Eastern District of Michigan
Press releases recorded for this federal judicial district.
Attorney General Recognizes Employees of the United States Attorney's OfficeRead the Press Release
Eight lawyers and two paralegals of the U.S. Attorney's Office for the Eastern District of Michigan were recognized by the Department of Justice today at the 31st Director's Awards Ceremony in Washington D.C. The ceremony honored 160 members of the Department of Justice. They were recognized by Attorney General Loretta Lynch, Deputy Attorney General Sally Quillian Yates and Executive Office for U.S. Attorneys Director Monty Wilkinson. The Eastern District of Michigan was one of 31 districts represented at the ceremony, which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building. In her prepared remarks, Attorney General Lynch said that the awardees "have faced daunting and sometimes dangerous challenges. They have dedicated their leadership and their expertise, their time and their energy, to the service of their mission. And they have remained devoted, at all times, to the high ideals and deeply-held values that animate our country and our cause." United States Attorney Barbara L. McQuade said, "I am very grateful that these public servants have devoted their talents and careers to serving the people of the Eastern District of Michigan. Every one of them could be earning higher salaries in the private sector, but they choose public service to make a positive impact on our community." Assistant U.S. Attorney Julie Beck was recognized for her outstanding management of the Forfeiture and Financial Litigation Unit ("FFLU) for the Eastern District of Michigan. Beck, an Assistant U.S. Attorney for 11 years, has served as chief of the unit for five years. Under her leadership, the work of the FFLU has grown in quantity and complexity, while fostering ever greater cooperation between civil and criminal lawyers, expanding training and re-engineering operations to increase collections. Assistant U.S. Attorney Leslie Wizner was recognized for her work on a case with the Civil Division at the Department of Justice and the U.S. Attorney's Office for the Northern District of Ohio. Wizner and her team obtained a $200 million settlement to resolve allegations that U.S. Bank violated the False Claims Act by originating and underwriting government-backed loans for residential mortgages without complying with legal requirements. When many of the borrowers were unable to repay the loans, the federal government became responsible for the loss and the homes went into foreclosure. Wizner and her team recovered these funds for taxpayers and the home loan program. The team that investigated and prosecuted former Detroit Mayor Kwame Kilpatrick was recognized for outstanding work by a litigation team. The team included Assistant U.S. Attorneys Mark Chutkow, Michael Bullotta, Linda Aouate, Jennifer Blackwell, Eric Doeh and Andrew Goetz. Also recognized were paralegals Ana Bruni and Anna Facchini, and special agents Bob Beeckman of the Federal Bureau of Investigation, Carol Paszkiewicz of the Environmental Protection Agency Office of Inspector General and Ronald Sauer and Rowena Schuch of the Internal a Revenue Service Criminal Investigations. The team was recognized for its investigation and prosecution of Kilpatrick and members of his administration. The prosecution team uncovered and dismantled a wide-ranging "pay to play" network of corruption within the highest levels of city government, convicting 35 public and business officials of felony offenses, including the former mayor of Detroit, his chief administrative officer, the deputy mayor, business people and consultants. EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys' offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usaoDetroit One Partnership Announces Initiative to Reduce Gun ViolenceRead the Press Release
The Detroit One violence reduction partnership today announced an initiative to reduce gun violence in Detroit. The initiative includes enforcement and public awareness about the serious federal penalties that face violent felons who possess firearms. Joining in the announcement were United States Attorney Barbara L. McQuade, Detroit Mayor Mike Duggan, Wayne County Prosecutor Kym Worthy, Detroit Police Chief James Craig and John Broad, President, Crime Stoppers of Michigan. The Wayne County Prosecutor’s Office and the U.S. Attorney’s Office are focusing on prosecution of the illegal possession of guns by felons with violent criminal convictions. Felons with one prior violent crime conviction who possess a gun in Detroit will face federal prosecution. An offender with three prior violent felony convictions who merely possesses a gun faces a mandatory minimum sentence of 15 years. An offender who uses a gun during a violent crime faces a mandatory minimum sentence of five years, and an additional mandatory minimum sentence of 25 years for a second offense. The public awareness campaign is designed to deter possession of illegal guns by violent felons by raising awareness of the significant federal penalties for firearms offenses. The campaign’s message, "You Do The Math: Felon + Gun = Long Federal Sentences" will be communicated on billboards and in a public service announcement for broadcast media. The billboards are located on E. I-94 Freeway and Conner and the Southfield Freeway and Grand River. Last year, the Detroit One partnership tackled carjacking in Detroit with a similar enforcement and deterrence strategy. Carjacking fell by 32 percent last year. During the past three years, fatal and non-fatal shootings have ranged between 1,400 and 1,600 per year. Violent crimes often increase during warmer weather, so this campaign is designed to coincide with the approaching summer months. "We hope that if violent felons are aware of the very serious penalties for carrying a gun, then they will be less likely to carry one,” McQuade said, “If violent felons do carry guns, we are prepared to back up our warnings with federal prosecution.” Detroit Mayor Mike Duggan stated, "This kind of partnership among all of our local, state and federal law enforcement agencies is something people are going to start seeing a lot more of in Detroit. When we are operating under a single, unified strategy and engaging our community partners more effectively, we will see a reduction in gun violence, just as we have seen reductions in every other major category or crime over the past two years." Wayne County Prosecutor Worthy stated, “We must continue to think of innovative ways to address the problem of gun violence. The Detroit One Initiative does just that. Our work together will allow us to be more effective in reducing the gun violence that plagues our community” “Strong, collaborative relationships with the common goal of making our city safer will continue to reduce violent crime,” said Detroit Police Chief James E. Craig. “This has been a very effective crime-abatement strategy here in Detroit and in other cities around the country.” “Crime Stoppers is pleased to be a partner in the Detroit One violence reduction initiative,” stated John Broad, President. “We encourage those who witness a crime to call their local police department or Crime Stoppers at 1-800-SpeakUp.” Participating agencies in the Detroit One initiative include the Detroit Police Department, Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration, U.S. Marshals Service, Homeland Security Investigations, Internal Revenue Service, Michigan State Police, Michigan Department of Corrections, Wayne County Sheriff’s Department, Wayne County Prosecutor’s Office and U.S. Attorney’s Office. To view the PSA, please visit our website at http://www.justice.gov/usao/mie/index.html or on YouTube at https://youtu.be/7Nqbi6iUk1QFour Men Charged with Distributing Heroin, Fentanyl and Vicodin, Resulting in Three DeathsRead the Press Release
Four men have been charged with distributing drugs that resulted in the overdose deaths of three people, U.S. Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Special Agent in Charge Joseph P. Reagan of the U.S. Drug Enforcement Administration and Oakland County Sheriff Michael Bouchard. The charges are in response to the ongoing epidemic of heroin and prescription pill abuse in the United States and in southeast Michigan. Heroin overdose deaths in the United States have tripled from 2010 to 2013. Since January 1, more than 60 people have died by overdose of heroin and fentanyl in Wayne and Washtenaw counties. Fentanyl is a synthetic opioid pain medication that is 15 to 20 times more potent than heroin. The number of heroin overdose deaths in Oakland County doubled from 2013 to 2014. The men charged include: - Zachary R. Burdette, 29, of Ypsilanti, - Roy Edward Brownlee, 49, of Ypsilanti’ - Kenyatta Akili McConico, 36, of Detroit, and - Charlie Stevens, 24, of Beverly Hills. Burdette was charged in a criminal complaint with distributing a deadly mix of heroin and fentanyl to a 27 year old Ypsilanti Township man who died on April 5. The man died of a heroin/fentanyl overdose, and he was found by his mother in his home slumped over on his bed with a syringe in his hand. Burdette had supplied the man with a tenth of a gram of heroin laced with fentanyl. Brownlee was charged in a separate but related indictment. The indictment charged Brownlee with supplying the heroin/fentanyl mix to Burdette that was subsequently sold to the overdose victim. In addition, Brownlee is charged with possessing and supplying an assault rifle and a 9mm semi-automatic pistol. Another indictment from a separate investigation charged McConico with distributing heroin that resulted in the March 19overdose death of a 35-year-old woman from Redford Township. A third indictment charged Stevens with distributing Vicodin pills to an 18-year-old man from Franklin. The man died of an overdose from the Vicodin on June 25, 2011, when he was discovered in his home by his family. Burdette, Brownlee and McConico face up to life in prison and a $1 million fine because of their roles in the heroin overdose deaths. Stevens faces up to 15 years in prison and a $500,000 fine for distributing Vicodin that resulted in death. Indictments and complaints are only charges, and defendants are presumed innocent until proven guilty at trial. Sentences are determined by the judges assigned to the cases based on sentencing guidelines, relevant sentencing statutes and other factors. United States Attorney McQuade said, “We have made it a priority to prosecute the distribution of heroin resulting in death. Heroin is poison, and overdose deaths are foreseeable to the criminals who sell it. These charges send a strong message that heroin traffickers face severe consequences for the real harm that they inflict on our residents and our families.” DEA Special Agent in Charge Reagan said, “DEA will continue to focus our resources on the drug violators such as these, who prey on our communities.” "Due to the excellent police work and investigations that were conducted, these dealers are no longer afflicting harm on our communities," said Sheriff Michael J. Bouchard. "This is an excellent example of the great partnerships between the federal and local level that has resulted in getting these criminals off the streets, and can no longer contribute to the continuing heroin and opioid epidemic in Southeast Michigan." These cases were investigated by agents, officers, and investigators from the U.S. Drug Enforcement Administration, the Oakland County Sheriff’s Office, the Office of the Oakland County Medical Examiner, the Redford Township Police Department, and the Office of the Wayne County Medical Examiner. These cases are being prosecuted by Assistant United States Attorneys William Sauget, Kenneth Chadwell, and Andrea Hutting.Statement of U.S. Attorney Barbara L. McQuade on Officer ShootingRead the Press Release
“Yesterday's shooting was a tragedy and we offer our deep condolences to the family. Police work sometimes requires use of deadly force, but officers may use only as much force as is reasonable under the circumstances. In a situation like this, it is important to protect the rights of both the deceased and the officer. Therefore, we are closely monitoring the investigation."Detroit One Collaboration Leads to Indictment of “RTM” Gang Members in Northwest DetroitRead the Press Release
Five members of a violent street gang in Detroit have been indicted on racketeering and other related charges, announced United States Attorney Barbara L. McQuade today.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division and Chief James Craig, Detroit Police Department.
The superseding indictment, unsealed today, is a result of the collaboration of local, state, and federal law enforcement under the Detroit One initiative.
According to the superseding indictment, the gang known as “RTM” short for “Related Through Money” operates in northwest Detroit, between the Southfield Freeway and Greenfield Road to the west and east and by Plymouth Road and Joy Road to the north and south. The RTM gang members refer to this area as the “Skuddzone” and actively use violence to stake out the gang’s “turf” and intimidate both rival gang members and the citizens of northwest Detroit and the surrounding area. The gang is active around Cody High School and has been involved in a number of assaults and acts of intimidation at the high school. The superseding indictment alleges a variety of crimes, including murders, shootings, carjackings, assaults, the breaking and entering of residential homes or businesses, and robberies and attempted robberies of jewelry stores. The five individuals charged with racketeering conspiracy are:
- Deonta Matthews, 20, of Detroit;
- Brandon Owens, 19, of Detroit;
- Brandon Sims, 20, of Detroit;
- Meyer Thedford, 20, of Detroit; and
- Antwan Foster-Stockton, 21, of Detroit.
Under the Detroit One Initiative investigators were able to combine separate probes into various members of this organization and its activities into one investigation. Detroit One is led by the Detroit Police Department and the FBI Violent Gang Task Force, which consists of representatives of Detroit Police Department, Redford Township Police Department, Homeland Security Investigations, Michigan Department of Corrections, and Michigan State Police.
“The Detroit One partnership has made it a priority to dismantle violent street gangs to restore peace to our neighborhoods,” McQuade said. By working together with various law enforcement agencies, we are able to detect patterns and repeated crimes by the same individuals to build larger cases out of separate incidents.”
“As part of the Detroit One Initiative, this collaborative investigation targeted some of the most violent criminal offenders in the Detroit area,” said Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “As alleged in the indictment, RTM gang members have been involved in assaults and acts of intimidation in and around a high school. There is nothing more important than protecting our children and keeping our communities safe from violent offenders. Through the Detroit One Initiative, we wage this battle on behalf of law abiding citizens every day. The FBI, in cooperation with the officers, agents and prosecutors engaged in this effort, will continue to fight for the safety of the citizens we serve.”
Detroit One is a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. This indictment is the latest in a string of indictments or informations over the last two years involving violent street gangs in the city of Detroit, including:
- Nine members of the Bounty Hunter Bloods street gang charged with federal racketeering conspiracy and other violent acts in furtherance of racketeering;
- Thirteen members of the Latin Counts street gang charged with federal racketeering conspiracy and other violent acts in furtherance of racketeering;
- Fourteen members of the Phantom Outlaw Motorcycle Club / Vice Lords street gang charged with federal racketeering conspiracy and other violent acts in furtherance of racketeering;
- A Vice Lord leader charged under the federal street gang statute for his role in an armed robbery; and
- 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.
These charges are just some of the tangible and significant results of this joint effort.
An indictment is only a charge and is not evidence of guilt. The burden is on the government to prove guilt beyond a reasonable doubt.
Man Sentenced for Strangling Two Different Women on Indian ReservationRead the Press Release
A 38-year-old resident of Farwell, Michigan, was sentenced today to 37 months in prison for strangulation of a dating or intimate partner for separate assaults he committed against two different girlfriends, announced U.S. Attorney Barbara L. McQuade.
United States District Judge Thomas L. Ludington also imposed two years of supervised release on Rodney Kenneth House who pled guilty on January 16, 2015.
The evidence established that in early 2014, House threw around one victim, punched her, kicked her, and strangled her to the point she thought she was going to die. The evidence also established that in late 2013, House strangled the other victim multiple times to the point that she thought she was going to pass out. Both incident happened on the Isabella Reservation.
The case was investigated by the Saginaw Chippewa Tribal Police. The case was prosecuted by Assistant United States Attorney Roy Kranz.
Operator of Detroit Adult Day Care Center and Two Home Health Care Company Owners Sentenced in $29 Million Medicare Fraud ConspiracyRead the Press Release
WASHINGTON – The former operator of a Detroit adult day care center and two former owners of Detroit-area home health care companies were sentenced to prison today for their roles in a $29 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office and Special Agent in Charge Jarod Koopman of Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.
Felicar Williams, 51, of Dearborn, Michigan, was sentenced to five years in prison and ordered to pay $2,431,018 in restitution, representing the amount paid by Medicare for Williams’ fraudulent claims. Abdul Malik Al-Jumail, 54, and Jamella Al-Jumail, 25, both of Brownstown, Michigan, were sentenced to 10 years in prison and four years in prison respectively. Both were also ordered to pay $8,389,541 and $589,516 in restitution, respectively, the amounts paid by Medicare for their fraudulent claims. The sentences were imposed by U.S. District Judge Denise Page Hood of the Eastern District of Michigan in Detroit.
All three defendants were convicted on Sept. 30, 2014, after a 12-week jury trial in the Eastern District of Michigan. Williams was convicted of conspiracy to commit health care fraud and conspiracy to receive health care kickbacks. Abdul Malik Al-Jumail and Jamella Al-Jumail were each found guilty of conspiracy to commit health care fraud. Abdul Malik Al-Jumail was also found guilty of conspiracy to pay and receive health care kickbacks. Jamella Al-Jumail was also found guilty of destroying documents in connection with a federal investigation.
According to the evidence at trial, Williams billed Medicare, through her company, Haven Adult Day Care Center LLC, for psychotherapy services that were not actually provided. The evidence demonstrated that, in some instances, Williams billed Medicare for services purportedly provided to patients who were already deceased. Williams also sold the private medical information of her patients to Abdul Malik Al-Jumail so that he could use it to submit fraudulent claims to Medicare.
The evidence further showed that Abdul Malik Al-Jumail obtained patients by paying unlawful kickbacks to Williams and others, and caused claims to be submitted to Medicare for home health services, including physical therapy, that were never delivered. Like her father, the evidence demonstrated that Jamella Al-Jumail billed Medicare for home health services and physical therapy that were not actually provided. The evidence at trial also showed that, the day her father was arrested, Jamella Al-Jumail told an employee to retrieve falsified patient medical records from their company, which she and others later burned.
The case was investigated by the FBI, HHS-OIG and the IRS, and 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. The case was prosecuted by Trial Attorneys Christopher Cestaro, Brooke Harper and William Kanellis of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney Patrick Hurford of the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 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.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
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Government Sues Skilled Nursing Chain HCR Manorcare for Allegedly Providing Medically Unnecessary TherapyRead the Press Release
WASHINGTON – The government has intervened in three False Claims Act lawsuits and filed a consolidated complaint against HCR ManorCare alleging that ManorCare knowingly and routinely submitted false claims to Medicare and Tricare for rehabilitation therapy services that were not medically reasonable and necessary, the Department of Justice announced today. ManorCare is one of the nation’s largest healthcare providers, operating approximately 281 skilled nursing facilities (SNFs) in 30 states.
“The Department of Justice is committed to ensuring that healthcare providers who pressure their employees to provide medically unnecessary services to Medicare beneficiaries and Tricare recipients, solely to increase their own profits, are held accountable,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “We will not relent in our efforts to stop these false billing schemes and recover funds for federal healthcare programs.”
The government’s complaint alleges that ManorCare, which is owned by The Carlyle Group, exerted pressure on SNF administrators and rehabilitation therapists to meet unrealistic financial goals that resulted in the provision of medically unreasonable and unnecessary services to Medicare and Tricare patients. ManorCare allegedly set prospective billing goals designed to significantly increase revenues without regard to patients’ actual clinical needs and threatened to terminate SNF managers and therapists if they did not administer the additional treatments necessary to qualify for the highest Medicare payments. ManorCare also allegedly increased its Medicare payments by keeping patients in its facilities even though they were medically ready to be discharged.
“We strive for a system whereby health care providers provide reasonable and necessary services without overbilling Medicare for unreasonable and unnecessary services” said U.S. Attorney Dana Boente of the Eastern District of Virginia. “We will continue our robust investigations of the companies operating in this important sector of our economy.”
“We want to ensure that taxpayer dollars are used to pay for health care for Americans that need it, not to unjustly enrich health care companies,” said U.S. Attorney Barbara McQuade of the Eastern District of Michigan. “Medical providers will be held accountable when they exploit patients for profit by subjecting them to therapies they don’t need and then billing Medicare for reimbursement.”
“Today’s action is the result of a robust investigation into alleged false billings submitted to Medicare and Tricare for rehabilitation therapy services that were not necessary for patients,” said Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington, D.C., Field Office. “Healthcare fraud is a top priority for the FBI and we will continue to work closely with federal, state and local law enforcement partners to address vulnerabilities, fraud and abuse in the healthcare industry.”
The three consolidated lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The False Claims Act permits the government to intervene in such lawsuits, as it has done in these cases. A defendant that violates the False Claims Act is liable for three times the government’s losses plus civil penalties.
The government’s intervention in these matters illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, including the conduct described in the United States’ complaint, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
These matters were investigated by the Civil Division’s Commercial Litigation Branch; the U.S. Attorney’s Offices for the Northern and Southern Districts of Iowa, Eastern and Western Districts of Michigan, Northern and Southern Districts of Ohio, Eastern District of Pennsylvania, and Eastern District of Virginia; the Department of Health and Human Services’ Office of Inspector General; the Department of Defense’s Office of Inspector General; the Defense Health Agency; the Medicaid Fraud Control Units of the California Attorney General’s Office, Delaware Department of Justice, the Florida Attorney General’s Office, Illinois State Police, Iowa Department of Inspections and Appeals, the Maryland Attorney General’s Office, the Michigan Attorney General’s Office, the Ohio Attorney General’s Office, and the Virginia Attorney General’s Office; the National Association of Medicaid Fraud Control Units; and the FBI.
The cases are captioned United States ex rel. Ribik v. ManorCare, Inc., et al., Case No. 1:09cv13-CMH-HCB (E.D. Va.); United States ex rel. Slough v. HCR ManorCare, et al., Case No. 1:14cv1228 (E.D. Va.); and United States ex rel. Carson v. HCR ManorCare, et al., Case No. 1:11cv1054 (E.D. Va.).
The claims asserted against ManorCare are allegations only, and there has been no determination of liability.
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West Bloomfield Man Sentenced in Multi-Million Dollar Cellphone Trafficking SchemeRead the Press Release
A West Bloomfield man was sentenced to twelve months in federal prison and ordered to forfeit $600,000, for his role in a scheme to traffic in cellular telephones, announced United States Attorney Barbara L. McQuade. Joining McQuade in the announcement was Marlon Miller, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). The sentencing caps a more than three-year probe by special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). U.S. District Judge Nancy G. Edmunds imposed sentence on Jason Floarea, 29, of West Bloomfield, the former president of ACE Wholesale in Troy and Taylor, Michigan. As part of the sentencing, Floarea forfeited his interest in approximately $1,000,000 in seized funds and assets and was ordered to pay a $120,000 forfeiture money judgment. In addition, Floarea will be under the supervision of the court for a period of 24 months following his release. According to court documents, Floarea used ACE Wholesale to sell stolen and fraudulently obtained cellphones. The phones were modified to function on any mobile network through a process known as “jailbreaking.” Floarea then shipped to phones overseas buyers at costs far exceeding their retail price, sometimes up to $3,000 each. The investigation showed that Floarea obtained phones from straw purchasers who entered into cellular service contracts that provided buyers with cellular phones at either no cost or low promotional costs, a practice called “credit muling.” Credit muling occurs when recruiters solicit individuals to purchase cellphones in bulk by entering into contracts that they have no intention of fulfilling. During one 2012 outbound inspection, special agents discovered ten boxes containing 300 cellphones, which were later determined to be obtained by fraud. In 2012, HSI special agents searched businesses, homes and warehouses belonging to Floarea in Troy, Taylor, West Bloomfield and Atlanta, Georgia. Floarea’s offices were equipped with armed guards and bulletproof glass. “This sentence will no doubt send shock waves throughout the illegal, underground cell phone trafficking network which continues to be a source for robberies and other violent crimes in metro areas throughout the country,” said Marlon Miller, Special Agent in Charge of HSI Detroit. “The individuals and groups operating these schemes should be warned that HSI has the unique authorities and expertise to bring down these networks wherever they operate.” The Taylor and Romulus Police Departments and the Wayne County Airport Authority assisted with the investigation. According to Mr. Miller, the latest industry studies estimate credit muling contributes to approximately $50 million in annual losses to the telecommunications industry. Analysts say stolen and lost cellphones cost American consumers up to $30 billion each year.National Crime Victim's Rights WeekRead the Press Release
In commemoration of National Crime Victim’s Rights Week, the U.S. Attorney’s Office for the Eastern District of Michigan, Wayne County Prosecutor’s Office, U.S. Postal Inspection Service (USPIS), Federal Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco and Firearms (ATF), the Drug Enforcement Administration (DEA), United States Marshal Service, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and Crime Stoppers of Michigan will be recognizing the strength and tenacity of crime victims with a tree planting and dedication ceremony. Engaging community leaders, organizations, and local partners is critical to meeting victims where they are and empowering them throughout the healing process and as they become survivors. Please join us on Tuesday, April 21, 2015, at 2:30 pm in Elizabeth Gordon Sachs Greening of Detroit Park at 1463 East Jefferson Avenue, Detroit, MI. The park is located East of Rivard between East Jefferson and Larned. Parking is available along Larned. If you are a victim of a crime, or know of a victim of a crime in need of resources, the Detroit Police Department will be hosting a Crime Victim’s Awareness Fair at 18100 Meyers (Northwest Activities Center) on Saturday, April 25, 2015, from Noon until 5:00 pm.Ypsilanti Man Sentenced for Role in Scheme to File False Tax Returns Using Stolen IdentitiesRead the Press Release
An Ypsilanti man was sentenced yesterday for his involvement in a scheme to defraud the Internal Revenue Service, announced United States Attorney Barbara L McQuade.
McQuade was joined in the announcement by Jarod J. Koopman, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Receiving the sentence from U.S. District Judge Gershwin A. Drain was Antonio R. Lundy, 43. Lundy pleaded guilty before Judge Drain in December 2014. Judge Drain sentenced Lundy to 18 months in prison and three years’ supervised release and ordered him to pay restitution to the IRS in the amount of $251,900.
According to court records, Lundy participated in a scheme to defraud the Internal Revenue Service through the filing of numerous income tax returns in the names of individuals whose personal identification information (PII) had been either obtained with their consent or obtained illegally. From September 2011 through April 2012, Lundy provided the home addresses and PII of individuals to others members of the scheme. The information provided by Lundy was used to prepare and file fraudulent federal income tax returns, which requested refunds based on reported tax withholdings that were false. The refunds were loaded onto Turbo Tax Visa debit cards and mailed to the home addresses provided by Lundy. Lundy used the debit cards to withdraw cash at ATMs, and his cash withdrawals totaled $251,900. Overall, the scheme involved approximately 180 fraudulent returns that requested approximately $1.7 million in refunds.
“IRS-CI is committed to working with our law enforcement partners to combat identity theft. Investigating and prosecuting identity thieves who attempt to defraud the government by filing fraudulent income tax returns remains a top priority for the IRS,” said IRS Criminal Investigation Special Agent in Charge Koopman.
The case was investigated by special agents of the IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorney Stephen Hiyama.
Mt. Pleasant Woman Pleads Guilty to EmbezzlementRead the Press Release
A Mt. Pleasant, Michigan resident pleaded guilty to embezzlement and filing false tax returns with the Internal Revenue Service, United States Attorney Barbara L. McQuade announced today.
United States Attorney McQuade was joined in the announcement by Jarod J. Koopman, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division and Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation.
On April 8, 2015, Kimberly Misky entered her guilty plea before U.S. Magistrate Judge Patricia L. Morris.
According to court records, Misky was the branch manager of Citizens Bank in Alpena, Michigan. In her role as manager, Misky managed other bank employees, opened new accounts, renewed certificates of deposit and generated sales.
Beginning in April 2010 and continuing through July 2011, Misky used her positions as branch manager and personal banker to open Citizens Bank accounts that she controlled, in the names of fictitious individuals. She then accessed the certificates of deposit account of elderly and deceased Citizens Bank customers and transferred the funds from those accounts to the accounts she controlled. Later, Misky transferred the funds from the accounts in the fictitious names to an account at another financial institution that was in her name and her daughter’s name. Overall, Misky embezzled approximately $86,489 in 2010 and $222,983 in 2011.
“The public has every right to expect that the employees of the banks that they entrust their money with will be honest and law abiding. Ms. Misky violated this trust for her own financial gain and is now facing serious criminal sanctions as a result of her actions”, said Special Agent in Charge Jarod J. Koopman.
Embezzlement carries a maximum penalty of 30 years imprisonment and/or a fine of $1,000,000. Filing a false tax return carries a maximum penalty of 3 years imprisonment and/or a fine of $250,000.he case was investigated by special agents of the IRS Criminal Investigation, FBI and prosecuted by Assistant U.S. Attorney Libby Kelly Dill.
Detroit Police Lieutentant, Officer Charged with Robbery, Extortion, Drug and Firearm OffensesRead the Press Release
A Detroit Police lieutenant and an officer were indicted yesterday on charges of robbing drug dealers and stealing drugs and money obtained in police searches, U.S. Attorney Barbara L. McQuade announced today.The indictment was sealed until this morning.
Joining McQuade in the announcement were Special Agent in Charge Paul M. Abbate of the Federal Bureau of Investigation’s Detroit Division, Chief James E. Craig of the Detroit Police Department and Special Agent in Charge Joseph P. Reagan, Drug Enforcement Administration, Detroit Field Division.
Lieutenant David Hansberry, 34, and Officer Bryan Watson, 46, each were charged with conspiracy to possess with intent to distribute narcotics, conspiracy to interfere with commerce by robbery, multiple counts of interference with commerce by robbery and extortion, possession with intent to distribute five or more kilograms of cocaine and two counts of possessing a firearm in furtherance of a crime of violence and drug trafficking crime. A third defendant, Kevlin Omar Brown, 45, was also charged with one count of interference with commerce by robbery and extortion.
According to the indictment, 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 are charged with using 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 allegedly 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. The indictment also alleges that Hansberry 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.
“Officers who violate the law cannot be tolerated because effective law enforcement requires public trust,” McQuade said. “We applaud Chief Craig’s commitment to root out any officers who tarnish the badge.”
“Special Agent in Charge Abbate stated, “Every police officer who would dishonor the badge must know that they will be held accountable under the law. As law enforcement officers, we owe a tremendous duty to the public we serve, and therefore must be held to the highest standards of trust and integrity. The FBI and its law enforcement partners are committed to ensuring that these fundamental principles are fully maintained and enforced without compromise.”
“The vast majority of the men and women of the Detroit Police Department are honest and hard-working, but these defendants betrayed their oath and their fellow officers,” said Chief Craig. “We are committed to the highest standards of integrity, and we will remove any officers who do not live up to those high standards.”
Hansberry and Watson were previously assigned to the now-disbanded Narcotics Section of the Detroit Police Department. Since October 2014, they have been on suspension by the Detroit Police Department.
The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case was investigated by the by the FBI Detroit Area Public Corruption Task Force, in collaboration with the Detroit Police Department’s Office of Internal Affairs and the Drug Enforcement Administration. The case is being prosecuted by Assistant U.S. Attorneys Sheldon Light and Louis P. Gabel.
Six Individuals Charged in String of Armed Home Invasion Robberies That Targeted Victims of Indian and Asian AncestryRead the Press Release
Six individuals were charged today in connection with their involvement in an armed robbery crew that conducted home invasion robberies in Michigan and Texas, principally targeting victims of Indian and Asian ancestry.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Division, Acting Special Agent in Charge Katherine J. Greer of U.S. Immigration and Customs Enforcement’s Homeland Security Investigation’s (ICE-HSI) Dallas Field Office, Chief John Seto of the Ann Arbor, Michigan, Police Department, Sheriff Jerry L. Clayton of the Washentaw County, Michigan, Sheriff’s Department and Director Todd L. Mutchler of Canton, Michigan, Public Safety made the announcement.
“The armed robberies allegedly committed by this organized criminal group were horrific home invasions that spread fear through Asian and Indian communities across multiple states,” said Assistant Attorney General Caldwell. “This indictment is the first step in holding responsible those accused of carrying out armed robberies that were both life threatening and ethnically targeted.”
“As alleged in the indictment, these defendants used online research to target their victims from a distance, traveled to their homes, and then carried out the robberies while the victims were at home,” said U.S. Attorney McQuade. “The defendants either broke in or used a female decoy to knock, luring victims to open the door. Once the door was open, the robbers would charge inside with guns and threats of violence, round up all the adults and children into one room, and bind them with duct tape before ransacking the house and stealing valuables. We are grateful for the outstanding work of federal, state and local law enforcement in various jurisdictions to connect the dots and put this case together.”
“This multistate investigation serves as an example of the successful collaboration between federal, state and local law enforcement to bring justice to bear upon those who have wreaked havoc upon our neighborhoods and victimized families in their own homes,” said Special Agent in Charge Abbate. “Combating violent crime is among the highest of priorities for the FBI. There is nothing more important than protecting our communities and keeping law abiding citizens safe in their own homes. The FBI, along with our law enforcement partners, will maintain its resolve and continue the fight against violent criminal offenders.”
Chaka LeChar Castro, 40, Juan Olaya, 35, and Octavius Scott, 22, all of Houston, and Jakeyra Augustus, 21, of La Marque, Texas, are each charged with engaging in a RICO conspiracy, four counts of assault with a dangerous weapon in aid of racketeering, and four counts of use and carrying of a firearm in furtherance of a crime of violence. Rodney Granger, 19, and Johnisha Williams, 19, both of Houston, are each charged with engaging in a RICO conspiracy. All of the defendants are currently in custody.
According to the indictment, the defendants committed four armed home invasion robberies in the greater Ann Arbor area over the Thanksgiving weekend in 2014, as well as additional armed robberies in the greater Dallas area in early December 2014. The crews allegedly utilized a similar modus operandi in each of the robberies. According to the indictment, they typically used female decoys to knock on the victims’ doors and gain entry, or they merely forced entry themselves. Once inside, members of the robbery crew—disguised with bandanas and masks—allegedly brandished firearms to gain control of their victims, including children, and then forced them at gunpoint into a single room of the home. Some members of the crew were allegedly assigned to bind the victims with duct tape, or otherwise maintain control over them. At the same time, other members of the crew allegedly ransacked the homes in search of cash, jewelry and electronics.
According to allegations in the indictment, Castro was the leader of the enterprise. In that capacity, she allegedly coordinated with Olaya to generate lists of robbery targets by conducting research on the Internet, among other methods, to identify families of Asian and Indian ancestry. Castro then assigned crews to carry out the armed robberies of these targeted families. Olaya allegedly led the robberies themselves, and Scott, Augustus, Granger and Williams were allegedly members of the robbery crew.
The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case was investigated by a collaboration of local, state and federal law enforcement in Michigan and Texas, including the FBI, ICE-HSI, Washtenaw County Sheriff’s Office, the Ann Arbor Police Department and the Canton Police Department. The case is being prosecuted by Trial Attorney Kelly Pearson of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Christopher Graveline and Douglas C. Salzenstein of the Eastern District of Michigan.
Detroit Man Sentenced for Robbing Iraqi DiplomatRead the Press Release
A Detroit resident was sentenced yesterday in federal court to more than eight years in prison for his role in an armed robbery of an Iraqi diplomat and his wife, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division, Special Agent in Charge David R. Eberhardt, Diplomatic Security Service and Chief Michael Patton, West Bloomfield Police Department.
U.S. District Judge Paul D. Borman imposed sentence on James Frederick Dubose, 24, to a mandatory minimum sentence of 84months in prison for using a firearm during a crime of violence and a consecutive sentence of 20 months in prison for assault of a foreign official using a deadly weapon. Dubose had pleaded guilty to these two offenses in December. At sentencing, Dubose was also ordered to pay $4,150 in restitution to the victims.
According to the documents filed in this case, on November 11, 2012, the defendant and his co-defendant targeted the victims, an Iraqi diplomat and his wife, as they were shopping at the Meijer store in Southfield, Michigan. The defendants then followed the victims to their residence. Dubose and his co-defendant approached the victims inside the garage after the victims had exited their vehicle. Dubose held the victims at gunpoint, threatened to shoot them and stole their jewelry. Dubose and his co-defendant then ran from the garage and fled the scene. Dubose was arrested by Southfield Police on November 23, 2012, in possession of the same firearm used in the armed robbery.
The investigation of this case was conducted by the Federal Bureau of Investigation, the United States Department of State Diplomatic Security Service, and the West Bloomfield Police Department. The case was prosecuted by Assistant U.S. Attorneys Ronald W. Waterstreet and Cathleen M. Corken
Summer Camps Must Reasonably Accommodate Children with DisabilitiesRead the Press Release
Summer camps are legally required to make reasonable accommodations to accept children with disabilities, U.S. Attorney Barbara L. McQuade announced today.
With summer approaching, parents are beginning to think about sending their children to summer camps. To help ensure that children with disabilities receive the opportunity to attend summer camp, the U.S. Attorney’s Office recently sent the attached flyer to hundreds of summer camps located within the Eastern District of Michigan reminding them of their obligations under the Americans with Disabilities Act (“ADA”).
Under the ADA, summer camps, both private and those run by municipalities, must make reasonable modification to enable campers with disabilities to participate fully in all camp programs and activities. This generally means that children with disabilities are entitled to attend any camp or activity that non-disabled children attend, that camps must evaluate each child on an individual basis and that camps must train their staff in the requirements of the ADA. Camps are obligated to pay for the cost of any reasonable modifications necessary for disabled children to participate in camp activities, and parents should not be charged any additional fee beyond standard camp enrollment costs.
“Summer camps present tremendous growth opportunities for children to learn independence, try new activities and gain self-confidence,” McQuade said. “The law requires camps to provide equal opportunities to disabled children whose needs can be reasonably accommodated.”
Additional information about the ADA is available at www.ada.gov, or through contacting the U.S. Attorney’s Office Civil Rights Hotline at (313) 226-9151.
Eleven Individuals Charged with Stealing and Fraudulently Using Personal Information of Blue Cross Blue Shield SubscribersRead the Press Release
Eleven individuals from metro-Detroit have been charged with running identity theft and credit card fraud schemes, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Marlon Miller, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Jeffrey Frost, Special Agent in Charge of the U.S. Secret Service, Detroit Field Office and Chief Michael Patton, West Bloomfield Police Department, Southeast Michigan Financial Crimes Task Force.
Indicted for multiple counts of identity theft-related crimes were:
- Angela Denise Patton, 47, Belleville, MI
- Sam Oscar Patton, 47, Dearborn, MI
- Dontez Patton, 23, Woodhaven, MI
- Johnathon Weston, 24, Detroit, MI
- Charlie Smith, 47, Detroit, MI
- Thomas Turner, Sr., 47, Detroit, MI
- Aramona Coleman, 56, Southfield, MI
- Tynekwa Hill, 26, Pontiac, MI
- Jeffrey Morton, 41, Oak Park, MI
- Verdell Kennedy, 45, Detroit, MI
- Raymond Thomas, 40, Oak Park, MI
According to the indictment, Angela Patton, who worked for Blue Cross Blue Shield of Michigan (BCBSM), printed screen shots containing subscribers’ profiles, including Personal Identifying Information (PII), and gave them to other individuals who used that information to apply for credit in other people’s names and purchase merchandise in stores across the country. Co-conspirators were arrested in Texas, Ohio and Michigan in possession of BCBSM screen shots coming from Angela Patton’s work computer as well as counterfeit identification cards and credit cards in the names of individual subscribers whose personal information was included in those screen shots.
Agents recovered additional screen shots that included personal information belonging to thousands of BCBSM and Blue Care Network subscribers while executing search warrants at co-conspirators’ homes in metropolitan Detroit. The information included individuals’ names, dates of birth and Social Security numbers. Counterfeit and re-encoded credit cards and gifts cards were also recovered. The indictment alleges that three of the co-conspirators who used counterfeit credit cards at different major stores and warehouses fraudulently obtained more than $742,000 worth of merchandise from Sam’s Club alone.
United States Attorney McQuade, stated, "Criminals should know that while technology has made it easier than ever for them to commit identify fraud, technology is also making it easier for law enforcement to catch them. We are making enforcement of identity theft a high priority because this crime has become so pervasive and can be so damaging to victims.”
“An individual’s personal information has significant value on the black market, which is why the threat of data breaches and identity theft remain at an all-time high,” said Marlon Miller, HSI special agent in charge. “Over the last decade, we’ve seen a steady increase in crimes like this which is why HSI continues to prioritize and increase the quality and complexity of our investigative efforts to combat them.”
“As reflected by the indictments, United States Secret Service in Detroit—along with our federal, state and local partners—remains dedicated to the pursuit and apprehension of those responsible for these serious identity theft cases,” stated Jeff Frost, Special Agent in Charge of the Secret Service Detroit Field Office. “The continued, multi-jurisdictional collaboration between law enforcement resulted in the indictment of these individuals for their involvement in these crimes, and we will maintain our resolve as we continue to thoroughly investigate this case.”
"The entire West Bloomfield community is grateful for the great law enforcement partnership that has led to the continuing federal indictments related to these very serious crimes. As the investigation continues, this partnership remains devoted to bringing everyone that played a role in these incidents to justice," said Chief Michael Patton.
“Our company is determined to thoroughly investigate alleged fraud, and work hands-on with law enforcement to bring perpetrators of fraud and identity theft to justice,” said Gregory W. Anderson, vice president for Corporate and Financial investigations at Blue Cross Blue Shield of Michigan. “We salute the task force for these arrests, and for their diligent efforts to help Blue Cross protect our members’ personal information and privacy.”
If policy holders notice any inappropriate activity on their Explanation of Benefits statements, BCBSM and BCN ask members to contact the companies’ Anti-Fraud Hotline at 800-482-3787, between 8:30 a.m. and 4:30 p.m. Monday through Friday.
The case was investigated by the Southeast Michigan Financial and Cyber Crimes Task Force, which is based at the Novi Police Department and includes U.S. Secret Service, Homeland Security Investigations, the U.S. Postal Inspection Service, and IRS Criminal Investigations agents, as well as state and local law enforcement officers from the West Bloomfield, Novi, Royal Oak, Southfield, and Troy Police Departments.
The case is being prosecuted by Assistant U.S. Attorney Abed Hammoud with the United States Attorney’s Office for the Eastern District of Michigan in Detroit.
An indictment is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.Hamtramck Grocery Store Owner Pleads Guilty to Conspiracy and Engaging in Monetary Transaction in Criminally Derived PropertyRead the Press Release
A Hamtramck grocery store owner pleaded guilty to food stamp fraud, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Anthony Mohatt, U.S. Department of Agriculture – Office of Inspector General, Jarod J. Koopman, Internal Revenue Service Criminal Investigation and Colonel Kriste Kibbey Etue, Director, Michigan State Police.
Syed Ali, 42, owner of Modhubon Grocery, Pleaded guilty to conspiracy to defraud the United States and engaging in monetary transactions in criminally derived property. Ali entered the guilty plea before U.S. District Court Judge Matthew F. Leitman.
According to court records, from October 2010 through July 2012, Ali and an employee of Modhubon conspired to defraud the U.S. Department of Agriculture Supplemental Nutrition Assistance Program (SNAP). Ali and Modhubon, an authorized food stamp program retailer, engaged in the fraudulent practice of redeeming benefits for cash and ineligible items from SNAP recipients at a discounted rate. Ali and his employee would then process the purchase of SNAP benefits through the Modhubon Grocery as purchases of eligible food items, obtaining the full dollar amount of the SNAP benefit from the U.S. Department of Agriculture.
In December 2011, Ali cashed a check, drawn on the account of Modhubon Grocery in the amount of $12,000.00. Ali took the cash from the account knowing that it was derived from the proceeds of the theft of SNAP benefits.
As part of his plea agreement, Ali has agreed to pay restitution to the U.S. Department of Agriculture in the amount of $1,844,690.95.“Food stamp fraud victimizes both the recipients of the benefits and the taxpayers that fund the program. We are pleased to collaborate with our law enforcement partners towards the common goal of combatting food stamp fraud”, said IRS Special Agent in Charge Koopman.
The case was investigated by special agents of the U.S. Department of Agriculture – Office of Inspector General, the Internal Revenue Service – Criminal Investigation and the Michigan State Police
A sentencing hearing was set for June 25. The maximum penalty is ten years' imprisonment and a $250,000 fine.Detroit One Collaboration Leads to Additional Arrests and Indictments of Violent Gang Members in Southwest DetroitRead the Press Release
Three alleged members of the Latin Counts violent street gang were charged by a federal grand jury today with murder occurring in southwest Detroit, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement were Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division and Chief James Craig, Detroit Police Department.
The charges were added to a pending indictment charging nine other individuals with crimes including assault, murder, selling illegal narcotics and stolen firearms, breaking and entering into residential homes and businesses and robbery.
The case was investigated by the Detroit One partnership of federal, state and local law enforcement agencies.
The new charges allege that multiple members of Latin Counts shot two men, killing one of the victims in August of 2013.
The gang allegedly operates in southwest Detroit, Lincoln Park and Ecorse. According to the indictment, the gang actively uses violence to stake out its “turf” and intimidate rival gang members and the residents of southwest Detroit.
Several incidents of violence were charged in a five-count indictment against seven Latin Count gang members in August. The most serious of these incidents involved the killing of a man at the Big Apple Market in southwest Detroit on April 18, 2014. According to that indictment, several Latin Count members jumped out of vehicles and assaulted the victim until one member shot and killed him.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 bring together separate probes into various members of this organization and its activities into one encompassing investigation. Through this collaborative effort, law enforcement has been able to identify members of this organization and charge a total of fourteen individuals in multiple indictments in federal court.
"The Detroit One partnership has dealt a strong blow to the Latin Counts," McQuade said. "Removing violent street gangs from our neighborhoods is important to improving public safety."
Among those charged today are:
- Jonathan Estrada, 25, of Lincoln Park, charged with murder in aid of racketeering, use and carry of a firearm in furtherance of a crime of violence causing death, use and carry of a firearm in furtherance of a crime of violence, and assault with a dangerous weapon in aid of racketeering;
- Jesus Rodriguez, 21, of Lincoln Park, charged with murder in aid of racketeering, use and carry of a firearm in furtherance of a crime of violence causing death, use and carry of a firearm in furtherance of a crime of violence, and assault with a dangerous weapon in aid of racketeering;
- Angel Rodriguez, 21, of Lincoln Park, charged with murder in aid of racketeering, use and carry of a firearm in furtherance of a crime of violence causing death, use and carry of a firearm in furtherance of a crime of violence, and assault with a dangerous weapon in aid of racketeering; and
- Kyle Voltz, 25, of Lincoln Park, charged with murder in aid of racketeering, use and carry of a firearm in furtherance of a crime of violence causing death, use and carry of a firearm in furtherance of a crime of violence, and assault with a dangerous weapon in aid of racketeering.
An indictment is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government's burden to prove guilty beyond a reasonable doubt.
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 officials are striving to maximize their ability to identify and arrest the individuals and groups initiating the violence in Detroit.
Detroit Man Indicted for Evasion of Payment of Income Tax Due, Filing False Income Tax Returns and Bankruptcy FraudRead the Press Release
A Detroit man was arraigned today on charges of tax evasion and bankruptcy fraud, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Jarod J. Koopman, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division.
Steven Pittman was charged with one count of federal income tax evasion, two counts of filing false tax returns and seven counts of bankruptcy fraud.
According to the indictment, from 2003 through 2006, Pittman worked for Direct Internet Consulting as a contract salesman providing internet cable services to the Detroit Public School district (DPS), the Detroit Medical Center and others. In mid-2007, Pittman filed Forms 1040, U.S. Individual Income Tax returns for the years 2003 and 2006, reporting tax due and owing of approximately $70,000. Pittman did not include payment of this tax liability with the returns.
When the Internal Revenue Service initiated collection efforts in early 2008, Pittman began to take steps to evade the payment of his outstanding federal tax liability. In April 2008, Pittman filed documents with the State of Michigan, forming an entity named Metrotech Solution Services, LLC (Metrotech), with the signature of “Rodman Edmons” as the Organizer and Resident Agent. Around the same time, Pittman also opened a bank account in the name of Metrotech, and over the course of that year deposited more than $150,000 into the account. Most of the deposits were derived from payments made by the DPS for work performed by Metrotech to install security equipment. In September 2009, Pittman, signed a contract under an alias name with DPS to install and maintain security equipment. Pittman provided services for a number of months to DPS under the security equipment contract and was paid more than $700,000.
In September 2011, Pittman filed a voluntary petition in bankruptcy with the U.S. Bankruptcy Court for the Eastern Judicial District of Michigan. Pittman signed the petition and the Statement of Financial Affairs under penalty of perjury declaring that all of his statements were true and correct. However, Pittman knew that the statements were false. Pittman stated that he owed only $532.44 to the IRS; he failed to disclose the use of an alias; he failed to properly report income he earned in 2009 and 2010 and he failed to declare his interest in the bank accounts and businesses he controlled.
In October 2011, Pittman filed Forms 1040, Individual Income Tax returns for the years 2009 and 2010. Each of these returns were false; Pittman listed himself as an employee of Metrotech, failed to disclose that he was the owner of the company, and failed to report any of the income he earned from the DPS security equipment contract.
“Pittman's blatant abuse of the bankruptcy and tax system was motivated by greed. Investigating and seeking convictions for these violations will hopefully reinforce to the public that no one is above the law”, said Special Agent in Charge Jarod J. Koopman.An indictment is merely an accusation and is not evidence of guilt. The defendant is presumed innocent unless and until proven guilty in a court of law.
The investigation of this case was conducted by Special Agents of the Internal Revenue Service Criminal Investigation and prosecuted by Assistant U.S. Attorney Ross I. MacKenzie and Assistant U.S. Attorney Richard A. Robel.Dearborn Woman Pleads Guilty to Tax ChargeRead the Press Release
A Dearborn woman pleaded guilty to tax evasion, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Jarod J. Koopman, Internal Revenue Service Criminal Investigation and Acting Chief Patrol Agent R. Alan Booth, United States Border Patrol Detroit Sector.
Zena Karkaba, 33, entered her guilty plea before U.S. District Judge Judith E. Levy.
The case was investigated by special agents of the IRS Criminal Investigation Division, patrol agents of the United States Border Patrol – Detroit Sector and was prosecuted by Assistant U.S. Attorney Gary M. Felder.
According to court records, during 2009 through 2012, Karkaba received monetary gifts from an individual, who provided her with personal checks in amounts ranging from $1,000 to $10,000. In preparing many of these checks, the individual wrote the numeric value on the checks and signed them, leaving the date, payee and written amount blank.
During 2012, Karkaba received at least 41 checks totaling $160,100, which she altered by changing the numeric amount on the check, increasing the total of the checks to $278,100. On these checks, Karkaba filled in the date, payee and the corresponding altered written amount. Karkaba went to the individual’s issuing bank and endorsed these checks, receiving the value of the altered checks in cash. By altering the checks, Karkaba received $118,000 above the original check amount.
Karkaba filed an individual U.S. Income Tax return, Form 1040, with the Internal Revenue Service for the 2012 tax year claiming the married filing joint filing status and reporting zero taxable income and no tax due and owing. However, Karkaba knew at the time she filed the return that it was false and fraudulent. During her plea hearing, Karkaba admitted that her true filing status for the 2012 tax year was single; that her taxable income for the year was $108,250.00 and that she owed income tax of $23,771.00.
“Income from any source, whether earned legally or stolen, is subject to income tax. By her guilty plea today, Karkaba is acknowledging and accepting the consequences of her criminal actions,” said Special Agent in Charge Jarod J. Koopman.
“We are proud to have played a part in bringing this case to resolution,” said Chief Patrol Agent Booth. “This result is a testament to the partnership between law enforcement agencies along our shared border.”
A sentencing hearing was set for June 24. The maximum penalty for tax evasion is five years imprisonment; three years supervised release and a $100,000 fine.Joint Federal/State Investigation Leads to Indictment of 17 Individuals for Smash and Grab Robberies Across the United StatesRead the Press Release
Seventeen individuals from the metro-Detroit area have been charged in a series of smash and grab robberies of jewelry stores across the United States, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Field Office, along with partners of the FBI Oakland County Gang and Violent Crime Task Force which include, Sheriff Michael J. Bouchard, Oakland County Sheriff’s Office; Director Rebecca Adducci, U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations, Detroit Field Office; Commander Monica Yesh, Michigan State Police; Chief Eric Hawkins, Southfield Police Department; Chief Geof Gaudard, Bloomfield Township Police Department; Acting Chief Jeff James, Waterford Police Department; Chief Corrigan O’Donahue, Royal Oak Police Department; Assistant Deputy Director Beverly Smith, Michigan Department of Corrections; and other local police agencies.
Three separate federal indictments filed during the past month charge the defendants with conspiracy to interfere with commerce by robbery of stores located in New York, Maryland, North Carolina, Mississippi, Nebraska and Connecticut.
These indictments follow a series of investigations nationally by various state, local and federal law enforcement agencies involving approximately 40 smash and grab robberies in 2014. In Michigan alone, between 2012 and 2014, approximately 25 smash and grab jewelry store robberies were committed. FBI agents and other state and local law enforcement officers continue to work collaboratively to identify and criminally charge all of the individuals responsible for these robberies.
According to the indictments, crews from the metro-Detroit area planned and executed six robberies. The crews traveled across the country to jewelry stores that sell Rolex watches and other jewelry. Several members of the crew entered the jewelry stores while they were open for business, smashed the Rolex display cases with sledge hammers and fled the store with Rolex watches, valued at hundreds of thousands of dollars. The robbers escaped into waiting, stolen vehicles and returned to Michigan with the stolen watches.
The indicted defendants are:
- Elijah McKinney, 24, of Detroit,
- Darius Ellis, 30, of Detroit,
- Kordaryl Cross, 25, of Westland,
- Latrina Williams, 38, of Detroit,
- Lorenzo Daniel Terry, 21, of Detroit,
- Anthony Jerome Browner, 24,of Farmington Hills,
- DaJuan Cortez Marcellus, 24, of Detroit,
- Brandon Phillip Wilkerson, 24, of Detroit,
- Marquis Wade Cheatham, 24, of Detroit,
- Darien Savon Thompson, 21, of Detroit,
- Britnei Rodgers, 29, of Detroit,
- Ernie Thomas Evans, 25, of Detroit,
- Darrick Adams, 29, of Detroit,
- Brandon Mayes, 20, of Detroit,
- Bria Jackson, 22, of Shelby Township,
- Bria Stanford, 21, of Belleville, and
- Shaquita Wyatt, 24, of Detroit.
“These crimes, committed during business hours, are serious because of the danger and trauma they create for the victim customers and sales clerks,” McQuade said. “These defendants travelled around the country to commit their crimes in hopes of dividing and conquering witnesses and investigators, but with the collaboration of law enforcement agencies across the country, those schemes have been thwarted.”
Special Agent in Charge Abbate stated, "The defendants in this case intentionally targeted jewelry stores across the country, exposing the public to danger and attempting to thwart the efforts of law enforcement. Together, law enforcement at every level, through shared intelligence, resources, and evidence, brought their crime spree to a halt. The FBI stands, along with its partners, both local and national, ready to bring other criminal smash and grab robbery crews to justice.”
Sheriff Bouchard stated, “Clearly as evidenced by this case, criminals do not recognize jurisdictional boundaries. Therefore, it is imperative for all agencies to work together to defeat complex criminal activity. It's a pleasure for us to have the Gang and Violent Crime Task Force work out of our Pontiac substation and we are proud of the relationships and success that comes from this teamwork.”
Chief Hawkins stated, “This is another great example of how law enforcement agencies at different levels of government can work together to disrupt complex criminal enterprises and take dangerous individuals off the streets. I commend the U.S. Attorney’s Office, the Federal Bureau of Investigation, and all of the officers involved for their hard work on this case.”
John Kennedy, head of the Jewelers’ Security Alliance (JSA) that represents the interests of 21,000 retail jewelry stores stated, “It’s very difficult for a local agency to address the problem by itself, but when the FBI—with its national and international scope—assists, the overall law enforcement effort is more effective.” The JSA also plays a key role in these investigations by offering law enforcement agencies access to its database of jewelry and gem thefts.
Jewelers Mutual Insurance Company and an industry consortium are offering a combined reward of up to $45,000 for information leading to the arrest of other individuals responsible for these robberies.
An indictment is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
This case is being investigated by the FBI Oakland County Gang and Violent Crime Task Force which is comprised of special agents and officers of the Federal Bureau of Investigation; U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations; Oakland County Sheriff’s Office; Michigan State Police; Southfield Police Department; Bloomfield Township Police Department; Royal Oak Police Department; Waterford Police Department and the Michigan Department of Corrections.
The case is being prosecuted by Assistant United States Attorneys Douglas Salzenstein and Jerome Gorgon.
Southwest Detroit Store Managers Plead Guilty to Failing to Maintain an Effective Anti-Money Laundering ProgramRead the Press Release
Two Detroit store managers pleaded guilty yesterday to charges of failing to maintain an effective anti-money laundering program, U.S. Attorney Barbara L. McQuade announced today.
United States Attorney McQuade was joined in the announcement by Acting Special Agent in Charge Jarod Koopman, IRS Criminal Investigation.
John Miri, 55, and Wisam Daman, 38, entered their guilty pleas before U.S. District Court Judge Stephen J. Murphy, III.
According to court records, Daman managed and operated Big Apple Fruit Market on McGraw Street, and Miri managed and operated Junction Party Store on Junction Street, both of which are located on the southwest side of Detroit. Each store was registered as a Money Services Business (MSB) with the State of Michigan. As MSB’s, the Big Apple Fruit Market and Junction Party Store cashed checks for their customers in amounts greater than $1,000, for which they would charge a fee. Businesses that cash checks in this manner qualify as a financial institution under the Bank Secrecy Act (BSA) which obligates them to file Currency Transaction Reports (CTRs) with the Financial Crimes Enforcement Network. CTRs must be filed by the financial institution when a customer conducts a transaction involving more than $10,000. As managers/operators of the businesses, Daman and Miri were required to develop, implement and maintain effective anti-money laundering programs for the stores. The BSA regulations also require that financial institutions treat multiple currency transactions, totaling more than $10,000, as a single transaction and file a CTR if the financial institution has knowledge that the multiple transactions were made by, or on behalf of, a single person.
From late 2011 and continuing through April 2012, Miri and Daman cashed federal income tax refund checks, issued by the U.S. Treasury Department, that were provided to them by Juan Carlos Pena-Lora. These checks were issued to alleged taxpayers with addresses in eastern states, such as New York and New Jersey. Miri cashed approximately 751 income tax refund checks totaling $5,427,903 for Pena-Lora. Daman cashed approximately 1,268 income tax refund checks totaling $9,311,883 for Pena-Lora. Miri and Daman provided Pena-Lora with the cash from the refund checks, less a fee that they charged for cashing the checks. The fee that Miri and Daman charged Pena-Lora was based on a percentage of the total checks they cashed. The U.S. Treasury checks had actually been generated through the filing of false tax returns using the names and social security numbers of Puerto Rican nationals whose identity information had been stolen.
Payments in cash to Pena-Lora by Miri and Daman exceeded $10,000 on the days that they cashed the checks for him. Miri and Daman failed to file CTRs for some of the cash payments to Pena-Lora violating the requirement to implement and maintain an effective anti-money laundering program.
Failure to maintain an effective anti-money laundering program is punishable by a maximum penalty of 5 years imprisonment and/or a fine of $250,000. A sentencing date will be set by the court.
The investigation of this case was conducted by special agents of the Internal Revenue Service Criminal Investigation and prosecuted by Assistant U.S. Attorney’s Ross MacKenzie and Philip Ross.Priest Pleads Guilty to Transportation of Child PornographyRead the Press Release
Jesuit Priest Richard James Kurtz, 69, formerly of Clarkston, Michigan, pleaded guilty today to transportation of child pornography, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division.
Kurtz admitted that in 2011 he transported child pornography from his home in Clarkston, Michigan to a new residence in Chicago, Illinois. Just after his move to Chicago, Kurtz was arrested for “sexual assault on a child by one in a position of trust” based on an arrest warrant issued out of Douglas County, Colorado. After Kurtz’s arrest in Chicago, two Jesuit priests discovered evidence of child pornography crimes among Kurtz’s belongings in Chicago, as well at Kurtz’s former residence in Clarkston, Michigan. The Jesuits provided that evidence to the FBI. At the plea hearing today, Kurtz acknowledged that his collection of child pornography exceeded 2,300 images.
Beyond his transportation of child pornography, court records indicated that Kurtz surreptitiously videotaped UDJHS hockey players after games during the 1998-1999 hockey season. Kurtz was a teacher of chemistry at the UDJHS from 1970-1973, 1978-1983, and from September 1984-May 2001.
Kurtz entered into a plea agreement that calls for a sentence of between 10-14 years in custody. District Judge Mark A. Goldsmith accepted Kurtz’s guilty plea, and took the proposed plea agreement under advisement. Sentencing is set for July 14, 2015.
McQuade praised the work of the FBI agents for their professionalism and dedication in their thorough investigation of these cases.
Assistant United States Attorneys Kevin M. Mulcahy is prosecuting this case for the United States.
Detroit Scrap Recycler Agrees to Settlement with United States to Reduce PollutionRead the Press Release
A Detroit scrap metal and iron recycling company has agreed to pay a $25,000 penalty and implement a compliance program to resolve allegations that it violated the Clean Air Act, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was Susan Hedman, Administrator of Region 5 of the Environmental Protection Agency.
The settlement resolves a lawsuit brought by the U.S. Attorney’s Office and the Environmental Protection Agency against Basic Recycling, alleging that its facility on Fulton Avenue in Detroit was releasing harmful chlorofluorocarbons (CFCs) into the environment. CFCs cause ozone depletion and have harmful effects on human health.
Under the settlement, Basic Recycling agreed to implement a Clean Air Act compliance program at its facility to eliminate the harmful release of CFCs.
The settlement requires Basic Recycling to pay a civil penalty of $25,000 and comply with all environmental regulations in accepting and processing small appliances which present a risk of harmful CFC emissions.
“This settlement will protect the health of Detroit residents and ensure cleaner air for future generations,” McQuade said.
“This settlement will help to preserve the earth’s ozone layer, which protects us from harmful radiation,” EPA Region 5 Administrator Hedman said. “Basic Recycling will also take steps to improve air quality in a community that has been disproportionately impacted by environmental contamination.”
While Basic Recycling did not admit any of the violations alleged by the government, it has agreed to all compliance provisions.
The settlement was lodged with the U.S. District Court for the Eastern District of Michigan and will be subject to a 30-day public comment period and final court approval. It can be viewed at: http://www.usdoj.gov/enrd/Consent_Decrees.html and will appear in the Federal Register. Comments can be directed to Assistant Attorney General, Environment and Natural Resources Division, with reference to United States v. Basic Recycling.The National President, Vice President, Warlord and Three Other Members of the Devils Diciples Motorcycle Gang Convicted of Racketeering and Drug-Trafficking ChargesRead the Press Release
WASHINGTON – After a four-month trial, a federal jury in the Eastern District of Michigan convicted six members of the Devils Diciples Motorcycle Gang today, including the national president, national vice president and national warlord, for their participation in various criminal acts, including violent crimes in aid of racketeering, methamphetamine production and trafficking, illegal firearms offenses, obstruction of justice, illegal gambling and other federal offenses.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan and Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office made the announcement.
“For too many years the Devils Diciples spread fear and violence throughout Michigan and the country,” said Assistant Attorney General Caldwell. “This outlaw motorcycle gang thrived on intimidation and its ability to avoid prosecution – but no longer. Through these convictions, we have decimated the gang and its leadership and helped secure justice for the communities they harmed.”
"These defendants were responsible for violence and trafficking in methamphetamine in Macomb County and across the country,” said U.S. Attorney McQuade. “We are grateful for the work of the investigating agencies and the jury to bring them to justice."
“The defendants in this case perpetrated a broad range of violent criminal activities in support of their illegal enterprise,” said Special Agent in Charge Abbate. “Today’s convictions, which targeted the leadership of this criminal organization, reflect the hard work and dedication of federal, state and local law enforcement, the Department of Justice Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office for the Eastern District of Michigan.”
Devils Diciples national President Jeff Garvin Smith, aka “Fat Dog,” 60, of Mt. Clemens, Michigan; National Vice President Paul Anthony Darrah, aka “Pauli,” 50, of Macomb Township, Michigan; and National Warlord Cary Dale Vandiver, aka “Gun Control,” 56, of Sand Mountain, Alabama, were all found guilty by a jury of engaging in a RICO conspiracy, methamphetamine trafficking conspiracy, conspiracy to obstruct justice, violent crimes in aid of racketeering and various substantive charges. Another prominent leader, Vincent John Witort, aka “Holiday,” 64, of Fontana, California, and a methamphetamine cook, Patrick Michael McKeoun, aka “Magoo,” 60, of Birmingham, Alabama, were found guilty of engaging in a RICO conspiracy and methamphetamine trafficking conspiracy. David Randy Drozdowski, aka “D,” 38 of Fair Haven, Michigan, was found guilty by a jury of committing violent crimes in aid of racketeering and being a felon in possession of a firearm. Scott William Sutherland, aka “Scotty Z,” 49, of Redford, Michigan, was acquitted by the jury of various charges, but previously pleaded guilty to being a felon in possession of a firearm. Sentencing hearings will be scheduled at a later date before U.S. District Judge Robert H. Cleland of the Eastern District of Michigan.
According to evidence presented at trial, the Devils Diciples (which is intentionally misspelled) is a motorcycle gang with its national headquarters in Clinton Township, Michigan. The Devils Diciples operated regional chapters in cities throughout Michigan, Alabama, Arizona, California, Illinois, Indiana, Ohio and elsewhere, and engaged in criminal activities for financial gain.
Evidence presented at trial demonstrated that membership in the Devils Diciples is based in part on successful completion of a probationary period, followed by formal approval by one or more members or leaders. Members, commonly referred to as “full patched members,” are required to own Harley Davidson motorcycles and are required to follow orders from the gang’s leadership, including orders to assault, threaten and intimidate others, to transport and distribute drugs, to lie to law enforcement and to hide or destroy evidence. Members are also required to follow the Devils Diciples by-laws and attend regular meetings referred to as “church.”
According to evidence presented at trial, Smith was the National President and Darrah was the National Vice President of the gang. In those roles, they were responsible for overall management of the activities of the other Devils Diciples members and chapters, including giving final approval to any activity generally affecting the gang as a whole. Vandiver was the National Warlord – or enforcer – of the gang. With other gang members, the leaders also participated directly in criminal activities both for financial gain on behalf of the Devils Diciples, and to protect the gang and its members.
Specifically, the evidence showed that in late 2007, Smith and Darrah were involved in the shooting of a Devils Diciples member who failed to abide by the gang’s rules. And, in August 2008, Smith violently assaulted the girlfriend of another Devils Diciples member because he believed she disrespected him and the gang.
Additionally, the evidence showed that Smith possessed state and federal law enforcement manuals regarding outlaw motorcycle gangs marked “For Official Use Only” and “Law Enforcement Sensitive,” and numerous documents related to criminal matters involving members of the Devils Diciples, including police reports, search warrants, affidavits, indictments and witness interview transcripts. The evidence showed that the documents were used for the purposes of counter-surveillance and to identify suspected informants.
The other defendants were also full patched members of the gang, who committed several other acts of violence.
For example, in August 2003, Witort and other gang members robbed, kidnapped and attempted to murder members of the gang’s Arizona Chapter for violating the gang’s rules. Inside the Arizona clubhouse, the victims were bound with duct tape and zip ties, and severely beaten with firearms, tasers, knives, and other weapons. The victims were then loaded into the bed of a pick-up truck, driven out into the desert, dumped into ravines, and left to die. The evidence showed that Witort and Smith helped to plan the beatings and that Smith later congratulated one of the participants, telling him in a letter that the Devils Diciples were “all proud of you.”
Additionally, the evidence demonstrated that in 2012, at a bar in Chesterfield Township, Michigan, Drozdowski and another Devils Diciples member assaulted a perceived rival motorcycle gang member for being present in Devils Diciples territory. The victim was knocked unconscious and suffered multiple fractures to his face and jaw. Drozdowski and the other Devils Diciples member then ripped the leather vest off of the unconscious victim.
In addition to the defendants convicted today, 21 members and associates of the Devil’s Diciples have been pleaded guilty to various crimes as result of this investigation. The investigation further resulted in the seizure of more than 60 firearms and more than 6,000 rounds of ammunition and the dismantling of eight methamphetamine manufacturing laboratories across the country.
The case was investigated by the FBI, the Michigan State Police, the Macomb County Sheriff’s Office and the County of Macomb Enforcement Team (COMET), with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the St. Clair County Sheriff’s Office. The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Warren Doctors Plead Guilty to Unlawful Distribution of Prescriptions PillsRead the Press Release
Two physicians who practiced in Warren pleaded guilty today to writing prescriptions for oxycodone without medical justification, and one also pleaded guilty to health care fraud, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by DEA Special Agent in Charge Joseph P. Reagan, Special Agent in Charge Lamont Pugh III of the U.S. Department of HHS Office of Inspector General’s Chicago Regional Office, and Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office.
During a hearing before U.S. District Judge Nancy Edmunds, Hussein “Sam” Awada, 45, of Royal Oak, admitted that from late 2010 through early 2012, he conspired with James Lyons, a patient “marketer,” to write prescriptions for oxycodone and Roxicodone in the names of people who were brought to him by Lyons, for no medical purpose. Lyons has admitted that he paid Awada for those prescriptions, then bought the pills from the “patients” and re-sold them to street dealers.
Awada also admitted that during this same time he billed Medicare, Medicaid, and Blue Cross Blue Shield for numerous medical procedures that were not medically justified. Awada’s plea agreement acknowledged that he prescribed more than 80,000 oxycodone and Roxicodone as part of his conspiracy with Lyons, and defrauded Medicare, Medicaid, and Blue Cross of about $2.3 million.
Lyons was recently sentenced to 48 months in custody for his part in this scheme.
Luis Collazo, 55, of Farmington Hills, admitted that in late 2012 he provided prescriptions to patients for controlled substance medications such as oxycodone although he knew that the patients had no medical need for the medications.
McQuade said, "More people die from overdoses of prescription drugs in America than from overdoses of all other drugs combined. We hope that prosecuting the doctors who are putting these drugs on the streets will deter others from contributing to this epidemic.”
DEA Special Agent in Charge Reagan stated, “The DEA has made it a priority to address the dangerous practice of illegally diverting prescription medications. Prescription drugs, such as oxycodone and Roxicodone, are controlled substances for a very good reason. If they are abused, they can lead to addiction, illness, or even death. As physicians, Mr. Awada and Mr. Collazo violated the public trust by illegally diverting prescription drugs on to the streets. These guilty pleas make it clear that the DEA, and our partners in law enforcement, will continue to utilize our investigative techniques to bring to justice those individuals that are responsible for the illegal distribution of prescription medicines.”“Not only did these physicians practice medicine, they practiced drug dealing and fraud. They put the public’s health and safety at risk and stole vital taxpayer dollars”, said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “The OIG will continue to work with our law enforcement partners to root out individuals who choose to abandon their professional obligations and commit criminal acts that jeopardize the public’s well-being and essential health care programs”.
Based on his guilty pleas Hussein Awada is facing a maximum of thirty years in prison and a fine of up to $1,250,000. Luis Collazo is facing a maximum of twenty years in prison and a $1 million fine. Both will also lose their privilege to write controlled substance prescriptions.
Warren Businessman Pleads Guilty to FraudRead the Press Release
A Macomb County business owner pleaded guilty yesterday to intentionally setting a fire at his commercial laundry facility to collect on an insurance policy, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Steven Bogdalek, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearm, and Explosives (ATF).
Alexandros Yfantidis, 74, of Clinton Township, admitted in court that on May 4, 2011, he intentionally burned down the building housing his commercial laundry service, which he operated as Best Textile Services. In pleading guilty to one count of mail fraud, Yfantidis admitted making a fraudulent claim to his insurance company in relation to fire. His agreement with the government calls for restitution to reimburse victims whose homes and/or personal properties were damaged by the fire explosion.
U.S. District Judge Stephen J. Murphy, III, set Yfantidis’s sentencing for June 5.
“Committing any fraud scheme harms victims, but intentionally setting a fire creates a danger to public safety that far exceeds the financial loss,” McQuade said. McQuade thanked the agents of ATF for their investigation of the case. She also thanked the Warren Fire Department for assisting in the investigation. The case is being prosecuted by Assistant U.S. Attorney Abed Hammoud.
“As we know arson for profit crimes have many victims. Mr. Yfantidis chose to break the law for his personal gain by putting community and fire fighters at significant risk”, said ATF Special Agent in Charge Steven Bogdalek. “I would like to thank the ATF Special Agents, the Warren Fire Department and the United States Attorney’s office for their hard work and dedication in this investigation.”
For information concerning restitution potential victims are encouraged to contact the U.S. Attorney’s Office Victim Witness Coordinator at (313) 226-9633 or Tiesha Johnson of the Bureau of Alcohol, Tobacco, Firearms and Explosives at (313) 202-3400.Former Jackson Tax Preparer Found Guilty of Tax FraudRead the Press Release
A Jackson tax preparer was found guilty yesterday of 20 counts of filing false tax returns today by a federal jury after a week-long trial, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Jarod Koopman, Internal Revenue Service Criminal Investigation.
Richard Alan Williams was found guilty of three counts of subscribing and filing false personal income tax returns for himself and 17 counts of assisting in the preparation and filing of false tax returns for his customers. The case was tried before U.S. District Judge Stephen J. Murphy, III.
At trial, witness testimony and exhibits established that Williams owned and operated Imperial Tax Service on Prospect Street in Jackson, and prepared and filed false tax returns for individuals for the 2004, 2006 and 2007 tax years. These returns claimed false business expenses or losses. The falsified items caused the taxpayers’ refunds to be larger than what they were entitled to by either reducing their taxable income with phony business expense losses or increasing the Earned Income Credit they were entitled to receive by adding the right amount of phony business income.
Additionally, Williams declared that his own income was only $1 in 2004; $2 in 2006; and $10 in 2007 when, in fact, he earned substantial fees for preparing tax returns during each of those years. The taxpayers who testified that Williams had prepared their returns, but had added phony business expenses or income, were unaware of the false items Williams had included to increase their refunds. However, a number of them have since been audited by the IRS and have been directed to pay back the excess refunds they received for those years along with penalties and interest.
A sentencing hearing was set for June 5. The maximum penalty for each offense of conviction is up to three years imprisonment, a $250,000 fine, and 1 year of supervised release.
"IRS Criminal Investigation focuses on protecting revenue by identifying, investigating and prosecuting abusive return preparers. This case accentuates the importance for taxpayers to carefully select a tax return preparer,” said Special Agent in Charge Koopman.
The case was investigated by Special Agents of the IRS Criminal Investigations and prosecuted by Assistant U.S. Attorneys Christopher Varner and Ross I. MacKenzie.
Investigation of Wayne County Government CompletedRead the Press Release
United States Attorney Barbara L. McQuade announced today the completion of the federal corruption investigation of Wayne County government. Joining McQuade in the announcement was Paul M. Abbate, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.
The investigation, which began three years ago, resulted in the convictions of five individuals, including Wayne County’s Chief Information Officer and an Assistant Wayne County Executive who served as the Director of HealthChoice of Michigan. The United States will not seek additional charges in connection with the investigation.
“I would like to thank and commend the officials and staff of the Wayne County Executive and the Wayne County Corporation Counsel for their cooperation during this investigation,” said McQuade. “Their assistance and openness allowed federal investigators to carefully review and assess a number of complex issues regarding the operation of county government.”
Former Court Officer for the 36th District CourtCharged with Extortion, Fraud and TheftRead the Press Release
An indictment was unsealed today charging a former court officer for the 36th District Court in Detroit with extortion, mail fraud and theft, announced U.S. Attorney Barbara L. McQuade.
Joining in the announcement was Michigan Attorney General Bill Schuette and Paul M. Abbate, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation.
Marlon Cleveland, 33, of Westland, was charged with misusing his position as a Court Officer for the 36th District Court to steal and extort thousands of dollars from defendants in civil cases over the course of more than a year. The crimes are alleged to have occurred in 2013 and 2014.
McQuade stated, “Anyone who abuses a position of trust to steal from our courts or to extort money from members of the public should expect to face serious penalties under the law.”
“We must weed out corruption at all levels of government to ensure the public is served,” said Michigan Attorney General Bill Schuette. “Nobody will get a free pass when they break the law.”
“Preventing the abuse of power to conduct criminal activity remains among the highest priorities of the FBI,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “FBI Detroit, in concert with the Michigan Attorney General’s Public Integrity Unit and the U.S. Attorney's Office, will continue to investigate these types of crimes and bring to justice those who abuse the public’s trust.”
This case was investigated by the Federal Bureau of Investigation in collaboration with the Michigan Attorney General's Public Integrity Unit.
An indictment is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government's burden to prove guilty beyond a reasonable doubt.
Former Pharmacist Sentenced for RoleIn Drug Distribution Scheme and Money LaunderingRead the Press Release
A Dearborn pharmacist was sentenced yesterday to six years in prison for conspiracy to illegally distribute prescription pills and money laundering, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Jarod J. Koopman, Internal Revenue Service Criminal Investigation and Special Agent in Charge Marlon Miller, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
In March 2013, Waleed Yaghmour was charged with 43 others in a health care fraud and drug distribution scheme. The indictment alleged that Sardar Ashrafkhan, Deepak Kumar, John Check and David Vezzossi, who owned home health agencies, provided kickbacks, bribes and other illegal benefits to physicians in exchange for prescriptions for patients with Medicare, Medicaid and private insurance. The prescriptions were for controlled substances including oxycodone (Oxycontin), hydrocodone (Vicodin) and alprazolam (Xanax). Patient recruiters or “marketers” would pay kickbacks and bribes to patients in exchange for the patients’ permitting the pharmacies and physicians to bill their insurers for medications and services that were medically unnecessary and/or never provided. During the conspiracy, prescriptions were presented to the Sav-Mart Pharmacy in Detroit, which was owned and operated by Yaghmour, as well as several other pharmacies.
In his guilty plea, Yaghmour, 48, admitted that he knew that the controlled substances he dispensed for these fraudulent prescriptions had no legitimate medical purposes. Yaghmour has admitted to dispensing at least 1,500 oxycodone 100,000 hydrocodone and 100,000 alprazolam doses as part of the scheme.
Yaghmour received nearly $2 million in cash payments for illegally dispensing the controlled substances. Yaghmour has agreed to forfeit $973,177.87 that was seized from an account that he maintained at HSBC Bank Middle East Limited, Ramallah, Palestine.
“More people die in America every year from prescription drug overdoses than from overdoses of all other drugs combined,” McQuade said. “In addition, prescription drug addiction has led to a resurgence in heroin use. Pharmacists who divert prescription drugs to the street market are contributing to this epidemic, and we are focusing our enforcement efforts on stopping them.”
"We entrust physicians and healthcare providers with monitoring, caring, and treating members of our community," said Miller. "When that trust is violated, the integrity of the system is compromised and lives are put at risk. HSI will continue to partner with the law enforcement community to ensure that unscrupulous physicians and healthcare providers are brought to justice"
“The public rightfully expects that doctors and pharmacists will uphold the oath that they take to “do no harm.” When they abuse their professional license for financial gain they put the public at risk, in this case by dispensing highly addictive controlled substances. IRS Criminal Investigation's unique role in these investigations is to follow the money trail in order to disrupt these criminal drug organizations that diminish the quality of life in our communities” said Jarod J. Koopman, Special Agent in Charge, IRS Criminal Investigation.
Many of the defendants charged in the indictment have been convicted by pleas and have been sentenced already. Others are scheduled to be sentenced in the near future.
The case was investigated by special agents from the Internal Revenue Service Criminal Investigation, the U.S. Immigration and Custom’s Enforcement’s Department of Homeland Security Investigations, the Drug Enforcement Administration, the Federal Bureau of Investigation, the Bureau of Alcohol Firearms and Explosives, Detroit Police Dept., Portsmouth, Ohio, Police Dept., Scioto County Sheriff’s Office, the Department of Health and Human Services Office of Inspector General, and the Detroit Violent Crimes Task Force and Michigan State Police. The case is being prosecuted by Assistant U.S. Attorneys Terrence R. Haugabook, Michael Martin, and Wayne F. Pratt. They are assisted by Assistant U.S. Attorneys Jonathan Grey and Gjon Juncaj of the Forfeiture Section.Nevada Man Convicted of Producing Child Pornography in KalamazooRead the Press Release
GRAND RAPIDS, MICHIGAN – Riley Patrick Lively, 27, of Las Vegas, Nevada, was convicted Wednesday afternoon of child sexual exploitation after a two-day jury trial in federal court in Grand Rapids. The crime took place in Kalamazoo in 2009. Lively faces a minimum of 15 years and a maximum of 30 years in prison.
In April 2009, while visiting Robert Norwood-Charlier, in Kalamazoo, Michigan, Lively sexually assaulted a nine-year-old boy. Norwood-Charlier openly took pictures of the assault. The FBI discovered the evidence of Riley’s sexual assault in the course of investigating Norwood-Charlier for his own sexual exploitation of children. Norwood-Charlier is currently serving a 300-month federal sentence for producing and distributing child pornography. Lively was arrested in Las Vegas in February 2014 and has been held in custody since his arrest. Despite claims that he was the victim of “mind control” and that the pictures were fakes, the jury found Lively guilty after less than an hour of deliberations.
Lively’s sentencing will be before U.S. District Judge Robert J. Jonker on a date to be scheduled.
The investigation was conducted by the FBI. Assistant U.S. Attorneys Tessa K. Hessmiller and Jeanne F. Long prosecuted the case.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney’s Office; county prosecutor’s offices; and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. Individuals with information or concerns about possible child exploitation should contact local law enforcement. For more information about Project Safe Childhood in West Michigan, including resources for children and parents, visit: http://www.justice.gov/usao/miw/programs/psc.html.
Former Detroit Public Library Contractors Sentenced on Bribery ChargesRead the Press Release
Two former contractors with the Detroit Public Library were sentenced late yesterday afternoon on charges of bribery of a public official, United States Attorney Barbara L. McQuade announced.
Joining McQuade in the announcement were Paul M. Abbate, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Jarod Koopman, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
James Henley, 44, of Detroit, and Ricardo Hearn, 32, of Royal Oak, were sentenced to 27 months and 28 months, respectively, by United States District Judge George Caram Steeh. Each man also was ordered to pay $750,000 in restitution to the Detroit Public Library for losses suffered by the library as a result of the crimes.
According to court records, Henley and Hearn paid former Detroit Public Library Chief Administrative Officer Timothy Cromer a total of $1.4 million in kickbacks in return for contracts for information technology services with the Detroit Public Library during the period 2007 to 2010. After being confronted by federal law enforcement officials, Henley and Hearn both cooperated in the prosecution of Cromer. On September 16, 2014, Cromer was sentenced to 10 years in prison for his role in the bribery conspiracy, and ordered to pay $3,913,890.42 in restitution to the library.
Henley owned a company called Core Consulting & Professional Services. Cromer approved a proposal submitted by Core Consulting to provide information technology work, and approved various extensions and change orders to the contract. Ultimately, the Library paid Core Consulting almost $2 million under the contract, and Henley secretly paid kickbacks to Cromer totaling over $650,000 during the period 2007 to 2008. Henley also pleaded guilty to failing to file tax returns for the year 2007. Hearn, who owned Cubemation LLC, paid Cromer kickbacks totaling about $800,000 in exchange for Cromer approving no-bid professional services contracts for Hearn’s company to perform information technology services for the library from 2008 until 2010. Cubemation received about $3.2 million in payments from the Detroit Public Library
"This case demonstrates that not just bribe takers, but bribe payers will be held accountable in appropriate cases. Everyone who corrupts the system should be brought to justice," said United States Attorney McQuade.
“All those involved in the misappropriation of government funds for their own selfish purposes violate federal law and betray the trust of the citizens they purport to serve,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The FBI, and its local, state and federal law enforcement partners, remain vigilant in the fight against public corruption, and committed to bringing to justice those who abuse the public’s trust.”
“It’s disappointing when the public trust is abandoned by the actions of a few,” said IRS Acting Special Agent in Charge Jarod Koopman. “IRS-Criminal Investigation will continue to identify and help prosecute those that attempt to deceive the public, abuse the system and use their position for their own personal gain. These sentences will hopefully send a message to others that not only will they be held to the highest standard, but they will be punished equally.”
The case was investigated by agents of the FBI and IRS-Criminal Investigation. The case was prosecuted by Assistant United States Attorneys Mark Chutkow and Julie BeckUnion Clerk Sentenced for EmbezzlementRead the Press Release
A Livonia woman was sentenced to 12 months in federal prison for embezzlement of labor organization assets, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Ian Burg, Director of the Detroit-Milwaukee District Office of the U.S. Department of Labor's Office of Labor-Management Standards, and James Vanderberg, Special Agent-in-Charge of the Chicago Regional Office of the Labor Department's Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
Ann Marie Shaffer, 57, was sentenced by United States District Judge Stephen J. Murphy. Judge Murphy further ordered Shaffer to pay $340,267.73 in restitution to the International Brotherhood of Electrical Workers (IBEW) Local 58 in Detroit, and to serve two years of supervised release following her discharge from prison.
Shaffer pleaded guilty to one count of theft of union funds on August 7, 2014. As part of her plea agreement, Shaffer admitted that between September 2008 and September 2010, while employed as a dues clerk, she embezzled $101,059.56 of IBEW Local 58 funds by engaging in a check substitution scheme. She received dues remittance checks from employers, set them aside without properly recording them, and when an equal amount of cash was received, embezzled the cash by replacing it with the unrecorded checks.
“Union officials hold a position of trust, and will be held accountable when they cheat the workers they serve,” McQuade said
U.S. Attorney McQuade commended the U.S. Department of Labor’s Office of Labor-Management Standards and the Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations in Detroit for conducting the investigation.Bloomfield Township Theater Agrees to Improve Access for People with DisabilitiesRead the Press Release
The Maple Theater in Bloomfield Township has agreed to improve physical accessibility for people with disabilities at the theater, U.S. Attorney Barbara L. McQuade announced today.
The settlement agreement resolves an investigation under the Americans with Disabilities Act, alleging that the theater’s 2012 renovations allowed insufficient room for wheelchair seating. The complaint was filed by a Bloomfield Hills moviegoer with a mobility disability.
Under the agreement, the Maple Theater agreed to construct a new accessible unisex bathroom, relocate some of the existing accessible seating, ensure that the theater has accessible aisle seating and handrails in each auditorium, and make the bar area more accessible. Construction on some of the modifications is scheduled to begin this month, and the entire project should be completed within six months. Today’s agreement was reached under Title III of the ADA, which prohibits discrimination against individuals with disabilities by public accommodations.
“The law ensures that people with disabilities have the same access to public accommodations as all other Americans,” McQuade said. “This case is a reminder to businesses considering renovations that the Americans with Disabilities Act requires that building alterations comply with design standards.”
For more information on the ADA or today’s agreement with the Maple Theater, 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.
Mortgage Lender Agrees to $4.2 Million SettlementRead the Press Release
A Southfield mortgage lender has agreed to pay $4.2 million to resolve allegations that it violated the False Claims Act in its origination of loans backed by the federal government, United States Attorney Barbara L. McQuade announced today.
GTL Investments, Inc., doing business as John Adams Mortgage Company (JAMCO), entered into the agreement with the U.S. Attorney’s Office for the Eastern District of Michigan to resolve allegations that it originated mortgage loans that had material underwriting deficiencies. The loans were guaranteed by the Federal Housing Administration.
The FHA makes home financing available by insuring residential mortgages for the purchase of properties with modest down-payments for purchasers meeting certain criteria, known as underwriting standards. The original lender or loan originator is responsible for making sure that the borrower meets these underwriting standards to minimize the possibility of default and the need for the FHA to pay the mortgage holder for the losses caused by the default.
An investigation by the Office of Inspector General for the Department of Housing and Urban Development found that GTL originated 31 FHA mortgage loans between January 2008 and April 2012 that had material underwriting deficiencies. Twenty-nine of these loans went to claim, causing the FHA damages of $2,445,912. The investigation also identified two loans that had not yet been presented for payment by the FHA with approximately $250,000 in potential losses. GTL has agreed to indemnify the FHA for these two loans.
“By holding accountable lenders who fail to comply with underwriting requirements, we hope to send a message to all lenders that they must comply with government standards for federally insured loans,” McQuade said.
Detroit Man Indicted on Robbery ChargesRead the Press Release
A Detroit man was indicted today for his role in the armed robbery of a pharmacy in Detroit, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division.
Kavin Stinson, 19, was charged with robbery and with using a firearm during a crime of violence.
The investigation determined that on August 22, 2014, three men armed with handguns entered the Rite Aid store at 1900 East Eight Mile Road in Detroit at approximately 3:00 p.m. The men stole liquor and threatened the Rite Aid employees, forcing some at gunpoint to the back of the store to open a safe. The robbers also forced employees to open cash registers and give them money. One of the assailants pistol-whipped a male and a female employee as they were handing over money.
Johnny Johnson was indicted in September by a federal grand jury for his role in the robbery. Additional investigation by the FBI led to the identification of Kavin Stinson as the second suspect. The third suspect remains at large.
If convicted, Johnny Johnson and Kavin Stinson will face a minimum of seven years in prison with the possibility of 27 years in prison for their participation in the crimes.
“We take armed robberies very seriously because armed robbers put residents at risk and create fear in our neighborhoods,” McQuade said. “We hope that criminals will take note that committing crimes with guns will bring charges with severe consequences.”
“Mr. Stinson and the other perpetrators in this case are alleged to have violently robbed a neighborhood pharmacy at gunpoint,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Gun-related violence injects fear into the lives of law abiding citizens and wreaks havoc upon our communities. The FBI, along with its local, state and federal partners, remains committed to rooting out these violent offenders and maintaining the safety of our neighborhoods.”
The cooperative efforts of the Detroit Police Department and the Federal Bureau of Investigation's Violent Crime Task Force resulted in the charges against these two defendants.
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.
Unlicensed Investment Advisor Sentenced to 64 Months in Ponzi SchemeRead the Press Release
A 37-year-old Brighton man was sentenced today in federal court to 64 months in prison for running a $3.8-million Ponzi scheme, United States Attorney Barbara L. McQuade announced.
Joining in the announcement was Paul M. Abbate, Special Agent in Charge of the Federal Bureau of Investigation.
U.S. District Judge Nancy G. Edmunds sentenced Sachin Uppal today, following his August guilty plea to wire fraud charges. According to court documents, Uppal ran the Jefferson Smith Trading Company LLC (“JSTCO”) from July 2007 through September 2013. Uppal, who was not a licensed investment advisor, marketed JSTCO to potential investors and solicited investor funds, describing it as a “hedge fund.” Uppal told investors that he was a “day trader,” who would use investor funds to buy and sell financial instruments within the same trading day, which he said would reduce risk to investors.
Several of Uppal’s victims were family friends. This phenomenon, known as ‘affinity fraud,’ often targets members of identifiable groups, such as a religious or ethnic communities or clubs. Judge Edmunds ordered Uppal to pay restitution to his victims in the amount of $3,867,187.
Uppal promised a return of 18 to 20 percent per year, with a minimum investment commitment of only 12 months. Once he secured the initial investment, Uppal emailed his victims false monthly “year-to-date investment summaries” to make them believe that their accounts were performing well, and to persuade them to invest additional funds. Sometimes, Uppal traded and lost funds during the relevant period. Other times, Uppal simply pocketed the money without conducting any trades at all. When investors asked to close their accounts and withdraw their investment funds, Uppal attempted to lull them with various excuses.
"Some people use guns to steal money. Other people use lies," McQuade said. "Investors should not be lulled into trusting an investment advisor just because they know him or because he is a fellow member of an organization to which they belong. Criminals take advantage of those relationships as cover to commit fraud."
“Mr. Uppal took advantage of trusting relationships with family, friends, and associates, breached their confidence, and stole their money,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Criminals like this use every means of deceit available to further their selfish goals, and investors need to exercise great caution so as not to become victimized.”
Investors are encouraged to consult with the Financial Industry Regulatory Authority (FINRA) website (http://www.finra.org) and its BrokerCheck resource before investing.
The case was investigated by the FBI and prosecuted by Assistant United States Attorney Erin ShawJury Convicts Former Detroit City Treasurer,Pension Officials of Conspiring to DefraudPensioners Through BriberyRead the Press Release
The former Treasurer of the City of Detroit and two former pension officials were convicted by a federal jury of conspiring to defraud retirees through bribery and kickbacks, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was Paul M. Abbate, Special Agent in Charge of the Federal Bureau of Investigation in Detroit, Jarod Koopman, Special Agent in Charge of the Internal Revenue Service, Criminal Investigations, and James Vanderberg, Special Agent in Charge, Department of Labor, Office of Labor Racketeering and Fraud Investigations, Chicago Regional Office.
Jeffrey Beasley, 45, of Chicago, Illinois, the former Treasurer of the City of Detroit, Ronald Zajac, 70, of Northville, Michigan, the former General Counsel of Detroit's two pension systems for more than 30 years, and Paul Stewart, 57 of Detroit, a trustee of Detroit's Police and Fire Retirement System, were convicted following a two-month jury trial before U.S. District Judge Nancy G. Edmunds. All three defendants were convicted of conspiring to defraud the city's pensioners of the honest services to which they were entitled by accepting bribes. In addition, Beasley was convicted of two counts of extortion and one count of bribery. Beasley was acquitted on three other counts of extortion.
The evidence at trial showed that Detroit’s two retirement systems lost more $97 million on pension deals corrupted by bribes and kickbacks taken or paid by the defendants. Beasley, Zajac, and Stewart conspired with each other and with former Detroit Mayor Kwame Kilpatrick and others to take bribes and kickbacks in return for votes on investment decisions made by the boards of trustees of Detroit’s two pension systems.
Beasley forced investment sponsors and consultants to pay Bernard Kilpatrick hundreds of thousands of dollars in exchange for his support of their proposed pension investments. Beasley also accepted tens of thousands of dollars in cash from investment sponsors and consultants in exchange for his support of their pension deals.
As part of the conspiracy, Zajac organized so-called “birthday parties” for Beasley, Stewart, and another trustees. At the parties, people having business before the pension systems gave each trustee thousands of dollars in cash. Zajac also directed investment sponsors and pension consultants to give thousands of dollars in cash and entertainment to Beasley and Stewart. Zajac also demanded that an investment sponsor pay for a trip to London for Zajac and a pension trustee in exchange for a $10 million investment in Detroit pension money.
During the conspiracy, Stewart accepted more than $48,000 in cash, trips, meals, drinks and other things of value in return for his support on pension deals proposed by the givers of the bribes. Among other things, Stewart accepted a Christmas basket stuffed with cash, a $5,000 Greektown casino chip, and a $4,000 trip to the Ritz-Carlton in Naples, Florida.
McQuade said, “These defendants breached their duties to retirees by basing their investment decisions on bribes. Their greed cost retirees almost $100 million in losses to pension funds. In light of all of the sacrifices made by Detroit retirees, we are gratified that the jury has brought these corrupt pension officials to justice.”
“The perpetrators in this case criminally conspired with one another to sell their influence over the city’s pension systems,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Their breach of the public’s faith and their fiduciary responsibilities to Detroit retirees resulted in nearly $100 million in losses. The FBI, along with its law enforcement partners, will continue to aggressively pursue and bring to justice those who abuse the public’s trust and enrich themselves at the cost of our communities.”
Based on the jury’s guilty verdicts for conspiring to engage in honest services mail and wire fraud, Beasley, Zajac, and Stewart each face a maximum of twenty years in prison and a fine of up to $250,000. In addition, Beasley also faces an additional twenty years in prison and a fine of $250,000 for each of his two convictions for extortion, and an additional ten years in prison and a fine of $250,000 for his bribery conviction. Their sentences will be based on sentencing guidelines and other statutory factors.
In addition, a number of other defendants have been convicted in relation to the pension fund investigation, including:
- Roy Dixon, an investment sponsor convicted of conspiring with Beasley, Zajac, and Stewart to pay bribes;
- Monica Conyers, a former Trustee of the General Retirement System and former member of the Detroit City Council, for conspiracy to take bribes, including bribes relating to a proposed multi-million dollar pension fund investment in Wireless Resources and a $10,000 extortion payment relating to the Police and Fire Retirement System's investment in the Romulus Deep Injection Waste Well;
- Samuel L. Riddle, Conyers' Chief of Staff, for conspiracy to commit bribery and extortion relating to the Wireless Resources and Romulus Deep Injection Well investments;
- DeDan Milton, a former Trustee of Detroit's two pension funds;
- Andrew Park, an owner of Asian Village, who paid a bribe to obtain a $2.75 million loan from Detroit's General Retirement System;
- Derrick Miller, former Chief Information Officer of Detroit, who accepted the bribe from Park and who took a kickback of more than $500,000 on a $44 million investment by Detroit's two pension funds;
- Chauncey Mayfield, for conspiracy to commit bribery with Treasurer Beasley by supplying Beasley and Kwame Kilpatrick with tens of thousands of dollars in hotel, entertainment, and private jet flights, as well as a job for Beasley's paramour and significant contributions to the Kilpatrick Civic Fund, all in return for maintaining Mayfield's position as an investment advisor controlling more than $200 million in pension fund money; and
- George Stanton, the former Chief of Staff of a pension trustee, who accepted a $15,000 cash bribe from Dixon relating to a proposed investment in the Turks and Caicos Islands.
The case was investigated by agents of the Federal Bureau of Investigation, the Internal Revenue Service, and the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations. It is being prosecuted by Assistant United States Attorneys Robert Cares, David A. Gardey, and Stephanie Dawkins Davis.
Detroit One Collaboration Leads to Convictions of Violent Drug Gang in Northwest DetroitRead the Press Release
The collaboration of local, state and federal law enforcement under the Detroit One program led to convictions of three individuals who were involved in a violent, armed drug gang located in northwest Detroit, United States Attorney Barbara L. McQuade announced.
Mohamed Faraj, Fouad Faraj, and Mohamed Ayoub, were convicted of a variety of charges after a six-week trial before U.S. District Judge Stephen J. Murphy, III. The drug crew had been distributing marijuana and prescription pills in the Warrendale neighborhood in Detroit from 2009 until their arrests in August 2013. The criminal enterprise led by the two Faraj brothers employed teenagers and young men to act as their street level distributors. These young workers regularly had access to firearms supplied by the leaders. The group committed arson to create stash houses and to further the enterprise=s narcotics distribution activities.
The investigation was coordinated by the Detroit One Initiative, through the lead efforts of the Comprehensive Violence Reduction Partnership, consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Detroit Police Department, Michigan State Police, Michigan Department of Corrections, and assisted by the Federal Bureau of Investigation, Homeland Security Investigations, and the Internal Revenue Service, Criminal Investigations. By sharing information and coordinating efforts, investigators were able to link suspects and incidents to uncover the scope of the organization and identify its members. Seven members of the group now stand convicted of federal charges.The three men convicted at trial were:
- Mohamed Faraj, 31, of Dearborn Heights, who was found guilty of continuing criminal enterprise, conspiracy to possess with intent to distribute controlled substances, and use of a telecommunications device in furtherance of narcotics trafficking;
- Fouad Faraj, 44, of Dearborn Heights, who was found guilty of continuing criminal enterprise and conspiracy to possess with intent to distribute controlled substances; and
- Mohamed Ayoub, 32, of Dearborn Heights, was found guilty of conspiracy to possess with intent to distribute controlled substances.
These convictions follow the guilty pleas of the following members of the crew:
- Mohammed Abdul Alhakami, 23, of Detroit, who pleaded guilty to possession of firearms in furtherance of narcotics trafficking;
- Ali Al-Hisnawi, 22, of Detroit, who pleaded guilty to conspiracy to possess with intent to distribute controlled substances; and
- Zaidon Al-Beheia, 26, of Dearborn, who pleaded guilty to conspiracy to possess with intent to distribute controlled substances; and
- Adnan Bazzi, 28, of Dearborn, who pleaded guilty to conspiracy to possess with intent to distribute controlled substances.
- Abed Faraj, 40, of Detroit was acquitted of the charges against him.
“The convictions of this drug trafficking organization is the direct result of the collaboration of the Detroit One effort, where we are sharing information and working together to connect the dots between federal, state and local investigations,” McQuade said. “This group caused significant damage to the Warrendale community, exploiting teenage boys to do their dirty work on the street as drug runners and burning homes to use as stash houses.”
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.
Detroit Man Pleads Guilty to Access Device FraudRead the Press Release
A Detroit man pleaded guilty today to access device fraud in connection with a scheme to defraud the Internal Revenue Service, United States Attorney Barbara McQuade announced today.
McQuade was joined in the announcement by Jarod J. Koopman, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Entering the guilty plea before U.S. District Judge Gershwin A. Drain was Antonio R. Lundy, 43. According to court records, from September 2011 through April 2012, Lundy obtained the home addresses and personal identification information of individuals, which was used by others to prepare and file false and fraudulent income tax returns with the IRS. The returns requested refunds, which were paid by the IRS, loaded onto Turbo Tax Visa debit cards, and mailed to the home addresses provided by Lundy.
The names on the debit cards were of individuals who were unaware that their identities were being used as part of a scheme. Lundy picked up the debit cards and used them at ATMs in the Detroit area to withdraw cash. Lundy’s cash withdrawals totaled approximately $252,000, which he knew he was not entitled to and was a part of a scheme to defraud the IRS. Overall, the scheme involved approximately 180 fraudulent returns that requested approximately $1.7 million in refunds.
“IRS-CI is committed to working with our law enforcement partners to combat identity theft. Investigating and prosecuting identity thieves who attempt to defraud the government by filing fraudulent income tax returns remains a top priority for the IRS,” said IRS Criminal Investigation Special Agent in Charge Koopman.
Lundy’s sentencing is set for April 9, 2015. The crime to which he pleaded guilty carries a maximum term of imprisonment of ten years and a fine of $250,000. In addition, Lundy will be required to pay restitution to the IRS in the amount of $251,990.
The case was investigated by special agents of the IRS-Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Stephen Hiyama.
Royal Oak Resident Pleads Guilty to Tax EvasionRead the Press Release
Robin Petty, age 53, of Royal Oak, Michigan, part owner of Superior Metal Finishing Corporation, a Detroit, MI corporation, pleaded guilty to one count of income tax evasion, United States Attorney Barbara McQuade announced today.
McQuade was joined in the announcement by Jarod J. Koopman, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Petty entered the guilty plea before U.S. District Judge Avern Cohn.
According to court records, Petty served as the treasurer of Superior Metal Finishing, a Sub-S Corporation and received wages, as well as the income that was generated by her ownership of Superior Metal Finishing Corporation shares. During 2008, Petty received income totaling $119,117, which she reported on her Federal Income Tax return. However, evidence showed that in 2008, Petty had received a total of $356,050 in Superior Metal Finishing Corp. checks made payable to her. Her deliberate failure to report $236,933 in income received from Superior Metal Finishing caused her tax liability to be understated by $70,073 for the 2008 tax year. Under her plea agreement, Petty is also being held responsible for filing similar false returns for the years 2009-2011. In all, she evaded $339,526 in federal income taxes for the years 2008-2011.
“Every American has a duty to pay their fair share of taxes. By her guilty plea today, Petty is acknowledging and accepting the consequences of evading that duty,” said Special Agent in Charge Jarod J. Koopman.
Petty’s sentencing will be set by the court. The charge of income tax evasion carries a maximum term of imprisonment of five years and/or a fine of $250,000.
The case was investigated by special agents of the IRS-Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Ross I MacKenzie.
Jackson Man Convicted of Sex Trafficking by ForceRead the Press Release
A Jackson man was convicted by a federal jury in Ann Arbor yesterday of sex trafficking several women and one minor victim, using force and coercion, announced U.S. Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the Federal Bureau of Investigation, Detroit Field Office.
The two-week trial was conducted before U.S. District Judge John Corbett O’Meara in Ann Arbor. Devin Smith, 29, faces a minimum of 15 years in federal prison at his sentencing on March 11, 2015.
According to the evidence presented at trial, Smith used physical violence, fear and crack cocaine to maintain control over his victims. Smith moved his victims around various hotels in southeastern Michigan. The victims attempted to flee from these hotels. On one occasion, a victim called 911 from a dumpster in Livonia. On another occasion, a different victim flagged down a Southfield police officer. One of the victims was 16 years old when she was prostituted and beaten by Smith. The minor was rescued by the FBI during an annual initiative, known as Operation Cross Country, in July 2013.
"This defendant used his victims as commodities, forcing them to engage in sex acts with strangers for money multiple times a day," McQuade said. "He coerced compliance with his demands with beatings, threats and drugs. We hope that cases like this one will raise awareness that sex traffickers are exploiting victims in hotels and truck stops in our communities."
“The perpetrator in this case used physical violence, fear, and coercion to further the sexual exploitation of his victims,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “This type of criminal conduct is horrific and intolerable. Our investigation in this case through the Southeastern Michigan Crimes Against Children Task Force, in conjunction with our local, state, and federal partners, demonstrates that combating sex trafficking and violence in our communities is of the highest priority for the FBI.”
The case was investigated by the FBI’s Southeastern Michigan Crimes Against Children Task Force (SEMCAC). The Southfield Police Department, Livonia Police Department, Jackson Police Department, and Jackson County Sheriff’s Office all provided crucial assistance in the investigation.Sixteen People Charged in Nationwide Telemarketing Scheme That Involved Thousands of Homes in DetroitRead the Press Release
Sixteen people have been charged for operating a fraudulent telemarketing scheme that involved losses of over $20 million to more 290 victims in 46 states and Canada, including Michigan, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office.
According to the first superseding indictment, the telemarketers operated from call centers in Florida and New York. The telemarketers made unsolicited calls to individuals across the country offering to sell homes in Detroit. The telemarketers lied about the values of the homes, and told investors that they were purchasing bank-owned homes that previously had mortgages worth many times more than the current sales price. In reality, the homes were oftentimes acquired for no more than $500 before quickly being sold by the telemarketers to victims for between $7,500 and $15,000. After an investor agreed to purchase one home, the telemarketers caused the investor to believe that it was quickly resold to a hedge fund or foreign buyer for a substantial profit. In reality, the property was transferred to a shell company controlled by the telemarketers for no consideration and there were no profits. Based on these sham transactions, which caused investors to believe that there was an established process and market for flipping homes in Detroit, numerous investors purchased multiple additional homes from the telemarketers. After purchasing a substantial number of homes, the investors had difficulty contacting the telemarketers and eventually all communication ceased. The telemarketers utilized aliases and frequently changed the name of their company to avoid disgruntled investors and law enforcement.The following individuals were charged:
- Izhak Halbani (Florida resident)
- Antwan Reid (Florida resident)
- Scott Amster (Florida resident)
- Richard Pierce (Michigan resident)
- Matthew Golden (Michigan resident)
- Erez Arsoni (New York resident)
- Gregory Swarn (New York resident)
- Joseph Arsenault (New York resident)
- Richard Silverstein (Florida resident)
- Michelle Pintado (Florida resident)
- John Trumble (Florida resident)
- Wayne Scott Simpson (Florida resident)
- Theodore Jacobs (Florida resident)
- Joseph Haden (Florida resident)
- Scott Lipman (Florida resident)
- Steven Goldstein (Florida resident)
The charges include a conspiracy to commit mail and wire fraud, 15 underlying wire fraud counts, and a conspiracy to commit international money laundering. Each of the seventeen counts in the first superseding indictment carries a potential sentence of 20 years’ imprisonment. The FBI arrested numerous individuals in Florida on Friday, November 21, 2014, prompting the unsealing of the charges.
"This nationwide telemarketing fraud not only caused millions of dollars in losses to victims of the scheme, but it also contributed to blight in Detroit neighborhoods,” McQuade said. “Thousands of homes were left to fall into decay as a result of these individuals using Detroit real estate as a commodity to accomplish their fraud.”
“The perpetrators in this case stole millions of dollars from hundreds of victims,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “However, they did more than steal money - their greed and fraud compounded the proliferation of vacant homes left for ruin in far too many Detroit neighborhoods. The FBI is committed to rooting out and bringing to justice those who would commit crimes of this nature and act against the interests of our communities."
Gregory Swarn was previously arrested in early November after he fled overseas utilizing a fraudulent passport. The U.S. Department of State, Diplomatic Security Service (DSS), with the assistance of the FBI, was able to locate Swarn in Thailand. In cooperation with DSS, Thai officials arrested Swarn and deported him to the United States to face charges for his passport fraud and the telemarketing fraud. At the time of his arrest, Swarn was on DSS’s Most Wanted List. Erez Arsoni likewise fled overseas and is currently on DSS’s Most Wanted List.
During the execution of search warrant and seizure warrants, the FBI has seized over $1 million in proceeds of the fraud.
The case was investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorney Louis Gabel with the United States Attorney’s Office for the Eastern District of Michigan in Detroit.
An indictment is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.Oakland County Brain and Spine Doctor Charged in Health Care Fraud SchemeRead the Press Release
A Bloomfield Hills doctor was arrested this morning and charged in a criminal complaint for his role in a health care fraud scheme for improperly performing lumbar spinal fusions, announced United States Attorney Barbara L. McQuade.
Joining in the announcement were Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Special Agent in Charge Lamont Pugh, Health and Human Services, Office of Inspector General (HHS-OIG), and Special Agent in Charge Marlon Miller, Homeland Security Investigations.
According to the complaint, Dr. Aria O. Sabit operates the Michigan Brain and Spine Physicians group in Southfield. The complaint alleges Sabit purportedly performed lumbar spinal fusion surgeries, which normally entails placing a medical device in a patient’s spinal column. In fact, Dr. Sabit would place no medical device in the patient’s spinal column, while billing the patient’s insurer, leading the patient to believe that the surgery had been performed correctly. When their pain continued, patients sought second opinions and were told that no medical devices had been implanted.
Insurers included Medicare, Medicaid and Blue Cross and Blue Shield of Michigan, as well as auto insurance companies.
The complaint further alleges that Dr. Sabit failed to disclose his involvement in health care fraud when he obtained citizenship in the United States. Before his naturalization as a U.S. citizen on May 10, 2013, Dr. Sabit failed to disclose that he had knowingly committed health care fraud, an aggravated felony, making him statutorily ineligible for naturalization.
“Doctors who lie to their patients about the procedures they have undergone not only obtain funds by fraud, but, even worse, they put patients’ health at risk,” McQuade said.
"The violation of a patient's trust for selfish gain through the fraudulent abuse of our nation's health care system is a very serious crime," stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. "The FBI, along with our law enforcement partners, remains committed to fighting health care fraud and keeping our citizens safe."
HHS-OIG Special Agent in Charge Lamont Pugh stated, "The conduct alleged in this complaint is serious, not only in terms of potential Medicare dollars improperly obtained, but patient safety as well. The OIG will aggressively investigate allegations of this nature in order to ensure the safety of Medicare patients and to protect vital taxpayer dollars."
Dr. Sabit was to appear in federal court today at 1:00 p.m.
Patients who have questions concerning their medical records and/or information regarding this investigation and prosecution can call the United States Attorney’s Office Information Line at 888-702-0553. In addition, to obtain any information relating to patient medical records, please send an email request to [email protected].
The case is being prosecuted by Assistant United States Attorneys Regina McCullough and Phillip Ross. The investigations were conducted jointly by the FBI and HHS-OIG, and DHS-ICE.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team, go to: www.stopmedicarefraud.gov.U.S. Attorney’s Office for Eastern MichiganCollects $691,889,997.55 for U.S. Taxpayers in 2014Read the Press Release
U.S. Attorney Barbara L. McQuade announced today that the Eastern District of Michigan collected $691,889,997.55 in criminal and civil actions in Fiscal Year 2014. This total is more than 27 times more than the office’s annual budget of $25 million. Of this amount, $685,731,929.48 was collected in criminal actions and $6,158,068.07 was collected in civil actions.
Additionally, the Eastern District of Michigan worked with other U.S. Attorneys’ offices and components of the Department of Justice to collect an additional $204,518,877.66 in cases pursued jointly with these offices. Of this amount, $34,182.13 was collected in criminal actions and $204,484,695.53 was collected in civil actions.
Attorney General Eric Holder announced today that the Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.“Every day, the Justice Department’s federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And this result shows the fruits of the Justice Department’s tireless work in enforcing federal laws; in protecting the American people from violent crime, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis.”
McQuade said, “These numbers are the result of the hard work of our lawyers, support professionals and our partner law enforcement agents. Their diligence has helped to restore illegally obtained funds to taxpayers and victims.”
This past June, the United States Attorney’s Office for the Eastern District of Michigan and the Northern District of Ohio recovered $200 million as part of the settlement in the case of U.S. Bank. This that case, U.S. Bank agreed to pay the United States $200 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the Federal Housing Administration (FHA) that did not meet applicable requirements
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in the Eastern District of Michigan, working with partner agencies and divisions, collected $12,316,830.00 in asset forfeiture actions in FY 2014. Forfeited assets deposited into the Department of Justice Asset Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
Two Men Sentenced for Planning to Murder Federal AgentRead the Press Release
Two Detroit men were sentenced to lengthy prison terms following their convictions for plotting to kill a federal agent and committing narcotics and firearms offenses, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Steven Bogdalek, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)
Rufus Deon Wilson, 39, was sentenced to life in prison and John Robert Davis, 43, was sentenced to 25 years in prison. The sentenced was imposed by U.S. District Judge Bernard A. Friedman.
The evidence presented at the June trial established that in April 2013, Davis and Wilson conspired to rob and murder an ATF agent who was acting in an undercover capacity. Davis and Wilson believed that the agent was a drug courier who wanted to rob a drug stash house. Davis and Wilson planned to double-cross the agent by robbing and murdering him after he picked up drugs from the stash house. During recorded conversations, Davis and Wilson talked about killing the agent by crashing into his vehicle, binding his hands behind his back, slashing his throat with a knife to avoid the sound of gun fire, stripping his body of any identifying information, and then either leaving the agent naked in the car to die or burning the car.
On May 2, 2013, Davis and Wilson were arrested in a warehouse as they prepared to travel to the stash house to commit the robbery and murder. Davis was in possession of a black mask and latex gloves. Wilson, who was already wearing latex gloves, was in possession of loaded pistol and a large knife with an 8” serrated blade.
“These defendants plotted to violently kill another human being so that they could steal drugs and money,” McQuade said. “These sentences are harsh but appropriate for violent offenders who place such little value on human life.”
This case was investigated by special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives and was prosecuted by Assistant United States Attorney Michael Martin and Douglas Salzenstein.Two Individuals Charged with Stealing PersonalInformation of More Than 1,400 PeopleRead the Press Release
An indictment was unsealed yesterday charging two individuals with running an identity theft and false income tax return scheme, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Jeffrey Frost, Special Agent in Charge of the U.S. Secret Service, Detroit Field Office; Jarod Koopman, Special Agent in Charge, Internal Revenue Service, Criminal Investigations; and Chief Michael Patton, West Bloomfield Police Department.
This six-count indictment charges Markitta Washington, 29, of Hampton, Georgia, and previously of Farmington Hills, Michigan, and Martez Lear, 29, of Farmington Hills, with multiple counts of identity theft-related crimes.
According to the indictment, Washington, who worked for Henry Ford West Bloomfield Hospital and DMC Harper Hospital, removed patient records, including Personal Identifying Information (PII) and used that information to file false tax returns in other people’s names. During the execution of a search warrant at a residence shared by Washington and Lear, personal information belonging to approximately 1,400 people was recovered. The information included individuals’ names, dates of birth, and Social Security numbers. Counterfeit and re-encoded credit cards and gifts cards were also recovered. The indictment alleges that at least 305 victims whose PII was stolen had false tax returns filed on their behalf for tax years 2011 and 2012, resulting in a loss to the Internal Revenue Service of approximately $489,000. Most of the refunds were sent using prepaid debit cards, some of which were recovered from the home shared by Washington and Lear.
United States McQuade, stated, "Criminals should know that while technology has made it easier than ever for them to commit identify fraud, technology is also making it easier for law enforcement to catch them. We are making enforcement of identity theft a high priority because this crime has become so pervasive and can be so damaging to victims.”
“As reflected by the indictments, United States Secret Service in Detroit—along with our federal, state and local partners—remains dedicated to the pursuit and apprehension of those responsible for these serious identity theft cases,” stated Jeff Frost, Special Agent in Charge of the Secret Service Detroit Field Office. “The continued, multi-jurisdictional collaboration between law enforcement resulted in the indictment of these individuals for their involvement in these crimes, and we will maintain our resolve as we continue to thoroughly investigate this case.”
“Investigators in this case have been relentless. It should send a powerful message to the criminals within our community that identity theft crimes will not be tolerated and will be vigorously investigated and prosecuted,” stated IRS Special Agent in Charge Jarod Koopman.
"The entire West Bloomfield community is grateful for the great law enforcement partnership that has led to the continuing federal indictments related to these very serious crimes. As the investigation continues, this partnership remains devoted to bringing everyone that played a role in these incidents to justice," said Chief Michael Patton.
Washington was arrested in Georgia, where she appeared in court and was released on a personal bond to appear in court in the Eastern District of Michigan for arraignment on the charges. Lear is currently serving a sentence in the Michigan Department of Corrections for gun related charges.
The case was investigated by the Southeast Michigan Financial and Cyber Crimes Task Force, which is based at the Novi Police Department and includes U.S. Secret Service, Homeland Security Investigations, the U.S. Postal Inspection Service, and IRS Criminal Investigations agents, as well as state and local law enforcement officers from the West Bloomfield, Novi, Royal Oak, Southfield, and Troy Police Departments.
The case is being prosecuted by Assistant U.S. Attorney Abed Hammoud with the United States Attorney’s Office for the Eastern District of Michigan in Detroit.
An indictment is only a charge and is not evidence of guilt. Every defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Hospitals have notified individual victims whose personal information was compromised. Patients of the Henry Ford West Bloomfield Hospital may call (313)874-9561with any questions. Patients of DMC Harper Hospital may call (313) 966-8818.
Naturalized U.S. Citizen Convicted on Immigration Fraud for Failing to Disclose Terrorism ConvictionRead the Press Release
A naturalized U.S. citizen was convicted of immigration fraud today for failing to disclose that she had been convicted of participating in a terrorist bombing, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was Marlon Miller, Special Agent in Charge of Immigration and Customs Enforcement, Homeland Security Investigations.
Convicted was Rasmieh Yousef Odeh, 67, a Chicago-area resident. The five-day trial was conducted before U.S. District Judge Gershwin Drain.
Odeh was found guilty of procuring her U.S. citizenship unlawfully. According to the indictment, Odeh was convicted in Israel for her role in the 1969 bombings of a supermarket and the British Consulate in Jerusalem, which were carried out on behalf of the Popular Front for the Liberation of Palestine ("PFLP"), a designated terrorist organization. Odeh and others placed multiple bombs at the British Consulate and in a supermarket. One of the bombs placed at the supermarket detonated, killing two and injuring others. A bomb placed at the Consulate caused structural damage to the facility. Odeh was sentenced by Israeli military authorities to life imprisonment, but was released after ten years as part of a prisoner exchange, and she then returned to the West Bank.
The evidence presented at trial established that in 1995, Odeh immigrated to the United States and was naturalized as a citizen in 2004. In her immigration documents filed in the United States, Odeh failed to disclose her arrest, conviction and imprisonment overseas, which were material facts for the U.S. government in determining whether to grant her citizenship.
“Today’s guilty verdict further emphasizes that the United States will never be a safe haven for individuals seeking to distance themselves from their pasts, no matter how distant that past might be,” said Marlon Miller, 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.”
"An individual convicted of a terrorist bombing would not be admitted to the United States if that information was known at the time of arrival," McQuade said. "Upon discovery that someone convicted of a terrorist attack is in the United States illegally, we will seek to use our criminal justice system to remove that individual."Odeh faces a maximum sentence of 10 years in federal prison and will be stripped of her United States citizenship. A sentencing date has been set for March 10, 2015 at 11 am. Judge Drain remanded Odeh to the custody of the United States Marshals pending her sentencing.
This case was investigated by special agents of Immigration and Customs Enforcement, Homeland Security Investigations and prosecuted by Assistant U.S. Attorney Jonathan Tukel and Special Assistant U.S. Attorney Mark Jebson.