Eastern District of Michigan
Press releases recorded for this federal judicial district.
Dearborn Man Sentenced on Extortion Charges Involving Employees of DTE EnergyRead the Press Release
A Dearborn man was sentenced today by United States District Judge Denise Page Hood to 41 months in federal prison after having been convicted by a jury in September of extortion by threatening employees of DTE Energy, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement were Paul M. Abbate, Special Agent in Charge of the of the Federal Bureau of Investigation in Detroit and Michael Lynch, Chief Security Officer for DTE Energy Corporate Security.
Sentenced was Sami William Mustafa, 28, of Dearborn, Michigan.
Evidence presented at trial established that on January 14, 2013, Mustafa was facing a shut-off from DTE Energy for failure to pay his power bill. Mustafa, who felt that DTE was not handling his bill properly, placed two calls to the customer service department and explained to the operators his intention to come down to their office to kill DTE’s employees. During these telephone conversations, Mustafa threatened “Do you want to get shot in the face over a couple of dollars” and “It’s going to be another Sandy Hook,” referring to the mass shooting that took place at an elementary school in Connecticut in December, 2012. Mustafa also used racially charged language.
In announcing the sentence, McQuade stated, “Mass shootings around the country have taught our society to take these kinds of threats very seriously. The public should be aware that threats of violence will be prosecuted criminally.”
Paul M. Abbate, Special Agent in Charge of the Detroit, Michigan, Division of the FBI, said, “ Violent threats like those made by the defendant in this case toward DTE Energy employees are taken very seriously, particularly when the threats make reference to other tragedies in an attempt to intimidate and instill fear. Those whose conduct violates federal law in this manner will be brought to justice.”
Michael Lynch, Chief Security Officer for DTE Energy, commended the FBI and U.S. Attorney's office, stating, "I'd like to recognize the efforts of the FBI and U.S. Attorney's office for their work to resolve this case and help keep DTE Energy employees safe."
This case was investigated by the Federal Bureau of Investigation and DTE Corporate Security.
Former Detroit Public Schools Accountant Sentenced on Fraud and Money Laundering ChargesRead the Press Release
Sandra Campbell, 60, a former Detroit Public Schools contract accountant and School Board candidate, was sentenced to nearly six years in federal prison today by United States District Judge Julian Abele Cook on charges of program fraud conspiracy, money laundering conspiracy and tax charges, following a five-week jury trial which took place in August, 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, Special Agent in Charge, Erick Martinez, Internal Revenue Service, Criminal Investigation and Detroit Public Schools Emergency Manager Jack Martin.
Sandra Campbell was sentenced to 70 months in federal prison on charges of program fraud against the Detroit Public Schools, money laundering and criminal tax fraud. In addition, Campbell was ordered to pay restitution to the Detroit Public Schools in the amount of $530,091.00. Co-defendant Domonique Campbell, daughter of Sandra Campbell, is set to be sentenced on January 7, 2014 at 11am.
The evidence presented at trial established that between 2004 and 2008, Sandra Campbell and Domonique Campbell, obtained in excess of $530,000.00 from the Detroit Public Schools through a fraudulent scheme in which orders were placed with the Campbells’ sham company for books and educational materials never provided to the schools. Sandra Campbell and Domonique Campbell conspired to launder the fraud proceeds and to defraud the Internal Revenue Service and failed to report the money they fraudulently obtained from the Detroit Public Schools as income on their tax returns.
United States Attorney Barbara L. McQuade said, "Anyone who considers defrauding our schools should take note that we are scrutinizing records and conduct, and will prosecute those who steal funds intended to educate our children."
DPS Emergency Manager Martin stated, “This sentence sends a powerful message that fraudulently converting DPS resources for personal gain and thereby depriving students of the tools they need to prepare for educational and employment opportunities will not be tolerated. If you steal DPS resources, you will get caught and you will be prosecuted."
FBI Special Agent in Charge Paul M. Abbate stated, “In this case, the defendant’s criminal actions amounted to stealing the opportunity for a quality education from our children. Such conduct cannot, and will not, be tolerated. The FBI Detroit Field Office, together with our local, state, and federal partners will continue to battle public corruption and hold those responsible accountable for their actions."
IRS Special Agent in Charge Erick Martinez stated, “"Those who profit at the expense of our children and steal from our community will be held accountable for their greedy actions".The case was investigated by special agents of the FBI, IRS and Department of Education, Office of Inspector General, with the assistance of Detroit Public Schools, Office of Inspector General. The case was investigated and prosecuted by Assistant United States Attorneys J. Michael Buckley and Bruce Judge of the Public Corruption Unit.
Detroit Woman Sentenced for Theft of Funds Earmarked for Lighthouse of Oakland CountyRead the Press Release
Linda Linseman, 56, of Detroit, Michigan, was sentenced yesterday to 32 months imprisonment by Judge Robert H. Cleland for her theft of more than $385,000 in Federal and State grant funds designated to Lighthouse of Oakland, a non-profit organization in Pontiac, Michigan, dedicated to helping the homeless, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Giovanni Tiano, Special Agent in Charge, Department of Homeland Security, Office of Inspector General (DHS-OIG) and Barry McLaughlin, Special Agent in Charge, Housing and Urban Development, Office of Inspector General.
The case arose from Linseman’s employment as the Program Manager for Lighthouse’s Emergency Services Division. During a four year period starting in late 2008, Linseman misdirected funds designated for rental housing for the homeless to her friends and relatives as phony landlords and even paid her own rent in this manner.
United States Attorney McQuade stated, "This defendant stole taxpayer funds intended to benefit the homeless. She not only abused her position of trust, but denied shelter to those who need it most."
Special Agent in Charge Abbate stated, “Ms. Linesman abdicated the responsibilities of her trusted position to line her own pockets. In the process, she not only breached the public trust, but also stole funds intended to provide basic shelter for those in our community who need it most. The FBI Detroit Field Office, working with our law enforcement partners, remains dedicated to rooting out those who corrupt essential public systems. We will continue to bring these criminals to justice.”
Special Agent in Charge Tiano stated, “The DHS OIG is pleased with the successful outcome of this investigation and will continue to be committed to aggressively pursuing those individuals who seek to exploit the integrity of the DHS programs and operations for their own greed-driven motivations.”
The investigation of this case was conducted by special agents of the FBI, and the Offices of Inspector General for the Departments of Housing and Urban Development and Homeland Security and by Assistant U.S. Attorney Ross MacKenzie.
Serial Armed Robber Sentenced to 124 Years in PrisonRead the Press Release
Frank Richardson Jr., 39 of Detroit, was sentenced to 124 years in federal prison after having been found guilty in June on ten counts of robbery and firearms offenses, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Acting Special Agent in Charge Daryl McCrary, Bureau of Alcohol Tobacco and Firearms, and Detroit Police Chief James Craig.
The sentence was imposed by Chief Judge Gerald E. Rosen in Detroit.
The evidence presented at trial established that Richardson was the leader of a seven man robbery crew that committed armed robberies of Verizon and Radio Shack stores in the cities of Detroit and Eastpointe between February 22, 2010 and May 8, 2010. Richardson and one of his co-defendants selected and surveilled the stores to be robbed. They would then assemble the crew and, armed with handguns, commit armed robberies at the various locations. During the robberies, employees and patrons would be forced into rear storage rooms at gunpoint. Other co-defendants collected cellular telephones into large laundry bags before fleeing the store. Richardson would act as a look-out from outside of each location, communicating with the men inside the stores by cell-phone or handheld radios. The stolen cell phones would later be sold to individuals who offered them for sale on-line on e-Bay. Through the course of the robberies, losses to the various stores exceeded $80,000.
Richardson and the rest of the crew were apprehended when counter-surveillance by the Detroit FBI Violent Crimes Task Force resulted in arrests immediately following the May 8, 2010 robbery.
US Attorney McQuade stated, “"A lengthy sentence like this one results from the mandatory minimum sentences required for multiple counts of armed robbery. Congress mandated severe sentences for the severe harm violent criminals cause to public safety. We hope that violent offenders will take note of this type of sentence and put down their guns."FBI Detroit Field Office Special Agent in Charge, Paul M. Abbate said, "This investigation, leading to the arrest, conviction, and sentencing of the defendant, highlights the value and effectiveness of combining local, state, and federal resources and working jointly to combat violent criminals and protect the citizens of the Detroit metropolitan area. The FBI Detroit Division maintains strong working relationships with its local, state and federal law enforcement partners to aggressively pursue violent criminal offenders and protect the community."
ATF Acting Special Agent McCrary stated, ““In addition to the intense prosecution effort, we are getting the word out that violent crime committed with a firearm will lead to serious time in prison. I think the message is clear that we will not tolerate individuals who continually jeopardize the safety of our citizens by committing senseless violent acts of crime.”
United States Attorney McQuade praised the work of the Detroit Violent Crimes Task Force for the diligent pursuit and investigation of the men who were intent on terrorizing businesses, employees and customers in the Detroit area. The Violent Crimes Task Force is comprised of federal and local law enforcement officers who focus their efforts on the investigation and apprehension of individuals who commit violent, assaultive and narcotics related federal offenses in southeastern Michigan.
The case was prosecuted by Assistant United States Attorneys Jeanine Brunson and John O’Brien.
Buyer Beware - That's the Message Consumers Should Keep in Mind While Shopping OnlineRead the Press Release
With Cyber Monday approaching, consumers should educate themselves to prevent fraud, U.S. Attorney Barbara L. McQuade announce today.
Joining McQuade in the announcement were Special Agent in Charge Marlon Miller, U.S. Immigration and Customs Enforcement, Office of Homeland Security Investigations (HSI), Detroit and Paul Abbate, Special Agent in Charge of the Federal Bureau of Investigation (FBI) in Detroit.
“Cyber Monday,” the year’s busiest online shopping day, occurs each year following the Thanksgiving weekend. Cyber Monday brings with it the risk of fraud. Consumers sometimes lose their money, receive counterfeit merchandise or become victims of credit card fraud.
United States Attorney McQuade stated, “Like all technology, online shopping offers benefits and risks. Online shopping offers convenience and information for comparison shopping, but consumers should do their homework before sharing credit card information online.”
ICE Special Agent in Charge Miller stated, "It's especially critical around the holiday shopping season that consumers act as the first line of defense to protect themselves from losing their hard earned money by being ripped off," said Miller. "There are three basic principles consumers should consider to avoid being victims of scams-for both in-person retail and online shopping: price, location and quality. Substandard quality, prices far below retail, and goods being sold at suspicious websites or at locations not ordinarily associated with a particular brand should set off red flags to the consumer."
FBI Special Agent Paul M. Abbate stated, “Online consumers should be extra vigilant in their Internet purchases and activity during the holiday season. The FBI and the Internet Crime Complaint Center (IC3) see significant increases around Cyber Monday, and thereafter, in online scams. Fraud schemes are often associated with products or gift cards being sold for dramatically reduced prices; ‘one day only’ websites, offering sales on high-demand items; and ‘phishing’ emails, text messages, or phone calls that purport to come from established and well-known retailers, seeking shoppers to verify credit card numbers, bank accounts, or detailed personal information. These and other suspicious offers or communications are utilized by criminals as traps amidst the convenience of the online shopping environment. The FBI and IC3 (at www.ic3.gov) offer tips to help avoid being a victim of these and other cyber scams, particularly during the holiday season.”
Here are some tips the FBI suggests for protecting yourself from online fraud.
- Purchase merchandise only from reputable sellers.
- Obtain a physical address and phone number rather than a post office box, and call the seller to see if the number is correct and working.
- Send an email to the seller to make sure the email address is active.
- Check with the Better Business Bureau in the seller’s area.
- Inquire about returns and warranties.
- Be wary of overseas sellers, who may not be subject to recourse by U.S. law enforcement.
- Don’t judge a company by its website. Impressive-looking websites can be set up quickly.
- Use a credit card for purchases rather than a money order or personal check if your credit card company allows you to dispute charges if something goes wrong.
- Shop around to educate yourself about the price range for the item; if the deal is too good to be true, it probably isn’t legitimate.
Of course, despite a consumer’s best efforts, sometimes fraud still occurs. If you are a victim of an internet crime, you may report it at the Internet Crime Complaint Center, known as IC3, a partnership of the FBI and the National White Collar Crime Center, at www.ic3.gov . Also visit, http://www.iprcenter.gov/WebsiteFraudRedFlagTipSheet_12412.pdf/view for additional information.
Former Mayoral and Congressional Candidate Sentenced to 15 Years in Prison in BP Oil Fraud SchemeRead the Press Release
A 46-year-old Livonia man was sentenced today to 15 years in prison on three counts of mail fraud, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Jeffrey Frost, Special Agent in Charge of Secret Service, Detroit Field Office.
U.S. District Judge Stephen J. Murphy, III, imposed sentence on Duane Montgomery, who ran for Mayor of Detroit in 2009, and for a congressional seat in 2010. Montgomery was convicted by a federal jury in Detroit on August 5, 2013.
At the trial, which began on July 16, 2013, the jury heard evidence that Montgomery submitted a series of false claims to British Petroleum, the Gulf Coast Claims Facility (funded by BP), and the National Pollution Fund Center, administered by the U.S. Coast Guard, seeking compensation for purported damages to a boat he claimed to have been operating in the Gulf of Mexico at the time of the Deepwater Horizon oil spill. The claims centered around his assertion that tar balls resulting from the oil spill destroyed his engines while he was engaged in pollution monitoring for the corporation he owned, Engineering Technological Researchers, Inc., and that the company lost hundreds of thousands of dollars in revenue as a result. Montgomery’s last claim to the National Pollution Fund Center sought more than $2.5 million for denying his previous claims of $861,512. Before Montgomery’s final claim, the Gulf Coast Claims Facility had issued an emergency interim payment to the him in the amount of $43,900.
In imposing sentence, the judge cited Montgomery’s long history of using the judicial system as a tool of harassment, his prior criminal history, his ownership and possession of various weapons, including body armor and silencers, even after a prior felony conviction, and his elaborate and nearly constant evasion of the truth, not only to the various funds from which he sought money, but also to the Court and jury throughout the prosecution of this case.
United States Attorney Barbara L. McQuade said, “This defendant’s scheme to defraud sought to exploit private and public funds designated for the victims of the worst ecological disaster in our nation’s history.”
McQuade commended the United States Secret Service Detroit Field Office and the Department of Homeland Security’s Office of Inspector General for the investigation leading to this successful prosecution.
The defendant has been incarcerated since the Court revoked his bond after the jury’s guilty verdict in August of 2013.
Dearborn Man Sentenced for Clean Air Act ViolationsRead the Press Release
A Dearborn man was sentenced to 14 months in federal prison after having pleaded guilty to criminal violations of the Clean Air Act, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Randall Ashe, the Special Agent-in-Charge of the U.S. Environmental Protection Agency’s criminal investigation division in Chicago.
Khalil Mahmoud Saad, 40, was sentenced yesterday before United States District Judge Paul D. Borman in Detroit.
According to court records, in November 2011, Saad was hired as a demolition contractor to tear down a vacant commercial warehouse building located at 10401 Ford Road, Dearborn, Michigan, and dispose of the demolition debris. An asbestos consultant hired by the defendant inspected the building before the demolition began, and identified more than one-thousand linear feet of asbestos-containing pipe insulation, as well as asbestos-containing insulation on a large boiler. Federal law required that all of the asbestos materials had to be removed properly before any activity began that would break up, dislodge or similarly disturb the material. Rather than pay for the removal of the asbestos, Saad hired workers in April 2012 to tear down the warehouse building and failed to follow proper procedures such as failing to adequately wet regulated asbestos-containing material and ensure that it remained wet until collected or treated in preparation for disposal, both violations of the Clean Air Act’s asbestos regulations.
“The temptation is great to save money by cutting corners when tearing down buildings by failing to properly abate asbestos, but that conduct contaminates our clean air and exposes people to hazardous materials,” McQuade said. “We hope that prosecutions like this one will encourage people to comply with the law and keep our air clean.”
“Exposure to asbestos can lead to serious, even fatal diseases, and unsafe asbestos removal and demolition practices put the health of both the workers and the public at risk,” said Ashe. “For that reason, it is critical that those in charge of demolition operations strictly comply with the federal asbestos laws. The Defendant chose to ignore those legal requirements, potentially putting others at risk. Today’s sentence demonstrates that those who knowingly engage in such conduct will be prosecuted to the fullest extent of the law."
The case was prosecuted by the United States Attorney’s Office in the Eastern District of Michigan, by Assistant United States Attorneys Jennifer Gorland, Jennifer Blackwell and Special Assistant United States Attorney James Cha. The case was investigated by agents of the Environmental Protection Agency’s Criminal Investigation Division.
Dearborn-Based Business Owner and Former AttorneySentenced to Prison for Bank FraudRead the Press Release
The owner of a Dearborn, Michigan, based real estate company was sentenced to 110 months in prison, and a former Dearborn attorney was sentenced to 48 months in prison following their convictions for bank fraud and commercial bribery, announced United States Attorney Barbara L. McQuade.
Making the announcement along with U.S. Attorney McQuade were Paul M. Abbate, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, and Giovanni Tiano, Special Agent in Charge of the Dearborn office of the Department of Homeland Security - Office of Inspector General, and Jeffrey Frost, Special Agent in Charge of the Detroit office of the U.S. Secret Service.
Defendant, Hussein “Sam” Nazzal, 60, of Dearborn, and the owner of the of G & S Development real estate investment firm, was sentenced to serve 110 months in federal prison following his conviction at trial for bank fraud, bribery of a bank officer and obstruction of justice. Nazzal was also order to pay $2.9 million in restitution to his victims.
Defendant Edward A. Schneider, 60, of Dearborn, the former principal in the law firm Edward Schneider, P.C. was sentenced to serve 48 months in prison following his conviction at trial for bank fraud and bribery of a bank officer. Schneider was also ordered to pay more than $2.7 million in restitution to his victims.
Both defendants were sentenced before the Honorable David M. Lawson of the U.S. District Court for the Eastern District of Michigan.
As part of the same prosecution, four additional defendants were previously sentenced to terms ranging from two years of probation to 40 months in prison. One defendant faces deportation to Lebanon on his release from the Bureau of Prisons.
In announcing the two sentences, McQuade stated, ABank fraud offenses harm all of us by shifting costs to consumers and by making it harder for legitimate borrowers to obtain loans.”Special Agent in Charge Abbate stated, "These types of crimes target our financial institutions, the integrity of which is critical for our communities. The FBI Detroit Division, in concert with our law enforcement partners, will continue to aggressively pursue those who fraudulently enrich themselves at the expense of us all."
Special Agent in Charge Tianno stated, “The DHS-OIG is very pleased by the successful outcome of this investigation and will continue to be committed to working with our law enforcement partners to aggressively pursue those who selfishly engage in the corruption of our financial institutions, which ultimately results in the weakening of our nation’s economy.”
Special Agent in Charge Frost stated, “The consequences of financial crimes perpetrated against individuals and organizations are far-reaching and long-lasting. The Secret Service believes that building trusted partnerships between all levels of law enforcement has been a proven and successful model for facing the challenges of criminal activity. It is through our collaborative approach with established partnerships that the Secret Service plays a critical role in detecting, investigating and mitigating the effects of financial crimes.”
This case was investigated by the Federal Bureau of Investigation, the Department of Homeland Security - Office of Inspector General and the United States Secret Service.
Monroe Couple Sentenced for Interstate Theft and Tax OffensesRead the Press Release
A husband and wife from Monroe were sentenced today for their roles in a theft and tax violation scheme, U.S. Attorney Barbara L. McQuade announced today.
Judge Marianne O. Battani sentenced John Arthur McCarter, 46, to 57 months in prison, and his wife, Katherine McCarter, 36, to 3 years of probation.
McQuade was joined in the announcement by Carolyn Weber, IRS-Detroit, Acting Special Agent in Charge, and Paul M. Abbate, Special Agent in Charge of the Detroit Division of the Federal Bureau of Investigation.
John McCarter was sentenced for interstate theft of stolen tires and for tax evasion. Katherine McCarter was sentenced for impeding the administration of the IRS laws and presenting false documents to the IRS.The case arose from John McCarter’s theft of six semi-trailers full of new tires and wheels from the Kace Logistics yard in Romulus, Michigan, in August 2006 and October 2007. Some of the stolen tires and wheels were intended for the Ford F-150 Harley Davidson series. After breaking the locks and hitching the semi-trailers to their own cabs, McCarter and his accomplices transported the semi-trailers to Knox, Pennsylvania, where they sold them to a wholesale tire dealer for approximately $240,000.
In addition to the interstate theft charge, John McCarter was also charged with tax evasion for failing to declare and pay taxes on approximately $759,000 that he obtained during from sales of new tires to the wholesale tire company in Pennsylvania. The IRS calculated that he owed taxes of nearly $225,000 on the unreported income.
Katherine McCarter pleaded guilty to impeding the investigation of IRS Criminal Investigations agents by attempting to mislead them about the source and purpose of monies John McCarter directed her to deposit into her personal bank accounts from the proceeds of the tire sales he had obtained.
“Not only did Mr. McCarter evade payment of taxes on his ill-gotten gains but his wife lied to the IRS about it when confronted with these facts. Compliance with our tax laws is an important aspect of our civil responsibilities” stated Carolyn Weber, Acting Special Agent in Charge. The IRS will continue to pursue those who circumvent the United States tax system.”
The investigation of this case was conducted by special agents of the FBI and IRS Criminal Investigations and prosecuted by Assistant U.S. Attorneys Ross MacKenzie and Ellen Christensen.
United States Attorney's OfficeTo Distribute $2 Million to Victims of FraudRead the Press Release
Today, the United States Attorney’s Office announced the distribution of approximately $2,000,000 in criminally forfeited funds back to the victims of a Ponzi scheme relating to the investigation and ultimate prosecution of Dante DeMiro.
The following is a list of victims to whom restitution was ordered and to whom forfeited funds will be distributed on a pro rata basis:
Comstock Township
County of Lapeer
American Postal Workers Union
Boilermakers Local 85
Northern Community Credit Union
UAW Local 900
United Services Credit Union
Mona Shores Public Schools
UAW Local 1700
UAW Local 892
Lantec Bank
UAW Local 412
Boilermakers Local 107
UAW Local 723
UAW Local 600United States Attorney McQuade stated, “This case reflects the way asset forfeiture is used to disgorge the ill-gotten gains from the defendant and return the funds to victims.”
Dante DeMiro, formerly of Milford, pleaded guilty to five counts of bank and wire fraud and was sentenced to ten years in federal prison. DeMiro was an investment advisor to various municipalities, credit unions, school districts, and trade unions, through his Southfield-based companies MuniVest Financial Group and MuniVest Services LLC. DeMiro used the MuniVest entities to operate a bank and wire fraud ponzi scheme. DeMiro falsely promised investor clients that he would invest their funds in various certificates of deposit. He did not invest their funds as promised, but instead, used their funds to purchase personal items and real property, to gamble, to make payments to other investors in the same scheme, and to make loans to several individuals and a local jewelry store.
"Asset Forfeiture" refers to the process of confiscating money and property that represent either proceeds of crimes or property used in the commission of crimes. The U.S. Attorney’s Office treats asset forfeiture as a priority because forfeiture is an important deterrent to criminal conduct and facilitates restitution in criminal cases that involve victims who have suffered losses.
Adrian Resident Pleads Guilty to Health Care Fraudand Filing A False Tax ReturnRead the Press Release
The operator of a human resource company was sentenced today to 72 months in federal prison after having pleaded guilty to health care fraud and filing a false tax return, announced U.S. Attorney Barbara McQuade.
Ms. McQuade was joined in the announcement by Special Agent in Charge Erick Martinez of the Internal Revenue Service Criminal Investigation (IRS-CI) Detroit Field Office and Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office.
Jason Syrek, age 39, of Adrian was sentenced before United States District Judge Paul D. Borman. In addition, Syrek was ordered to pay restitution in the amount of $4,502,576.04 to Blue Cross and Blue Shield of Michigan and $13,156,985 to the IRS.
According to court records, between May 2008 and December 2010, Syrek engaged in health care fraud and tax fraud while operating CAS Resources of Adrian, Michigan. CAS Resources provided outsourcing of human resource services, such as payroll, taxes and employee benefits administration, including health care coverage.
CAS collected $1.75 million in premiums from client companies in November and December 2010, an amount due to Blue Cross Blue Shield of Michigan (BCBSM), but never paid by Syrek. He admitted diverting these funds for personal use.
According to the plea agreement, in January, 2011, Syrek as the Director of CAS Resources filed a Form 941 for 2010: Employer’s Quarterly Federal Tax return for the third quarter. The Form 941 was filed with the IRS and stated that CAS Resources paid $1,862,902 in payroll taxes. Syrek knew he had diverted these funds for his own personal use and only paid $633,332 in payroll taxes. In addition to the third quarter Form 941 for 2010, Syrek filed approximately 7 other Form 941s with the IRS which he did not pay. In total, from 2010 through 2011, Syrek’s tax due was $13.4 million.
Syrek used the money to buy beachfront properties, several cars, a boat and investment properties. In order to pay his debt, Syrek will forfeit his homes, beach properties in Florida, 2009 32.5’ Sea Ray Boat and cars to include a 2008 Ferrari F430 and 2008 Porsche Boxster.
“Fraud schemes like this one may involve sophisticated methods, but they are nothing more than stealing. This defendant robbed health care programs and taxpayers for his personal benefit,” McQuade said.
“Syrek’s conduct was egregious in that he effectively stole funds that were withheld on behalf of employees,” said Erick Martinez. “His actions cost the government $13.4 million dollars in tax loss alone.”"Those who commit health care fraud and other related crimes will face severe penalties for their illegal acts,” stated FBI Special Agent in Charge Abbate. “The FBI is committed to working with the IRS and other agencies to bring these individuals to justice."
This case was prosecuted by Assistant United States Attorneys Sarah Resnick Cohen and Linda Aouate and investigated by special agents of the IRS Criminal Investigation and the FBI.Lake Orion Man Pleads Guilty to Tax EvasionRead the Press Release
A Lake Orion resident pleaded guilty yesterday to tax evasion charges, United States Attorney Barbara L. McQuade announced. Ms. McQuade was joined in the announcement by Carolyn Weber, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Bret Loren Kelly pleaded guilty before United States District Judge Denise Page Hood in Detroit, Michigan.
According to court records, Brett Kelly was employed as a financial broker. He assisted clients in securing commercial financing. In March of 2008, Kelly told IRS officials that he was destitute. Shortly thereafter, in May of 2008 Kelly opened a bank account in the name of Fidelity Capital Group, LLC (Fidelity). Kelly received approximately $1.8 million in income which he deposited into the Fidelity Bank account. He used this $1.8 million to purchase and renovate a home and two condominiums. He also purchased jet skis, snowmobiles, musical equipment and other assets which he concealed in the Fidelity name as well as another corporate shell called Cambridge North American Holdings out of Nevada. Kelly failed to file a 2007 income tax return. The 2008 and 2009 income tax returns were filed late and income was hidden in the Fidelity entity. In addition, Kelly failed to pay $141,725 in taxes in 2009.
“Kelly thought he had successfully disguised his income by diverting it into an undisclosed account,” said Acting Special Agent in Charge Carolyn Weber. “He should never have underestimated the IRS Criminal Investigators who were able to follow the money and bring him to justice.”
A sentencing hearing was set by Judge Hood for February 27, at 3 p.m. The maximum penalty for tax evasion is imprisonment of not more than five years and a $250,000 fine.The investigation of this case was conducted by special agents of the IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Ross MacKenzie.
Illinois Man Sentenced for Sending Threatening CommunicationRead the Press Release
An Illinois man was sentenced to 13 months in federal prison and ordered to pay restitution in the amount of $45,955 after having pleaded guilty to sending threatening communications over the Internet, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation.
Rodney Termini, 48, of Oglesby, Illinois, was sentenced by United States District Judge Gershwin Drain.
According to court records, on April 15, 2013, the day of the Boston Marathon bombing, Termini posted two threatening messages to the Facebook page of Con-Way Freight, a shipping company with locations in various states, including Michigan and Illinois. Termini was a contract employee for Con-Way Freight at its LaSalle, Illinois facility. Termini—using a Facebook identification in someone else’s name—wrote to Con-Way “there is a bomb at one of your facilities, have fun finding it.” In response to the threats, Con-Way evacuated several of its facilities and suspended certain operations while law enforcement officers (assisted by bomb sniffing dogs) searched the facilities. At the time of Termini’s threats, law enforcement had not yet captured the two men suspected in the Boston Marathon bombings.
United States Attorney McQuade stated, “Hoax threats are a serious crime. In addition to needlessly alarming the victims, threats divert law enforcement resources from other important assignments. We hope this prosecution will deter others from committing similar crimes.”
Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office, stated, “The FBI takes threats like those communicated by Mr. Termini very seriously. Law enforcement must respond to these kinds of threats, which diverts critical resources from other missions. We will continue to thoroughly investigate actions like these, and bring those who commit them to justice.”
The investigation of this case was conducted by special agents of the FBI in Ann Arbor and prosecuted by Assistant U.S. Attorney Kevin Mulcahy.
Bloomfield Hills Man Sentenced for Tax OffensesRead the Press Release
A Bloomfield Hills resident was sentenced yesterday to 27 months imprisonment for impeding the administration of the IRS laws and presenting false documents to the IRS, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Carolyn Weber, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Ernest Adam Csolkovits, 57, of Bloomfield Hills, Michigan, was sentenced by United States District Judge Julian Able Cook.
According to court records Csolkovits’ operated a multi-level marketing company called W.H.I.C. USA, Inc. based in Northville, Michigan. Csolkovits solicited monies from individuals, typically retired and elderly, for what he called commissaries to sell products that his company, W.H.I.C. USA would produce. One such product was an all-natural rodenticide called E.R.A.S.E. which Csolkovits promised to have approved by the EPA and then market and produce. Csolkovits obtained more than $2 million from individuals during the period of June 2000 through the end of 2003. Csolkovits, however, spent much of the money for personal expenditures, but filed no corporate or individual tax returns. Eventually, when he and his company were audited by the IRS, he falsely informed the IRS that the substantial cash he had taken out of his corporate account was to pay royalties to a parent company in the Bahamas, called W.H.I.C. International. He also provided the IRS with a purported Exclusive License Agreement between his company and the Bahamian company and a substantial number of receipts purportedly evidencing the cash royalty payments made pursuant to the Exclusive License Agreement. The evidence revealed, however, that the Bahamian company was merely a shell company that Csolkovits had formed himself and the license agreement and receipts were phony.
“Not only did Mr. Csolkovits lie to the IRS, he lied to his investors in this elaborate multi-level marketing scheme,” stated Carolyn Weber, Acting Special Agent in Charge. “He had no intention of using the money as he promised his investors he would. Instead Mr. Csolkovits used the funds for his own personal benefit. The IRS will continue to pursue those who circumvent the United States tax system and seek justice for the victims of those who unscrupulously take advantage of others.”
The investigation of this case was conducted by special agents of the FBI and IRS Criminal Investigations and prosecuted by Assistant U.S. Attorney Ross MacKenzie.
Columbiaville Man Indicted and Arrested for Filing False Tax ReturnsRead the Press Release
Gary Woody, of Columbiaville, Michigan, was arrested and arraigned today in federal court on an indictment charging him with three counts of filing false tax returns, United States Attorney Barbara McQuade announced today. Ms. McQuade was joined in the announcement by Carolyn Weber, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
The three count indictment charges that for the tax years 2006-2008, Woody filed tax returns that he knew were false. Woody knew that he was not truthfully reporting income that he received from Technico Products, LLC. The alleged tax loss to the government for 2006-2008 was approximately $270,000.
The defendant faces a maximum term of imprisonment of three years on each count of the indictment. The defendant faces a fine of $250,000 per count. The actual sentence imposed, if Woody is convicted, would depend on a number of factors, including the advisory sentencing guidelines.
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.
The case was investigated by Special Agents of the IRS-Criminal Investigation and is being prosecuted by U.S. Attorney’s Office in Flint, MI.
Gross Ile Businessman Convicted in Mortgage Fraud CaseRead the Press Release
A Grosse Ile businessman was found guilty today by a federal jury of conspiracy and one count of wire fraud, announced United States Attorney Barbara L. McQuade.
U.S. Attorney McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation.
The jury convicted Richard Dean Woolsey, 42, after a two-week trial before U.S. District Judge Avern Cohn.
The evidence at trial showed that from 2006 to 2008, Woolsey conspired and defrauded mortgage lenders in numerous transactions in Michigan and Tennessee. Using his own real estate and appraisal companies, Woosley orchestrated millions of dollars of fraudulent mortgage transactions by directing the activities of bank employees, buyers, appraisers and closing agents. To complete the scheme, he disguised the source of down payments, provided false and inflated appraisals for properties and provided false income information for buyers to bolster their creditworthiness to qualify for mortgage loans.
Woolsey was convicted of wire fraud and conspiracy to commit wire fraud. Each count carries a maximum possible penalty of 20 years in prison and a $250,000 fine.
We all pay the price for mortgage fraud," McQuade said. "This crime damages the integrity of our real estate markets and undermines the ability of lending institutions to protect themselves from debilitating losses, which leads to higher costs for all of us," McQuade said.
Special in Charge Abbate stated, “As reflected in the investigation of Mr. Woolsey’s criminal activity and his conviction today, the FBI takes mortgage fraud very seriously. These crimes, particularly those as egregious as Mr. Woolsey’s, not only negatively impact real estate markets, banks, and the financial industry, but hurt our entire community. The FBI will continue to aggressively investigate these crimes.”
Sentencing will be set after a presentence investigation by the United States Probation Department. Bond was continued.
Dearborn-Based Business OwnerSentenced to Prison for Immigration FraudRead the Press Release
The owner of a Dearborn-based investment company was sentenced to 33 months in prison today in federal court in Detroit for operating an immigration fraud ring from one of his restaurants. U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement were Giovanni Tiano, Special Agent in Charge of the Detroit Division of the Department of Homeland Security - Office of Inspector General, and Paul Abbate, Special Agent in Charge of the of the Federal Bureau of Investigation in Detroit.
U.S. District Judge Marianne O. Battani imposed sentence on Hussein “Sam” Nazzal, 59, of Dearborn. Nazzal is the former owner of the Shish Village restaurant and the G&S Development real estate company, both located in Dearborn.
Nazzal pleaded guilty in July to conspiracy to defraud the United States. That conviction arose from Nazzal’s role in brokering three separate false marriages between U.S. citizens and Lebanese nationals to obtain immigration benefits by fraud. As part of the same investigation, federal officials obtained criminal convictions of two of the individuals involved in the fraud activity. Two other participants have been deported from the United States to Lebanon.
In announcing the sentence, McQuade stated, A Fraud schemes undermine the integrity of our immigration system, and make it harder for legitimate applicants to obtain immigration benefits.”
Special Agent in Charge Tianno stated, A"DHS-OIG will continue to actively attack corrupt and greed-driven criminal schemes which would compromise our immigration system and threaten our border security."
Paul M. Abbate, Special Agent in Charge of the Detroit, Michigan, Division of the FBI, said “The FBI is committed to aggressively pursuing individuals who perpetrate fraud schemes such as this one to commit crimes against the United States. The FBI praised the teamwork of the law enforcement agents, partners, and the Assistant United States Attorneys who brought this case to a successful conclusion.”
This case was investigated by the Department of Homeland Security - Office of Inspector General and the Federal Bureau of Investigation.
Sam Nazzal is also facing sentencing for his convictions on multiple counts of bank fraud, commercial bribery and obstruction of justice. That sentencing will take place on November 18, 2013, before U.S. District Judge David M. Lawson.
Naturalized U.S. Citizen Charged with Immigration FraudFor Failing to Disclose Terrorism ConvictionRead the Press Release
A naturalized United States citizen, who was convicted in Israel for participating in a terrorist bombing, was charged with immigration fraud, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was William Hayes, Acting Special Agent in Charge of Immigration and Customs Enforcement, Homeland Security Investigations.
Special agents arrested Rasmieh Yousef Odeh, 66, at a Chicago-area residence after the unsealing of an indictment filed in federal court in Detroit. The indictment charges procurement of citizenship unlawfully. The indictment alleges that 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.
According to the indictment, 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 indictment alleges that in 1995, she immigrated to the United States, and naturalized as a citizen in 2004. In her immigration documents filed in the United States, the indictment alleges, Odeh omitted her arrest, conviction and imprisonment overseas, which were material facts for the United States government in determining whether to grant her citizenship.
“The United States will never be a safe haven for individuals seeking to distance themselves from their pasts,” said William Hayes, acting 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."
If convicted of the charge, Odeh will be stripped of her United States citizenship. She also faces a maximum sentence of 10 years for naturalization fraud.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in court.
This case was investigated by special agents of Immigration and Customs Enforcement, Homeland Security Investigations with the assistance of the Federal Bureau of Investigation.
Indictment Document- pdf
First Independence Bank and Federal Authorities Reach AgreementRead the Press Release
US Attorney Barbara McQuade announced today that her office reached an agreement regarding First Independence Bank’s compliance procedures under the Bank Secrecy Act (BSA) and anti-money laundering (AML) regulations. Under the Agreement the Bank will pay a fine of $250,000 and ensure that its BSA/AML policies and procedures will comply with all applicable laws and regulations. The Agreement requires the Bank to maintain procedures regarding customer identification and customer due diligence in order to obtain, analyze and maintain sufficient customer information to allow effective suspicious activity monitoring. It also requires guidelines to reasonably ensure identification and timely, accurate reporting of known or suspected criminal activity as required by law.
US Attorney McQuade said that “It is vital that banks perform the required level of customer identification and due diligence and possess the ability to monitor transactions so that they can report properly to authorities when there is any suspicious criminal activity. The banks are one of our country’s first lines of defense against, and identification of, certain financial crimes. We are intent on vigorously enforcing their obligations to perform these obligations effectively.”
The agreement indicates that, prior to 2009, First Independence Bank had unsatisfactory BSA and AML compliance programs and practices. US Attorney McQuade noted that, “since the time the deficiencies were discovered in 2009, First Independence has hired a significant number of new officers and staff, including in its BSA department, purchased sophisticated monitoring software, implemented several enhanced projects to identify possible money laundering in customer accounts, filed suspicious activity reports and devoted considerable resources to improved its BSA and AML compliance policies and procedures and controls.” The Bank has agreed to maintain its systems and procedures and to comply with all applicable laws and regulations regarding AML and BSA.
Former Detroit Mayor Kwame Kilpatrick, Contractor Bobby Ferguson and Bernard Kilpatrick Sentenced on Racketeering, Extortion, Bribery, Fraud and Tax ChargesRead the Press Release
Former Detroit Mayor Kwame M. Kilpatrick, 43, contractor Bobby Ferguson, 44, and Bernard Kilpatrick, 72, have all been sentenced for their roles in the wide-ranging Detroit public corruption scandal, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by John Robert Shoup, Acting Special Agent In Charge of the Detroit Field Office of the Federal Bureau of Investigation, Randall Ashe, Special Agent in Charge of the U.S. Environmental Protection Agency, Criminal Investigation Division, Richard Weber, Chief of IRS
Criminal Investigation and Barry McLaughlin, Special Agent in Charge, U.S. Department of Housing and Urban Development - Office of Inspector General.Kwame Kilpatrick was sentenced to 28 years in federal prison for using his position as Mayor of Detroit and Michigan State House Representative to execute a wide ranging racketeering conspiracy involving extortion, bribery and fraud.
Bobby Ferguson was sentenced to 21 years in federal prison for being the catalyst at the center of an extortion scheme that netted him millions of dollars in city contracts.
Bernard Kilpatrick was sentenced to 15months on a charge of subscribing false tax returns. The jury was unable to reach a unanimous decision on the racketeering conspiracy charge.
United States Attorney Barbara L. McQuade stated, “This case is not so much about punishing for the past as it about shaping the future. These sentences will deter other officials from stealing from the people and will attract honest public servants to office.”
In March, Kwame Kilpatrick was convicted by a jury of 24 counts of extortion, mail fraud, tax violations and racketeering. The jury deliberated for about 14 days before returning the verdicts, concluding a five-month long trial before United States District Judge Nancy G. Edmunds.
The evidence presented at trial established that Kwame Kilpatrick and contractor Bobby Ferguson participated in a racketeering conspiracy to financially enrich themselves, their associates and their families by using the power and authority of Kwame Kilpatrick=s position as Mayor of Detroit, as well as his position as a member of the Michigan House of Representatives, to commit extortion, bribery and fraud, and to defraud donors to nonprofit entities under the control of Kwame Kilpatrick and his associates, including the Kilpatrick Civic Fund, Kilpatrick for Mayor, and the Kilpatrick Inaugural Committee.
At the heart of the conspiracy was a scheme to use the power and authority of Kwame Kilpatrick=s office as Mayor of Detroit to extort municipal contractors by coercing them to include Ferguson in public contracts, and to rig the awarding of public contracts to ensure that Ferguson obtained a portion of the revenue from those contracts. Ferguson obtained at least $73 million in revenues from municipal contracts through this scheme, a portion of which he shared with his co-conspirators.
Evidence showed that during Kwame Kilpatricks tenure as a Representative of the Michigan House and as the Mayor of Detroit, Kwame Kilpatrick and Bobby Ferguson obtained more than half a million dollars from the State of Michigan and donors to nonprofit entities they controlled, including the Kilpatrick Civic Fund, Kilpatrick for Mayor, and the Kilpatrick Inaugural Committee, under the false pretense that the money would be used to better the community or for campaign expenses when, in reality, the money was used for personal or other impermissible expenses, including vacations to luxury resorts, spa treatments, yoga lessons and golf clubs.
Further evidence showed that during Kwame Kilpatricks tenure as mayor, he solicited and accepted payments and property valued at over one million dollars from persons seeking business with the City or its General Retirement System or Police and Fire pension funds.
Evidence was also presented that in return for the proceeds from the public contracts Ferguson received, Ferguson kicked back significant sums of cash, items of value or other benefits to Kwame Kilpatrick. Further evidence was presented that during his tenure as Mayor, Kwame Kilpatrick used more than $840,000 cash, derived from the conspiracy, to make deposits into his bank accounts, pay his credit card bills, purchase cashiers checks and clothing, and to repay loans.
As a result of the lengthy and wide-ranging investigation into corruption in the City of Detroit, the government has obtained convictions from thirty-two other individuals.
The investigation of this case was conducted by agents of the FBI, EPA-CID and IRS-CID. The case was prosecuted by Assistant U.S. Attorneys Mark Chutkow, R. Michael Bullotta, Jennifer Blackwell and Eric Doeh.
Detroit Tax Preparer Sentenced for Aiding in Fraudulent ReturnsRead the Press Release
A former tax preparer was sentenced today to a term of imprisonment of one year and one day and was ordered to pay restitution to the IRS in the amount of $74,000 after having been convicted of one count of willfully aiding in the preparation and filing of fraudulent income tax returns, United States Attorney Barbara L. McQuade announced.
Ms. McQuade was joined in the announcement by Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation.
Anthony Womack, 57, of Detroit, was sentenced by U.S. District Judge Gerald Rosen in Detroit. Mr. Womack pleaded guilty to the charge on July 15, 2013.
From approximately 2008 through 2010, Womack prepared tax returns in Southfield, Michigan, under the name “Tax Consultants Inc.” Womack prepared and filed federal income tax returns for 2008 through 2010, which he knew were fraudulent, with the Internal Revenue Service in the name of various taxpayers. The returns were filed with inflated charitable contributions, false unreimbursed employee expenses, and false education credits. Womack caused a tax loss of more than $96,000 to the United States by his fraudulent conduct. In addition, Womack did not claim the income from his tax preparation business on his personal income tax returns.
Erick Martinez, Special Agent in Charge stated, “IRS, criminal investigators uncovered Mr. Womack’s illegal activity and he is now paying the price for his actions.”
The investigation of this case was conducted by special agents of the IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Stephen Hiyama.
U.S. Department of Justice Awards GrantsFor Public Safety in Eastern District of MichiganRead the Press Release
U.S. Attorney General Eric H. Holder, Jr., and U.S. Attorney Barbara L. McQuade, announced funding awards for the Eastern District of Michigan.
The grantees and amounts awarded include:
CITY # OF OFFICERS ESTIMATED AWARD AMOUNT
City of Detroit 10 $1,884,390
City of Flint 6 $1,119,897
Harper Woods PD 1 $ 174,972
City of River Rouge 1 $ 125,000
Waterford Township 2 $ 250,000
Attorney General Eric Holder said, “These critical investments represent the Justice Department's latest effort to strengthen key law enforcement capabilities, and to provide communities with the resources they need to protect our young people. Especially in a time of increased challenges and limited budgets, our top priority must always be the safety and well-being of our children.”Overall the COPS Office funded awards to 263 cities and counties, aimed at creating 937 law enforcement positions. More than $125 million will be awarded nationally, including nearly $45 million to fund 356 new school resource officer positions.
In addition to the COPS grants, the Department of Justice, through its Office of Justice Programs, will award $1.5 million to Wayne County in the form of a Justice Assistance Grant – of which the City of Detroit will receive roughly $1 million. The majority of these funds will be used to purchase law enforcement technology and equipment to bolster the efficiency and effectiveness of law enforcement operations.
Additionally, through the Bureau of Justice Assistance, the Justice Department will award $100,000 to the Michigan Department of Corrections. This funding will support the Detroit Reentry Center Project – assisting with the release of parolees in Wayne County, and helping to contain future prison growth. These goals are in line with the “Smart on Crime” initiative Attorney General Holder announced last month, which is designed to improve public safety, reduce recidivism, redirect criminal justice spending, and ensure fair and appropriate sentences – along with other positive outcomes.
Further, through the Department’s Office of Juvenile Justice and Delinquency Prevention, the City of Detroit was awarded more than $170,000 which will allow the city to continue its work as part of the National Forum on Youth Violence Prevention.Lastly, the Detroit Police Department’s Detroit AmeriCorps Urban Safety Bike Watch will receive $49,998 as part of the 2013 Community Policing Development Awards.
“We in the Eastern District of Michigan are grateful that the U.S. Department of Justice is providing funding to help address our public safety challenges,” said U.S. Attorney McQuade.Rose City Dentist Arrested for Refusing to Pay His TaxesRead the Press Release
A Rose City dentist was arrested and arraigned yesterday in federal court on an indictment charging him with one count of evasion of payment of federal income taxes, one count of mail fraud and one count of making false statements to the IRS, United States Attorney Barbara McQuade announced today.
McQuade was joined in the announcement by Carolyn Weber, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Arrested was Carter White Rae, of Rose City, Michigan.
According to court records, Rae refused to pay his United States and the State of Michigan taxes from 2001 to 2011. Rae sought to avoid paying taxes by various means, including using the employer identification number (EIN) of the former owner of the dental practice run by Rae. He also opened and used a business bank account using the name and the EIN of the former owner of the practice. He closed his personal bank account, and used the business bank account, cash and money orders to pay his personal expenses. Rae attempted to trick the IRS by characterizing payments to his wife as “payroll” expenses. His wife rarely worked for his dental business; in fact she lived in a different state. Rae further attempted to relieve himself of his tax burden by filing bankruptcy.
The defendant faces a maximum term of imprisonment of 5 years on both counts one and three, and a maximum term of up to 20 years on count two of the indictment. The defendant face fines of $250,000 on all counts. The actual sentence imposed, if convicted, would depend on a number of factors, including the advisory sentencing guidelines.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial at which it will be the government's burden to prove guilt beyond a reasonable doubt.
The case was investigated by special agents of the IRS-Criminal Investigation and is being prosecuted by the U.S. Attorney’s Office in Bay City.
Northern Michigan Residents Charged in Drug Trafficking ConspiracyRead the Press Release
Four residents of northern Michigan have been charged with participating in a drug trafficking organization, U.S. Attorney Barbara L. McQuade announced today.
A ten-count indictment was returned by a federal grand jury in Bay City on Wednesday, charging four individuals with conspiracy to distribute cocaine, crack and heroin along with related charges.
Named in the indictment were:
Tradvis Demarr Williams, 33, of Cheboygan,
Paul Allen Anderson, 31,
Rachel Lee Winslow, 29, of Cheboygan, and
Kimberly Ann Turcott, 26, of Charlevoix.The charges follow an investigation conducted during the past several months by the Michigan State Police Straits Area Narcotics Enforcement ("MSP SANE") team and the Drug Enforcement Administration. On Thursday, the MSP SANE team executed arrest warrants and search warrants at several locations.
Members of the conspiracy are alleged to have transported or arranged for the transportation of kilogram quantities of cocaine, crack and heroin from Detroit to the Cheboygan County area over the course of the conspiracy, where they delivered the drugs to other distributors and end-users in northern Michigan. Members of the conspiracy are also charged with wiring drug proceeds to individuals in Detroit for the purchase of additional drugs.
The case is being prosecuted by the Bay City branch of the United States Attorney's Office for the Eastern District of Michigan.
The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless proven guilty.
First Leadership Summit on Good Governance for DetroitRead the Press Release
"Building An Honest & Open Government in Detroit: Why Public Integrity Matters,” is the theme of a leadership summit October 21, 9-3pm at Wayne State University Law School Auditorium to be attended by leaders in business, government, nonprofit, foundation and the wider civic community.
U.S. Attorney General Eric Holder is set to open the summit through a video-conference followed by a special “Gatekeepers Roundtable,” featuring media stakeholders such as Detroit Free Press Publisher Paul Anger, discussing the role of the media in ensuring public integrity and good governance.
Quicken Loans Founder & CEO Dan Gilbert will appear for a special conversation about Detroit and its prospects for the future including the role of the private sector in ensuring the public trust as well as Federal Bar Association President Michael K. Lee, Detroit Regional Chamber CEO Sandy Baruah and Detroit Council of Baptist Pastors General Counsel Rev. Bertram Marks, Wayne State Law School Dean Jocelyn Benson, former federal prosecutor Peter Henning among other headline speakers. Detroit Inspector General James Heith is expected to address the summit.
Summit convener United States Attorney for the Eastern District of Michigan Barbara L. McQuade underscored the significance of the summit saying "Public corruption is so harmful because it erodes trust in government, which makes government less effective. This forum will provide an opportunity to share ideas about ensuring the honest government that all of our citizens deserve."
Summit moderator, Bankole Thompson, editor of the Michigan Chronicle applauded the effort at a time when Detroit is seeking new leadership as it wriggles in unchartered waters.
“This summit is timely because Detroit needs to make public integrity and accountability the central focus of its governance aspirations,” Thompson said. “What this city has gone through in the last decade should not repeat itself because leaders owe it to the next generation to leave a legacy of integrity and enduring positive achievements. And that begins by building an honest government.”
Dean Benson stated, “An honest and open government is the most basic part of maintaining the public trust and reinforcing the democratic process. Wayne Law is thrilled to be hosting this event focused on how the public, private and non-profit sectors can work together to ensure municipal government in Detroit is transparent and accountable. My mentor, Judge Damon J. Keith, once said, ‘Democracies die behind closed doors.’ They are strengthened by a well-informed electorate.”
FBA President Michael K. Lee stated, "The power of elected officials is derived solely from the willingness of the people to agree to that governance. That willingness is contingent on the credibility of those in public office as seen through the eyes of that populace. A primary tool that a populace uses to measure that credibility is transparency, by which a populace can measure honesty and integrity."
To register for the summit, contact Wayne State University Law School Community Relations Department at 313-577-2733.
A Former Resident of Troy Sentenced to Serve Six Years in Prison for Fraud and Tax EvasionRead the Press Release
Scott Atkins, 44, of Scottsdale, Arizona, and a former resident of Troy, Michigan, was sentenced on September 18, 2013 to serve 6 years in custody, for operating an advanced fee fraud scheme and tax evasion, United States Attorney Barbara L. McQuade announced today.
Imposing the sentence was U.S. District Judge Marianne O. Battani.According to information provided to the court at the April 17, 2013 guilty plea hearing, from February 2005 through August 10, 2010, Atkins, falsely portraying himself as a hedge fund manager and/or an attorney, solicited large advanced fees by falsely promising to arrange large commercial loans for over 50 individual and commercial clients throughout the nation. In fact, Atkins had no means to secure such funding and never intended to do so. Moreover, Atkins' never intended to keep his promises that the advanced fees would be refunded should financing not materialize, but rather, always intended to use the funds to pay for personal expenses. As a result of these activities, Atkins' clients lost over $1,400,000.00.
In addition, Atkins never reported or paid any income taxes on any of the funds he received during that period, and evaded his income tax liability, totaling over $270,000, by opening bank accounts in the names of fictitious entities, sometimes using the social security number of his minor daughter, and depositing funds into those accounts, or transferring or directing his income into accounts controlled by his mother.
Upon his release from custody, the Court ordered Atkins to serve 3 years on supervised release, and pay restitution of over $1,730,000 to the victims of his advanced fee fraud scheme, as well as related investment fraud, and $270,094 to the Internal Revenue Service.
FBI Acting Special Agent in Charge John Robert Shoup stated “We are very proud of the work done by the FBI and the IRS Criminal Investigation Division in this complex case. Large-scale financial crimes have a tremendous negative impact on our economy, and the FBI remains committed to investigating them.”
"Atkins is a scam artist. He took money from people with no intention of producing what he promised. He used the money for his own personal gain," said Acting Special Agent in Charge Carolyn Weber. "IRS Criminal Investigation will thoroughly investigate those who blatantly steal from others and fail to pay their taxes."
The investigation of this case was conducted by the F.B.I and I.R.S. Criminal Investigations.
Oncologist Charged in Superseding Indictment with Medically Unnecessary Cancer Treatments SchemeRead the Press Release
Dr. Farid Fata was charged in a superseding indictment in the Eastern District of Michigan for a health care fraud scheme involving the administration of medically unnecessary drugs, including chemotherapy, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS). The superseding indictment adds eleven additional health care fraud counts, a count of conspiracy to receive and pay kickbacks as well as one count of naturalization fraud. Criminal forfeitures are also sought in the indictment.
According to court documents, Dr. Fata was the owner of Michigan Hematology Oncology, P.C. (MHO), a Michigan hematology and oncology practice that did business at multiple locations and billed multiple health care providers, including Medicare, Blue Cross Blue Shield of Michigan, Health Alliance Plan and Aetna. Beginning in August 2007 and continuing through July 2013, Dr. Fata is alleged to have submitted or caused the submission of false and fraudulent claims for services that were not medically necessary, including claims for (a) administering chemotherapy and other cancer treatments to patients whose medical conditions did not support the treatments; (b) administering intravenous immunoglobulin therapy to patients whose medical conditions did not support the therapy; and (c) administering intravenous iron treatments to patients who were not iron deficient.
For Medicare alone, from in or around August 2007, through in or around July 2013, MHO submitted approximately $225 million in claims to Medicare, of which approximately $109 million was for chemotherapy or other cancer treatment drugs. Of the approximate $225 million, Medicare paid over $91 million, of which over $48 million was for chemotherapy or other cancer treatment drugs. Dr. Fata is alleged to have submitted and caused MHO to submit claims for years of medically unnecessary treatments including repeated and unnecessary chemotherapy and cancer drug treatments for individuals who did not, in fact, have cancer. One patient who did not have cancer received approximately 155 chemotherapy treatments over a period of approximately two and a half years.
The indictment also alleges that Dr. Fata engaged in a scheme to unlawfully enrich himself through the solicitation and receipt of kickbacks in exchange for the referral of services and arranging for the furnishing of services, including home health care services and hospice services.
In addition, Dr. Fata is alleged to have procured his naturalization unlawfully by falsely stating on his application for naturalization that he never committed a crime or offense for which he was not arrested when in fact Dr. Fata then well knew he had, as of March 10, 2008, committed crimes of health care fraud.
Upon conviction, each of the health care fraud counts carries a maximum term of imprisonment of 10 years. The kickback conspiracy carries a maximum term of imprisonment of 5 years. The naturalization fraud carries a maximum term of imprisonment of 10 years, with the additional penalty that the order admitting the defendant to citizenship must be voided, and the certificate of naturalization must be cancelled.
Please contact the United States Attorney’s Office Victim Information Line at 888-702-0553 to access information relating to scheduled court events and procedures for requesting copies of patient files. Updates will be posted as information becomes available.
The case is being prosecuted by Fraud Section Assistant Chief Catherine K. Dick and Deputy Chief Gejaa T. Gobena, as well as Assistant United States Attorneys Wayne Pratt and Sarah Resnick Cohen. The investigations were conducted jointly by the FBI and HHS-OIG, as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney's Office for the Eastern District of Michigan and the Criminal Division's Fraud Section.
Since its inception in March 2007, strike force operations in nine locations have charged more than 1,330 defendants who collectively have billed the Medicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and 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 Action Team, go to: www.stopmedicarefraud.gov.
Law Enforcement Crackdown on Food Stamp FraudRead the Press Release
Nine individuals have been charged and six arrested during a two day period on food stamp fraud charges, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Assistant Special Agent-in-Charge Andrew LaFleur, United States Department of Agriculture, Office of Inspector General, Special Agent-in-Charge Erik Martinez, Internal Revenue Service, Criminal Investigation, Colonel Kriste Kibbey Etue, Director, Michigan State Police andWilliam Hayes, Special Agent- in-Charge, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), to highlight the district’s continued work in combating fraud against the United States Department of Agriculture’s Supplemental Nutrition and Assistance Program (SNAP) (Food Stamp Program).
Today’s announcement comes at the conclusion of a two-day federal search and arrest warrant operation which targeted numerous retailers in Detroit’s Eastern Market Terminal, and other locations in the city, who the government alleges to have been engaged in the illegal practice of exchanging cash for food stamp benefits (trafficking). The principal scheme alleged in a number of the cases involved individuals, known as “runners”, who would obtain food stamp recipients’ EBT (Electronic Benefits Transfer), or Bridge Cards, and take them to the various stores in the Eastern Market Terminal to conduct fraudulent discounting transactions. These transactions totaled millions of dollars during the past year.
The following individuals and Detroit establishments were subjects of the warrants:
Ronnie’s Quality Meats, 1429 Gratiot Avenue;
Embassy Foods, 2478 Riopelle Street;
Ftoni Meat & Produce, 2800 Riopelle Street;
Detroit Wholesale Produce, 2614 Riopelle Street;
Dayton Market, 8002 Dayton Street.Cheech’s Chicken Company, 1429 Gratiot Avenue. Frank Paul Buonbrisco, resident of Saint Clair Shores, Eric Lamont Owensby, resident of Romulus, and Damon Keith Ownensby, resident of Detroit, , all managers of Cheech’s Chicken Company were arrested on criminal complaints charging them with SNAP Fraud.
Gratiot Produce & Grocery Inc., 1429 Gratiot Avenue. Rassoul Ali Jamil, owner of Gratiot Produce & Grocery, and resident of Dearborn, has been named in a criminal complaint charging him with SNAP Fraud.
Greg’s Pallet Company, 1483 Winder Street. Greg King, resident of Detroit, and owner of Greg’s Pallet Company was arrested on a criminal complaint charging him with SNAP fraud, and being a felon in possession of a firearm.
Campus Diner, 5470 Cass Avenue. Anton Vuljaj, resident of Waterford and Owner of Campus Diner, was arrested on a criminal complaint charging him with SNAP Fraud.
Mike’s K&G Deli, 15500 East Warren Avenue. Ghassan Ghazi Shamoon, resident of Livonia and former Manager of Mike’s K&G Deli, was arrested on a criminal complaint charging him with SNAP Fraud.
Dayton Market, 8002 Dayton Street. Waleed Hindo, manager of Dayton Market, resident of Inkster, was arrested on a criminal complaint charging him with SNAP fraud.
Christopher Stanley Jackson, resident of Detroit, and employee of the Eastern Market Terminal, has been named in a criminal complaint charging him with SNAP Fraud.
"Taxpayers in Michigan fund the Food Stamp Program to provide food for the needy, not to create a commodity to be traded for profit," McQuade said. "We will work to ensure that food assistance programs are not abused."
Assistant Special Agent in Charge Andrew LaFleur stated, “SNAP is the largest program in the domestic hunger safety net, and retailers who prey on the poor by illegally purchasing SNAP benefits erode public trust in the program. As we conduct investigations throughout the State of Michigan, we appreciate the support of our Federal and State law enforcement partners and the U.S. Attorney’s Office’s long-term commitment to prosecuting SNAP fraud.”
“This is another positive step in our ongoing effort to combat food stamp fraud,” stated IRS-Criminal Investigation Special Agent in Charge, Erick Martinez. “The activities over the past days demonstrate our collective efforts to enforce the law and ensure public trust."
“The Michigan State Police recognize how important the coordination of law enforcement resources are when working with our federal law enforcement partners,” stated Col. Kriste Kibbey Etue, director of the Michigan State Police. “Bridge Card fraud harms those less fortunate so we are thankful for the support of the USDA and U.S. Attorney’s Office in bringing these cases to justice.”
“Taxpayers fund food stamps as a benefit to those who need assistance,” said William Hayes, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Detroit. “When unscrupulous business owners take advantage of these benefits for their own profit, the taxpayer is cheated and the individuals who really need the help also suffer.”
Prosecution is being coordinated by Assistant United States Attorneys Craig Weier, Christopher Varner, Graham Teall, and Stephen Hiyama.Detroit Carjacking Ring Dismantled by Conspiracy ConvictionRead the Press Release
Two Detroit men and a Redford Township man were found guilty yesterday by a federal jury in Detroit on 20 counts in a case involving armed carjacking to support a chop shop, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Acting Special Agent in Charge John Robert Shoup, Federal Bureau of Investigation, Chief James Craig, Detroit Police Department, Colonel Kriste Kibbey Etue, Director, Michigan State Police and William Hayes, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
The jury convicted Frank Harper, 29, of Detroit, Phillip Harper, 25, of Detroit and Bernard Edmond, 46, of Redford Township. The three-week trial was conducted before U.S. District Judge George Caram Steeh.The evidence presented at trial established that the defendants conspired with several others to steal high-end vehicles, many by committing armed carjacking, and then to retag the vehicles for sale. Edmond would purchase the stolen vehicles from the Harper brothers and others after the thefts. He would then alter the vehicle identification number of the stolen vehicles to conceal the fact that the vehicles had been stolen. Edmond would also create false documents to file with the Secretary of State, then sell the vehicles to unwitting buyers in Michigan and other states. Edmond created a market for the stolen vehicles by informing the Harpers and others of his desire to buy these stolen vehicles.
The Harper brothers committed several carjackings and other auto thefts. For example, on October 14, 2010, Phillip Harper and others brandished firearms to steal a Cadillac Escalade, a GMC Yukon, a Chyrsler Aspen, and a Mercury Milan from the Elysium Night Club in downtown Detroit. On January 25, 2011, Frank Harper and others carjacked a Mercedes S550 from a person at the intersection of Atwater and Joseph Campau streets in Detroit. On January 31, 2011, the Harper brothers and another used a firearm to carjack three vehicles from a person on Joseph Campau Street in Detroit. On February 22, 2011, the Harper brothers and others carjacked three high-end vehicles from the valet at Opus One restaurant in Detroit. On March 20, 2011, Philip Harper and others carjacked a Lexus 460 near Club Vain in Detroit. Many of these and other vehicles were intended for Bernard Edmund to retag and sell.
Co-defendants Justin Bowman, Stratford Newton, and Darrell Young have each pleaded guilty to their roles in the conspiracy and are awaiting sentencing.
Phillip Harper faces a mandatory minimum sentence of eighty years in federal prison and Frank Harper and Bernard Edmond are facing a mandatory minimum sentence of fifty-five years in federal prison.
A sentencing date will be set by the court.
U.S. Attorney McQuade said, "Armed carjacking poses an unacceptable danger to public safety and creates a climate of fear for residents in our community. Although these convictions bring with them severe sentences, we think they are appropriate for such serious and pervasive crimes. We hope that these convictions will deter others from committing similar crimes that wreak havoc in our neighborhoods."
Acting FBI Special Agent in Charge Shoup said, “This case stands as a superb example of the fine collaborative work being done by the FBI, Homeland Security Investigations, and the Detroit Police Department. FBI thanks the Assistant United States Attorneys who handled this case for the excellent work that they did in bringing justice to those who would prey on our society.”Chief Craig stated, “Thank you to all involved who dismantled this Detroit carjacking ring. This is another opportunity for the Detroit Police Department to work with our partners to help reduce carjacking crimes, which is one of the department’s top priorities.”
The case was investigated by Special Agents of the FBI, officers of the Detroit Police Department, Michigan State Police and Homeland Security Investigations.
U.S. Attorney and Acting Assistant Attorney General Send Letter to Michigan Supreme Court Addressing Rule 1.111, Foreign Language InterpretersRead the Press Release
091713_AAG_Letter_to MI-Re_Court_Rule(2).pdf (pdf file) Click on link to view document
Former Wayne County Official Sentenced for FalsifyingDocuments to Conceal Bribery SchemeRead the Press Release
A former Wayne County official was sentenced to more than three years in prison for obstructing justice in the investigation of a bribery and extortion scheme, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Acting Special Agent in Charge John Robert Shoup of the Federal Bureau of Investigation (“FBI”).
Zayd Allebban, former Wayne County Director of Enterprise Applications, the office that does software application development for Wayne County, was sentenced to 41 months in federal prison by U,S. District Judge Stephen J. Murphy, III. Allebban was found guilty at trial in February by a federal jury in Detroit on charges of falsifying documents with the intent to obstruct justice. The purpose of the falsified documents was to conceal a bribery and extortion scheme involving Allebban’s friend and supervisor, Tahir Kazmi, former Wayne County Chief Information Officer.
The evidence presented at trial established that Allebban and Kazmi sought to obstruct justice by seeking to persuade a private contractor to provide false information to the FBI and to a federal grand jury investigating corruption in the Wayne County government. Allebban and Kazmi sought to conceal the fact that the contractor had given Kazmi tens of thousands of dollars in cash and trips to Hawaii, Turkey, and Florida. Allebban was found guilty of falsifying documents that indicated that all payments from the contractor had been repaid by Kazmi, prior to the initiation of the grand jury investigation, with the intent to obstruct the grand jury and FBI investigation. Allebban, as part of the scheme, also delivered $24,000 in cash to the private contractor in an effort to induce the contractor to tell the FBI that the contractor had never given anything to Kazmi.
Allebban was found not guilty on separate charges of conspiracy to obstruct justice and obstruction of justice by means of false documents.
Tahir Kazmi pleaded guilty on July 26, 2012, to accepting a bribe and is scheduled to be sentenced on December 13, 2013. He faces a maximum sentence of ten years in prison and/or a $250,000 fine.
U.S. Attorney McQuade said, “Public officials who illegally enrich themselves will be detected and brought to justice. Efforts to conceal their crimes will bring additional charges and higher penalties.”
FBI Acting Special Agent in Charge Shoup said, "The citizens of Wayne County deserve honest government and leaders committed to serving the needs of taxpayers. This verdict should serve as a reminder that the FBI-led Detroit Area Public Corruption Task Force will remain vigilant and dedicated to stopping these illegal acts."The case was investigated by Special Agents of the FBI and Detroit Area Public Corruption Task Force. It is being prosecuted by Assistant United States Attorney Sheldon Light.
Defendant Sentenced for Role in Fast Food Business RobberyRead the Press Release
A Detroit resident was sentenced today to 9 ½ years’ imprisonment for charges involving armed robbery and possession of a firearm in furtherance of a violent crime, United States Attorney Barbara L. McQuade announced today. Ms. McQuade was joined in the announcement by Acting Special Agent in Charge John Robert Shoup, of the Federal Bureau of Investigation.
Jamal Muhammad, 29, of Detroit, was sentenced today by U.S. Chief District Court Judge Gerald E. Rosen after previously pleading guilty on May 3, 2013. Muhammad received two and a half years for robbing the Hungry Howies Pizzeria in Ferndale, Michigan, to be followed by a mandatory minimum seven years consecutive sentence for the possession of the firearm in furtherance of the robbery offense.
During 2008, there were a rash of robberies of fast food establishments in Detroit and its surrounding suburbs of Oak Park, Ferndale, Dearborn, and Redford. The businesses included a Subway, several Little Caesars, a Hungry Howies, a Long John Silvers, and a Wendy's to name a few. Guns were usually brandished during the robberies which typically involved two armed robbers entering the establishment, pulling firearms, and demanding cash from the registers and/or safe while an accomplice waited outside in the getaway vehicle. On one occasion the patrons inside a Wendy's restaurant, located in Detroit at Livernois and Eight Mile Road, were robbed of their personal possessions too. The police agencies in these respective cities noted similarities between the various robberies including the manner of dress of the robbers. There were two unique "hoodies" worn during the robberies. One had a skeletal-like design on the chest area, and the other had a web-like design on its chest area. Hence, law enforcement dubbed them the "Spiderman Crew." In addition, the hood of each hoodie zipped from the back portion of the hood all the way down below the front chest portion. Each hoodie, once zipped, had a built in mask that enclosed and hid the wearer's face behind a built-in dark mesh material.
Muhammad was not a participant in the Wendy's robbery mentioned above, which was the final robbery of the group. However, two group members arrested following the Wendy’s robbery were also involved in the Hungry Howie’s robbery with Muhammad. The robbery participants were apprehended in Detroit, while in possession of the hoodies and the robbery proceeds, after a brief chase and traffic stop moments after the Wendy’s robbery. The robbers present inside the getaway vehicle were Elisha Whitehead, Anthony Sampson, and Elan Andrews. Whitehead pleaded guilty to robberies of the Detroit Wendy’s, the Ferndale Hungry Howie’s, a Dearborn Little Caesar’s and a Detroit Long John Silver’s. Sampson pleaded guilty to robberies of the Detroit Wendy’s, a Detroit Popeye’s and a Ferndale Subway. Both are awaiting sentencing, while Andrews is awaiting an October trial date for robberies of the Detroit Wendy’s, Ferndale Hungry Howie’s, a Ferndale Subway and Little Caesar’s restaurants in Oak Park, Redford and Dearborn.
The case was the result of multi-agency cooperation between the Federal Bureau of Investigation, the Oakland County Sheriff’s Department, the Michigan State Police, the Oak Park Police, the Ferndale Police, the Dearborn Police, the Redford Police, the Detroit Police Department, and the Wayne County Prosecutor’s Office. The case was prosecuted by Assistant United States Attorney Terrence R. Haugabook with collaboration from Assistant Wayne County Prosecutor Joe Jansen.JaVierre Head Chosen as Detroit OneRap Contest WinnerRead the Press Release
Contest Showcasing Talented Teens from Detroit
Javierre Head, 17, of Detroit, Michigan was the winner of the first Detroit One Rap Contest promoting anti-violence, announced U.S. Attorney Barbara L. McQuade.
The rap contest was part of this year’s Youth Summit, the youth-led event hosted by the Detroit Youth Violence Prevention Initiative (DYVPI) in partnership with Detroit One and Youth Voice.
The day-long Summit included presentations on safe routes to school, the consequences of bullying, student-led school safety stations, self-defense tactics, and a rap contest featuring original material with a non-violence theme prepared and performed by Detroit high school students.
Javierre appeared on Fox 2's morning show and performed his rap and will be featured in a local public service announcement. Rap contest judges included City Council President Saunteel Jenkins, DJ BJ of 107.5 FM, a Detroit high school student, and a representative of the United States Attorney’s Office.
United States Attorney Barbara L. McQuade stated, “The youth summit provided a positive image of Detroit by showcasing talented teens working to prevent violence.”
Below is a link to Javierre’s performance on Fox 2 News: http://www.myfoxdetroit.com/video?clipId=9238003&autostart=true
Bank and Pharmacy Bandit Sentenced to 57 YearsRead the Press Release
A 42-year-old Oak Park man was sentenced today to 684 months in federal prison without parole for committing armed robberies, U.S. Attorney Barbara L. McQuade announced.
Joining in the announcement was Robert D. Foley, III, Special Agent in Charge of the Detroit Division of the Federal Bureau of Investigation.
The sentence was handed down by United States District Judge Arthur J. Tarnow. The defendant, Alfred Ross Wingate, Jr., was convicted at a jury trial in March.
The evidence presented at trial established that Wingate, a multi-convicted felon on parole for murder, conspired with seven other people to commit bank robbery and pharmacy robbery with firearms during the spring and summer of 2011. Wingate was one of two gunmen who robbed the Grosse Pointe Woods branch of Citizens Bank on May 18, 2011, Medicap Pharmacy in Warren on June 18, 2011 and Ferndale Pharmacy on July 11, 2011.
“Violent criminals who use guns can expect to be charged in federal court, where they face long prison sentences.” McQuade said. “Armed robberies risk a loss of life that we cannot tolerate.”
FBI Special Agent in Charge Foley said, “Violent criminals who use guns to threaten lives during robberies and other crimes will face severe penalties for their illegal acts. The FBI is committed to working with its law enforcement partners to ensure the safety of our communities.”
The case was investigated by Special Agents of the FBI, the Warren Police Department, the Ferndale Police Department and the Grosse Pointe Woods Department of Public Safety. It was prosecuted by Assistant United States Attorney Kenneth Chadwell.
U.S. Attorney’s Office Reaches Settlement with Palace Sports and Entertainment to Improve Access for People with Disabilities at the Palace of Auburn HillsRead the Press Release
The U.S. Attorney’s Office for the Eastern District of Michigan has reached an agreement with Palace Sports and Entertainment, LLC, under the Americans with Disabilities Act (ADA) for extensive changes to improve physical accessibility and opportunities for people with disabilities at The Palace of Auburn Hills, a large entertainment complex, and home of the NBA team the Detroit Pistons, located in Auburn Hills, Michigan. The settlement agreement resolves an investigation following complaints filed by two separate patrons with disabilities who were unable to attend events at The Palace, as well as a complaint from the Michigan Paralyzed Veterans of America.
“We applaud the new owners of the Palace of Auburn Hills for agreeing to make meaningful changes that will ensure full and equal access to its facilities for people with disabilities” said U.S. Attorney Barbara L. McQuade.
“Providing an accessible environment for our patrons is the core of our business. We thank the U.S. Attorney’s Office for working closely with us to elevate the level of service and accessibility at the Palace of Auburn Hills,” said Palace Sports & Entertainment’s Richard Haddad. “This effort is a cornerstone of our capital improvement plan and we’re proud to expand our commitment to enhance the experience of everyone who comes to the Palace.”
Under the settlement agreement, Palace Sports will provide at least 99 wheelchair accessible seats, and an equal number of companion seats, dispersed vertically and horizontally throughout The Palace, and will provide people in wheelchairs with lines of sight over standing spectators that are comparable to those offered to individuals without disabilities. In addition, beginning with all tickets on sale after October 1, 2013, tickets for accessible and companion seats will be available for purchase in the same manner as general seats, including online through Ticketmaster. Palace Sports has also agreed to improve accessibility in restrooms, restaurants, concession stands, parking areas, suites, and dressing rooms; improve signage throughout The Palace, and to annually train its employees on the ADA.
Today’s agreement was reached under Title III of the ADA, which prohibits discrimination against individuals with disabilities by public accommodations. The U.S. Attorney’s Office will actively monitor compliance with the agreement, which will remain in effect for three years.
For more information on the ADA and today’s agreement with Palace Sports and Entertainment, 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.
Local Business Executive Pleads Guilty to Conspiracy to Defraud the United StatesRead the Press Release
The former Vice President of a Detroit based construction management firm entered a plea of guilty today as part of the ongoing federal investigation and prosecution involving the Garden View Estates public housing project in Detroit, Michigan, United States Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Robert D. Foley, III, Special Agent In Charge of the Detroit Field Office of the Federal Bureau of Investigation (FBI), Randall Ashe, Special Agent in Charge of the U.S. Environmental Protection Agency, Criminal Investigation Division (EPA-CI), and Barry McLaughlin, Special Agent in Charge, U.S. Department of Housing and Urban Development - Office of Inspector General (HUD-OIG).
Calvin Hall, 45, of Detroit, entered the guilty plea in United States District Court before Judge David M. Lawson.
According to court documents, Hall and others prepared and submitted a proposal for XCEL Construction Services, Inc. which included false information. Based upon the false documents, XCEL Construction Services, Inc. was awarded a contract worth more than $11 million to act as the construction manager of the infrastructure phase of the Garden View Estates public housing project, which was funded by a $24 million grant from the U.S. Department of Housing and Urban Development. At the time, Hall was the Vice President of XCEL Construction Services.
During the plea hearing, Hall stated that he conspired with Michael Woodhouse, the President of XCEL Construction Services, Inc., and Bobby W. Ferguson, the founder and original owner of XCEL Construction Services, Inc.
United States Attorney McQuade stated, "We hope that this conviction will deter people from committing fraud against public housing programs, which are intended to provide housing to needy people in our community.”
FBI Special Agent in Charge Foley said, "Those who use false documents to receive millions of dollars in government contracts will face severe consequences for their illegal acts. The FBI will remain committed to pursuing and prosecuting such criminals."
HUD-OIG Special Agent in Charge McLaughlin said, The funds for this project were dedicated to improve the quality of life for Detroit’s neediest families. Working with our law enforcement partners, the Office of Inspector General for HUD will redouble our efforts to combat the fraud that limits that opportunity”.”
Under the plea agreement, Hall faces up to 18 months of imprisonment, as well as a fine of up to $40,000. In addition, Hall agreed to forfeit more than $2.2 million in assets, including multiple bank accounts and certificates of deposit seized from XCEL Construction Services, Inc. during the course of the federal investigation.
This case is being prosecuted by Assistant United States Attorneys J. Michael
Buckley, Bruce Judge and Rita Foley.Facebook Predator Sentenced to 15 YearsRead the Press Release
A 33-year-old New Baltimore man was sentenced on Wednesday to 15 years in federal prison for producing child pornography by using Facebook to entice boys to send him nude pictures of themselves, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was FBI Special Agent in Charge Robert D. Foley, III.
On August 17, 2012, Gregory Austin, age 33, of New Baltimore, Michigan, was charged with three counts of production of child pornography for manipulating young boys, through Facebook, to create pornographic pictures of themselves.
In March of 2012, Austin was arrested by the Roseville Police Department, in the parking lot an elementary school, for illegally purchasing Vicodin. The arrest led to an investigation that discovered images of child pornography on Austin’s cellular phone. Further investigation revealed that Austin created an on-line persona, through Facebook, of a young woman named “Julie”. Through “Julie” and her Facebook page, Austin convinced numerous minor boys, including former students, to photograph their genital and pubic area and send him the images. In total, 133 images, depicting mostly young boys in various states of dress and undress, were found on Austin’s phone and computer.
Yesterday, United States District Judge Arthur J. Tarnow sentenced Austin to 15 years in federal prison for his crimes. In making his decision, Judge Tarnow cited that Austin had committed a serious crime that required a severe punishment. Austin was also placed on five years of supervised release.
According to McQuade, "Parents and teens should be aware that predators use social media to manipulate victims. This defendant tricked young boys into sending him nude pictures of themselves. You need to be careful when communicating online because you never know who really is on the other end of a digital message."
The Roseville Police Department along with the Federal Bureau of Investigation’s Southeast Michigan Crimes Against Children Task Force participated in the investigation and prosecution of this case. This case was brought as part of the U.S. Attorney’s Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation through the Internet.
Oakland County Doctor and Owner of Michigan Hemotology and Oncology Centers Charged in $35 Million Medicare Fraud SchemeRead the Press Release
Dr. Farid Fata, 48, of Oakland Township, Michigan was arrested this morning and charged in a criminal complaint for his role in a health care fraud scheme which involved submitting false claims to Medicare for services that were medically unnecessary, including chemotherapy treatments, announced United States Attorney Barbara L. McQuade and Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division
Joining in the announcement were Special Agent in Charge Robert D. Foley, III, Federal Bureau of Investigation and Special Agent in Charge Lamont Pugh, Health and Human Services, Office of Inspector General (HHS-OIG).United States Attorney Barbara L. McQuade stated, “Our first priority is patient care. The agents and attorneys acted with great attention to detail to stop these allegedly dangerous practices as quickly as possible, and we have set up a victim hotline so that patients can access their files and get questions answered.”
FBI Special Agent in Charge Robert D. Foley, III stated, "Violating a patient's trust and placing them at risk through fraudulent abuse of our nation's health care system is deplorable and a crime which the FBI takes most seriously. The FBI remains committed to the arrest and prosecution of those who commit health care fraud."
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."
According to the complaint, Dr. Fata owns and operates Michigan Hematology Oncology Centers (MHO) which has offices in Clarkston, Bloomfield Hills, Lapeer, Sterling Heights, Troy and Oak Park. It was through MHO that Dr. Fata allegedly submitted fraudulent claims to Medicare for medically unnecessary services, including chemotherapy treatments, Positron Emission Tomograph (PET) scans and a variety of cancer and hematology treatments for patients who did not need them. In the course of the scheme, Dr. Fata falsified and directed others to falsify documents. MHO billed Medicare for approximately $35 million dollars over a two-year period, approximately $25 million of which is attributable to Dr. Fata.The complaint further alleges that Dr. Fata directed the administration of unnecessary chemotherapy to patients in remission; deliberate misdiagnosis of patients as having cancer to justify unnecessary cancer treatment; administration of chemotherapy to end-of-life patients who will not benefit from the treatment; deliberate misdiagnosis of patients without cancer to justify expensive testing; fabrication of other diagnoses such as anemia and fatigue to justify unnecessary hematology treatments, and distribution of controlled substances to patients without medical necessity or are administered at dangerous levels.
The complaint goes on to allege that Dr. Fata directed that chemotherapy be administered to patients who had other serious medical conditions that required immediate treatment before he would permit them to go to the hospital. In one instance, a male patient fell down and hit his head when he came to MHO. Dr. Fata insisted that the patient receive his chemotherapy before he could be taken to the emergency room. MHO administered the chemotherapy, after which the patient was taken to the emergency room. The patient later died from his head injury. In the second instance, a patient came to MHO with extremely low sodium levels, which can be fatal. Dr. Fata again directed that the patient first receive chemotherapy before being taken to the emergency room. MHO administered the chemotherapy and the patient was taken to the emergency room and hospitalized.
Dr. Fata will be making his initial appearance in federal court this afternoon at 1pm.
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.
The case is being prosecuted by Assistant Chief Catherine Dick, supervisor of the Detroit Medicare Fraud Strike Force and Trial Attorney Matthew Thuesen of the Department of Justice as well as Sarah Resnick Cohen, Deputy Chief of the Health Care Fraud Unit at the U.S. Attorney’s Office, and Justin Bidwell, Special Assistant United States Attorney. The investigations were conducted jointly by the FBI and HHS-OIG, along with the assistance of the Michigan Attorney General’s Office.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team, go to: www.stopmedicarefraud.gov.Former Mayoral and Congressional CandidateGuilty of Mail Fraud in Scheme to Defraud the BP Oil Spill FundRead the Press Release
A former candidate for mayor of Detroit and for Congress was convicted on August 5, 2013, of three counts of mail fraud, United States Attorney Barbara L. McQuade announced today.
Duane Montgomery, Jr., age 46, of Livonia, Michigan was found guilty by a federal jury in Detroit after a trial before the Honorable Stephen J. Murphy, III, United States District Judge.
At the trial beginning July 16, 2013, the jury heard evidence that Montgomery submitted a series of false claims to British Petroleum (“BP”), the Gulf Coast Claims Facility (funded by BP), and the National Pollution Fund Center, administered by the United States Coast Guard, all seeking compensation for purported damages to a boat he claimed to have been operating in the Gulf of Mexico at the time of the Deepwater Horizon oil spill. The claims centered around his assertion that tar balls resulting from the oil spill destroyed his engines while he was engaged in pollution monitoring for the corporation he owned, Engineering Technological Researchers, Inc., and that the company lost hundreds of thousands of dollars in revenue as a result. Specifically, the defendant’s last claim to the National Pollution Fund Center sought $861,512, which was denied. Earlier, however, the Gulf Coast Claims Facility issued an emergency interim payment to the defendant in the amount of $43,900.
United States Attorney Barbara L. McQuade said, “This defendant’s scheme to defraud targeted private and public funds designated for the victims of the worst ecological disaster in this country’s history. We will continue to aggressively investigate and prosecute such crimes to protect the funds intended for those in need.”
McQuade commended the United States Secret Service Detroit Field Office and the Department of Homeland Security’s Office of Inspector General for the investigation leading to this successful prosecution.
After the verdict, the Court revoked the defendant’s bond. He will remain in custody awaiting sentencing at a time to be set by the Court.
U.S. Attorney Barbara L. McQuade and Detroit Police Chief James Craig to Take Part in National Night OutRead the Press Release
U.S. Attorney Barbara L. McQuade and Detroit Police Chief James Craig will join law enforcement and community leaders on Tuesday, August 6th at the Detroit Police Department’s 6th and 8th Precincts, 11450 Warwick at 5 p.m. as part of the 30th Annual National Night Out crime and drug prevention event.
National Night Out is designed to heighten crime and drug prevention awareness; generate support for and participation in local anti-crime efforts; strengthen neighborhood spirit and police-community partnerships; and send a message to criminals letting them know neighborhoods are organized and fighting back.
United States Attorney Barbara L. McQuade stated, "This is an important moment in Detroit's history. We want to use the opportunity of National Night Out to let all citizens in Detroit know that despite the City's financial challenges, the partnership between law enforcement and the community is stronger than ever. Through the Detroit One initiative, we are working together to protect public safety. "
U.S. Attorney McQuade and Chief Craig will hold a press availability beginning at 5:30 p.m. to discuss crime issues facing the city and the Detroit One Anti-Violence Initiative. The media is encouraged to attend the event. Please contact Gina Balaya, Public Information Officer, United States Attorney’s Office at (313)226-9758 if you need further assistance.
National Night Out organizers are expecting over 16,000 communities and 38 million people nationwide to take part in community events on Tuesday.
Former Detroit Public Schools Accountant, Teacher Found Guilty of Fraud and Money Laundering ChargesRead the Press Release
Sandra Campbell, 57 a former Detroit Public Schools contract accountant and School Board candidate, and her daughter, Domonique Campbell, 38, a Detroit Public Schools teacher, were convicted today by a federal jury in Detroit on charges of program fraud conspiracy, money laundering conspiracy and tax charges, following a five-week jury trial, United States Attorney Barbara L. McQuade announced today. The jury returned its verdict after only one and one half hours of deliberations.
McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III and Special Agent in Charge, Erick Martinez, Internal Revenue Service, Criminal Investigation.
The evidence presented at trial established that between 2004 and 2008, Sandra Campbell and Domonique Campbell, obtained in excess of $530,000.00 from the Detroit Public Schools through a fraudulent scheme in which orders were placed with the Campbells’ sham company for books and educational materials never provided to the schools. Sandra Campbell and Domonique Campbell conspired to launder the fraud proceeds and to defraud the Internal Revenue Service and failed to report the money they fraudulently obtained from the Detroit Public Schools as income on their tax returns.
United States Attorney Barbara L. McQuade said, "Anyone who considers defrauding our schools should take note that we are scrutinizing records and conduct, and will prosecute those who steal funds intended to educate our children."
FBI Special Agent in Charge Robert D. Foley stated, "The FBI would like to thank all of our partners who continue to assist us in battling corruption. In particular, I would like to note the continued support of DPS Inspector General Van Marsh and his team. The actions of these subjects do nothing more than steal the opportunity for quality education from our children. Such actions cannot be tolerated and will be pursued by the FBI and its partners.”
IRS Special Agent in Charge Erick Martinez stated, “"Those who profit at the expense of our children and steal from our community will be held accountable for their greedy actions".The case was investigated by special agents of the FBI, IRS and Department of Education, Office of Inspector General, with the assistance of Detroit Public Schools, Office of Inspector General. The case was investigated and prosecuted by Assistant United States Attorneys J. Michael Buckley and Bruce Judge of the Public Corruption Unit.
Detroit One Collaboration Leads to Indictment of Violent Drug Gang in Northwest DetroitRead the Press Release
The collaboration of local, state, and federal law enforcement under the Detroit One program is beginning to show dividends with the investigation, indictment, and arrests of a violent, armed drug gang located in northwest Detroit, United States Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Daryl McCrary, Acting Special Agent in Charge of the Detroit Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Detroit Police Chief James E. Craig.
The indictment unsealed today charges three brothers, Mohamed, Abed, and Fouad Faraj, with distributing marijuana and prescription pills on the 6800 block of Rutherford Street and the greater Warrendale neighborhood in the city of Detroit. The criminal enterprise led by the Faraj brothers employed numerous teenagers and young men to act as their street level distributors. These young workers regularly had access to firearms supplied by the leaders and used arson as a tactic to create stash houses and to further the enterprise’s narcotics distribution activities. Among those charged today are:
- Mohamed Faraj, 29, of Dearborn Heights, charged with continuing criminal enterprise, conspiracy to possess with intent to distribute controlled substances, possession of firearms in furtherance of narcotics trafficking, and use a telecommunications device in furtherance of narcotics trafficking;
- Abed Faraj, 38, of Detroit, charged with continuing criminal enterprise, conspiracy to possess with intent to distribute controlled substances, and possession of firearms in furtherance of narcotics trafficking;
- Fouad Faraj, 43, of Dearborn Heights, charged with continuing criminal enterprise, conspiracy to possess with intent to distribute controlled substances, and possession of firearms in furtherance of narcotics trafficking;
- Mohammed Abdul Alhakami, 22, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances and possession of firearms in furtherance of narcotics trafficking;
- Ali Al-Hisnawi, 20, of Detroit, charged with conspiracy to possess with intent to distribute controlled substances; and
- Adnan Bazzi, 28, of Dearborn, charged with conspiracy to possess with intent to distribute controlled substances, possession of firearms in furtherance of narcotics trafficking, and felon in possession of a firearm.
“Detroit One is bringing a unified focus to arresting violent offenders in Detroit," McQuade said. "Dismantling violent drug gangs will help restore peace in our neighborhoods."“We know that illegal narcotics and firearms are a major threat to the safety of our citizens and to law enforcement officers,” said Acting ATF Special Agent in Charge Daryl McCrary. “Today’s operations and arrest warrants highlight ATF’s and our law enforcement partners’ effort to remove armed violent drug dealers from our streets. We are committed to reducing violent crime and this case emphasizes a repetitive problem of illegal narcotics traffickers willing to use and carry firearms to protect their drug proceeds,” McCrary added.
“This is the perfect example of law enforcement teamwork,” said Chief James E. Craig. “Working with our local, state, federal law enforcement agencies has and will continue to enhance our crime-fighting efforts in providing a safe environment for visitors and residents of the city of Detroit.”
Detroit One is a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. By working cooperatively, local, state, and federal law enforcement agencies are maximizing their ability to identify and arrest the individuals and groups committing violent crime.
In this case, investigators were able to share information and resources to identify the leaders and key members of this organization, leading to charges against six individuals in federal court. The case was initiated by the Comprehensive Violence Reduction Partnership, consisting of representatives of the Detroit Police Department, Michigan State Police, Michigan Department of Corrections, and ATF, and assisted by the Federal Bureau of Investigation, Homeland Security Investigations, and Internal Revenue Service.
An indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government's burden to prove guilty beyond a reasonable doubt.
Illinois Resident Pleads GuiltyTo Sending Threatening CommunicationsRead the Press Release
Rodney Termini, 47 of Ogelsby, Illinois, pleaded guilty today to sending threatening communications, announced United States Attorney Barbara L. McQuade. McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III, Federal Bureau of Investigation (FBI).
United States Attorney McQuade stated, “We treat all threats seriously, even hoaxes, because they divert law enforcement resources from other public safety needs. Anyone who communicates a threat to kill or injure others can expect serious criminal consequences.”
“Those who use popular Internet websites such as Facebook to post threatening communications will be investigated vigorously by the FBI”, stated Special Agent in Charge Foley. “We remain committed to the pursuit and prosecution of such individuals.”
According to court records on April 15, 2013, shortly after two bombs exploded near the finish line of the Boston Marathon in Boston, Massachusetts, killing three people and injuring more than 250 others, Termini posted two threatening messages to the Facebook page of Con-Way Freight, a shipping company that has locations in various states in the Midwest, including in Michigan and Illinois. Termini was a contract worker at Con-Way Freight’s LaSalle facility.
Termini’s first post read: “Hehehehehehahahahahah!!!!!!! Took Care Of The Boston Marathon And Now I Take Care Of Conway In Michigan And Lasalle.” Termini’s second post read: “ere (sic) bomb at one of your facilities, have fun finding it.” Termini posted these messages while at his home in Illinois, and the threats were received by Con-Way Freight employees in the Ann Arbor, Michigan office. Termini’s threats were made from a Facebook account he created in the name “Maggie Ladenn.”
As a result of the threatening messages, Con-Way Freight evacuated its facility in LaSalle, Illinois and had bomb sniffing dogs used in an attempt to detect any explosive devices. No actual explosive devices were recovered. Con-Way also diverted several trucks for a period of time, as they attempted to secure their various facilities. As a result of the bomb threats, Con-Way Freight suffered a loss of approximately $46,000.
Termini will be sentenced on November 21, 2013 at 2 pm by United States District Judge Gershwin Drain. Under the terms of his plea agreement, Termini faces 12 to 18 months in federal prison.
The case was investigated by special agents of the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Kevin Mulcahy.
Former Priest Pleads Guilty to Distributing and PossessingChild PornographyRead the Press Release
Timothy Murray, 62, of Novi, pleaded guilty to one count of distributing child pornography and one count of possession child pornography, United States Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Acting Special Agent in Charge William Hayes of the Department of Homeland Security (DHS) in Detroit.
According to court records, Murray used peer-to-peer software to trade child pornography with others, including an undercover DHS Homeland Security Investigations (HSI) special agent. A search warrant executed at Murray’s home recovered at least seven different computer devices containing videos and images of child pornography. Murray’s collection included over 650 movies and over 450 images of child pornography. Murray had previously served as a Catholic priest within the Archdiocese of Detroit before being removed from public ministry when substantiated allegations of Murray’s prior sexual abuse of a young boy came to light.
United States Attorney McQuade stated, “With his guilty plea, this defendant acknowledges his continued criminal sexual interest in children. The hands-on sexual abuse that led to his removal from public ministry by the Catholic church had long-lasting effects on the defendant’s prior victim. Similarly, the victims depicted in his extensive collection of child pornography suffered greatly not only at the hands of their abusers, but by those, like the defendant, who collect and continue to view the permanent depictions of their abuse.”
“This case serves as a reminder that child predators often try to portray themselves as trustworthy members of the community and parents everywhere should remain vigilant to potential dangers,” said acting special agent in charge of HSI Detroit William J. Hayes. “HSI and its law enforcement partners will continue to work aggressively to identify, investigate and seek prosecution for the perpetrators of these horrendous crimes.”
Murray will be sentenced on December 4, 2013 at 2pm, by the Honorable Victoria A. Roberts. Under the terms of his plea agreement, Murray faces a sentence of 262-327 months in federal prison.McQuade praised the work of the HSI agents for their professionalism and dedication in their aggressive and thorough investigation of these cases.
Assistant United States Attorney Kevin M. Mulcahy prosecuted this case for the United States.
Livingston County Man Indicted for Manufacturing Child PornographyRead the Press Release
Matthew Lewis Colston, 30, of Livingston County was indicted by a federal grand jury in Flint on charges of manufacturing child pornography, use of a facility in interstate commerce to entice a minor, and transfer of obscene matter to a minor, announced United States Attorney Barbara L. McQuade. McQuade was joined in the announcement by Robert D. Foley III, FBI Special Agent in Charge and Kriste Kibbey Etue, Director of the Michigan State Police.
The 10-count indictment charges Colston with seven counts of manufacturing child pornography the dates of which extend over a five-month period. The indictment further alleges that for approximately one year Colston used a cellular telephone to attempt to persuade, induce and entice a minor to engage in sexual activity which, under the laws of the State of Michigan, could be charged as first and/or second degree criminal sexual conduct. The indictment further charges Colston with using the same cell phone to transfer obscene material to a minor.
"These despicable crimes victimize and exploit innocent children. Through the SEMCAC task force, the FBI is committed to the arrest and prosecution of criminals who engage in such deplorable, heinous behavior,” said Special Agent in Charge Robert D. Foley III; FBI Detroit Division.
“The Michigan State Police is committed to working with our federal and local law enforcement partners involved with the SEMCAC Task Force to protect children from being exploited in the State of Michigan,” said Michigan State Police Captain Monica Yesh. “The sexual assault of children and the production of child pornography are horrific crimes. The perpetrators who commit these acts of violence will be vigorously sought out and brought to justice.”
If convicted for manufacturing child pornography defendant faces a minimum sentence of 15 years and up to 30 years imprisonment and/or a fine of up to $250,000 on each count. If convicted of using a phone to entice a minor, Colston faces a minimum sentence of 10 years and up to life imprisonment and/or a fine of up to $250,000 on each count. Transferring of obscene material to a minor carries a maximum penalty of 10 years and/or a fine of up to $250,000.
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 guilty beyond a reasonable doubt.
The case was investigated by the FBI, Michigan State Police, Livingston County Prosecutor's Office and the Southeast Michigan Crimes Against Children Task Force.
Southfield Tax Preparer Pleads Guilty to Preparing False Tax ReturnsRead the Press Release
Anthony Womack, 57, of Southfield, Michigan, pleaded guilty to one count of willfully aiding in the preparation and filing of fraudulent income tax returns, United States Attorney Barbara L. McQuade announced. Ms. McQuade was joined in the announcement by Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation.
From approximately 2008 through 2010, Womack prepared tax returns in Southfield, Michigan, under the name “Tax Consultants Inc.” Womack prepared and filed federal income tax returns for 2008 through 2010, which he knew were fraudulent, with the Internal Revenue Service in the name of various taxpayers. The returns were filed with inflated charitable contributions, false unreimbursed employee expenses, and false education credits. Womack caused a tax loss of more than $96,000 to the United States by his fraudulent conduct. In addition, Womack did not claim the income from his tax preparation business on his personal income tax returns.
Womack entered the guilty plea in United States District Court before Chief Judge Gerald E. Rosen.
Erick Martinez, Special Agent in Charge stated, “IRS, criminal investigators uncovered Mr. Womack’s illegal activity and he will now pay the price for his actions.”
A sentencing hearing was set by Chief Judge Rosen for October 17, 2013, at 11 am. The maximum penalty for making false, fictitious, or fraudulent claims is imprisonment of not more than three years and a $100,000 fine.
The investigation of this case was conducted by special agents of the IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Stephen Hiyama.
U.S. Resident of Mexico Pleads Guilty to Money Laundering SchemeRead the Press Release
A US citizen who resides in Cabo San Lucas, Mexico pleaded guilty to brokering international Money Laundering transactions, announced U.S. Attorney Barbara McQuade.
McQuade was joined in the announcement with Special Agent in Charge Robert L. Corso, Drug Enforcement Administration Detroit Field Office.
Pleading guilty before United States District Judge Bernard A. Friedman on July 9, 2013 was Michael Venuta.
According to court records, between April, 2011 and December 2012 Venuta was an associate of individuals involved in drug trafficking in Canada, the United States and Mexico. Venuta brokered multiple transactions in which drug trafficking proceeds were transmitted or transported across international borders involving the United States, Mexico and Canada. Specifically, the transactions were intended to conceal the nature, source and location of the proceeds.
Sentencing is scheduled for October 8, 2013. Venuta faces a maximum sentence of 46 month in prison under the terms of the plea agreement which was taken under advisement by the court, and a fine of up to $250,000. In addition, $356,314.00 in drug proceeds was seized and is being forfeited.
Ms. McQuade complimented the Special Agents of the DEA responsible for the investigation of the case.United States Intervenes in Health Care Fraud Action and Obtains $4 Million in SettlementRead the Press Release
The United States will receive $4 million in settlement of a lawsuit brought under the False Claims Act against a cardiology practice and a hospital in Jackson, Michigan, United States Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Lamont Pugh,III, Special Agent in Charge, Department of Health and Human Services Office of Inspector General (“HHS-OIG”) and Robert D. Foley, III, Special Agent in Charge, FBI Detroit Field Division.
The lawsuit, alleging medically inappropriate cardiology procedures, was filed by a Michigan cardiologist, Dr. Julie A. Kovach, against Jackson Cardiology Associates and its owner, cardiologist Jashu Patel M.D., and against Allegiance Health, a hospital, all located in Jackson, MI. The action was kept under seal while the government investigated. The government thereafter notified the defendants that it intended to intervene and prosecute the action, and the case was unsealed this week.
Dr. Patel and Jackson Cardiology Associates have now settled the case against them for $2.2 million and Allegiance Health, where many of the catheterizations were performed, has settled for $1.8 million. Dr. Kovach will receive a percentage of the recovery.
The complaint alleges that Dr. Patel and cardiologists employed by Jackson Cardiology Associates performed medically inappropriate cardiac procedures, including invasive catheterizations at Allegiance Health. Specifically, the evidence showed that Dr. Patel ordered catheterizations for patients based on findings from nuclear stress tests that he improperly read as positive. The government found that three-quarters of these patients had no significant heart blockages. These catheterizations involve snaking a hollow tube into the heart through an incision in the patient’s groin.
Dr. Kovach also alleged that Patel and Jackson Cardiology Associates performed a variety of other office-based medically unnecessary tests. A portion of the settlement with Allegiance Health also covered medically unnecessary peripheral stents performed on an outpatient basis. Because the unnecessary procedures were paid for by Medicare or Medicaid, the United States is entitled to money damages under the False Claims Act.
“This case is especially important because the defendants unnecessarily subjected patients to invasive and potentially harmful procedures. We urge other health care professionals with knowledge of medically harmful procedures to come forward, either by calling our office and asking to speak to the criminal or civil health care fraud coordinators, or through the qui tam whistleblower mechanism,” McQuade said.
The case was handled by Assistant U.S. Attorneys Joan Hartman and Linda Aouate, and was investigated by Special Agent John Anderson of HHS-OIG and FBI Special Agent Sean Nicol. In addition to the monetary settlement, the resolution also provides that Jackson Cardiology Associates and Allegiance Health will enter into Integrity Agreements with HHS-OIG.
Jury Convicts Podiatrist, Psychologist and Pharmacist in Health Care Fraud CaseRead the Press Release
A podiatrist, a psychologist and a pharmacist were convicted today in federal court in Detroit, Michigan for health care fraud and controlled substance distribution, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Robert L. Corso, Drug Enforcement Administration, Detroit Division, Special Agent in Charge Robert D. Foley, III, Federal Bureau of Investigation and Lamont Pugh, III, Special Agent in Charge, Department of Health and Human Services Office of Inspector General ("HHS-OIG").
United States Attorney Barbara L. McQuade stated, “Law enforcement investigators in metro-Detroit are aggressively investigating health care fraud and detecting abuses by doctors and pharmacists. We hope that prosecutions like this one will deter medical professionals from stealing taxpayer funds intended for health care.”
Convicted were podiatrist Anmy Tran, 42, of Clinton Township, psychologist Sanyani Edwards, 34, of Southfield, and pharmacist Mitesh Patel, 39, of Troy. Defendants Tran and Edwards were convicted on all three of the counts with which they were charged, specifically conspiracies to commit health care fraud, to distribute controlled substances, and to pay or receive health care kickbacks. Defendant Patel was convicted of six of the seven counts with which he was charged, specifically health care fraud conspiracy, conspiracy to distribute controlled substances, and two substantive counts each of health care fraud and controlled substances distribution. Defendant Mitesh Patel was acquitted of conspiracy to pay or receive health care kickbacks.
The evidence presented during the three-week trial demonstrated that, from approximately January 2006 through August 2011, Canton Pharmacist Babubhai Patel owned and controlled over 20 pharmacies (termed “the Patel Pharmacies” at trial), which operated in and around Detroit, Michigan. The evidence also showed that Babubhai Patel’s model for turning a profit at his pharmacies was based upon large-scale health care fraud and the diversion of controlled substances. Babubhai Patel paid cash kickbacks and other things of value to physicians in exchange for those physicians writing prescriptions for expensive medications, without regard to medical necessity, that could be billed to Medicare, Medicaid, or a private insurer through one of the Patel Pharmacies. Physicians affiliated with Babubhai Patel would also write prescriptions for controlled substances for their patients, again regardless of medical necessity, which would then be filled at one of the Patel Pharmacies. These controlled substances were distributed to patients and patient recruiters as a kickback in exchange for the patients using a Patel Pharmacy. Pharmacists at the Patel Pharmacies would increase the pharmacies’ profits by billing insurers for medications never actually distributed to patients.
The evidence presented at trial showed that defendant Anmy Tran was one of the physicians to whom Babubhai Patel paid bribes and kickbacks in exchange for referrals of prescriptions. In exchange, Tran wrote numerous prescriptions for expensive medications, without regard to medical necessity, that could be filled at one of the Patel Pharmacies. Evidence presented at trial demonstrated that defendant Mitesh Patel, a pharmacist in Babubhai Patel’s organization, billed Medicare, Medicaid, and private insurers for expensive medications he never dispensed to patients. With respect to Sanyani Edwards, the evidence presented at trial showed that he offered and paid bribes and kickbacks to doctors, nurses, and assisted-living facility owners in exchange for referrals of prescriptions to the Patel Pharmacies. Edwards also worked with a corrupt psychiatrist to write fictitious prescriptions for patients, which could then be billed at a Patel Pharmacy.Defendants Tran, Edwards, and Mitesh Patel were three of 26 individuals who were charged in August, 2011, with offenses relating to their involvement with Babubhai Patel’s pharmacy network. All 26 of the original defendants have now been convicted of felonies arising out of their involvement with Babubhai Patel; 17 of those defendants entered guilty pleas, and nine, including the three defendants today, have been convicted after trial. Defendant Babubhai Patel was convicted at a trial in August 2012; he is serving a 17-year prison sentence. A superseding indictment charging 13 additional individuals was unsealed in March 2013; those defendants’ cases remain pending, with a trial date set for January 2014.
The case was prosecuted by Assistant United States Attorneys John K. Neal and Wayne F. Pratt.
Former Highland Park Police Officer Sentenced to Prison for BriberyRead the Press Release
A former Highland Park Police officer was sentenced to prison today for conspiring with three other police officers to commit extortion and protect a shipment of cocaine, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by FBI Special Agent in Charge Robert D. Foley, III.
During a hearing before U.S. District Judge Avern Cohn, Craig Clayton, 55, of Highland Park, Michigan, was sentenced to 12 months and one day in prison and two years of supervised release based on his plea of guilty to conspiring to commit extortion. Clayton had agreed with three other Highland Park police officers to take money in exchange for delivering a four-kilogram shipment of cocaine. Clayton brought his badge and gun to protect the shipment, and Clayton accepted $1,500 in cash from an FBI informant for his work.
United States Attorney McQuade said, "The court’s sentence today sends a strong message that police officers who take bribes will go to prison, and that no one is above the law.”
FBI Special Agent in Charge Foley stated, “Police officers who swear an oath to serve and protect are held to the highest standards of ethics and integrity. The FBI is committed to ensuring those standards are maintained, and in cases of abuse, will pursue and prosecute those responsible."Thus far in the investigation, three of the four Highland Park police officers charged have pleaded guilty and been convicted. Former Officer Shawn Williams pleaded guilty on May 2, 2013 to conspiring to commit extortion, and former officer Anthony Bynum pleaded guilty on May 23, 2013 to conspiring to commit extortion and bribery.
The case was investigated by agents of the FBI. It is being prosecuted by Assistant United States Attorney David A. Gardey.