Eastern District of Michigan

A Michigan computer company and its owner were sentenced today to 30 months in prison and ordered to pay a $2 million dollar fine and restitution in the amount of $10,839.00 for trafficking in counterfeit goods and services and violating environmental laws, announced Barbara L. McQuade, United States Attorney for the Eastern District of Michigan. 

McQuade was joined in the announcement by William Hayes, Acting Special Agent-in-Charge for U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Detroit and Randall Ashe, Special Agent-in-Charge of the Environmental Protection Agency's criminal enforcement program in Michigan.

U.S. District Judge David M. Lawson sentenced Mark Jeffrey Glover, 44, and his company, Discount Computers, Inc. (DCI) for trafficking in counterfeit goods and services.  DCI was also sentenced for storing and disposing of hazardous waste without a permit.  Glover pleaded guilty to the charges on behalf of his company and himself in October.

DCI, headquartered in Canton, Mich. with warehouses in Maryland Heights, MO., and Dayton, N.J., operated as a broker of used electronic components, such as computers and televisions.  DCI resold working items and disassembled broken ones, selling them for scrap.  A large part of DCI’s business involved exporting used cathode ray tube (CRT) monitors to Middle Eastern and Asian countries. Egypt prohibits the importation of computer equipment which is more than five years old.  To evade this requirement, all three DCI locations replaced original factory labels on used CRT monitors with counterfeit labels which reflected a more recent manufacture date.  Over a five-period, DCI sent at least 300 shipments to Egypt, with a total shipment value of at least $2.1 million, constituting more than 100,000 used CRTs monitors.

Federal law makes it illegal to knowingly use a counterfeit mark on or in connection with goods and services for the purpose of deceit or confusion.  It is also illegal to store and dispose of hazardous waste, which includes certain electronic waste, or e-waste, without a permit.  Glass from older CRT monitors is known to contain levels of lead, which is toxic hazardous waste.  When deposited in a landfill the lead can leach out and contaminate drinking water supplies.  As a result, these types of monitors are required to be disposed of as hazardous waste under the Resource Conservation and Recovery Act.  By exporting older CRTs with fraudulent manufacture dates, Glover sent a large quantity of older e-waste overseas which was subject to improper recycling, increasing the potential for environmental and human exposure to hazardous materials.  

“Mr. Glover and his company falsified labels to conceal the age of computer monitors and their potential for hazardous waste,” McQuade said. “We hope this case will encourage others to comply with laws designed to protect drinking water and prevent human exposure to toxic waste.”

"When potentially hazardous e-waste is not properly disposed of, human lives can seriously be impacted", said William Hayes, special agent in charge of HSI Detroit. "The investigation confirmed that the defendant repeatedly and illegally exported used cathode ray tubes overseas. Homeland Security Investigations stands with our law enforcement partners ready to prevent any company from ignoring U.S. controls to export hazardous e-waste."

“It is a serious and costly offense to abandon hazardous waste,” said Randall Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Detroit and Chicago.  “Furthermore it is a serious offence to engage in the illegal export of e-waste as this has potential for environmental and human exposure to hazardous materials.  It is because of these types of environmental and human health threats that the EPA has designated illegal export of e-waste one of its top six international priorities.  Those who engage in this type of behavior put the public and the environment at risk, and will be prosecuted.”

E-waste is a global concern because used electronic equipment contains more than 1,000 different substances including toxic heavy metals and organics that, if disposed of improperly, can cause significant pollution problems.  Improper e-waste disposal is common in third world and developing countries because they are ill equipped for proper recycling, refurbishing, and disposal.  It is also common in these countries to find black market recycling groups that extract valuable metals from e-waste without regard for the safety of their impoverished employees who are exposed directly to toxic materials.

The case was prosecuted by the U.S. Attorney's Office in the Eastern District of Michigan by Assistant U.S. Attorney Jennifer Blackwell.  The case was investigated by agents of the U.S. Environmental Protection Agency's Criminal Investigation Division and U.S. Department of Homeland Security–Homeland Security Investigations, Detroit.

A Highland Park Police officer pleaded guilty today to 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, admitted that in late 2012 and early 2013, he agreed with three other Highland Park police officers to take money in exchange for protecting a four-kilogram shipment of cocaine. Clayton admitted that on January 23, 2013, he drove a car containing what he believed to be two kilograms of cocaine. Clayton brought his police badge and gun to protect the shipment. Another Highland Park police officer drove a separate car containing what he believed were two additional kilograms of cocaine. Later, Clayton accepted $1,500 in cash from an FBI informant for his work in delivering and protecting the drug shipment.

United States Attorney McQuade said, "Police officers who take bribes have no place in law enforcement. They will be prosecuted for violating their duties to serve the public.”

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."

Based on his guilty plea and felony conviction for conspiring to commit extortion, Clayton is facing a maximum of twenty years in prison and a fine of up to $250,000.

The case was investigated by agents of the FBI. It is being prosecuted by Assistant United States Attorney David A. Gardey.

Ronald Zajac, of Northville, Michigan, the General Counsel of Detroit's two pension funds, and Paul Stewart, of Detroit, Michigan, a former Trustee of Detroit's Police and Fire Retirement System were both charged today in a superseding indictment with participating in a bribery and kickback conspiracy involving over $200 million in investments before the two City of Detroit pension funds United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by FBI Special Agent in Charge Robert D. Foley, III.

Zajac and Stewart were added as defendants in a superseding indictment that had already charged former city Treasurer Jeffrey Beasley and investment sponsor Roy Dixon with the bribery and kickback conspiracy. The charges were set forth in a Fifth Superseding Indictment issued by a Detroit federal Grand Jury today.

United States Attorney McQuade said, "Public officials entrusted with billions of dollars in employees’ pension money cannot take bribes and kickbacks to influence their investment decisions.”

Robert Foley, Special Agent in Charge, Federal Bureau of Investigation said, "Those who are fortunate enough to serve in positions of public trust are expected to act with honesty and integrity at all times. The FBI is committed to holding these individuals accountable for abuses including acts of bribery, kickbacks and other serious crimes."

Zajac served as the General Counsel of Detroit's two pension funds, the General Retirement System and the Police and Fire Retirement System, from 1982 through 2012. In November 2012, the Board of Trustees of the Police and Fire Retirement System terminated Zajac as General Counsel. Zajac still serves as the General Counsel of the General Retirement System. Stewart was a City of Detroit police officer for more than 30 years and served as a Trustee of the Police and Fire Retirement System from 2004 to 2011. Stewart also served as the Vice President of the Detroit Police Officers Association, the union that represents most of Detroit's police force.

According to the 13-count superseding indictment, between January 2006 and April 2009, defendants Zajac and Stewart conspired with Beasley, Dixon, and other individuals to defraud current and retired employees of the City of Detroit of their right to the honest services of former Mayor Kwame Kilpatrick, Beasley, Stewart, and other Trustees free from bribery and corruption. During the the conspiracy, Stewart accepted thousands of dollars in cash, trips, entertainment, and other things of value from people seeking investments from the Police and Fire Retirement System. Stewart accepted a $5,000 casino chip, a Christmas basket that included an envelope with thousands of dollars in cash, a cash payment of $2,500 during a trip to New York City, a cash payment of $2,500 during a trip to Florida, an excursion to the Bahamas for Stewart and his mistress, and a trip to Naples, Florida for Stewart and his mistress. In addition, Stewart accepted a "birthday present" of $5,000 in cash at a party at the Atheneum Hotel. Zajac organized the party, and Zajac solicited and collected the cash from people having business before the Boards of Trustees of the pension funds. Zajac also collected and delivered an additional $5,000 in cash for a second pension fund trustee at the same party. At a party in January 2007, Zajac collected and delivered thousands of dollars in cash for former Treasurer and Trustee Beasley.

Also during the conspiracy, Zajac sought to curry favor with Beasley and former Mayor Kilpatrick by raising more than $70,000 for the Kilpatrick Civic Fund. Zajac directed and forced people having business before the pension funds to spend thousands of dollars to entertain trustees of both pension funds. Zajac forced one trustee to pay more than $10,000 for limousines for trustees during a trip to New York City.

Soon after giving Beasley, Stewart, and a third trustee thousands of dollars in cash at their "birthday parties," the trustees voted to give Zajac a substantial raise as General Counsel of the two pension funds. As a result of the raise, Zajac was receiving over $400,000 in compensation per year from the pension funds.

Upon conviction, both Zajac and Stewart face a maximum of twenty years in prison and a fine of up to $250,000 on the charge of conspiracy to commit honest services mail and wire fraud. The superseding indictment seeks forfeiture of the proceeds of the conspiracy received by Zajac, Stewart, and their co-conspirators.

The case was investigated by agents of the FBI, the Department of Labor, and the Internal Revenue Service. It is being prosecuted by Assistant United States Attorneys Robert Cares and David A. Gardey.

Seven Doctors, Four Pharmacists, Three Home Health Agency Owners Among Those Indicted

Forty-Four individuals have been charged in a health care fraud and drug distribution scheme, U.S. Attorney Barbara L. McQuade announced today. 

McQuade was joined in the announcement by Special Agent in Charge Robert L. Corso of the Drug Enforcement Administration, Special Agent in Charge Robert D. Foley III, of the Federal Bureau of Investigation, Acting Special Agent in Charge Gilbert Salinas of the Bureau of Alcohol, Firearms, and Explosives, Lamont Pugh, Special Agent in Charge of the Inspector General of the Department of Health and Human Services, Acting Special Agent in Charge William Hayes of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations,  Special Agent in Charge Erick Martinez of the Internal Revenue Service, Criminal Investigation, Detroit Police Chief Chester Logan, and Portsmouth, Ohio, Police Chief Robert Ware, II.

The 13-count superseding indictment charges 44 new defendants with a drug conspiracy involving prescription drug controlled substances such as OxyContin, Opana, Vicodin and other drugs.  Health care fraud charges were filed against 32 of the defendants, while three defendants were charged with money laundering and three defendants were charged with being felons in possession of firearms. 

The superseding indictment alleges that Sardar Ashrafkhan, Deepak Kumar, John Check and David Vezzossi, owners of home health agencies, would provide kickbacks, bribes, and other illegal benefits to physicians to induce them to write prescriptions for patients with Medicare, Medicaid, and private insurance.  Patients were recruited into the scheme by patient recruiters or “marketers,” who would pay kickbacks and bribes to patients in exchange for the patients’ permitting the pharmacies and physicians to bill their insurance for medications and services that were medically unnecessary and/or never provided.  During this conspiracy, prescriptions were presented to the Sav-Max (pharmacist Ahab Elmadhoun), Sav-Mart (pharmacist Waleed Yaghmour), Atrium (pharmacist Krina Patel and manager Sanjay Patel), or Caremax (pharmacist Jayshriben Gandhi and manager Guarang Gandhi) Pharmacies for filling.  The medical professionals and health care agency owners would then bill the relevant insurers for services supposedly provided to the patients, without regard to the medical necessity of those prescriptions and services.  Some of the pharmacists would bill insurers, including Medicare, Medicaid, and private insurers, for dispensing the medications, despite the fact that the medications were medically unnecessary and, in many cases, never provided. Other times, the pharmacists accepted cash from the recruiters for filling and dispensing medications.  

The indictment further alleges a conspiracy to distribute controlled substances by the health care owners, physicians, pharmacies, and recruiters to facilitate the submission of false  claims to Medicare, Medicaid, and private insurers.  The home health care owners paid physicians associated with the scheme kickbacks in exchange for prescriptions for controlled substances for their patients which were filled at the respective pharmacies.  The controlled substances involved included the Schedule II drug oxycodone (Oxycontin), the Schedule III drug hydrocodone (Vicodin, Lortab) the Schedule IV drug alprazolam (Xanax), and the Schedule V drug cough syrup with codeine. 

The indictment further alleges illegal money laundering by pharmacists Waleed Yaghmour and Ahab Elmadhoun, and also by home health agency owner Sardar Ashrafkhan, a.k.a. “Dr. Khan.” The indictment further alleges individual charges of felon in possession of a firearm against marketers Toney Taylor and Troy Ivory, and home health agency owner John Stephen Check.

The 44 new defendants named in the 13-count indictment were pharmacists Krina  Patel, 35, of Shelby Twp.; and office manager Sanjay Patel, 39, of Shelby Twp., Jayshriben Gandhi, 43, of Canton; and office manager Guarang Gandhi, 39, of Canton, pharmacist Ahab Elmadhoun, 40, of Canton; pharmacist Waleed Yaghmour, 46, of Dearborn; physicians Adelfo Pamatmat, 67, of Farmington Hills, physician John Geralt, 84, of Beverly Hills, physician Malik Dababneh, 53, of Oxford, physician Paul Kelly, 76, of Bath, physician Ravi Iyer, 42, of Novi, physician Muhammad Ahmed, 65, of Ypsilanti, physician assistant Timothy Spencer, 64, of Inkster, Wayne State Medical School graduate Javar Myatt-Jones, a.k.a. “Dr. Jones,” 33, of Chicago, foreign medical student Faraj Ghabag, 33, of Oregon, OH, home health agency owners Sardar Ashrafkhan, a.k.a. “Dr. Khan,” 55, of Warren, home health agency owner Deepak Kumar, 45, of Washington Twp., and his assistant Mohammad Mian, 44, of Oak Park, home health agency owner John Stephen Check, 53, of  Dearborn Heights, and business partner co-owner David Vezzossi, 52, of West Bloomfield, marketer Frederick Till Jackson Sr., a.k.a. “Big Fred,” 52, of Detroit, marketer Tiffany Walker, a.k.a. “Mary Reed,” 45, of Detroit, Sierra Walker, a.k.a. “Tosha,” 25, of Detroit, marketer Toney Taylor, 44, of Detroit, marketer Jimmy Foster, 35, of Detroit, marketer James Blake, 32, of Sterling Heights, marketer Troy Ivory, 47, of Warren, marketer Jackie Renee Ivory, 32, of Ecorse, marketer  Eric Hester, 40, of Ionia, marketer Felicia Jackson, 27, of Eastpointe, marketer Ayesha McCray, 30, of Detroit, marketer Jamall Gibson, 30, of Eastpointe, couriers Alfornia Johnson, a.k.a. “Con,” a.k.a “Alex,” a.k.a. “ShiCon,” 34, of Detroit, Phillip Burnett, a.k.a. “Frank,” a.k.a “Frank Burns,” 33, of Detroit, Ronnie Moses, a.k.a. “Red,” 23, of Detroit, Corey Williams, a.k.a. “CoCo,” 44, of Detroit, William Ashley Smith, a.k.a. “Cash,” of Portsmouth, OH, Robert Scott Dials, 25, of Portsmouth, OH, Cherish Lewis, 26, of Wheelersburg, OH, distributors Willie David Jackson, a.k.a. “Lil’ Dave,” 24, of Eastpointe, Lance Hatten, 29, of Columbus, OH, Josh Barnes, 33, of Wheelersburg, OH, Nathan Reed, a.k.a. “Reed,” 31, of Portsmouth, OH, and electronic transfer nominee Garland Holman, 30, of Detroit. 

“The merger of health care fraud and drug trafficking is a disturbing trend that is not only robbing taxpayers, but also fueling addictions to prescription drugs,” McQuade said.  “Prescription drug abuse has become a national epidemic, with more Americans dying from overdoses than from gunshot wounds.”

Robert L. Corso, Special Agent in Charge of DEA's Detroit Field Division stated, "Confronting the illegal diversion and abuse of controlled pharmaceuticals is a top priority of DEA and our law enforcement partners.  The indictment alleges that this drug distribution organization includes members of the medical profession who abused their positions of trust and endangered the lives of countless people for pure profit.  This was done by illegally distributing opiate painkillers and other controlled prescription medications throughout southeast Michigan and stretching to the southern reaches of Ohio.  This investigation makes it clear that the DEA and our partners in law enforcement will continue to investigate and bring to justice those individuals that are responsible for the illegal distribution of prescription medicines." 

FBI Special Agent in Charge Foley stated, "These arrests are the result of countless hours of hard work by the FBI and its law enforcement partners. We remain dedicated to pursuing and prosecuting any individuals who illegally exploit the health care system for their own personal gains.”

Acting ATF Special Agent in Charge Gil Salinas stated. “The combined law enforcement intelligence and resources were crucial in addressing this criminal element and in making our communities safer.  ATF continues to pursue the  those who continually endanger our communities. I commend the outstanding collaboration of our Violent Crime Task Force and our local, state, and federal law enforcement partners in undertaking this sweeping investigation.”

Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation added that these crimes committed by doctors and pharmacists were worse than many typical schemes. “These illegal activities are done primarily to make money and once the money is in the hands of the suspects, it’s hard for them to deny their involvement.”

"The public rightfully expects that doctors will uphold professional standards rather than exploit patients for personal gain" said Lamont Pugh III, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General's region including Michigan.  "Working closely with our law enforcement partners, we will investigate and bring to justice those who harm the Medicare program and taxpayers by fraudulently submitting claims related to illegal diversion and/or distribution of addictive drugs."

 Detroit Police Chief Logan stated, "The investigation of this case exemplifies the strong teamwork between the men and women of the Detroit Police Department and our state and federal law enforcement partners, along with members of the Portsmouth, Ohio Police Department.  Having the United States Attorney’s Office prosecute this criminal case will be sending a strong message to those who choose to break the law. Together we will make a difference.”

Police Chief Robert Ware stated, “Portsmouth is along a corridor of U.S. Route 23 better known as the drug pipeline. The flow of drugs from Detroit to Portsmouth and to neighboring cities such as Huntington, West Virginia has changed lives and communities forever.   Behind the scenes are some very dedicated, hardworking Officers, Deputies, State Troopers, Federal Agents and Prosecutors working together to bring justice to those poisoning our communities. What you have before you today is the culmination of some of those joint efforts to curb the flow of illegal drugs into our neighborhoods.”

Of the ten defendants charged in the earlier indictment, all have been convicted by pleas over the last year. Those defendants included Detroit and Ohio residents. Several have been sentenced already and others are due to be sentenced in the near future.

The investigation in this case was handled by the Drug Enforcement Administration, the Federal Bureau of Investigation, the Bureau of Alcohol Firearms and Explosives, Detroit Police Dept., Portsmouth, Ohio, Police Dept., Scioto County Sheriff’s Office, the Internal Revenue Service Criminal Investigation, the U.S. Immigration and Custom’s Enforcement’s Department of Homeland Security Investigations, the Department of Health and Human Services Office of Inspector General, and the Detroit Violent Crimes Task Force and Michigan State Police.  The case is being prosecuted by Assistant U.S. Attorneys Terrence R. Haugabook, Michael Martin, and Wayne F. Pratt. They will be assisted by Assistant U.S. Attorneys Jonathan Grey and Gjon Juncaj of the Forfeiture Section.

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.

Five Doctors, Four Pharmacists, and Home Health Agency Owner among those indicted in follow-up to the Babubhai Patel case

Thirteen individuals have been charged in a large-scale health care fraud and drug distribution scheme, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Robert L. Corso of the Drug Enforcement Administration, Special Agent in Charge Robert D. Foley III, of the Federal Bureau of Investigation, and Lamont Pugh, Special Agent in Charge of the Inspector General of the Department of Health and Human Services.

The superseding indictment, unsealed yesterday, adds 13 new defendants and new charges to a 2011 indictment, which charged Canton Pharmacist Babubhai ‘Bob” Patel with overseeing a massive health care fraud and drug distribution ring at more than 20 pharmacies that he owned and controlled in metro-Detroit.

The 13 new defendants named in the superseding indictment include five doctors, four pharmacists, and a home health agency owner: pharmacist Mehul Patel, 34, of Canton; pharmacist Pradeep Pandya, 49, of Grand Blanc; pharmacist Vikas Sharma, 34, of Windsor; pharmacist Mukesh Khunt, 33, of Toronto; physicians Richard Utarnachitt, 71; of Clinton Township, physician Ruben Benito, 72; of Madison Heights, physician Javaid Bashir, 59, of Jackson, physician Carl Fowler, 60; of West Bloomfield, physician Rajat Daniel, 47; of West Bloomfield, home health agency owner Vinod Patel, 40; of Canton, business associate Atul Patel, 31, of Canton; marketer Anthony Macklin, a.k.a. “Jimbo,” of Detroit; and marketer
Michael Thoran, a.k.a. “Ace,” also of Detroit.

The 21-count superseding indictment charges that Babubhai Patel was the owner and controller of approximately 26 Michigan pharmacies.  The indictment alleges that Babubhai Patel would offer and provide kickbacks, bribes, and other illegal benefits to physicians to induce those physicians to write prescriptions for patients with Medicare, Medicaid, and private insurance.  Patel would also direct that those prescriptions be presented to one of the Patel Pharmacies for billing.  In exchange for their kickbacks and inducements, the physicians would write prescriptions for the patients, and bill the relevant insurers for services supposedly provided to the patients, without regard to the medical necessity of those prescriptions and services.  The physicians would direct the patients to fill their prescriptions at one of the Patel Pharmacies, where Babubhai Patel and his pharmacists would bill insurers, including Medicare, Medicaid, and private insurers, for dispensing the medications, despite the fact that the medications were medically unnecessary and, in many cases, never provided.  Patients were recruited into the scheme by patient recruiters or “marketers,” who would pay kickbacks and bribes to patients in exchange for the patients’ permitting the Patel Pharmacies and the physicians associated with Patel to bill their insurance for medications and services that were medically unnecessary and/or never provided.

The indictment further alleges a conspiracy to distribute controlled substances at the Patel pharmacies to facilitate the submission of false and fraudulent claims to Medicare, Medicaid, and private insurers.  According to the indictment, Babubhai Patel and his associates paid physicians kickbacks for prescriptions for controlled substances for their patients, and directed those patients to fill the prescriptions at a Patel Pharmacy.  The controlled substances included the Schedule II drug oxycodone (Oxycontin), the Schedule III drug hydrocodone (Vicodin, Lortab) the Schedule IV drug alprazolam (Xanax), and the Schedule V drug cough syrup with codeine. According to the indictment, prescriptions for these drugs were written outside the course of legitimate medical practice.  Babubhai Patel and his pharmacists would then dispense the controlled drugs to patients without medical necessity. The distribution of controlled substances in this manner was intended, in part, as a kickback to the patients for agreeing to enable their insurance cards to be billed for medications purportedly dispensed at the Patel Pharmacies.  The indictment also alleges that Babubhai Patel and his pharmacists dispensed controlled substances outside the scope of legitimate medical practice to patient recruiters or “marketers,” as a kickback for their efforts in to recruit patients into the scheme.

In addition to his pharmacies, the indictment alleges that Babubhai Patel had an ownership interest in a home health agency managed by his brother, Vinod Patel.  The indictment alleges that Vinod Patel, Babubhai Patel, and others bribed physicians and other referral sources for referrals to that home health agency, and then billed the Medicare program for home health services that were medically unnecessary and never provided.

Of the 26 defendants originally charged in the indictment, six, including Babubhai Patel and four pharmacists, were convicted at a trial last summer.  Fifteen additional defendants, including six pharmacists and two doctors, have pleaded guilty in the case.  The five remaining defendants whose charges were renewed in the superseding indictment are set for trial on June 10, 2013.  On February 1, 2013, Babubhai Patel was sentenced to 17 years imprisonment by U.S. District Judge Arthur J. Tarnow.

“Taxpayers fund Medicare and Medicaid to provide health care for needy citizens,” McQuade said.  “We hope that doctors and pharmacists will take note that if they exploit these programs for personal profit, they will face serious consequences.”

Robert L. Corso, Special Agent in Charge of DEA's Detroit Field Division stated, "Confronting the illegal diversion and abuse of controlled pharmaceuticals is a top priority of DEA and our law enforcement partners.  Today's indictments, particularly of the medical professionals are significant.  It is alleged that these individuals abused their positions of trust and endangered the lives of countless people by illegally distributing opiate painkillers and depressants throughout southeast Michigan.  This investigation makes it clear that the DEA and our partners in law enforcement will continue to investigate and bring to justice those individuals that are responsible for the illegal distribution of prescription medicines."

FBI Special Agent Foley stated, "Dishonest health care providers and pharmacists who exploit Medicare and Medicaid through fraudulent billing and other schemes will be held accountable for their crimes. The FBI remains committed to investigating this type of fraud and bringing those who abuse the system to justice."

“Schemes involving the illegal diversion and/or distribution of controlled substances go hand and hand with the fraudulent billing of Medicare and other health care programs” said Lamont Pugh III, Special Agent in Charge of the U.S. Department of Health & Human Services, Office of Inspector General – Chicago Regional Office. “The OIG and our law enforcement partners are acutely aware of the potential for those who commit health care fraud to utilize this blended approach when seeking to line their pockets with tax payer dollars. The indictments and arrests announced today illustrate our combined commitment and effort to protect the safety and well-being of the public and as well as the health care programs they rely upon.”

The investigation in this case was handled by the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Department of Health and Human Services Office of Inspector General.  The case is being prosecuted by Assistant U.S. Attorneys John K. Neal and Wayne F. Pratt.

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.

Today a federal jury returned guilty verdicts against Kwame M. Kilpatrick, 42, of Southlake, Texas and Bobby W. Ferguson, 44, of Detroit, on charges that they used Kwame Kilpatrick’s positions as Mayor of Detroit and Michigan State House Representative to execute a wide ranging racketeering conspiracy involving extortion, bribery and fraud, United States Attorney Barbara L. McQuade announced. Bernard Kilpatrick, 70, of Detroit was convicted of a felony tax offense.

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, Randall Ashe, Special Agent in Charge of the U.S. Environmental Protection Agency, Special Agent in Charge Erick Martinez, 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 convicted of 24 counts extortion, mail fraud, tax violations and racketeering, Bobby Ferguson was convicted of 9 counts of extortion and racketeering and Bernard Kilpatrick was convicted of one count of filing a false tax return.

Co-defendants Victor Mercado, former Director of the City of Detroit Water and Sewerage Department and Derrick Miller, former Chief Administrative Officer of the City of Detroit were also indicted as being part of the conspiracy and both pleaded guilty to their roles and are waiting sentencing.

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.

United States Attorney Barbara L. McQuade stated, "Although this investigation spanned many years, this case is not about the past. It is about the future. This verdict has sent a powerful message that corruption will not be tolerated in this community. The people of Detroit deserve better and expect better. Candidates should seek public office to make a difference, not to make money for themselves."

FBI Special Agent in Charge Foley stated, "The FBI Led Detroit Area Public Corruption Task Force worked tirelessly to pursue and prosecute individuals associated with a criminal enterprise run for years out of the Detroit Mayor's Office. Due to the scope and complexity of the investigation, it was imperative to make sure no corners were cut and no stone was left unturned. With this conviction, the public can be reassured that no corrupt activity will be left unchecked. No violation of the public's trust will go unpunished. The citizens of the state of Michigan and in this case the City of Detroit, deserve and expect the highest quality of government, and we remain dedicated to ensuring they receive it."

"Corruption at any level diminishes the hard work and dedication of the thousands of elected officials and government employees who are dedicated to providing honest services to the American public”, said Richard Weber, Chief of IRS Criminal Investigation. "IRS-CI stands committed to weed out individuals who ignore the public's well being, and choose to take the path to financial success by using greed and corruption. Mr. Kilpatrick attempted to conceal his public corruption by failing to report to the Internal Revenue Service his illicit receipt of hundreds of thousands of dollars. When elected officials disregard their sworn oath because greed has clouded their judgment, let this case serve as a reminder that no one is above the law and everyone is accountable for their misdeeds."

"The U.S. EPA mandated the improvement of the Detroit Water & Sewerage Department to address long term non compliance with the city's discharge permit," said Randall K. Ashe, Special Agent in Charge of EPA's criminal enforcement program in Michigan. "Sadly, former Mayor Kwame Kilpatrick used the awarding of these contracts as an opportunity to enrich himself and Bobby Ferguson. EPA CID is very grateful to the jury for rendering this verdict and hope that this sends a clear message to all municipal officials that this conduct will not be tolerated."

HUD Special Agent in Charge Barry McLaughlin stated, “The citizens of Detroit should not have to tolerate those who use deceit and fraud to fill their pockets with money reserved to improve this community. This case will serve notice that the United States Attorney Office and HUD - Office of Inspector General will make every effort to ensure that these funds are used for this community, and will vigorously investigate those that work scams at the expense of Detroiters”.

The evidence presented at trial established that Kwame Kilpatrick and 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, as well as by defrauding 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.

Extortion of Municipal Contractors. 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 award of public contracts to ensure Ferguson obtained a portion of the revenue from those contracts. Ferguson obtained at least eighty-three million dollars in revenues from municipal contracts through this scheme, a portion of which he shared with his co-conspirators. At trial, the government presented evidence regarding multiple instances of attempted or actual extortion and contract rigging, including the following:

• Kwame Kilpatrick held up a $50 million sewer lining contract until Inland Waters, the winning bidder, agreed to pay Ferguson, who ultimately received $24.7 million in contract revenue when the contract was increased to $138 million.

• Kwame Kilpatrick held up a $12 million amendment to a sewer lining contract until Inland Waters agreed to pay Ferguson $350,000 for work Ferguson wanted at a large sewer collapse at 15 Mile Road in Sterling Heights, although Ferguson did no work in exchange for the payments.

• Ferguson extorted Lakeshore Engineering Services to give Ferguson $1.7 million from a $28 million sewer outfalls contract although Ferguson did no work for the payments.

• Ferguson extorted Walbridge Aldinger Company for $5 million in work for Ferguson on a contract to construct the Baby Creek combined sewer overflow facility and the Patton Park recreational facility.

Defrauding the State and Non-Profit Donors. Evidence showed that during Kwame Kilpatrick’s tenure as a Representative of the Michigan House and as the Mayor of Detroit, Kwame Kilpatrick, Bobby Ferguson, and Bernard Kilpatrick obtained over 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. This included the following: • Kwame Kilpatrick, while a member of the State House of Representatives and with the assistance of Ferguson, defrauded the State of Michigan by directing over $280,000 in grant money from the State to nonprofit entities controlled by Ferguson and Kwame Kilpatrick’s wife. The State grant money, which was supposed to help children and seniors in the Detroit area, was spent in large part by Kilpatrick on personal expenses and by Ferguson to refurbish the offices of his company.

• Kwame Kilpatrick defrauded donors to Kilpatrick for Mayor, the Kilpatrick Inaugural Committee and the Kilpatrick Civic Fund by taking cash kickbacks of over $250,000 from his fundraising director.

• Kwame Kilpatrick, defrauded donors to the Kilpatrick Civic Fund by using at least $200,000 in Civic Fund money for personal expenses, $200,000 for friends and family, and $150,000 in improper campaign expenses.

Bribery/Extortion Involving Other Public Contracts and Investments. Further evidence showed that during Kwame Kilpatrick’s tenure as Mayor, he and Bernard Kilpatrick 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. Included in this bribery/extortion scheme were the following:

• Karl Kado paid Kwame Kilpatrick and Bernard Kilpatrick approximately a quarter-million dollars in cash for favorable treatment with respect to his contracts for cleaning and electrical services at Cobo Hall;

• Jon Rutherford provided money and campaign-related payments totaling over $300,000 on behalf of Kwame and Bernard Kilpatrick in return for Kwame Kilpatrick’s support of Rutherford’s waterfront casino development plan; • Tony Soave provided free private jet service and other benefits to Kwame and Bernard Kilpatrick worth over $300,000, so that he would not be harmed with respect to his business interests with the City; and

• Marc Andre Cunningham paid Bernard Kilpatrick a portion of his commission on a pension fund consulting deal from a venture capital firm (totaling at least $15,000) for Kwame Kilpatrick’s support of Cunningham’s firm getting the pension fund monies.

Proceeds from the Extortion/Bribery Conspiracy. Evidence was 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 over $840,000 cash, derived from the extortion/bribery/fraud conspiracy, to make deposits into his bank accounts, pay his credit card bills, purchase cashier’s checks, and clothing, and to repay loans. During his son’s tenure as Mayor, Bernard Kilpatrick deposited over $840,000 in cash into his personal bank accounts.

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. Attached is a list detailing these convictions.

The investigation of this case was conducted by agents of the FBI, EPA-CID and IRS-CID. The case is being prosecuted by Assistant U.S. Attorneys Mark Chutkow, R. Michael Bullotta, Jennifer Blackwell and Eric Doeh.

Michael Winans, Jr., 30, of Jessup, Maryland, was sentenced today to 14 years in federal prison for defrauding investors out of approximately $8 million dollars, United States Attorney Barbara McQuade announced.

Joining in the announcement was Wayne County Prosecutor Kym Worthy and Special Agent in Charge Robert D. Foley, III, Federal Bureau of Investigation (FBI).

In addition to the prison sentence, United States District Judge Sean Cox also ordered Winans to pay restitution in the amount of $4.7 million dollars to the hundreds of victims he defrauded as well as a $175,000 fine, which is the maximum allowed by law.

Winans pleaded guilty in October, 2012 to operating the Winans Foundation Trust (the Trust) and representing that the Trust was a company investing in crude oil bonds in Saudi Arabia. Winans initially recruited eleven other individuals, whom he called "shareholders" in the Trust, to invest in the crude oil bonds. Winans required the so-called "shareholders" to solicit additional investors and then send the investors' funds to the Trust. Over 1,000 victim investors from several states sent over $8,000,000 to the Trust. All of these victims were led to believe they were investing in Saudi Arabian crude oil bonds that Winans well knew did not exist. In reality, Winans converted some of the victim investors' money to his own personal use. He also redistributed some of his later victims’ money to the earlier victims while falsely representing to them that it was the return on their "investments" he had promised.

"Investor fraud schemes like this one are just a fancy way to steal other people's money," McQuade said. "Anyone who robs citizens of their hard-earned savings will be brought to justice."

"We are pleased that the many victims of Michael Winans can rest easier tonight knowing that he has been convicted and will be spending his time in federal prison," said Prosecutor Kym L. Worthy.

FBI Special Agent in Charge Foley, "Those individuals who engage in illegal investment schemes will face severe penalties for their criminal activity. The FBI is committed to vigorously pursuing anyone who commits these crimes."

This case was a joint investigation with the FBI, the Wayne County Prosecutor’s Office and the Michigan Department of Licensing and Regulatory Affairs, Office of Financial and Insurance Regulation (OFIR).

The case is being prosecuted by Assistant United States Attorney Abed Hammoud.

A telephone line and e-mail address have been set up by the FBI/United States Attorney’s Office to collect information about potential victims. Individuals who believe they may have been a victim of the Winans Foundation Trust should provide their name, address, phone number and e-mail address to one of the following: e-mail: [email protected] or toll free 1-888-702-0553.

The United States Attorney's Office for the Eastern District of Michigan announced today that it has filed suit against the Golden Corral restaurant in Westland, Michigan for violating the American's with Disabilities Act (ADA) by denying service to a mother and her minor children based on the appearance of the children's skin due to a genetic skin disorder.

The Justice Department's complaint, filed in the U.S. District Court for the Eastern District of Michigan in Detroit, alleges that the manager of the Golden Corral restaurant demanded that Danielle Duford and her four daughters leave the restaurant based on the appearance of the children's skin caused by a genetic skin disorder, epidermolysis bullosa, which causes blisters to form on the skin in response to minor injuries and temperature changes. Despite Ms. Duford informing the restaurant manager of her children's disability and repeatedly emphasizing that they did not have a contagious disease, the manager required the family to immediately leave the restaurant, claiming that he had received complaints from other customers. Title III of the ADA prohibits public accommodations, such as restaurants, from discriminating against people on the basis of disability, or their association with an individual with a disability, in the full and equal enjoyment of the goods or services offered. The lawsuit seeks an injunction against further discrimination, money damages for the victims of the unlawful discrimination, and civil penalties to be paid to the United States. The lawsuit is only an allegation of unlawful conduct by the defendants. The United States will bear the burden of proving the allegations at trial.

"The promise of the Americans with Disabilities Act is that disabled citizens should have full access to public life. We hope that this lawsuit will assist in expanding people's understanding of the range of disabilities and the obligations to treat all disabled citizens fairly under the law," said Barbara L. McQuade, the United States Attorney for the Eastern District of Michigan.

The case is being handled by Assistant U.S. Attorney Susan K. DeClercq in the U.S. Attorney's Office for the Eastern District of Michigan, in collaboration with the Disability Rights Section of the Civil Rights Division of the Justice Department.

More information about the ADA is available at the Justice Department's toll-free ADA Information line at (800) 514-0301 or (800) 514-0383 (TTY) and via the ADA website at http://www.ada.gov or through contacting the U.S. Attorney's civil rights hotline at 313-226-9151.

Zayd Allebban, former Wayne County Director of Enterprise Applications, the office that does software application development for Wayne County, was found guilty today by a federal jury in Detroit on charges of falsifying documents with the intent to obstruct justice, U.S. Attorney Barbara L. McQuade announced. The purpose of the falsified documents was to conceal a bribery/extortion scheme by Allebban’s friend and supervisor, Tahir Kazmi, former Wayne County Chief Information Officer.

McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III of the Federal Bureau of Investigation (“FBI”).

The eight day trial was conducted before United States District Judge Stephen J. Murphy. The jury deliberated for approximately a day and a half before reaching their verdict.

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 faces up to twenty years in prison and a fine of up to $250,000 on each of the two counts of falsifying documents.

A sentencing date will be set by Judge Murphy’s chambers.

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 February 22, 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 Special Agent in Charge Foley 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.

United States Attorney Barbara McQuade and Erick Martinez, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, along with E. C. Woodson, Inspector in Charge, United States Postal Inspection Service, and Jeffrey Frost, Special Agent in Charge, United States Secret Service announced a crackdown on tax identity theft and other related charges.

            Identity Theft is a serious crime which can result in great personal hardships to the victims of such crimes.  The U. S. Attorney’s Office, IRS Criminal Investigations and our law enforcement partners are committed to stemming refund fraud related to identity theft by focusing on preventing, detecting and resolving identity theft cases as soon as possible.

U.S. Attorney McQuade stated, "Identity theft is a serious crime with many layers of harm to innocent victims, including financial loss, damaged credit, and violation of privacy. We hope that these enforcement actions will deter identity thieves from committing these kinds of crimes."

"ID Theft is our top priority and we will not rest until the identity thieves are caught and sent to jail", said Erick Martinez, Special Agent in Charge of IRS-Criminal Investigation.

            Below are brief summaries of some of the criminal actions investigated by IRS Criminal Investigation, United States Postal Service, and United States Secret Service, that took place in the metropolitan Detroit area during the past several weeks.

∙           U.S. v. Drake Dodson -  As alleged in the criminal complaint, Dodson was part of a  conspiracy to file federal income tax returns using the names and Social Security numbers of individuals whose identities had been stolen.  The returns requested refunds based on false information about tax withholdings and tax credits.  The complaint further alleges that the conspirators obtained approximately $1.1 million in refunds.

∙           U.S. v. Brittany Goodson -  As alleged in the criminal complaint  Goodson was found to be in possession of numerous means of identification, i.e., names, social security numbers, dates of birth and other identifiers, bank routing and account numbers, and numerous prepaid debit cards, along with handwritten notes indicating that individual tax returns had been filed in some of the names.  The matter was referred to the IRS/CI which determined that  various false and fraudulent income tax returns had been filed using some of the means of identification found in her possession, which directed that fraudulent refunds be wire transferred to many of the prepaid debit card accounts also found in the defendant's possession.  The affidavit specifically describes false refunds of $1,464, $3,933 and $4,094 linked to the information possessed by Goodson.  She was charged with possession of means of identification with the intent to use them illegally and making false claims to the IRS.

∙           U.S. v. David Sneed -   According to the criminal complaint, Sneed was found to be in possession of 29 United States Treasury income tax refund checks with a face value of $141,951.00, all made out to different payees, none of whom was Sneed, and all listing addresses of the payees in the state of Florida.  The matter was referred to the U.S. Secret Service and the IRS/CI, and subsequent investigation determined that the checks were individual income tax refund checks issued as a result of the filing of fraudulent tax returns.  The defendant admitted that he agreed to receive the checks for a Florida tax preparer and bring them to Michigan to cash them for a percentage of their face value.  He was to be paid $100 per check for the service.   He was charged with the unlawful possession of means of identification (names and addresses on the checks) to aid and abet or in connection with a federal felony, that is, making false claims to the IRS.

∙           U.S. v. George Harris -   According to the affidavit underlying the complaint, Harris was found to be in possession of over 50 credit cards and over 100 pages containing various means of identification of others, including names, dates of birth, social security numbers, and addresses.  Analysis of the seized items and subsequent investigation revealed that the defendant had no permission to possess the means of identification, and that at least 20 different false individual tax returns had been filed in the names found in the defendant's possession resulting in false refunds of almost $28,000 being issued without the knowledge or consent of the persons named as the taxpayers on the returns.  The defendant was charged with possessing means of identification with the intent to commit or in connection with a federal felony, specifically, making false claims to the IRS.   

∙           U.S. v. Valerie Butler and Gary Young -  A federal indictment was returned charging Butler and Young, age 48 and 25 respectively, of Detroit, Michigan.   The defendants were named in an indictment charging them with one count of conspiracy to defraud the government, one count of Identity Theft and multiple counts of Theft of Public Money. The twelve count indictment charges that from 2009-2011, Butler and Young conspired by working together to prepare false tax returns. Butler and Young claimed tax refunds in amounts greater than the taxpayer was entitled to receive.  Butler and Young attempted to hide their involvement in the filing of the tax returns by failing to sign the return as the preparer.  Butler and Young had all of the refund money deposited to bank accounts that they controlled.  They split the refund money with some of the taxpayers, but most of the taxpayers never received any of the refund.  Butler and Young filed at least 299 false returns with total false claims of approximately $1,760,000, and refunds issued of approximately $1,079,201.

            IRS Criminal Investigation, United States Postal Inspection Service, and United States Secret Service need your help in preventing, detecting and resolving identity theft cases.  Let us know as soon as possible if you suspect that you may have you're your identity compromised or know someone who is involved in ID Theft.  Remember - Be careful with your personal information, especially with your social security number.  It you have questions about ID Theft, go to the following websites: www.IRS.gov,  www.postalinspectors.uspis.gov and www.secretservice.gov.  It is important to keep in mind the IRS does not initiate contact with taxpayers by email to request personal or financial information over the internet. This also includes any type of electronic communication, such as text messages and social media channels.

 

A serial bank robber was sentenced today to 45 years in federal prison after having been convicted of four counts of bank robbery and one count of conspiracy to commit bank robbery, announced United States Attorney Barbara McQuade.

McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III, Federal Bureau of Investigation.

Arthur Payton, 45, was sentenced by U.S. District Judge Lawrence P. Zatkoff in Port Huron, Michigan.

In November 2012, a federal jury convicted Payton for recruiting heroin-addicted prostitutes to rob banks in Oakland and Wayne counties. After the FBI determined that Payton was responsible for the bank robberies, his co-defendant wore a hidden microphone and recorded Payton planning his next set of bank robberies in downtown Detroit. Payton stole approximately $8,000 from the four banks.

This conviction was Payton's third federal conviction. He was convicted in San Diego in the mid-1990s and in Detroit in 2005 for engaging in identical schemes to use drug-addicted prostitutes to rob banks. In 1994, Payton appeared on the Oprah Winfrey Show as a "bank robbing pimp."

“This defendant has returned to the same criminal scheme each time he has been released from prison, preying on vulnerable women at the fringes of society to rob banks,” McQuade said. “This lengthy sentence was necessary because prison is the only thing that prevents him from robbing banks.”

FBI Special Agent in Charge Foley stated, "This case is an example of the FBI's commitment to combat violent crime in the state of Michigan. We will continue to work with our law enforcement partners to stop these illegal acts and ensure dangerous criminals are arrested and prosecuted."

This case was investigated by the FBI, the Livonia Police Department, the Farmington Hills Police Department, the Farmington Police Department, and the Novi Police Department.

AUSAs Doug Salzenstein and Matthew Roth prosecuted the case for the United States.

Chauncey Mayfield, a former investment advisor to the two City of Detroit pension funds, pleaded guilty today to conspiring with former Detroit Treasurer Jeffrey Beasley to pay him bribes in exchange for new business from the pension funds, United States Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Special Agent in Charge Robert Foley of the Federal Bureau of Investigation (“FBI”).

During a hearing this afternoon before United States District Judge Nancy Edmunds, Mayfield, 56, of Ft. Lauderdale, Florida, admitted that between 2006 and 2008 he had an agreement with the then City Treasurer Beasley to pay bribes to Beasley and others to influence Beasley’s decisions as a Trustee of Detroit’s Police and Fire Retirement System and General Retirement System.

Mayfield was the principal owner and Chief Executive Officer of MayfieldGentry Realty Advisors, L.L.C. (“MayfieldGentry”). MayfieldGentry was an investment advisor and fiduciary to the two Detroit pension funds overseeing a real estate investment portfolio worth more than $200 million of pension fund assets. According to Mayfield, Beasley agreed to maintain business for Mayfield’s company and to give Mayfield new pension fund business in exchange for cash others things of value. In particular, Mayfield gave $50,000 to the Kilpatrick Civic Fund. In addition, Mayfield paid for Beasley and others to take a trip to Las Vegas costing $60,000; paid for another private plane trip to Tallahassee, Florida costing $24,000; paid for a private jet flight to Bermuda; and hired Beasley’s paramour to work at MayfieldGentry at Beasley’s request. Because of the pension fund business directed to MayfieldGentry by Beasley, Mayfield earned significant investment advisory fees from Detroit’s two pension funds.

United States Attorney McQuade said, “Detroit’s pension fund officials are entrusted to care for the retirement savings of the City’s employees, including police officer and firefighters. Officials who abuse their positions of trust for personal gain will be brought to justice.”

Robert Foley, Special Agent in Charge, Federal Bureau of Investigation said,"Those individuals who engage in pay to play schemes rob citizens of their right to honest government. The FBI Led Detroit Area Public Corruption Task Force is committed to stopping these illegal acts."

Based on his guilty plea and felony conviction for conspiring to pay bribes, Mayfield is facing a maximum of five years in prison and a fine of up to $250,000.

A criminal indictment is pending against Beasley and against Roy Dixon, a former investment advisor to the two pension funds who paid bribes to Beasley and other officials and who embezzled millions from the funds.

In addition, a number of other defendants have been convicted in relation to the pension fund investigation, including (1) Monica Conyers, a former Trustee of the General Retirement System and former member of the Detroit city council, for conspiracy to take bribes, including bribes relating to a proposed multi-million dollar pension fund investment in Wireless Resources and a $10,000 extortion payment relating to the Police and Fire Retirement System’s investment in the Romulus Deep Injection Waste Well; (2) Samuel L. Riddle, Conyers’ Chief of Staff, for conspiracy to commit bribery and extortion relating to the Wireless Resources and Romulus Deep Injection Well investments; (3) DeDan Milton, a former Trustee of Detroit’s two pension funds; (4) Andrew Park, an owner of Asian Village, who paid a bribe to obtain a $2.75 million loan from Detroit’s General Retirement System; and (5) Derrick Miller, former Chief Information Officer of Detroit, who accepted the bribe from Park and who took a kickback of more than $500,000 on a $44 million investment by Detroit’s two pension funds.

The case was investigated by agents of the Federal Bureau of Investigation, the Internal Revenue Service, and the Department of Labor. It is being prosecuted by Assistant United States Attorneys Robert Cares and David A. Gardey.

A 50-year-old Canton pharmacist who owned and operated 26 pharmacies in the metro-Detroit area was sentenced today to 17 years in prison, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Robert D. Foley, III, Special Agent in Charge, Federal Bureau of Investigation, Robert Corso, Special Agent in Charge, Drug Enforcement Administration and Lamont Pugh, Special Agent in Charge of the Inspector General of the Department of Health and Human Services.

U.S. District Judge Arthur J. Tarnow sentenced BABUBHAI "Bob" PATEL on 26 convictions for a health care fraud conspiracy, a drug conspiracy, and related fraud and drug violations.

Evidence presented at a six-week jury trial concluding in August 2012 showed between 2006 and 2011, the pharmacies billed Medicare and Medicaid more than $57 million. At least 25% of those billings were for drugs that were either medically unnecessary never dispensed. Additional amounts were fraudulently billed to private insurers such as Blue Cross Blue Shield of Michigan. The pharmacies operated on a business model that paid kickbacks to physicians in exchange for writing prescriptions for expensive medications. The affiliated doctors would also write prescriptions for controlled substances, without regard to medical necessity, which would be filled at the pharmacies and distributed to paid "patients" and patient recruiters. The expensive non-controlled medications would be billed but not dispensed.

In sentencing the defendant, the court told the defendant that "what you have done is reprehensible." The criminal conduct engaged in by other health care fraud violators sentenced by the court was "small scale compared to this."

“Taxpayers fund Medicare and Medicaid to provide health care to needy Americans,” McQuade said. “It is gratifying to see courts impose strong sentences on defendants who exploit these programs for personal gain.”

FBI Special Agent in Charge Foley stated, "Those individuals who engaged in this health care fraud scheme stole millions of dollars over several years, from a system designed to provide health care to those in need. The FBI is committed to stopping these illegal acts and prosecuting these criminals."

"The conduct that occurred in this case was deplorable, inexcusable and dangerous" said Lamont Pugh III, Special Agent in Charge of the Chicago Region of the U.S. Department of Health & Human Services, Office of Inspector General. "The OIG will continue to work with our law enforcement partners to combat prescription drug fraud in the Medicare and Medicaid programs and seek to ensure the safety of program beneficiaries and taxpayer dollars."

Of the 26 defendants charged in the original indictment in this case, 20 defendants have either pleaded guilty or been convicted at trial. Six defendants are scheduled for trial in June. Out of 12 pharmacists charged, 11 have been convicted at trial or pleaded guilty, with one waiting to be tried. Out of four doctors charged, two have pleaded guilty, with two waiting to be tried.

Earlier this week, Judge Tarnow sentenced several of the other pharmacists who were convicted at trial. BRIJESH RAWAL, 36, of Canton; ASHWINI SHARMA, 34, of Novi; and LOKESH TAYAL, 36, of Northville, were each sentenced to terms of imprisonment of 68 months for their participation as pharmacists in these criminal offenses. These three pharmacists were non-U.S. citizens who entered the United States under a visa program for certain skilled workers, and each will be deported to the country of their citizenship upon the completion of their sentences. Defendant RAWAL is a citizen of Canada, while defendants SHARMA and TAYAL are citizens of India.

In addition to the prison sentence, defendant BABUBHAI PATEL was ordered to pay restitution to the Medicaid and Medicare programs in the amount of $17.3 million, and restitution to Blue Cross Blue Shield in the amount of $1.5 million. Defendant PATEL, who has been held without bond since his arrest on August 2, 2011, will receive credit toward his sentence for the time he has served.

U.S. Attorney McQuade thanked the Drug Enforcement Administration, the FBI, the Department of Human Services, Office of Inspector General, and Blue Cross and Blue Shield of Michigan for their tireless work in the investigation and prosecution of the case. The case is being prosecuted by Assistant United States Attorneys John K. Neal and Wayne F. Pratt.

James Henley, a former contractor with the Detroit Public Library (“DPL”), was charged in an Indictment for Bribery of a Public Official, United States Attorney Barbara L. McQuade announced today.

Joining McQuade in the announcement were Robert D. Foley, III, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation and Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation

According to the six count Indictment, James Henley bribed a public official of the DPL from about January 2007 until about July 28, 2008.  Henley owned a company called Core Consulting & Professional Services.  The DPL official approved a proposal submitted by Core Consulting to provide information technology work, and approved various extensions and change orders to the contract.  Ultimately, DPL paid Core Consulting $1.5 million under the contract, and Henley secretly paid kickbacks to the DPL official totaling at least $600,000. 

Henley is also charged with failing to file individual and corporate tax returns for years 2007 and 2008.

If convicted, Henley faces a maximum of ten years in prison and a fine of up to $250,000. The Indictment also seeks forfeiture of proceeds and payments associated with the bribery scheme.

United States Attorney McQuade said, “The citizens lose when public contracts are awarded on the basis of bribery instead of on the merits of the bids.  We will do all we can to root out corruption in public contracting in hopes of deterring officials from using public funds for self-enrichment.”

FBI Special Agent in Charge Robert D. Foley III said, "Those individuals who engage in bribery and kickbacks rob citizens of the honest government they deserve. The FBI Led Detroit Area Public Corruption Task Force is committed to stopping these illegal acts."

"Kickbacks will not be tolerated as a way to do business in Detroit," said Special Agent in Charge Erick Martinez, IRS Criminal Investigation.

The case was investigated by agents of the FBI. This case is being prosecuted by Assistant United States Attorneys Elizabeth A. Stafford and Julie Beck.

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.

Press Conference - Former Michigan Supreme Court Justice Diane M. Hathaway

Diane M. Hathaway, a former Michigan Supreme Court Justice, pleaded guilty today to committing bank fraud in connection with a property owned at 15834 Lakeview Court, Grosse Pointe Park, Michigan, United States Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III of the Federal Bureau of Investigation ("FBI"), and Michigan Attorney General, Bill Schuette.

During a hearing this morning before United States District Judge John Corbett O’Meara, Hathaway, 58, of Grosse Pointe, Michigan, admitted that between 2010 and 2011 she knowingly engaged in a scheme to defraud ING Direct bank by concealing assets from the bank to qualify for a “short sale.” A short sale is a forgiveness of debt by the bank to a borrower who claims financial hardship.

Based on her guilty plea and felony conviction for committing bank fraud Hathaway is facing a maximum of thirty years in prison, a fine of up to $1,000,000 and up to five years of supervised release.

United States Attorney McQuade said, "We have made mortgage fraud a priority in this district because of the harm this crime causes to our housing markets in the aggregate. Homeowners who play by the rules should know that those who don't will be held accountable, no matter who they are."

Robert Foley, Special Agent in Charge of the FBI said, "Regardless of a person's stature or position in life, we must all follow the same set of rules. In this case, an individual in a prominent position of public trust made extremely poor choices that have resulted in criminal activity. The FBI is committed to stopping these illegal acts."

Michigan Attorney General Bill Schuette said, “"Public corruption scandals have damaged the public's trust in government and tarnished our state's reputation. But today, we begin to move forward, beyond the cloud of controversy that hung over our state's Supreme Court. I appreciate the hard work of U.S. Attorney Barbara McQuade and FBI Special Agent In Charge Bob Foley, who brought this case to a swift and just end."

This case was investigated by the FBI with assistance from Michigan Attorney General’s Office.

Press Conference - Highland Park Police Department

A federal criminal complaint was unsealed today charging four Highland Park police officers with accepting bribes, conspiring to distribute six kilograms of cocaine, and carrying firearms in furtherance of a drug trafficking crime, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III, of the Federal Bureau of Investigation, Chief of Police Kevin Coney, Highland Park Police Department and Michigan Attorney General Bill Schuette.

The four Highland Park police officers charged are: Anthony Bynum, 29, of Highland Park, Michigan; Price Montgomery, 38, of Highland Park, Michigan; Shawn Williams, 33, of Detroit, Michigan; and Craig Clayton, 55, of Highland Park, Michigan. Bynum and Montgomery are both police officers with the Highland Park Police Department. Bynum is also a police officer for Detroit Public Schools. Williams and Clayton are both Auxiliary (Reserve) Officers for Highland Park. Chief Coney was instrumental in assisting the FBI in its investigation of the four officers from his department.

The Criminal Complaint charges the four police officers with accepting cash bribes and with conspiring to deliver six kilograms of cocaine. According to the Criminal Complaint, Bynum and Montgomery arrested a man in August 2012 in Highland Park on a firearms offense. The officers beat the man after arresting him. While in the hospital, the man offered to pay the officers if they would dismiss the charges against him. The officers were willing to accept money in exchange for failing to appear for trial. Subsequently, the man who had been arrested by Montgomery and Bynum began working undercover for the FBI as an unpaid confidential source. During the course of the investigation, Montgomery and Bynum were captured on videotape accepting $10,000 in cash from the confidential source, in return for failing to appear at the man's trial in the Wayne County Circuit Court. On the date set for the man's trial in Circuit Court, Officers Montgomery and Bynum failed to appear as witnesses as required by subpoena, and the case was dismissed.

Later, Officers Mongtomery and Bynum agreed to transport and deliver two kilograms of cocaine for the FBI confidential source, whom the officers believed to be a drug trafficker. On November 15, 2012, Officers Montgomery and Bynum protected and delivered a shipment of what they believed to be two kilograms of cocaine from the Oakland Mall in Troy, Michigan, to a location in Taylor, Michigan. Each officer was paid $1,500 for his role in the delivery of sham cocaine. Subsequently, Officers Montgomery and Bynum recruited two additional Highland Park officers, Williams and Clayton, to help with the delivery of a second, larger shipment of cocaine. On January 23, 2013, the four Highland Park police officers delivered four kilograms of what they believed to be cocaine, again from the Oakland Mall. Each officer was paid either $1,000 or $1,500 by the confidential source for his work in protecting and transporting the sham cocaine. The four police officers each carried a firearm, and some carried their police badges, while protecting the loads of sham cocaine.

Upon conviction, each of the four defendants faces a maximum of up to forty years in prison for conspiring to distribute cocaine. In addition, the officers face a maximum of ten years in prison on the bribery charges, and an additional five year consecutive sentence for carrying a firearm during a drug trafficking offense.

United States Attorney McQuade said, "We applaud Highland Park Police Chief Coney for initiating a federal investigation into misconduct by his officers. We want to emphasize that the misconduct is limited to these four officers. Our community deserves to be served and protected by police officers who perform their jobs with integrity. Police officers who take bribes and participate in criminal activities will be discovered and prosecuted."

Special Agent in Charge Foley of the FBI said, "Police officers swear an oath to protect and serve and are held to the highest standards of ethics and conduct. The FBI led Detroit Area Public Corruption Task Force is committed to ensuring illegal acts on the part of law enforcement officers are thoroughly investigated and those officers face harsh penalties for their crimes."

Highland Park Police Chief Coney stated, “"The illegal actions of these officers do not represent or reflect the ethical standards and values consistent with the Highland Park Police Department. We remain committed to providing our citizens with first class public safety and ensuring our officers display integrity at all times."

"Public corruption scandals damage the public's trust in government and harm our state's reputation," said Attorney General Schuette. "We will continue to work with U.S. Attorney Barbara McQuade, the FBI, state, and local law enforcement agencies to eliminate corruption wherever it is found."

DPS Emergency Financial Manager Roy S. Roberts stated, “"There are a corps of extremely dedicated law enforcement officers who selflessly work day and night to protect our students, teachers, staff and DPS property, and the arrest and prosecution of this one individual will ensure that their professionalism and dedication will be preserved and maintained in the public eye. While relieved that none of this activity occurred on Detroit Public Schools grounds or involved any of our students, I applaud the leadership of our police department for cooperating fully and am highly appreciative of the efforts of the agencies in the FBI-led Public Corruption Task Force who brought this matter to justice."

The case was investigated by the FBI led Public Corruption Task Force which includes Internal Revenue Service, Criminal Investigation, Environmental Protection Agency - Office of Inspector General, Housing and Urban Development - Office of Inspector General, Department of Transportation - Office of Inspector General, Michigan State Police, the Michigan Attorney General's Office and the Detroit Police Department. It is being prosecuted by Assistant United States Attorney David A. Gardey.

The United States Attorney's Office, along with Royal Oak Public Schools join the Detroit Tigers Winter Caravan in an effort to increase awareness about bullying prevention.  The Detroit Tigers’ “Strike Out Bullying” initiative in partnership with the Detroit Newspapers In Education, the Department of Justice’s Anti-Bullying Prevention initiative as well as the Royal Oak Schools’ prevention efforts aim to bring attention to the widespread and often underreported problem of bullying in schools.

Bullying creates a climate of fear in schools, playgrounds and neighborhoods.  Victims of bullying suffer from a wide range of psychological and school-related problems including depression, anxiety, low self-esteem and even suicide.  One of the key components critical to the success of any anti-bullying effort is community outreach.  In an effort to bring law enforcement and the community together to discuss this very important issue, a town hall meeting entitled "Strike Out Bullying - Strategies for Protecting Your Child" will be held at Royal Oak Middle School, 709 N. Washington Avenue, Royal Oak, Michigan 48067 on Thursday, January 24, 2013, from 5:00 p.m. until 6:15 p.m.  Royal Oak Schools Superintendent Shawn Lewis-Lakin has graciously offered to host the town hall and United States Attorney Barbara McQuade along with Fox Sports Detroit broadcaster Mario Impemba will moderate the event.

Highlighted speakers will include Barbara L. McQuade, United States Attorney, FBI Special Agent in Charge Robert D. Foley, III and 2012 American League Champions Alex Avila and Phil Coke.  Avila and Coke a will speak about bullying and how children can root out this serious problem.
United States Attorney McQuade stated, "Preventing bullying, both online and in person, is part of our violent crime reduction strategy.  We do not accept that subjecting children to harassment and intimidation is a necessary part of growing up.  Instead, we want to give children strategies for dealing with bullying so that they can be successful students."          

FBI Special Agent in Charge Foley stated, "Raising awareness about the dangers of bullying and intimidation in schools is a crucial part of the FBI's anti-bullying philosophy. Our goal is to educate students about the importance of stopping bullying and supporting a safe and friendly environment for learning. The FBI is committed to working together to ensure students make healthy choices and continue to respect one another's differences."

Royal Oak Schools Superintendent Lewis-Lakin stated, "Royal Oak Schools strives to be a community of excellence, a place where all students experience success.   We welcome opportunities to work collaboratively in private and public partnerships on initiatives that address critical student needs.   We welcome this opportunity to work together with the Detroit Tigers and the U.S. Attorney's Office on making our schools positive, safe, bully-free zones for student success."

This is a free, ticketed event however, tickets are no longer available.  The event is open to the media.  If you have any questions, please contact Gina Balaya, Public Information Officer, United States Attorney’s Office at [email protected] or call (313) 226-9758.

FLINT, Michigan – A Fenton podiatrist was sentenced in Bay City yesterday to 55 months in prison for his participation in a $1.6 million fraudulent medical billing scheme.

The sentencing was announced by United States Attorney Barbara L. McQuade, Special Agent in Charge Robert D. Foley, III of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.

Richard Alan Behnan, D.P.M., 56, was sentenced by U.S. District Judge Thomas L. Ludington in Bay City, Michigan. In addition to his prison term, Behnan was ordered to pay $1,427,133.12 million in restitution to Medicare, and $196,956.54 to Blue Cross Blue Shield of Michigan, jointly and severally with his podiatric assistant and co-defendant, Kelly Morel.
Behnan pleaded guilty on November 21, 2011, to one count of conspiracy to commit health care fraud. According to the plea documents, beginning approximately in 2000 and continuing to at least December 2010, Behnan, a traveling podiatrist who operated across Michigan, including Bay City, Flint, Detroit and Lansing, provided services to patients at various senior centers and assisted living facilities. Behnan and Morel submitted claims to Medicare and Blue Cross Blue Shield of Michigan for nail avulsion procedures, when in fact they had merely trimmed and polished the patients’ toenails - a form of routine foot care not covered by Medicare. In some instances, Behnan submitted claims for nail avulsion procedures he claimed to have performed at a time when he was outside of the United States. In total, Behnan billed and received a total of $1,624,089.66 in fraudulent claims.

Kelly Morel, who had pleaded guilty May 26, 2011, was sentenced yesterday to 18 months in prison.

U.S. Attorney McQuade stated, “"We hope that cases like this one will alert doctors and other health care providers that defrauding taxpayers through Medicare fraud is a serious crime that will land them in prison."

FBI Special Agent in Charge Foley stated, “"Those who commit health care fraud by illegally billing Medicare for services never performed are stealing money from all taxpayers. The FBI is vigorously committed to stopping these criminal acts."

The case was investigated by the FBI and HHS-OIG. and prosecuted by the U.S. Attorney’s Office for the Eastern District of Michigan.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

The final defendant in a Detroit narcotics conspiracy was sentenced today to almost ten years in prison, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge David McCain, Bureau of Alcohol, Tobacco, Firearms and Explosives, Detroit Field Division.

Chief United States District Judge Gerald E. Rosen sentenced Tyrone Wooten, 26, of Detroit, to 114 months in prison. Wooten pleaded guilty in September to Conspiracy To Distribute Controlled Substances. Wooten was charged as one of the co-leaders of the drug conspiracy. The indictment charged seven defendants with participating in the conspiracy to distribute at least 280 grams of crack cocaine and more than a kilogram of heroin.

During the investigation, a search warrant at a Detroit home uncovered 79 grams of crack cocaine and 15 grams of heroin, along with packaging materials and other narcotics paraphernalia.

In addition to Wooten, each of the charged defendants pleaded guilty to narcotics charges and were sentenced as follows; Stefan Toliver, 100 months; George Wooten: 60 months; Rashawn Marcel Jones: 180 months; Ryan Terrel Jones: 49 months; Jabron Poydras: 32 months and Maurice Curry: 168 months.

“We are focusing our drug enforcement efforts on drug trafficking organizations, which can lead to violence in our neighborhoods,” McQuade said. “We hope that prosecutions like this one can improve public safety for residents in our community.”

U.S. Attorney McQuade thanked the ATF for their work in the successful investigation of the case. The case was prosecuted by Assistant United States Attorney Susan Gillooly.

A 55-year-old Flint man was sentenced to more than four years in prison and more than $600,000 in restitution on Jan. 8, 2013, for conspiring to commit food stamp fraud, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Joe N. Smith, Special Agent in Charge of USDA - Office of Inspector General and Robert D. Foley, III, Special Agent in Charge of the Federal Bureau of Investigation in Detroit.

U.S. District Judge Mark A. Goldsmith sentenced Noha T. Fofana to 51 months in federal prison to be followed by a three-year term of supervised release. Fofana was also ordered to pay $612,980.96 in restitution to the USDA-Food and Nutrition Service. This amount is to be paid jointly and severally with Fofana’s co-defendant, Akhir K. McFarland, who was sentenced on Dec. 18, 2012, to 16 months in federal prison for his participation in the conspiracy.

Evidence introduced during the trial established that Fofana, the owner of Mandingo African Market, redeemed more than $750,000 in food stamp benefits from February 2009 to July 2011, approximately $612,000 of which was obtained utilizing fraudulent "food stamps-for-cash" exchanges. The U.S. Department of Agriculture -- Office of Inspector General, (USDA-OIG) which funds the food stamp program, calculated that during that same time period, Mandingo's average food stamp redemption amount was $26,798 per month - compared to an average of $5,479 monthly redemption for other convenience stores in the area.

Witnesses testified during the trial that Fofana and others conspired to fraudulently submit bridge card numbers for cash benefits. Members of the conspiracy agreed to pay customers, including undercover law enforcement agents, roughly 50 cents for each $1 charged against their cards.

USDA-OIG Special Agent in Charge Joe N. Smith stated, "The Office of Inspector General (OIG) will continue to dedicate resources to the investigation of retailers who commit fraud in vital USDA food assistance programs. OIG's objectives are to protect the integrity of USDA nutrition assistance programs such as Supplemental Nutrition Assistance Program and to stop unscrupulous retailers such as Noha Fofana from taking advantage of low-income individuals during these tough economic times. As we conduct fraud 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 crimes against SNAP."

FBI Special Agent in Charge Foley stated, “"Crimes involving food stamp fraud steal funds from a system designed to feed those in need. The FBI is committed to stopping this type of illegal activity."
“Taxpayers fund food stamps to provide food for the needy, not to create a revenue stream for store owners,” McQuade said. “We hope that other merchants will become aware of prosecutions like this one and be deterred from engaging in similar fraud schemes.”

The case was investigated by special agents from the United States Department of Agriculture-Office of Inspector General and special agents of the FBI.

The case was prosecuted by the Flint branch of the United States Attorney’s Office for the Eastern District of Michigan.

A Detroit man was sentenced yesterday in federal court on charges of being a felon in possession of a firearm, announced U.S. Attorney Barbara L. McQuade.

McQuade was joined in the announcement by David McCain, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

Jerry Burton, 31, was sentenced to 63 months in federal prison and will serve two years of supervision following his release from federal prison. Burton pleaded guilty last October and was sentenced by Judge Nancy G. Edmunds on January 8, 2013. The court noted that Burton’s numerous previous convictions demonstrated that he was a continuing danger to the community.

During the guilty plea and in memoranda and argument submitted to the court at sentencing, the evidenced showed that ATF agents identified Burton as someone who had expressed an interest in illegally selling firearms in Detroit. On January 4, 2012, Burton sold an assault rifle to an undercover agent and an undercover Detroit Police Office. The semi-automatic rifle was fully functional and capable of accepting a magazine that holds 30 rounds of ammunition. Burton also sold the undercover officers two 30-round, large capacity magazines, one of which was loaded with 20 rounds of ammunition.

U.S. Attorney Barbara McQuade said: “We are committed to removing dangerous weapons from the hands of felons and from those engaged in illegal gun sales. We believe that removing illegal guns from our streets will help reduce our intolerably high homicide rate.”

McQuade praised the work of the Detroit Police Officers and ATF agents, demonstrated the highest levels of dedication and professionalism in their aggressive and thorough investigation of the case.