’s Criminal Division, Fraud Section, including: Chief of the Securities and Financial Fraud Unit Benjamin D. Singer, as well as Trial Attorneys David Fuhr, Alison Anderson, Christopher Fenton and Gary Winters. Also prosecuting the case are members of the Department of Justice’s Environment and Natural Resources Division, Environmental Crimes Section, including: Senior Trial Attorney Jennifer Blackwell. Additionally, the case is being prosecuted by members of the U.S. Attorney’s Office for the Eastern District of Michigan, including Criminal Division Chief Mark Chutkow, Economic Crimes Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse. The Justice Department’s Office of International Affairs also assisted in the case. The Justice Department extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany.
Volkswagen AG Sentenced in Connection with Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
Volkswagen AG (VW) was sentenced in federal court in Detroit today after pleading guilty on March 10, 2017, to three felony counts of: (1) conspiracy to defraud the United States, engage in wire fraud, and violate the Clean Air Act; (2) obstruction of justice; and (3) importation of merchandise by means of false statements. During the sentencing hearing, the court accepted the parties’ plea agreement, which requires VW to pay a $2.8 billion penalty stemming from the company’s decade-long scheme to sell diesel vehicles containing software designed to cheat on U.S. emissions tests.
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, Deputy Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division, Acting Assistant Administrator Larry Starfield of the EPA’s Office of Enforcement and Compliance and Special Agent in Charge David Gelios of the FBI’s Detroit Field Office made the announcement.
U.S. District Judge Sean F. Cox of the Eastern District of Michigan accepted the plea agreement, resulting in VW’s conviction on three felony charges. VW was convicted, first, of participating in a conspiracy to defraud the United States and its U.S. customers and to violate the Clean Air Act by lying and misleading the EPA and U.S. customers about whether certain VW, Audi and Porsche branded diesel vehicles complied with U.S. emissions standards. Moreover, the company used cheating software to circumvent the U.S. testing process, and concealed material facts about its cheating from U.S. regulators. Second, VW was convicted of obstruction of justice for destroying documents related to the scheme. And third, VW was convicted of importing these cars into the United States by means of false statements about the vehicles’ compliance with emissions limits.
As part of the plea agreement, VW will pay a $2.8 billion criminal penalty to the U.S. and fully cooperate in the government’s ongoing investigation and prosecution of individuals responsible for these crimes. The parties also announced that the government had selected Larry D. Thompson as an independent corporate compliance monitor who will oversee the company during its three-year term of probation. Thompson is a former Deputy U.S. Attorney General. His team includes experts in automotive regulatory compliance, as well as the corporate monitors for Deutsche Bank in the London Interbank Offered Rate (LIBOR) manipulation prosecution and Duke Energy in the coal ash environmental prosecution.
“The sentencing of Volkswagen marks a significant milestone in this historic case,” said Acting U.S. Attorney Lemisch. “Volkswagen has been punished for its scheme to defeat U.S. environmental standards and cheat U.S. consumers. This prosecution sends a strong message to Volkswagen and others that we take our environmental laws seriously and that federal prosecution awaits those who defraud the EPA.”
“The Criminal Division will continue to be vigilant in assuring that all companies – foreign and domestic – that choose to benefit from our valuable economy and consumers abide by our laws, said Acting Assistant Attorney General Blanco. “The sentencing of VW vindicates the rights of U.S. consumers who for over a decade were victims of the calculated corporate decisions of VW and its senior management to fraudulently employ a device intended to deceive U.S. consumers and to defeat our environmental laws.”
“With today's sentence, VW is being held fully accountable for its deception and fraud perpetrated against American consumers and the environment, as well as the deliberate obstruction of the criminal investigation into its wrongdoing,” said Deputy Assistant Attorney General Williams. “We also hope this sends a message around the world that those who violate American environmental laws will be vigorously investigated and prosecuted.”
“Today's strong sentence recognizes the egregious nature of VW’s violations, and VW’s attempt to gain an unfair competitive advantage over automakers that follow the law,” said Acting Assistant Administrator Starfield. “Vehicle emissions standards help protect clean air and ensure a level playing field for companies that play by the rules. When those standards are broken, violators can expect to be held accountable.”
“Americans expect corporations doing business in the United States to conduct their business honestly,” said Special Agent in Charge Gelios. “Today's sentencing sends a clear message that the FBI, along with its federal partners, will continue to hold corporations, like Volkswagen AG, accountable when they defraud consumers and violate federal laws.”
Along with the January 2017 plea agreement, the United States also announced separate civil resolutions of environmental, customs and financial claims, in which VW agreed to pay an additional $1.5 billion to settle EPA’s claim for civil penalties in connection with the importation and sale of these cars, as well as U.S. Customs and Border Protection (CBP) claims for customs fraud. In addition, that agreement requires injunctive relief to prevent future violations. The agreements also resolved alleged violations of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).
The FBI and EPA investigated the case. This case is being prosecuted by members of the Department of Justice’s Criminal Division, Fraud Section, including: Chief of the Securities and Financial Fraud Unit Benjamin D. Singer, as well as Trial Attorneys David Fuhr, Alison Anderson, Christopher Fenton and Gary Winters. Also prosecuting the case are members of the Department of Justice’s Environment and Natural Resources Division, Environmental Crimes Section, including: Senior Trial Attorney Jennifer Blackwell. Additionally, the case is being prosecuted by members of the U.S. Attorney’s Office for the Eastern District of Michigan, including Criminal Division Chief Mark Chutkow, Economic Crimes Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse. The Justice Department’s Office of International Affairs also assisted in the case. The Justice Department extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany.
Detroit Doctor and Wife Arrested and Charged with Conspiring to Perform Female Genital MutilationRead the Press Release
A Detroit physician and his wife were arrested this morning and charged by criminal complaint unsealed today for their alleged participation in a conspiracy that involved performing female genital mutilations (FGM) on minors.
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 Steve Francis of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Detroit Field Office made the announcement.
Fakhruddin Attar, M.D., 53, and his wife, Farida Attar, 50, both of Livonia, Michigan, are charged with conspiring to perform female genital mutilations on minor girls out of Fakhruddin Attar’s medical clinic in Livonia. According to the complaint, some of the minor victims traveled interstate to have the procedure performed. The complaint alleges that the FGM procedure was performed on girls who were approximately six to eight years old.
Both defendants were arrested this morning and are scheduled to appear in federal court in Detroit this afternoon.
The defendants are alleged to have conspired with Jumana Nagarwala, M.D., who was arrested in Detroit on April 12, 2017, and ordered detained on April 17, 2017, pending trial. Nagarwala, Fakhruddin Attar and Farida Attar are believed to be the first people charged under 18 U.S.C. 116, which criminalizes FGM.
A complaint is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s Detroit Division and HSI investigated the case with the assistance of the Livonia Police Department and with support of the Criminal Division’s Fraud Section, the U.S. Attorney’s Office of the Eastern District of Michigan and the FBI’s International Human Rights Unit, Criminal Investigative Division. Deputy Chief Sara Woodward of the General Crimes Unit of the Eastern District of Michigan, Fraud Section Assistant Chief Nick Surmacz and Trial Attorneys Amy Markopoulos and Malisa Dubal are prosecuting the case.
The FBI’s Detroit Field Division has set up a tip line for anyone who has information pertaining to the illegal practice of FGM or Dr. Jumana Nagarwala, Fakhruddin Attar or Farida Attar at 1-800-CALL-FBI (225-5324). To submit an e-tip, please visit FBI.GOV/FGM.
Attar et al. ComplaintDetroit Doctor and Wife Arrested and Charged with Conspiring to Perform Female Genital MutilationRead the Press Release
A Detroit physician and his wife were arrested this morning and charged by criminal complaint unsealed today for their alleged participation in a conspiracy that involved performing female genital mutilations (FGM) on minors.
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 Steve Francis of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Detroit Field Office made the announcement.
Fakhruddin Attar, M.D., 53, and his wife, Farida Attar 50, both of Livonia, Michigan, are charged with conspiring to perform female genital mutilations on minor girls out of Fakhruddin Attar’s medical clinic in Livonia. According to the complaint, some of the minor victims traveled interstate to have the procedure performed. The complaint alleges that the FGM procedure was performed on girls who were approximately six to eight years old.
Both defendants were arrested this morning and are scheduled to appear in federal court in Detroit this afternoon.
The defendants are alleged to have conspired with Jumana Nagarwala, M.D., who was arrested in Detroit on April 12, 2017, and ordered detained on April 17, 2017, pending trial. . Nagarwala, Fakhruddin Attar and Farida Attar are believed to be the first people charged under 18 U.S.C. 116, which criminalizes FGM.
A complaint is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s Detroit Division and HSI investigated the case with the assistance of the Livonia Police Department and with support of the Criminal Division’s Fraud Section, the U.S. Attorney’s Office of the Eastern District of Michigan and the FBI’s International Human Rights Unit, Criminal Investigative Division. Deputy Chief Sara Woodward of the General Crimes Unit of the Eastern District of Michigan, Fraud Section Assistant Chief Nick Surmacz and Trial Attorneys Amy Markopoulos and Malisa Dubal are prosecuting the case.
The FBI’s Detroit Field Division has set up a tip line for anyone who has information pertaining to the illegal practice of FGM or Dr. Jumana Nagarwala, Fakhruddin Attar or Farida Attar at 1-800-CALL-FBI (225-5984). To submit an e-tip, please visit FBI.GOV/FGM.
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Detroit Podiatrist Charged for Role in $13.9 Million Medicare Fraud SchemeRead the Press Release
A Detroit podiatrist was charged in an indictment unsealed today for his alleged participation in a $13.9 million health care fraud scheme involving fraudulent claims for unnecessary foot surgeries and other podiatric services that were never rendered.
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.
Lawrence Young, D.P.M., of Bloomfield Hills, Michigan, was charged with six counts of health care fraud in an indictment filed in the Eastern District of Michigan. Young was arrested this morning and made his initial appearance before U.S. Magistrate Judge Anthony P. Pattiof the Eastern District of Michigan.
According to the indictment, Young owned Dearborn Podiatric Services and Georgetown Podiatric Services, located in Dearborn, Michigan, and Sterling Heights, Michigan, respectively. The indictment alleges that between January 2010 through 2016, Young falsely conveyed to his podiatry patients that they needed weekly or bi-weekly shots and minor surgeries to prevent hammertoe, which were allegedly medically unnecessary. As a result, these patients returned to his practice on a regular basis every month for shots and minor surgeries. Additionally, Young allegedly billed Medicare for other podiatry services, such as Unna Boots, which were never given.
According to the indictment, Young submitted false and fraudulent claims to Medicare in the amount of approximately $13.9 million.An indictment is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. Trial Attorney Amy Markopoulos of the Fraud Section is prosecuting the case.
Any patient of Dr. Young’s concerned about their treatment, or who needs access to his/her patient file can reach out to Nicole McGee, FBI Victim Specialist, at (313) 496-4348.
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.
Detroit Emergency Room Doctor Arrested and Charged with Performing Female Genital MutilationRead the Press Release
A Detroit Emergency Room physician was charged by complaint for performing female genital mutilation (FGM) on minor females.
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 Steve Francis of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Detroit Field Office made the announcement.
Jumana Nagarwala, M.D., 44, of Northville, Michigan, is charged with performing FGM on minor girls out of a medical office in Livonia, Michigan. According to the complaint, some of the minor victims allegedly traveled interstate to have Nagarwala perform the procedure. The complaint alleges that Nagarwala performed FGM on girls who were approximately 6 to 8 years old. This is believed to be the first case brought under 18 U.S.C. 116, which criminalizes FGM. Nagarwala was arrested and will appear in federal court in Detroit this afternoon.
“According to the complaint, despite her oath to care for her patients, Dr. Nagarwala is alleged to have performed horrifying acts of brutality on the most vulnerable victims,” said Acting Assistant Attorney General Blanco. “The Department of Justice is committed to stopping female genital mutilation in this country, and will use the full power of the law to ensure that no girls suffer such physical and emotional abuse.”
“Female genital mutilation constitutes a particularly brutal form of violence against women and girls. It is also a serious federal felony in the United States. The practice has no place in modern society and those who perform FGM on minors will be held accountable under federal law,” stated Acting United States Attorney Daniel Lemisch.
“The allegations detailed in today’s criminal complaint are disturbing. The FBI, along with its law enforcement partners, are committed to doing whatever necessary to bring an end to this barbaric practice and to ensure no additional children fall victim to this procedure”, said Special Agent in Charge David Gelios.
“The allegations against the defendant in this investigation are made even more deplorable, given the defendant’s position as a trusted medical professional in the community,” said Francis. “My sincere hope is that these charges will give support to those who have allegedly suffered both physically and emotionally.”
A complaint is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s Detroit Division and HSI investigated the case with the assistance of the Livonia Police Department and with support of the Criminal Division’s Fraud Section, the U.S. Attorney’s Office of the Eastern District of Michigan and the FBI’s International Human Rights Unit, Criminal Investigative Division. Deputy Chief Sara Woodward of the Eastern District of Michigan, Fraud Section Assistant Chief Nick Surmacz and Trial Attorneys Amy Markopoulos and Malisa Dubal are prosecuting the case.
The FBI’s Detroit Field Division has set up a tip line for anyone who has information pertaining to the illegal practice of FGM or Dr. Jumana Nagarwala. Please call 1-800-CALL-FBI (225-5984) or file an e-tip at FBI.GOV/FGM.
Detroit Emergency Room Doctor Arrested and Charged with Performing Female Genital MutilationRead the Press Release
A Detroit Emergency Room physician was charged by complaint for performing female genital mutilation (FGM) on minor females.
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 Steve Francis of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Detroit Field Office made the announcement.
Jumana Nagarwala, M.D., of Northville, Michigan, is charged with performing FGM on minor girls out of a medical office in Livonia, Michigan. According to the complaint, some of the minor victims allegedly traveled interstate to have Nagarwala perform the procedure. The complaint alleges that Nagarwala performed FGM on girls who were approximately six to eight years old. This is believed to be the first case brought under 18 U.S.C. 116, which criminalizes FGM. Nagarwala was arrested and is scheduled to appear in federal court in Detroit this afternoon.
“According to the complaint, despite her oath to care for her patients, Dr. Nagarwala is alleged to have performed horrifying acts of brutality on the most vulnerable victims,” said Acting Assistant Attorney General Blanco. “The Department of Justice is committed to stopping female genital mutilation in this country, and will use the full power of the law to ensure that no girls suffer such physical and emotional abuse.”
“Female genital mutilation constitutes a particularly brutal form of violence against women and girls. It is also a serious federal felony in the United States,” said Acting U.S. Attorney Lemisch. “The practice has no place in modern society and those who perform FGM on minors will be held accountable under federal law.”
“The allegations detailed in today’s criminal complaint are disturbing,” said Special Agent in Charge Gelios. “The FBI, along with its law enforcement partners, are committed to doing whatever necessary to bring an end to this barbaric practice and to ensure no additional children fall victim to this procedure.”
“The allegations against the defendant in this investigation are made even more deplorable, given the defendant’s position as a trusted medical professional in the community,” said Special Agent in Charge Francis. “My sincere hope is that these charges will give support to those who have allegedly suffered both physically and emotionally.”
A complaint is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s Detroit Division and HSI investigated the case with support of the Criminal Division’s Fraud Section, the U.S. Attorney’s Office of the Eastern District of Michigan and the FBI’s International Human Rights Unit, Criminal Investigative Division. Deputy Chief Sara Woodward of the Eastern District of Michigan and Fraud Section Assistant Chief Nick Surmacz and Trial Attorneys Amy Markopoulos and Malisa Dubal are prosecuting the case.
The FBI’s Detroit Field Division has set up a tip line for anyone who has information pertaining to the illegal practice of FGM or Dr. Jumana Nagarwala. Please call 1-800-CALL-FBI (225-5324) or file an e-tip at FBI.GOV/FGM.
Nagarwala ComplaintCalifornia Man convicted of Engaging in Child Exploitation EnterpriseRead the Press Release
A Modesto, California resident was convicted today after a 10-day jury trial on 14 child exploitation offenses for his 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, a bridge maintenance supervisor for the California Department of Transportation, was found 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 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.
The other five co-conspirators each pleaded guilty prior to trial to one count of engaging in a child exploitation enterprise. On June 21, 2016, Virgil Napier, 54, of Waterford, Michigan, pleaded guilty. On July 11, 2016, John Garrison, 52, of Glenarm, Illinois, pleaded guilty. On Feb. 24, 2017, Thomas Dougherty, 54, of Vallejo, California, pleaded guilty. On Sept. 23, 2016, Dantly Nicart, 39, a citizen of the Philippines residing in Las Vegas, pleaded guilty, and was sentenced to 20 years imprisonment followed by five years of supervised release and $150,000 in restitution on March 2, 2017. 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 $60,000 in restitution.
Trial Attorney Austin M. Berry of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) 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 (SEMTEC) 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.
California Man Convicted of Engaging in Child Exploitation EnterpriseRead the Press Release
A Modesto, California resident was convicted today after a 10-day jury trial on 14 child exploitation offenses for his 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, a bridge maintenance supervisor for the California Department of Transportation, was found 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 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.
The other five co-conspirators each pleaded guilty prior to trial to one count of engaging in a child exploitation enterprise. On June 21, 2016, Virgil Napier, 54, of Waterford, Michigan, pleaded guilty. On July 11, 2016, John Garrison, 52, of Glenarm, Illinois, pleaded guilty. On Feb. 24, 2017, Thomas Dougherty, 54, of Vallejo, California, pleaded guilty. On Sept. 23, 2016, Dantly Nicart, 39, a citizen of the Philippines residing in Las Vegas, pleaded guilty, and was sentenced to 20 years imprisonment followed by five years of supervised release and $150,000 in restitution on March 2, 2017. 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 $60,000 in restitution.
Trial Attorney Austin M. Berry of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) 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 (SEMTEC) 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.
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The U.S. Attorney’s Office Announces Settlement Agreement to Resolve Americans with Disabilities Act ViolationsRead the Press Release
The Fill Building Associates, L.L.C., d/b/a Fill Building East, owner of a professional office building located at 27301 Dequindre Rd. in Madison Heights, Michigan, has agreed to make a number of structural changes to the building to resolve allegations that it was inaccessible to individuals with mobility disabilities in violations of the Americans with Disabilities Act (ADA), announced Daniel L. Lemisch, acting United States Attorney.
The settlement agreement resolves an investigation following a complaint filed by a person with a disability who was unable to access her physician’s office due to architectural barriers present at the building. Under the terms of the settlement agreement, the building owners agreed to make renovations to the facility so that parking, office space, restrooms, elevators and other public areas are accessible to people with disabilities.
“When a building is inaccessible, it is essentially a proclamation to people with disabilities that they are not welcomed or valued there,” said Daniel L. Lemisch, acting U.S. Attorney. “This is why it’s so important for owners of existing buildings to understand that they are obligated under the ADA to remove all architectural barriers where readily achievable to do so and why the US Attorney’s Office will continue its vigorous ADA enforcement efforts.”
Today’s agreement was reached under Title III of the ADA, which prohibits discrimination against individuals with disabilities by businesses that serve the public. The United States Attorney’s Office for the Eastern District of Michigan will monitor compliance with the agreement until all required actions are completed.
More information about this settlement and 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.
State Senator Indicted on Conspiracy and Theft ChargesRead the Press Release
Today a federal grand jury returned an indictment charging a state senator with conspiracy and theft crimes, 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.
Charged was Bertram Johnson, Jr., 43, of Highland Park, Michigan
The two-count indictment charges that from approximately March 2014 through January 2015, Johnson, Jr., a Senator for the State of Michigan, conspired to commit theft, and did commit theft, of monies under the care, custody, and control of the State of Michigan.
According to the indictment, Johnson borrowed thousands of dollars in cash from an unnamed co-conspirator, and later placed that co-conspirator on the public payroll as a member of his staff, knowing that the co-conspirator was a “ghost employee” who contributed no work on behalf of Johnson’s staff. The indictment alleges that Johnson placed this “ghost employee” on the public payroll solely to pay off Johnson’s personal loan debt, and that the ghost employee was paid over $23,000 in taxpayer money.
“Theft of taxpayer’s money by elected public officials, as these charges allege, is disheartening and will not be tolerated" Lemisch said.
"Today’s indictment is an unfortunate reminder that public officials sometimes squander the public’s trust in exchange for personal gain", said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “Rooting out public corruption at all levels of government is an investigative priority of the FBI.”
“Senator Johnson’s alleged actions abused the trust of his constituents and amounted to simple theft,” said IRS-Criminal Investigation Special Agent in Charge Manny Muriel of the Detroit Field Office. “It is in these cases that the IRS takes particular interest in individuals, allegedly abusing the power they have been entrusted with – for their own personal benefit. This investigation exemplifies interagency collaboration and the United States’ commitment to combat the abuse of power and to elevate transparency and accountability
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.
If convicted on all charges, Johnson faces a statutory maximum penalty of ten years in prison.
An indictment is only a charge 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.
Second Detroit-Area Physician Pleads Guilty in $17.1 Million Health Care Fraud SchemeRead the Press Release
A second Detroit-area physician pleaded guilty today for his role in a $17.1 million Medicare fraud scheme involving medically unnecessary physician visits and drug prescriptions.
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.
Leonard Van Gelder, 69, of Caledonia, Michigan, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Avern Cohn of the Eastern District of Michigan. Sentencing will be set at a later date.
Van Gelder was a physician for Lake Michigan Mobile Doctors, a Chicago-based home physician service with an office in Southfield, Michigan, from November 2011 to August 2013. As part of his guilty plea, Van Gelder admitted that he saw patients who did not qualify for his services and whose visits were billed to Medicare at the highest billing codes. Van Gelder also admitted that he prescribed to patients medically unnecessary narcotics, such as Vicodin, in exchange for the ability to bill Medicare for the patients’ visits. According to court documents, Mobile Doctors billed Medicare approximately $17.1 million as a result of the scheme.
In December 2016, Van Gelder’s co-conspirator, Stephen Mason, 46, of Zionsville, Indiana, pleaded guilty to one count of conspiracy to commit health care fraud. One additional doctor, Gerald Daneshvar, 41, of West Bloomfield, Michigan, is awaiting trial. All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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 of the Eastern District of Michigan. Fraud Section Trial Attorney Amy Markopoulos is prosecuting 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.
Former Detroit Public Schools Director of Grant Development Sentenced on Fraud ChargesRead the Press Release
The former Detroit Public Schools Director of Grant Development was sentenced today to 18 months in prison and an additional 4 months in a community corrections center upon her release, as a condition of supervised release, after having pleaded guilty to federal program fraud, announced Acting U.S. Attorney Daniel 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 Bernadette Kakooza, Inspector General of the Detroit Public Schools.
Carolyn StarkeyDarden, 72, of Detroit, was sentenced by United States District Judge Stephen J. Murphy, III.
According to court records between 2005 and 2012, Carolyn StarkeyDarden, as president and/or agent of companies she established to provide supplemental educational services to eligible students in Michigan, obtained at least $1,275,000 from DPS through a scheme in which she submitted fraudulent invoices for payment to DPS for tutorial services that were never rendered to DPS students.
This case was investigated by agents of the FBI and the Office of Inspector General for Detroit Public Schools. This case was prosecuted by Assistant United States Attorney Dawn N. Ison.
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.
Detroit Resident Pleads Guilty to Unregistered Possession of Destructive DevicesRead the Press Release
A 30-year-old Detroit man pleaded guilty today to charges of unregistered possession of destructive devices, Acting United States Attorney Daniel L. Lemisch announced today.
Lemisch was joined in the announcement by Special Agent in Charge David P. Gelios, Federal Bureau of Investigation, Detroit Division.
Sebastian Gregerson pleaded guilty before United States District Judge Arthur J. Tarnow in Detroit.
According to court records, on July 31, 2016, defendant Gregerson and an FBI employee acting in an undercover capacity met at a gas station in Monroe, Michigan, where Gregerson traded his Beretta M9 handgun for grenade parts containing explosives that were designed or intended for use in grenades and from which grenades could be readily assembled. These grenades are considered destructive devices that must be registered in the National Firearms Registration and Transfer Record. Gregerson did not register the destructive devices.
According to the court records, Gregerson made statements, both online and in person, showing support for the Islamic State of Iraq and Levant (ISIL), a designated foreign terrorist organization, and made statements relating to committing violent acts.
Gregerson was arrested on July 31, 2016, by FBI agents and remains in custody pending his sentencing which has been scheduled for June 30, 2017 at 2:30 pm.. Gregerson faces a term of up 10 years in federal prison.
Two Physicians Found Guilty for Distributing OxycodoneRead the Press Release
Dr. Anthony Conrardy, age 61, and Dr. William McCutchen, III, age 46, were found guilty yesterday of unlawfully distributing Schedule II narcotics by a federal jury in Detroit, MI, acting United States Attorney Daniel L. Lemisch announced today. Dr. Anthony Conrardy was convicted of five counts of unlawfully distributing Oxycodone and Dilaudid, and Dr. William McCutchen, III was convicted of four counts of unlawfully distributing Oxycodone.
Lemisch was joined in the announcement by Special Agent in Charge Timothy J. Plancon, of the Drug Enforcement Administration, Special Agent in Charge David P. Gelios of the Federal Bureau of Investigation’s Detroit Division, 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 Internal Revenue Service-Criminal Investigation.
The jury deliberated for 8 days before returning the verdict, concluding a four-week trial before United States District Judge Arthur J. Tarnow.
Their convictions at trial follow the earlier guilty pleas of Dr. Shardchandra Patel, age 72, to conspiracy, and Lillian Meghnot, age 86, to conspiracy, healthcare fraud, and money laundering. The criminal activity of Dr. Anthony Conrardy, Dr. William McCutchen, III, Dr. Sharadchandra Patel, and Lillian Meghnot stemmed from the operation of the Meghnot Comprehensive Center for Hope, a purported medical clinic formerly located on the Ann Arbor-Ypsilanti border. Federal agents executed a search warrant and arrests at the Meghnot Clinic in March of 2015. The Meghnot Clinic was owned and operated by Lillian Meghnot, who hired staff and others to give the Meghnot Clinic the false appearance of a legitimate medical center, when in reality the Meghnot Clinic was a pill mill supplying narcotics to drug-seeking customers.
The evidence presented at trial demonstrated that Dr. Anthony Conrardy and Dr. William McCutchen, III wrote Schedule II narcotic prescriptions to individuals outside the course of professional medical practice and for no legitimate medical purpose in exchange for compensation. The Meghnot Center charged its purported patients $250.00 in cash for a thirty-day supply of narcotics.
The guilty pleas of Lillian Meghnot and Dr. Sharadchandra Patel acknowledged that from approximately September of 2011 to March of 2015, the Meghnot Clinic ostensibly operated as a pain management center that, in reality, wrote medically unnecessary prescriptions for Oxycodone, Dilaudid, Vicodin, and other narcotics and benzodiazepines to drug-seeking individuals purporting to be patients. The Meghont Clinic’s unlawful practices generated roughly $4.5 million dollars in revenue. And the Clinic’s physicians prescribed over 1.5 million oxycodone pills, among other drugs.
Each of the counts on which Dr. Conrardy and Dr. McCutchen were convicted carry a penalty of up to 20 years in prison and a fine of up to $1,000,000.
The jury trial and convictions followed a multi-year investigation by the United States Drug Enforcement Administration (DEA), the Federal Bureau of Investigation (FBI), the United States Department of Health and Human Services Office of the Inspector General (HHS-OIG), and the United States Internal Revenue Service Office of Criminal Investigations (IRS-CI). Assistant United States Attorneys Charles J. Kalil II and Patrick J. Hurford prosecuted the case.
Cass City Resident Sentenced for Falsely Certifying Cargo TanksRead the Press Release
Garald Bennett of Cass City, Michigan was sentenced on Monday, March 20, 2017, to one year and one day in custody for falsely certifying and marking cargo tanks as having passed hydrostatic pressure and wet fluorescent magnetic particle test as required by the Hazardous Materials Transportation Safety Act, acting United States Attorney Daniel L. Lemisch announced.
Mr. Lemisch was joined in the announcement by Thomas J. Ullom, Regional Special Agent-in-Charge, Office of Inspector General, U.S. Department of Transportation.
Bennet was sentenced by United States District Judge Thomas Ludington in Bay City, Michigan. In imposing the sentence, Judge Ludington described Bennett’s work as “dangerously ineffective.”
“The sentencing of Garald Bennett related to falsely certifying and marking certain cargo tanks as having passed required safety tests is a clear signal that severe penalties await those that would seek to circumvent hazardous materials transportation laws,” said Thomas J. Ullom, regional Special Agent-in-Charge of U.S. DOT’s Office of Inspector General. “Working with our Federal, state and local law enforcement and prosecutorial colleagues, we will continue our vigorous efforts to ensure the integrity of DOT’s HAZMAT safety program.”
According to court documents, Bennett, 72, managed LPG Service and Leasing LLC (LPG), a cargo tank testing facility in Cass City, MI. In that capacity, Bennett supervised the employees of LPG. Bennett, both personally and through his subordinates, repeatedly and falsely certified to customers that LPG had property inspected and tested the cargo tank portions of tanker trucks used to transport liquid and gaseous bulk cargos, including explosive materials, as required by the Department of Transportation regulations governing five year re-certifications. The regulations are designed to ensure the safety of the public on the roadways and the people who work on and around the cargo tanks.
Bennett also knew that the water tank at LPG that should have held the water used to conduct hydrostatic pressure tests was drained to prevent freezing. Nevertheless, he continued to certify that hydrostatic pressure tests had been done on tanks brought in for inspection.
Similarly, when Bennett was in charge at LPG, some of the cargo tanks that were supposed to be tested were not emptied and cleaned properly, making it impossible for workers to enter the cargo tanks to conduct the required testing procedure. Bennett nevertheless falsely certified that the cargo tanks had been properly subject to wet fluorescent magnetic particle testing and had passed inspection.
Knowing that the required testing procedures had not been followed, Bennett instructed the employees at LPG to apply labels to the cargo tanks that indicated that the tanks had been successfully tested. Moreover, Bennett directed employees to work on cargo tanks without verifying that the employees followed required procedures.
The case was investigated by agents of OIG- U.S. Department of Transportation and prosecuted by the United States Attorney’s Office in Bay City, Michigan.
U.S. Attorney Barbara L. McQuade ResignsRead the Press Release
United States Attorney Barbara L. McQuade has resigned after being asked to tender her resignation by President Donald Trump.
McQuade, the first woman to serve as U.S. Attorney for the Eastern District of Michigan, was appointed by President Barack Obama, and sworn in on January 4, 2010.
During her tenure, McQuade has overseen a number of significant cases, including the conviction of former Detroit Mayor Kwame Kilpatrick and more than 30 others on public corruption charges; the conviction and life sentence of an Al-Qaeda operative for attempting to blow up an airliner over Detroit on Christmas Day in 2009 with a bomb concealed in his underwear; the conviction and 45-year sentence Dr. Farid Fata for lying to patients about having cancer so that he could bill Medicare for expensive chemotherapy treatments; the conviction and $4.3 billion fine against Volkswagen AG for cheating on emissions tests; the conviction and $1 billion fine against Takata Corp. for fraudulently concealing defective airbags; and settlements with Pittsfield Township to permit the building of an Islamic School and with the City of Sterling Heights to permit the building of a mosque under religious land use laws.
McQuade also joined with other law enforcement leaders to launch Detroit One, a violence reduction strategy and community partnership. Since Detroit One began in 2013, homicide rates, non-fatal shootings and carjackings in Detroit have decreased. A key component of the initiative is the Ceasefire gang intervention program. A similar enforcement initiative, Flint First, was recently launched in Flint.
Upon taking office, McQuade restructured the office for the first time in 35 years to focus attorney resources on district priorities. At that time, McQuade created new units dedicated to violent crime, public corruption, health care fraud and civil rights. Each unit has seen robust enforcement activity. McQuade’s vision has been to use the resources of the U.S. Attorney’s Office to improve the quality of life for the people of the Eastern District of Michigan, focusing on enforcement, prevention and community trust.
At the national level, McQuade served as Vice Chair of the Attorney General’s Advisory Committee under Attorney General Loretta Lynch, and served as co-chair of the Terrorism and National Security Subcommittee since 2010.
“I have loved serving in this job as much as anyone has ever loved any job,” McQuade said. “It has been an incredible privilege to work alongside public servants who devote their tremendous talents to improving the quality of life in our community. I am proud to have served as U.S. Attorney in the Obama Administration.”
Before becoming U.S. Attorney, McQuade was an Assistant U.S. Attorney in Detroit for 12 years, serving as Deputy Chief of the National Security Unit. She prosecuted cases involving terrorism financing, foreign agents, export violations and threats, and served as the district’s Crisis Management Coordinator.
McQuade practiced law at the firm of Butzel Long in Detroit from 1993 to 1998, and served as a law clerk to Hon. Bernard A. Friedman on the U.S. District Court for the Eastern District of Michigan from 1991 to 1993. From 2003 to 2009, McQuade served as an adjunct professor at the University of Detroit Mercy School of Law, teaching criminal law in the evenings.
Born in Detroit, McQuade is a 1987 graduate of the University of Michigan and a 1991 graduate of the University of Michigan Law School. She and her husband have four children.
The Eastern District of Michigan covers 34 counties and six million residents. The United States Attorney’s Office, with staffed offices in Detroit, Flint and Bay City, has 115 attorneys and another 100 support professionals, and conducts all criminal and civil litigation in the district involving the United States government.
Volkswagen AG Pleads Guilty in Connection with Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
Volkswagen AG (VW) pleaded guilty in federal court in Detroit today to three felony counts charging: (1) conspiracy to defraud the United States, engage in wire fraud, and violate the Clean Air Act; (2) obstruction of justice; and (3) importation of merchandise by means of false statements. As part of the plea, VW agreed to pay a $2.8 billion penalty as a result of the company’s decade-long scheme to sell diesel vehicles containing software designed to cheat on U.S. emissions tests. In January 2017, VW had agreed to plead guilty to resolve these criminal charges.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney Barbara McQuade of the Eastern District of Michigan, Deputy Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division, Special Agent in Charge Jeffrey Martinez of the Chicago Area Office of the Environmental Protection Agency’s Criminal Investigation Division (EPA-CID) and Special Agent in Charge David Gelios of the FBI Detroit Field Office, made the announcement.
VW pleaded guilty before U.S. District Judge Sean F. Cox of the Eastern District of Michigan. Specifically, VW pleaded guilty, first, to participating in a conspiracy to defraud the United States and VW’s U.S. customers and to violate the Clean Air Act by lying and misleading the EPA and U.S. customers about whether certain VW, Audi and Porsche branded diesel vehicles complied with U.S. emissions standards, using cheating software to circumvent the U.S. testing process and concealing material facts about its cheating from U.S. regulators. Second, VW pleaded guilty to obstruction of justice for destroying documents related to the scheme. And third, VW pleaded guilty to importing these cars into the United States by means of false statements about the vehicles’ compliance with emissions limits. After accepting VW’s plea, Judge Cox scheduled the company’s sentencing for April 21, 2017.
The FBI and EPA-CID investigated the case. This case is being prosecuted by members of the Department of Justice’s Criminal Division, Fraud Section, including: Chief of the Securities and Financial Fraud Unit Benjamin D. Singer, as well as Trial Attorneys David Fuhr, Alison Anderson, Christopher Fenton and Gary Winters. Also prosecuting the case are members of the Department of Justice’s Environment and Natural Resources Division, Environmental Crimes Section, including: Senior Trial Attorney Jennifer Blackwell. Additionally, the case is being prosecuted by members of the U.S. Attorney’s Office for the Eastern District of Michigan, including Criminal Division Chief Mark Chutkow, Economic Crimes Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse. The Justice Department’s Office of International Affairs also assisted in the case. The Justice Department extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany.
Volkswagen AG Pleads Guilty in Connection with Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
Volkswagen AG (VW) pleaded guilty in federal court in Detroit today to three felony counts charging: (1) conspiracy to defraud the United States, engage in wire fraud, and violate the Clean Air Act; (2) obstruction of justice; and (3) importation of merchandise by means of false statements. As part of the plea, VW agreed to pay a $2.8 billion penalty as a result of the company’s decade-long scheme to sell diesel vehicles containing software designed to cheat on U.S. emissions tests. In January 2017, VW had agreed to plead guilty to resolve these criminal charges.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney Barbara McQuade of the Eastern District of Michigan, Deputy Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division, Special Agent in Charge Jeffrey Martinez of the Chicago Area Office of the Environmental Protection Agency’s Criminal Investigation Division (EPA-CID) and Special Agent in Charge David Gelios of the FBI Detroit Field Office, made the announcement.
VW pleaded guilty before U.S. District Judge Sean F. Cox of the Eastern District of Michigan. Specifically, VW pleaded guilty, first, to participating in a conspiracy to defraud the United States and VW’s U.S. customers and to violate the Clean Air Act by lying and misleading the EPA and U.S. customers about whether certain VW, Audi and Porsche branded diesel vehicles complied with U.S. emissions standards, using cheating software to circumvent the U.S. testing process and concealing material facts about its cheating from U.S. regulators. Second, VW pleaded guilty to obstruction of justice for destroying documents related to the scheme. And third, VW pleaded guilty to importing these cars into the United States by means of false statements about the vehicles’ compliance with emissions limits. After accepting VW’s plea, Judge Cox scheduled the company’s sentencing for April 21, 2017.
The FBI and EPA-CID investigated the case. This case is being prosecuted by members of the Department of Justice’s Criminal Division, Fraud Section, including: Chief of the Securities and Financial Fraud Unit Benjamin D. Singer, as well as Trial Attorneys David Fuhr, Alison Anderson, Christopher Fenton and Gary Winters. Also prosecuting the case are members of the Department of Justice’s Environment and Natural Resources Division, Environmental Crimes Section, including: Senior Trial Attorney Jennifer Blackwell. Additionally, the case is being prosecuted by members of the U.S. Attorney’s Office for the Eastern District of Michigan, including Criminal Division Chief Mark Chutkow, Economic Crimes Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse. The Justice Department’s Office of International Affairs also assisted in the case. The Justice Department extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany.
Two Brothers and a Sister Were Convicted of Numerous Counts of Identity Theft, Mail Fraud and Money LaunderingRead the Press Release
Ann Arbor, Michigan - Three defendants, two brothers and a sister were convicted in Ann Arbor on numerous counts of conspiracy, mail fraud, aggravated identity theft, and engaging in illegal monetary transactions, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was Manny Muriel, Special Agent in Charge of the Detroit Office of the Internal Revenue Service - Criminal Investigation.
The 10-day trial was conducted before U.S. District Judge Judith Levy. Sentencing is scheduled for August 21, 2017 at 10 am.
Defendants Anthony Gandy, Christopher Gandy and Sharon Gandy-Micheau, were each convicted of numerous counts of conspiracy, mail fraud, aggravated identity theft, and engaging in illegal monetary transactions. The conspiracy involved over 20 fraudulent income tax returns for trusts that requested over $1.4 million in refunds. The IRS mailed to the defendants a number of refund checks totaling $940,000.
According to evidence presented at trial, the defendants participated in a scheme to file fraudulent Forms 1041, U.S. Income Tax Returns for Estates and Trusts. The scheme was facilitated by opening post office boxes and bank accounts to receive the proceeds of the scheme. The funds were either deposited into the bank accounts and the proceeds were quickly withdrawn or the refund checks were cashed by a Detroit area check cashing store.
In addition, two witnesses testified they had previously lost their identification and social security cards. Those documents were either recovered at the residence of Sharon Gandy-Micheau or images were found on a computer at the same residence. Their identification was used to further the scheme.
"These defendants attempted to steal taxpayer money, and they did so by using the identities of innocent victims," McQuade 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. The case is being prosecuted by AUSAs Stephen Hiyama and Ross Mackenzie with the assistance of paralegal Carol Oliver.
Third Detroit-Area Physician Pleads Guilty in $5.4 Million Dollar Health Care Fraud SchemeRead the Press Release
A Detroit-area physician pleaded guilty today for his role in a $5.4 million Medicare fraud scheme involving phony physician visits and drug prescriptions.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade 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.
Aaron Goldfein, 52, of Bloomfield Hills, Michigan, pleaded guilty to one count of conspiracy to commit health care and wire fraud. Previously, on Jan. 19, 2017, co-conspirators, William Sokoll, 61, of Royal Oak, Michigan, and William Binder, 60, of Ypsilanti, Michigan, each pleaded guilty to one count of conspiracy to commit health care and wire fraud. Sokoll was a physician who lost his medical license in 2008 and Binder was a licensed physician who surrendered his DEA license in March 2011. Both worked at Tri-City Medical Center (Tri-City) in Livonia, Michigan, for Goldfein.
As part of his plea, Goldfein admitted to being part of a scheme in which his co-conspirators would hold themselves out as licensed physicians and purport to perform physician home visits and other services for Medicare beneficiaries, although these co-conspirators were not licensed to practice medicine in Michigan. Goldfein would then bill Medicare, through Tri City, as if he himself had completed these visits. Goldfein also admitted to being part of a scheme in which he received kickbacks in exchange for writing home health prescriptions.
In his plea agreement, Sokoll admitted to being one of the unlicensed physicians employed at Tri City. Sokoll admitted that he and this co-conspirator prepared medical documentation purportedly evidencing licensed physician home visits and other services provided to beneficiaries, when in fact the beneficiaries were not treated by a physician licensed in Michigan. In addition, third co-defendant and licensed physician, Goldfein signed the medical documentation completed by Sokoll and the other unlicensed co-conspirator for services the physician did not provide to beneficiaries.
Additionally, Sokoll, Binder and Goldfein admitted in connection with their guilty pleas that they and other unlicensed co-conspirators prescribed beneficiaries medications, including controlled substances, under Goldfein’s name and DEA registration number, when although Goldfein had not seen or diagnosed the beneficiaries. Medicare Part D ultimately paid for some of these prescriptions, which Goldfein ultimately signed.
In addition to writing prescriptions for controlled substances, Binder, as part of his guilty plea, admitted to being part of a scheme at Tri-City in which he and his co-conspirators would submit or cause the submission of false claims to Medicare by billing for physician home visits where referrals for the services were obtained through the payment and promise of payment of kickbacks. Members of the conspiracy, including Binder, would also bill for home health care services that were, at times, not provided and not medically necessary, and where referrals for services were obtained through the payment and promise of payment of kickbacks.
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 Dustin Davis, Amy Markopoulos and Jessica Collins are prosecuting the case.
Takata Corporation Pleads Guilty, Sentenced to Pay $1 Billion in Criminal Penalties for Airbag SchemeRead the Press Release
Tokyo-based Takata Corporation, one of the world’s largest suppliers of automotive safety-related equipment, pleaded guilty to one count of wire fraud and was sentenced to pay a total of $1 billion in criminal penalties stemming from the company’s conduct in relation to sales of defective airbag inflators.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney Barbara McQuade of the Eastern District of Michigan, Special Agent in Charge David Gelios of the FBI’s Detroit Field Office and Regional Special Agent in Charge Thomas J. Ullom of the U.S. Department of Transportation Office of Inspector General’s (OIG) Chicago Field Office made the announcement.
“For over a decade, Takata lied to its customers about the safety and reliability of its ammonium nitrate-based airbag inflators,” said Acting Assistant Attorney General Blanco. “Takata abused the trust of both its customers and the public by allowing airbag inflators to be put in vehicles knowing that the inflators did not meet the required specifications. Today’s sentence shows that the department will work tirelessly to hold responsible those who engage in this type of criminal conduct.”
“We hope that today's guilty plea and sentence will send a message to suppliers of consumer safety products that they must put safety ahead of profits,” said U.S. Attorney McQuade.
“The commission of fraudulent activity by the Takata Corporation to generate corporate profits jeopardized the safety of American consumers,” said Special Agent in Charge Gelios. “Today's guilty plea should reassure American consumers that the FBI and its federal law enforcement partners will aggressively pursue corporations and their employees when they violate federal laws.”
“Today’s sentencing of Takata Corporation for wire fraud related to sales of defective airbag inflators is a clear signal to all whose duty it is to protect the public: your most solemn obligation is to public safety,” said Regional Special Agent in Charge Ullom. “As is true for Secretary Chao and the Department of Transportation, safety is and will remain the highest priority for OIG, and we remain committed to working with our law enforcement and prosecutorial partners in pursuing those who commit criminal violations of transportation-related laws and regulations.”
Takata pleaded guilty before U.S. District Judge George Caram Steeh, in the Eastern District of Michigan, to a one count criminal information charging the company with wire fraud. After accepting Takata’s guilty plea, Judge Steeh, consistent with the terms of the plea agreement, sentenced Takata to pay a total criminal penalty of $1 billion, including $975 million in restitution and a $25 million fine and three years’ probabtion. Under a joint restitution order entered at the time of sentencing, two restitution funds will be established: a $125 million fund for those individuals who have been physically injured by Takata’s airbags and who have not already reached a settlement with the company, and a $850 million fund for airbag recall and replacement costs incurred by those auto manufacturers who were victims of Takata’s fraud scheme. A court-appointed special master will oversee administration of the restitution funds. Takata will also implement rigorous internal controls, retain an independent compliance monitor for a term of three years and cooperate fully with the department’s ongoing investigation, including its investigation of individuals.
According to admissions made during the course of the guilty plea, from 2000 through and including 2015, Takata carried out a scheme to defraud its customers and auto manufacturers by providing false and manipulated airbag inflator test data that made the performance of the company’s airbag inflators appear better than it actually was. Even after the inflators began to experience repeated problems in the field – including ruptures causing injuries and deaths – Takata executives continued to withhold the true and accurate inflator test information and data from their customers.
The FBI and the U.S. Department of Transportation’s Office of Inspector General investigated the case. Trial Attorneys Brian K. Kidd, Christopher D. Jackson and Andrew R. Tyler of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys John K. Neal, Erin S. Shaw and Andrew J. Yahkind of the Eastern District of Michigan prosecuted the case. The Criminal Division’s Office of International Affairs also provided assistance.
Takata Corporation Pleads Guilty, Sentenced to Pay $1 Billion in Criminal Penalties for Airbag SchemeRead the Press Release
Tokyo-based Takata Corporation, one of the world’s largest suppliers of automotive safety-related equipment, pleaded guilty to one count of wire fraud and was sentenced to pay a total of $1 billion in criminal penalties stemming from the company’s conduct in relation to sales of defective airbag inflators.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney Barbara McQuade of the Eastern District of Michigan, Special Agent in Charge David Gelios of the FBI’s Detroit Field Office and Regional Special Agent in Charge Thomas J. Ullom of the U.S. Department of Transportation Office of Inspector General’s (OIG) Chicago Field Office made the announcement.
“For over a decade, Takata lied to its customers about the safety and reliability of its ammonium nitrate-based airbag inflators,” said Acting Assistant Attorney General Blanco. “Takata abused the trust of both its customers and the public by allowing airbag inflators to be put in vehicles knowing that the inflators did not meet the required specifications. Today’s sentence shows that the department will work tirelessly to hold responsible those who engage in this type of criminal conduct.”
“We hope that today's guilty plea and sentence will send a message to suppliers of consumer safety products that they must put safety ahead of profits,” said U.S. Attorney McQuade.
“The commission of fraudulent activity by the Takata Corporation to generate corporate profits jeopardized the safety of American consumers,” said Special Agent in Charge Gelios. “Today's guilty plea should reassure American consumers that the FBI and its federal law enforcement partners will aggressively pursue corporations and their employees when they violate federal laws.”
“Today’s sentencing of Takata Corporation for wire fraud related to sales of defective airbag inflators is a clear signal to all whose duty it is to protect the public: your most solemn obligation is to public safety,” said Regional Special Agent in Charge Ullom. “As is true for Secretary Chao and the Department of Transportation, safety is and will remain the highest priority for OIG, and we remain committed to working with our law enforcement and prosecutorial partners in pursuing those who commit criminal violations of transportation-related laws and regulations.”
Takata pleaded guilty before U.S. District Judge George Caram Steeh of the Eastern District of Michigan to a one count criminal information charging the company with wire fraud. After accepting Takata’s guilty plea, Judge Steeh, consistent with the terms of the plea agreement, sentenced Takata to pay a total criminal penalty of $1 billion, including $975 million in restitution and a $25 million fine, and three years’ probabtion. Under a joint restitution order entered at the time of sentencing, two restitution funds will be established: a $125 million fund for those individuals who have been physically injured by Takata’s airbags and who have not already reached a settlement with the company, and a $850 million fund for airbag recall and replacement costs incurred by those auto manufacturers who were victims of Takata’s fraud scheme. A court-appointed special master will oversee administration of the restitution funds. Takata will also implement rigorous internal controls, retain an independent compliance monitor for a term of three years and cooperate fully with the department’s ongoing investigation, including its investigation of individuals.
According to admissions made during the course of the guilty plea, from 2000 through and including 2015, Takata carried out a scheme to defraud its customers and auto manufacturers by providing false and manipulated airbag inflator test data that made the performance of the company’s airbag inflators appear better than it actually was. Even after the inflators began to experience repeated problems in the field – including ruptures causing injuries and deaths – Takata executives continued to withhold the true and accurate inflator test information and data from their customers.
The FBI and the U.S. Department of Transportation’s Office of Inspector General investigated the case. Trial Attorneys Brian K. Kidd, Christopher D. Jackson and Andrew R. Tyler of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys John K. Neal, Erin S. Shaw and Andrew J. Yahkind of the Eastern District of Michigan prosecuted the case. The Criminal Division’s Office of International Affairs also provided assistance.
U.S. Attorney’s Office Obtains Settlement with School District in Bay City to Resolve ADA Investigation Regarding Student's Use of Service AnimalRead the Press Release
The U.S. Attorney’s Office for the Eastern District of Michigan has reached a settlement with the Bangor Township School District in Bay City, Michigan, to resolve allegations that the school district violated the Americans with Disabilities Act by refusing to allow a student with disabilities to use his service dog in school, U.S. Attorney Barbara L. McQuade announced today.
The service dog at issue alerts to the student’s seizures, and mitigates symptoms of his disabilities. The complaint alleged that the school district inappropriately delayed its decision on the parent’s request for the service dog to accompany the student, instead making the parent spend months responding to requests for unnecessary information and documentation.
Title II of the ADA prohibits discrimination on the basis of disability in public schools. Under the ADA, public schools must generally modify policies, practices or procedures to permit the use of a service dog by a student with a disability at school and school-related activities. In addition, a public entity may make only two inquiries to determine whether a dog qualifies as a service animal: (1) whether the dog is required because of a disability, and (2) what work or task the dog has been trained to perform. A public entity shall not require documentation, such as proof that the dog has been certified, trained or licensed as a service animal. Nor shall a public entity ask or require an individual with a disability to pay a surcharge for using a service animal.
The school district worked cooperatively with the U.S. Attorney’s Office throughout the investigation.
Under the agreement, the school district will adopt an ADA-compliant service animal policy and provide training to staff and School Board Members on the school district’s obligations under Title II of the ADA, including requirements related to service dogs.
“Use of service animals has evolved beyond simply serving as guide dogs for individuals who are blind, McQuade said. "Service animals now perform a wide range of tasks that can help individuals with disabilities lead fuller lives. This settlement will help ensure that students who use service animals can fully access all of the educational opportunities to which they are entitled, and we commend the Bangor Township School District for recognizing the rights of this student and others who will follow.”
Enforcing the ADA is a top priority of the Civil Rights Unit of the U.S. Attorney’s Office for the Eastern District of Michigan. Those interested in finding out more about this settlement or the obligations of public entities schools under the ADA may call the Department of Justice’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access the ADA website. ADA complaints within the Eastern District of Michigan can be made to the U.S. Attorney’s Office Civil Rights Hotline at (313) 226-9151 or [email protected].
Justice Department and Sterling Heights, Michigan, Resolve Lawsuit over Denial of Zoning Approval for a MosqueRead the Press Release
The Justice Department today announced a settlement with the city of Sterling Heights, Michigan to resolve allegations that the city violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) in denying approval to allow the American Islamic Community Center, Inc. (AICC) to build a mosque in the city.
The settlement, which must still be approved by the U.S. District Court for the Eastern District of Michigan, resolves a lawsuit the department filed in December 2016. A separate settlement resolving a similar lawsuit brought by the AICC against the city has also been submitted to the court for approval.
The United States alleged that Sterling Heights discriminated against the AICC on the basis of religion when it denied the application to build a mosque. It further alleged that the denial imposed a substantial burden on the AICC’s religious exercise. The AICC, currently located in Madison Heights, Michigan, sought to build in Sterling Heights because the location is more convenient for its members and its current space has become inadequate for its religious, educational and social needs.
As part of the settlement, the city has agreed to permit the AICC to construct a mosque in the city. The city has also agreed to publicize its non-discrimination policies and practices, undergo training on the requirements of RLUIPA, and report periodically to the Justice Department.
“Federal law protects the right of faith communities to build places of worship without discrimination or unreasonable burdens on their religious exercise,” said Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division. “We commend the city of Sterling Heights for agreeing to approve the AICC’s mosque, so that it can serve its members and contribute to the surrounding community.”
“The law protects people of all religions from discrimination or unnecessary obstacles when they seek to build a place of worship,” said U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan. “Thanks to this settlement, the AICC will be able to build a mosque where its members can gather for religious and community events. I grew up in Sterling Heights, and I am proud that the city is taking steps to protect the religious rights of all of its residents.”The case was handled by the department’s Civil Rights Division and the U.S. Attorney’s Office of the Eastern District of Michigan.
RLUIPA, enacted in 2000, prohibits religious discrimination and protects against unjustified burdens on religious exercise in, among other things, land use and zoning decisions. People who believe they were subjected to religious discrimination in land use or zoning may contact the Housing and Civil Enforcement Section at 1-800-896-7743 or the U.S. Attorney’s Office of the Eastern District of Michigan’s Civil Rights Hotline at (313) 226-9151 or [email protected].
More information about RLUIPA, including a report on the department’s enforcement, may be found at www.justice.gov/crt/religious-land-use-and-institutionalized-persons-act.
Sterling Heights Consent OrderJustice Department and Sterling Heights Resolve Lawsuit over Denial of Zoning Approval for a MosqueRead the Press Release
The Justice Department today announced a settlement with the city of Sterling Heights, Michigan to resolve allegations that the city violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) in denying approval to allow the American Islamic Community Center, Inc. (AICC) to build a mosque in the city.
The settlement, which must still be approved by the U.S. District Court for the Eastern District of Michigan, resolves a lawsuit the department filed in December 2016. A separate settlement resolving a similar lawsuit brought by the AICC against the city has also been submitted to the court for approval.
The United States alleged that Sterling Heights discriminated against the AICC on the basis of religion when it denied the application to build a mosque. It further alleged that the denial imposed a substantial burden on the AICC’s religious exercise. The AICC, currently located in Madison Heights, Michigan, sought to build in Sterling Heights because the location is more convenient for its members and its current space has become inadequate for its religious, educational and social needs.
As part of the settlement, the city has agreed to permit the AICC to construct a mosque in the city. The city has also agreed to publicize its non-discrimination policies and practices, undergo training on the requirements of RLUIPA, and report periodically to the Justice Department.
“Federal law protects the right of faith communities to build places of worship without discrimination or unreasonable burdens on their religious exercise,” said Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division. “We commend the city of Sterling Heights for agreeing to approve the AICC’s mosque, so that it can serve its members and contribute to the surrounding community.”
“The law protects people of all religions from discrimination or unnecessary obstacles when they seek to build a place of worship,” said U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan. “Thanks to this settlement, the AICC will be able to build a mosque where its members can gather for religious and community events. I grew up in Sterling Heights, and I am proud that the city is taking steps to protect the religious rights of all of its residents.”
The case was handled by the department’s Civil Rights Division and the U.S. Attorney’s Office of the Eastern District of Michigan.
RLUIPA, enacted in 2000, prohibits religious discrimination and protects against unjustified burdens on religious exercise in, among other things, land use and zoning decisions. People who believe they were subjected to religious discrimination in land use or zoning may contact the Housing and Civil Enforcement Section at 1-800-896-7743 or the U.S. Attorney’s Office of the Eastern District of Michigan’s Civil Rights Hotline at (313) 226-9151 or [email protected].
More information about RLUIPA, including a report on the department’s enforcement, may be found at www.justice.gov/crt/religious-land-use-and-institutionalized-persons-act.
Former Detroit Police Lieutenant, Officer Sentenced for Conspiracy to Obtain Property by ExtortionRead the Press Release
A former lieutenant and crew chief from the now-disbanded Narcotics Unit of the Detroit Police Department were sentenced today following their convictions for conspiring to rob drug dealers and to steal drugs and money obtained in police searches, announced U.S. Attorney Barbara L. McQuade.
Joining McQuade in the announcement were Special Agent in Charge David P. Gelios of the Federal Bureau of Investigation’s Detroit Division, Chief James E. Craig of the Detroit Police Department, Manny Muriel, Special Agent in Charge of the Detroit office of the Internal Revenue Service – Criminal Investigation and Special Agent in Charge Timothy Plancon, Drug Enforcement Administration, Detroit Field Division.
Lt. David Hansberry, 35, was sentenced to 12 ½ years in prison and Officer Bryan Watson, 47, was sentence to 9 years in prison. Both Defendants were also ordered to serve two year terms of supervised release upon completion of their prison sentences. Watson was also ordered to pay a $2,000 fine. The two were convicted on charges of conspiracy to interfere with commerce by extortion and robbery following a five-week trial conducted before U.S. District Judge Stephen J. Murphy.
According to the evidence presented at trial, the defendants arranged drug transactions with civilians, including confidential sources, so that they could rob and extort them. The defendants allegedly carried out traffic stops and fake arrests, and then stole drugs, money and personal property from their victims. Hansberry and Watson used their status as law enforcement officers to assist in their scheme, by driving police vehicles, activating lights on their police vehicles, wearing police-issued attire, displaying official badges and carrying firearms. Hansberry and Watson also identified themselves as police officers to coerce their victims into complying with their demands and to encourage their victims to flee, leaving behind illegal drugs, money and personal property.
In addition, the evidence showed that Hansberry, who was a sergeant at the time, and Watson failed to log into evidence money and drugs seized during searches of homes. Instead, they split the proceeds and arranged for the sale of the drugs, sharing the proceeds generated by the sales. In one instance in July 2010, Hansberry and Watson participated in a drug seizure that netted more than $3 million, the largest cash seizure by the Detroit Police Department at that time. Only $2.2 million, however, was placed in the evidence room.
“Police officers who abuse their positions of trust must be held accountable so that they do not tarnish the badges of all of the thousands of police officers who serve with honor," McQuade said.
"While an unfortunate reminder that sometimes those in public service squander the trust placed in them by the public, today's sentences should not taint the outstanding work conducted every day by the Detroit Police Department to combat crime in city of Detroit,” said David P. Gelios, Special Agent in Charge, FBI Detroit Division. "The conclusion of this case highlights the continued importance of the work of the FBI-led Public Corruption Task Force, in coordination with our law enforcement partners, to aggressively investigate allegations of public officials who abuse their positions for personal gain."
The case was investigated by the FBI Detroit Area Public Corruption Task Force, in collaboration with the Detroit Police Department’s Office of Internal Affairs and the Drug Enforcement Administration. The case was prosecuted by Assistant U.S. Attorneys Sheldon Light and J. Michael Buckley.
Serial Armed Robbers Convicted in Federal CourtRead the Press Release
Two men were convicted yesterday for their roles in three armed robberies of Dollar General stores in Detroit, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge David P. Gelios, Federal Bureau of Investigation, Detroit Division, and Chief James Craig, Detroit Police Department whose departments led the collaborative investigation into this armed robbery crew as part of the Detroit One initiative.
Convicted by federal jury verdict after a week-long trial were:
Dwayne Dupree, 30, of Detroit, of three counts of robbery and three counts of using a firearm in furtherance of a crime of violence; and
Shawn Pearson, 23, of Detroit, of three counts of robbery and three counts of using a firearm in furtherance of a crime of violence.
Facts at trial showed that the men’s crime spree started on December 17, 2014, when four armed robbers stormed into the Dollar General store at 13441 E. Seven Mile Road in Detroit. The robbers, with their identities concealed with hoodies, masks and gloves, took over the counter area of the store, holding store employees at gunpoint before making off with some of the store’s money. One of the four men was Pearson. He was assisted by Dupree, who acted as a lookout.
Less than three weeks later, on January 5, 2015, two armed masked men robbed the same Dollar General store, this time firing shots at the store manager as they made their getaway. Once again, Pearson was one of the armed robbers, while this time Dupree acted as both a lookout and getaway driver.
Then, on March 19, 2015, Pearson and Dupree acted as the armed robbers of the Dollar General store at 16004 Fenkell. On this occasion, the evidence showed that Dupree fired a shot into the air to scare the store employees to move faster in turning over the store’s money.
FBI Violent Crime Task Force, working in close collaboration with members of the Detroit Police Department, followed the evidence, including ballistic, phone, and social media information, to identify Dupree and Pearson and to solve these robberies.
"The Detroit One partnership focuses on criminals like this armed robbery crew, who endanger public safety and create a climate of fear." McQuade said. "By identifying and prosecuting the individuals and groups driving violence in Detroit, we hope to make the city a safe place to live and work."
“The defendants in this string of violent robberies were brazen in both terrorizing employees and placing the public in danger", said David P. Gelios, Special Agent in Charge, FBI Detroit Division. "Yesterday’s verdict demonstrates the value of the continuing investigative partnership between the FBI and the Detroit Police Department in our collaborative efforts to reduce violent crime in metropolitan Detroit and to keep our communities safe.”
The case was prosecuted by Assistant United States Attorneys Christopher Graveline and Michael Heesters.
Novi Restaurant Owner and Wife Plead Guilty to Harboring Undocumented WorkersRead the Press Release
The owner of a Novi restaurant and his wife pleaded guilty today to conspiracy and harboring undocumented workers for commercial advantage and private financial gain, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Acting Special Agent in Charge Steve Francis, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) and Chief David Molloy, Novi Police Department.
Roger Tam, 56, and his wife, Ada Lei, 49, of Novi, entered their guilty pleas before U.S. District Judge Marianne O. Battani in Detroit.
"Today the principal defendants were convicted for using illegal labor to operate restaurants in metro Detroit," said Steve Francis, acting special agent in charge of HSI Detroit. "These guilty pleas should stand as a warning to employers who knowingly hire and employ illegal aliens that they will be held accountable for their actions.”
“These defendants are accepting responsibility for harboring undocumented workers and conspiracy, but we disagree about the appropriate sentencing guidelines that apply,” McQuade said. “At the sentencing hearing, the United States will seek a sentencing enhancement for creating a substantial risk of death or serious bodily injury to reflect the seriousness of the offense.”
According to court records, HSI special agents and officers with the Novi Police Department executed federal and state search warrants at a Novi residence owned by the Tams where five Mexican nationals died as a result of a fire that occurred on January 31, 2016. Department of Homeland Security databases revealed that all five men were illegally present in the United States.
Evidence obtained during the course of the investigation showed that the five Mexican nationals were hired by the defendants to work at their restaurant, Kim’s Garden, in Novi. As a benefit of their employment, the Mexican nationals resided at the couple’s Novi home and were transported to and from the restaurant for work. Tam admitted that the deceased individuals were employees at Kim’s Garden, that they were paid in cash, and that they were allowed to reside in the basement of Tam’s home.
The Tams each face up to 10 years in prison and a $250,000 fine. Sentencing has been set for June 13, 2017.
This case was investigated by the Novi Police Department and HSI with assistance from ICE’s Enforcement and Removal Operations (ERO), U.S. Customs and Border Protection’s Border Patrol and the Oakland County Sherriff’s Office
Conspirators Sentenced to Nearly Five Years for Identity Theft and Unemployment Insurance Fraud SchemeRead the Press Release
A Detroit man was sentenced today for conspiring to steal identities and unemployment benefits, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by James Vanderberg, Special Agent in Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General, and Wanda Stokes, director, of the Michigan Talent Investment Agency which administers the Unemployment Insurance program
Joel Randall Driscoll, 27, was sentenced to 57 months for conspiracy to commit mail fraud and aggravated identity theft. The aggravated identity theft charge carries a mandatory two-year sentence, which is imposed consecutively to the sentence for other crimes.
According to the indictment, Driscoll, along with co-conspirators Lashea Catrice Scott, Grady Whitaker, Jr., Devonte Cook, Deonta Holley and Terence Gould, devised and executed a scheme to defraud and obtain public money from the State of Michigan Unemployment Insurance program from January 2012 to December 2015. Michigan unemployment benefits, which are funded by employers and the U.S. Department of Labor, are paid to individuals who are unemployed. As part of the conspiracy, the defendants stole the identities of unsuspecting individuals and applied for benefits in their names. The benefits were issued on debits cards, which the defendants used at automated teller machines across Detroit to access the unemployment insurance benefits for personal use. The conspiracy involved the stolen identities of hundreds of individuals and resulted in losses to the government of more than $400,000.
“These criminals not only stole funds from the state, but they also stole money from the pockets of the unemployed workers for whom the benefits were intended by committing identify fraud.” McQuade said.
“Joel Driscoll victimized individuals by stealing their identities, and defrauded the Michigan Unemployment Insurance program of more than $400,000 intended for American workers in need of relief from the financial effects of unemployment. We will continue to work with our law enforcement partners to safeguard the Unemployment Insurance Program,” stated James Vanderberg, Special Agent in Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General.
Co-conspirator Grady Whitaker, Jr. was sentenced to 68 months in custody on December 12, 2016 for his role in the conspiracy and the aggravated identity theft. The remaining defendants have all entered pleas to various charges and are awaiting sentencing.
The case was investigated by U.S. Department of Labor – Office of Inspector General in conjunction with the State of Michigan – Unemployment Insurance Agency and prosecuted by Assistant United States Attorneys Erin J. Hendrix and Brandy R. McMillion.
Members of Credit Card Fraud Ring SentencedRead the Press Release
Four Detroit men have been sentenced to federal prison for roles they played in a credit card fraud ring, announced U.S. Attorney Barbara L. McQuade.
On January 25, 2017, U.S. District Judge Mark A. Goldsmith sentenced Terry Lewis, age 41, to 60 months in prison. Judge Goldsmith had previously sentenced Lewis’s co-defendants, Eric Dismukes, age 40, to 75 months in prison, Pastor Julius Baker, age 33, to 42 months in prison and Darrius Guyton, age 29, to 39 months in prison. All four defendants were also ordered to serve three-year terms of supervised release upon completion of their prison sentences.
The evidence in the case showed that Dismukes and Lewis illicitly acquired personal identifying information of third parties and then used that information to fraudulently obtain credit cards. Dismukes and Lewis used the fraudulently-obtained credit cards to conduct illicit financial transactions in the Metropolitan Detroit area, including fraudulent retail store purchases and ATM cash withdrawals. Dismukes and Lewis also provided fraudulently-obtained credit cards to other members of the fraud ring, including Baker and Guyton, so that those individuals could also conduct illicit financial transactions. Baker conducted a number of illicit financial transactions using a credit card terminal that was registered to the Rock Community Christian Church, where Baker had served as a pastor. Baker admitted to moving the proceeds of those fraudulent transactions to personal accounts that he controlled. In total, members of the credit card fraud ring caused more than half a million dollars in loss.
Judge Goldsmith has ordered the defendants to pay the following amounts in restitution:
• Dismukes: $150,000
• Pastor Baker: $150,000
• Lewis: $40,000
• Guyton: $15,000
The case was investigated by the United States Postal Inspection Service and prosecuted by Assistant United States Attorney Andrew Yahkind.
Detroit One Collaboration Leads to Five Guilty Pleas for Latin Count Gang Members on Racketeering ChargesRead the Press Release
Detroit One collaboration of local, state and federal law enforcement has led to the guilty pleas of five Latin Counts street gang members for racketeering conspiracy involving murder and drug trafficking, U.S. Attorney Barbara L. McQuade announced today.
The pleas were unsealed today and occurred during the past week in federal court in Ann Arbor. All five defendants pleaded guilty to racketeering conspiracy, and each faces 30 years in prison. The five gang members are:
- Devin Dantzler, 21, of Ecorse;
- Victor Vasquez, 26, of Detroit;
- Jonathan Estrada, 27, of Lincoln Park;
- Jesus Rodriguez, 25, of Lincoln Park; and
- Angel Rodriguez, 21, of Lincoln Park.
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 11 defendants committed assaults, murder, trafficking in drugs and stolen firearms, robbery and breaking and entering homes and businesses. The indictment alleges that the gang uses violence to stake out its “turf” and to intimidate both rival gang members and the citizens of southwest Detroit.
As part of their guilty pleas, Dantzler and Victor 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, and Dantzler shot and killed him. Three other gang members have already pleaded guilty for their roles in this murder. Similarly, as part of their pleas, Estrada and the two Rodriguez brothers took responsibility for participating in the killing of Terrence McClearen and the shooting of another victim on August 18, 2013.
Under the Detroit One Initiative, and through the lead efforts of the Detroit Police Department and the FBI Violent Crime Task Force, which consists of representatives of Homeland Security Investigations, Detroit Police Department, Lincoln Park Police Department, Michigan Department of Corrections, and Michigan State Police, investigators were able to merge separate probes of various members of this organization and its activities into one encompassing investigation.
“By working together, the Detroit One partners are systematically dismantling the street gangs that cause violent crime in our neighborhoods,” McQuade said. “We want to take back our streets from violent gangs so that Detroit residents can enjoy the safe quality of life that we all deserve.”
“The success of the Detroit One initiative is evident in the continued disruption, arrest and prosecution of these violent gang members in our communities” said Chief James Craig. “The collaboration of law enforcement agencies certainly plays a key role in returning the neighborhoods back to the people.”
“These guilty pleas demonstrate law enforcement's resolve to stopping the escalating violence linked to gang activity”, stated HSI Acting Special Agent in Charge Steve Francis. "Removing criminal gang members from the streets will ensure that they are no longer in a position to wreak havoc in our neighborhoods and threaten the public's safety."
"Once again, the Detroit One Initiative and its ongoing dynamic law enforcement collaborations have proven highly effective in combating some of the most violent and heinous criminals in our community”, said David P. Gelios, Special Agent in Charge, FBI Detroit Division. "Success, in these cases, is a direct result of ongoing joint investigative efforts like this led by the FBI’s multi-agency Violent Gang Task Force, which is comprised of federal, state and local law enforcement agencies. It is through these joint ventures and the Detroit One Initiative we are routinely and effectively force multiplying by leveraging resources to help keep our neighborhoods and communities safe from the threats gang violence poses to our citizens”.
Detroit One is a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. By working together, local, state, and federal law enforcement agencies strive to maximize their ability to identify and arrest individuals and groups initiating violence in Detroit. Since its launch in 2013, homicides are down 20% and non-fatal shootings are down 25% in the City of Detroit. A comparison between the four-year period since Detroit One began with the prior four-year period shows 174 fewer homicides in the city.
These pleas are the latest in a string of charges from the U.S. Attorney’s Office and Wayne County Prosecutor’s Office during the last four years involving violent street gangs in the city of Detroit, including:
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19 members/associates of the Seven Mile Blood street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
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Nine members of the Bounty Hunter Bloods street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
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14 members of the Phantom Outlaw Motorcycle Club/Vice Lords street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
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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;
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Nine Vice Lords members for racketeering charges stemming from the shooting of four individuals at their family residence on Detroit’s northwest side;
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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;
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10 members of the RTM street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
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11 members of the 6 Mile Chedda Grove street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
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14 members of the Rollin’ 60s Crips street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering;
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Four members of the Band Gang street gang charged under the state of Michigan gang felony statute for violent acts in furtherance of their gang activities and three members of the Band Gang for federal access device fraud/ aggravated identity theft and one member of the same gang charged in federal court with being a felon in possession of a firearm;
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24 individuals on drug conspiracy charges for their use of sixteen different houses in the east side Ravendale neighborhood of Detroit, many of them abandoned homes, for distributing heroin, cocaine, and crack cocaine between 2013 – 2015; and
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14 individuals on federal charges of criminal enterprise, drug distribution or weapons offenses for drug distribution in the west side Warrendale neighborhood of Detroit.
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Gang Associate Sentenced for Disclosing Private Hospital Information of Victims and Witnesses in Gang-Related ShootingRead the Press Release
A Detroit man was sentenced to four years in prison yesterday for witness tampering for disclosing personal identification information of shooting victims and their family members to a leader of a street gang. The case was the result of work by the Detroit One partnership of local, state and federal law enforcement.
The announcement was made by Acting Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Special Agent in Charge David P. Gelios of the Federal Bureau of Investigation, and Chief James Craig of the Detroit Police Department.
Jamerio Clark, 28, of Detroit, pleaded guilty on September 27, 2016, to tampering with a witness, victim or informant before U.S. District Judge David M. Lawson in Detroit. He is the eighth person to be sentenced in this case, part of the Detroit One partnership of local, state and federal law enforcement.
According to admissions made by the Vice Lord gang members who have pleaded guilty in this case, the Vice Lords is a national gang engaged in a variety of crimes, and Vice Lords’ leaders are located in both Chicago and Detroit. As admitted in the plea agreements, members of the Vice Lords, including Antonio Clark, were searching for two brothers who had attempted to leave the gang as part of a plan to “violate” the brothers for their perceived infractions against the gang. to admissions, on May 7, 2015, they and others met at a Vice Lord member’s house to discuss their plan and collect firearms, including an AK-47 assault rifle, and then traveled in multiple cars to the intended victims’ house. After a brief confrontation with the brothers’ family members, Antonio Clark opened fire with an AK-47, firing at the family more than two dozen times and hitting the brothers, their mother and 15-year-old sister. All of the victims survived the shooting.
Jamerio Clark admitted that from May 8, 2015, through at least January 2016, he was employed at a medical facility where he had access to a private database that contained personally identifiable health information for anyone who had been treated at a Detroit Medical Center facility. At his brother’s request and while employed at the medical facility, Jamerio Clark accessed this database on at least 15 occasions to search for three Vice Lords shooting victims. According to the plea agreement, Jamerio Clark then provided to Antonio Clark information, including dates of birth, phone numbers, addresses and information pertaining to relatives of these individuals. Jamerio Clark admitted that he knew his brother wanted this information to locate these individuals and prevent them from cooperating in the investigation and prosecution of the shooting.
Seven gang members have already been sentenced in this case and received the following terms of imprisonment:
Antonio Clark, 27, of Detroit – 20 years
Aramis Wilson, 26, of Detroit – 12 years, 6 months
Tyrone Price, 27, of Detroit – 11 years, 8 months
Dion Robinson, 38, of Detroit – 10 years, 1 month
Jonathan Kinchen, 24, of Detroit – 10 years
Kojuan Lee, 20, of Detroit – 8 years, 1 month
Kirshean Nelson, 20, of Detroit – 3 years
“The Detroit One partners are working to dismantle violent street gangs that commit gun violence because of the harm it causes to our residents and our neighborhoods,” McQuade said. “Our community will not tolerate gun violence as a method to resolve disputes.”
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 the 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.
Another defendant, Burney Everett, 27, of Detroit, is scheduled to be sentenced on February 8, 2017. The sentencing date for the final defendant, Kenneth Smith, has yet been set.
This case is being investigated by the ATF, FBI, and Detroit Police Department. The case is being prosecuted by Assistant United States Attorneys Christopher Graveline and Mark Bilkovic of the United States Attorney’s Office for the Eastern District of Michigan, and Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section.
Costco Wholesale to Pay $11.75 Million to Settle Allegations of Lax Pharmacy ControlsRead the Press Release
Costco Pharmacies Filled Prescriptions that Were Improper or Incomplete
DETROIT - Costco Wholesale will pay $11.75 million to settle allegations that its pharmacies violated the Controlled Substances Act when they improperly filled prescriptions for controlled substances. The settlement resolves allegations that Costco pharmacies filled prescriptions that were incomplete, lacked valid Drug Enforcement Administration (DEA) numbers or were for substances beyond various doctors’ scope of practice. Additionally, the settlement resolves allegations that Costco failed to keep and maintain accurate records for controlled substances at its pharmacies and centralized fill locations.
The settlement was announced today by U.S. Attorneys Annette L. Hayes of the Western District of Washington, Michael C. Ormsby of the Eastern District of Washington, Eileen M. Decker of the Central District of California, Barbara L. McQuade of the Eastern District of Michigan and Phillip A. Talbert of the Eastern District of California.
“In light of the prescription pill and opioid overdose epidemic we are seeing across the country, compliance with regulations governing pharmacies is more important than ever,” said U.S. Attorney McQuade. “We applaud Costco for working with DEA and taking steps to tighten up its compliance to ensure that prescription pills do not end up on the street market.”
“Pharmacies across this country are on the leading edge of the battle against our prescription drug abuse crisis,” said U.S. Attorney Hayes. “A company such as Costco that distributes a significant volume of controlled substances has a responsibility to ensure it complies with regulations that help prevent opioids and other dangerous drugs from being misused or otherwise added to the illegal marketplace. I commend the DEA investigators for uncovering the violations at issue in this case, and working with Costco to ensure that systems are put in place to prevent controlled substances from ending up in the wrong hands.”
“Last year, over 50,000 Americans died as a result of drug overdoses, many of which were related to the misuse of prescription drugs. This settlement demonstrates the accountability and responsibility that go along with handling controlled prescription drugs,” said DEA Assistant Administrator Louis Milione. “DEA works every day to reinforce good corporate practices through outreach and education efforts and, when appropriate, with administrative and criminal action.”
Under the settlement reached Jan. 18, 2017, Costco acknowledges that between Jan. 1, 2012 and Dec. 31, 2015, certain Costco Pharmacies dispensed controlled substances inconsistent with their compliance obligations under the Controlled Substances Act (CSA) and its implementing regulations. The violations include: filling prescriptions from practitioners who did not have a valid DEA number; incorrectly recording the practitioner’s DEA number; filling prescriptions outside the scope of a practitioner’s DEA registration; filling prescriptions that did not contain all the required information; failing to maintain accurate dispensing records; and failing to maintain records for their central fill locations in Sacramento, California, and Everett, Washington.
“These are not just administrative or paperwork violations – Costco’s failure to have proper controls in place in its pharmacies played a role in prescription drugs reaching the black market,” said U.S. Attorney Decker. “Costco pharmacies in Southern California filled numerous prescriptions for drugs that should not have been sold to consumers because of its flawed system for validating DEA registration numbers.”
“Opioid misuse has reached epidemic levels in the United States. This important matter is yet another example of the tenacious dedication of Drug Enforcement Administration investigators in uncovering and addressing corporate regulatory noncompliance,” said U.S. Attorney Ormsby. “The DEA must be commended for its superb efforts in combating the opioid problem at so many different levels, including regulatory compliance.”
“Pharmacies are the gatekeepers responsible for ensuring the lawful use of powerful drugs that have a legitimate medical purpose but are easily abused. The CSA provides the statutory oversight to ensure that pharmacies keep meticulous records,” said U.S. Attorney Talbert. “The successful resolution of this matter demonstrates the Department of Justice’s commitment to enforcing the CSA.”
To address issues uncovered in this investigation, Costco made improvements in its pharmacies. The company purchased a new pharmacy management system at a total budgeted five year cost of approximately $127 million. Additionally, Costco implemented a three tier audit program of its pharmacy locations: Tier 1 done by pharmacy managers and regional pharmacy supervisors; Tier 2 completed by an Internal Audit group consisting of three auditors and an audit supervisor; and Tier 3 an External Audit of 40 annual audits.
Under the terms of the settlement, over the next three years, DEA is allowed to conduct unannounced and unrestricted inspections of all DEA registered Costco Pharmacy locations without Administrative Inspection Warrants. The DEA monitors pharmacy prescribing practices to ensure compliance with federal law. Pharmacies found in violation face escalating penalties up to the revocation of their DEA Registration number – the authorization that allows them to write prescriptions for controlled substances.
This case was investigated by DEA Diversion Groups in Seattle, Los Angeles, Sacramento and Detroit. While this settlement is national in scope, the settlement was negotiated by the United States Attorney’s Offices in the Western and Eastern Districts of Washington, Central and Eastern Districts of California and Eastern District of Michigan.
Vice Lords Associate Sentenced to 48 Months in Prison for Obtaining and Disclosing Private Hospital Information of Victims and Their FamiliesRead the Press Release
An associate of the Vice Lords street gang was sentenced to 48 months in prison today for witness tampering by obtaining and disclosing the private health information of Vice Lords shooting victims and victims’ family members to a member of the gang.
Acting Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Robin Shoemaker 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.
Jamerio Clark, aka Merio, 28, of Detroit, was sentenced by U.S. District Judge David M. Lawson of the Eastern District of Michigan.
According to admissions made by codefendants who have pleaded guilty in this case, the Vice Lords is a national gang engaged in a variety of crimes, and Vice Lords’ leaders are located in both Chicago and Detroit. The gang is broken down into various “sets,” “decks,” or “branches,” including the Detroit-based Traveling Vice Lords (TVL). The Vice Lords have often targeted members who sought to leave the gang for physical beatings or murder.
Jamerio Clark admitted that from May 8, 2015, through at least January 2016, he was employed at a medical facility where he had access to a private database that contained individually identifiable health information for anyone who had been treated at a Detroit Medical Center facility. At the request of his brother and fellow gang member, Antonio Clark, and while employed at the medical facility, Jamerio Clark accessed this database on at least 15 occasions to search for three TVL shooting victims, he admitted. Jamerio Clark then provided information, including dates of birth, phone numbers, addresses, and information pertaining to relatives of these victims to Antonio Clark. Jamerio Clark admitted that he knew his brother wanted this information to locate these relatives and prevent them from cooperating in the investigation and prosecution of the TVL shooting.
Nine members and leaders of the TVL have pleaded guilty to charges related to the shooting, eight of whom have been sentenced: Antonio Clark, 27, of Detroit, was sentenced to 240 months in prison; Aramis Wilson, 26, of Detroit, was sentenced to 150 months in prison; Dion Robinson, 38, of Detroit, was sentenced to 121 months in prison; Jonathan Kinchen, 24, of Detroit, was sentenced to 120 months in prison; Tyrone Price, 27, of Detroit, was sentenced to 140 months in prison; Kojuan Lee, 20, of Detroit, was sentenced to 97 months in prison; and Kirshean Nelson, 20, of Detroit, was sentenced to 36 months in prison. Burney Everett, aka Tank, 27, of Detroit, pleaded guilty on Oct. 25, 2016, and is scheduled to be sentenced on Feb. 8, 2017. Kenneth Smith, 35, of Detroit, pleaded guilty on Jan. 28, 2016, and awaits sentencing, which has not yet been set.
The charges and convictions related to the TVL shooting 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 dozens of Vice Lords leaders and members over the last few years. In two trials during March and May 2015, juries convicted eight leaders and members of the Phantom Outlaw Motorcycle Club, many of whom were also leaders and members of the Vice Lords, for various crimes, including a mass-murder plot against a rival organization and the shooting of a member of another rival organization. Among those convicted was Antonio Johnson, aka MT and Mister Tony, the National President of the Phantoms and the Three-Star General over all of the Vice Lords in Michigan. On Sept. 8, 2015, Johnson was sentenced to 35 years in prison for racketeering conspiracy, murder conspiracy in aid of racketeering, assault with a dangerous weapon in aid of racketeering, aiding and abetting the use and carry of firearms during and in relation to a crime of violence and felon in possession of a firearm.
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 charges and allegations contained in the indictment are merely accusations. The defendants are presumed innocent until and unless proven guilty.
The ATF, FBI and Detroit Police Department are investigating the case. Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Christopher Graveline and Mark Bilkovic of the Eastern District of Michigan are prosecuting the case.
Takata Corporation Agrees to Plead Guilty and Pay $1 Billion in Criminal Penalties for Airbag SchemeRead the Press Release
Three Takata Executives Charged with Wire Fraud and Conspiracy
Tokyo-based Takata Corporation, one of the world’s largest suppliers of automotive safety-related equipment, agreed to plead guilty to wire fraud and pay a total of $1 billion in criminal penalties stemming from the company’s fraudulent conduct in relation to sales of defective airbag inflators. An indictment was also unsealed charging three Takata executives with wire fraud and conspiracy in relation to the same conduct.
U.S. Attorney Barbara McQuade of the Eastern District of Michigan, Chief Andrew Weissmann of the Fraud Section of the Justice Department’s Criminal Division, Special Agent in Charge David P. Gelios of the FBI’s Detroit Field Office and Inspector General Calvin L. Scovel III of the U.S. Department of Transportation Office of Inspector General made the announcement.
“Automotive suppliers who sell products that are supposed to protect consumers from injury or death must put safety ahead of profits,” said U.S. Attorney McQuade. “If they choose instead to engage in fraud, we will hold accountable the individuals and business entities who are responsible.”
“For more than a decade, Takata repeatedly and systematically falsified critical test data related to the safety of its products, putting profits and production schedules ahead of safety,” said Fraud Section Chief Weissmann. “This announcement is the latest in the automotive industry enforcement actions the Fraud Section has taken to protect U.S. consumers against fraud.”
“Today’s criminal charges of the Takata Corporation and three of its employees should be a reminder to other corporations and their employees that if they commit fraud, the FBI and its law enforcement partners will ensure they are held accountable for their actions,” said Special Agent in Charge Gelios. “Whether it is the manipulation of test results which impact customer safety, defective product development or any other type of fraud, we will continue to aggressively investigate corporate fraud allegations to protect consumers in the United States and elsewhere.”
“I offer my deepest sympathies to the families and friends of those who died and to those who were injured as a result of the Takata Corporation’s failure to fulfill its obligation to ensure the safety of its airbag systems,” said Inspector General Scovel. “Because safety is and will remain the highest priority for my office, we will continue to work tirelessly with our law enforcement and prosecutorial partners in pursuing those who commit criminal violations of transportation-related laws and regulations. Along with similar settlements with General Motors in September 2015 and Toyota in March 2014, today’s agreement makes clear to all auto manufacturers and parts suppliers their duty in keeping the public safe.”
According to the company’s admissions, in the late 1990s, Takata began developing airbag inflators that relied upon ammonium nitrate as their primary propellant. From at least in or around 2000, Takata knew that certain ammonium nitrate-based inflators were not performing to the specifications required by the auto manufacturers. Takata also knew that certain inflators had sustained failures, including ruptures, during testing. Nevertheless, Takata induced its customers to purchase these airbag systems by submitting false and fraudulent reports and other information that concealed the true condition of the inflators. This fraudulent data made the performance of the company’s airbag inflators appear better than it actually was, including by omitting that, in some instances, inflators ruptured during testing. Takata employees – including a number of key executives – routinely discussed the falsification of test reports being provided to Takata’s customers in email and in verbal communications. Even after the inflators began to experience repeated problems in the field – including ruptures causing injuries and deaths – Takata executives continued to withhold the true and accurate inflator test information and data from their customers.
In addition, Takata took no disciplinary actions against those involved in the falsification of test data until 2015, despite the fact that senior executives had been made aware of the fraudulent conduct years earlier.
Takata has agreed to plead guilty to a one-count criminal information filed today in the Eastern District of Michigan and assigned to U.S. District Judge George Caram Steeh, charging the company with one count of wire fraud. Under the terms of the agreement, Takata will pay a total criminal penalty of $1 billion, including $975 million in restitution and a $25 million fine. Two restitution funds will be established: a $125 million fund for individuals who have been physically injured by Takata’s airbags and who have not already reached a settlement with the company, and a $850 million fund for airbag recall and replacement costs incurred by auto manufacturers who were victims of Takata’s fraud scheme. A court-appointed special master will oversee administration of the restitution funds. Takata has also agreed to implement rigorous internal controls, retain a compliance monitor for a term of three years and cooperate fully with the department’s ongoing investigation, including its investigation of individuals.
The three Takata executives – Shinichi Tanaka, 59; Hideo Nakajima, 65; and Tsuneo Chikaraishi, 61, all Japanese citizens – were each charged in an indictment filed on Dec. 7, 2016, in the Eastern District of Michigan with one count of conspiracy to commit wire fraud and five counts of wire fraud for their alleged conduct in connection with the above-described fraud scheme.
The department reached this resolution based on a number of factors, including Takata’s extensive cooperation with the government’s investigation. However, the company did not receive more significant mitigation credit, either in the penalty or the form of resolution, because of the nature of the conduct to which the company is pleading guilty, including the approximate 15-year duration of the fraud, the pervasiveness of the scheme into the executive level of management and the potential risk the fraud posed to drivers and passengers.
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.
The FBI and the U.S. Department of Transportation’s Office of Inspector General investigated the case. Assistant Chief Robert Zink and Trial Attorneys Brian K. Kidd, Christopher D. Jackson and Andrew R. Tyler of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys John K. Neal, Erin S. Shaw and Andrew J. Yahkind of the Eastern District of Michigan are prosecuting the case. The Criminal Division’s Office of International Affairs also provided assistance.