Western District of North Carolina

Fakeplastic.net Taken Over By Federal Law Enforcement, Ongoing Investigation Has Led To 11 Additional Arrests

CHARLOTTE, N.C. – Three men who allegedly ran a one-stop online shop selling counterfeit credit cards and holographic overlays, to be used by criminals to make fake identifications, face federal charges in an ongoing investigation that has already resulted in 11 additional arrests, including a customer facing federal charges.

U.S. Attorney Anne M. Tompkins for the Western District of North Carolina and New Jersey U.S. Attorney Paul J. Fishman announced the charges today.

Sean Roberson, 39, of Palm Bay, Fla., who allegedly ran the site, is charged in an amended complaint, unsealed today in the District of New Jersey, with conspiracy to commit wire fraud; conspiracy to traffic in counterfeit goods or services; and conspiracy to commit fraud and related activity in connection with authentication features. A superseding indictment returned today in the Western District of North Carolina charges Roberson’s two conspirators, Vinicio Gonzalez, 30, of Melbourne, Fla., and Hugo Rebaza, 31, of Palm Bay, Fla. with conspiracy to traffic in counterfeit goods and conspiracy to commit mail fraud, wire fraud and bank fraud. The superseding indictment also charges a customer of the website, Nashancy Johnny Colbert, 27, of Charlotte, N.C., with one count of conspiracy to commit mail fraud, wire fraud and bank fraud. All four men are expected to appear this week in U.S. District Courts in Newark and Charlotte to face the charges. Roberson is expected to appear in Newark federal court this afternoon before U.S. Magistrate Judge Mark Falk. The North Carolina court dates have not yet been set.

U.S. Postal Inspection Service (USPIS) and the FBI assumed control of the website, fakeplastic.net, on Dec. 5, 2013, and made more than 30 controlled deliveries of ordered materials – not allowing those materials to leave law enforcement control. Those controlled deliveries have resulted in 11 additional arrests of alleged fakeplastic customers, including Colbert, being handled by federal, state and local prosecutors across the United States.

U.S. Attorney Tompkins stated, “This ring of computer criminals ran an online one-stop shop where counterfeit credit cards were a mouse click away. As consumer fraud becomes more sophisticated, law enforcement and prosecutors across the country are joining forces to pull aside the veil of cyberspace anonymity and take down criminal enterprises that pilfer the identities of innocent victims for personal gain.”

“According to the complaint, Sean Roberson and his conspirators ran a large-scale, online operation filling custom orders for counterfeit cards,” said U.S. Attorney Fishman. “This made-to-measure service provided the last link in the chain necessary for criminals to make money from stolen credit card numbers and identities.”

Inspector in Charge Keith Fixel of USPIS in Charlotte stated, “Protecting the integrity of the nation’s mail system is a top priority for the Postal Inspection Service. Even though these defendants went to great lengths to avoid detection, their scheme was uncovered by Postal Inspectors committed to enforcing the laws that protect the mail from illegal use and bringing to justice those who attempt to compromise the public’s trust in the mail.

“This investigation is yet another example of the unrelenting pursuit of cyber criminals by federal law enforcement,” said Newark FBI Special Agent in Charge Aaron T. Ford. “The FBI and its law enforcement partners will continue to identify and investigate individuals that try to hide in the supposed anonymity of Internet crime organizations in order to steal from innocent parties.”

According to the amended complaint unsealed today in Newark federal court and charging documents filed in the Western District of North Carolina:

USPIS and the FBI, assisted by the U.S. Secret Service, have been investigating the online retail shop, fakeplastic.net, since January 2013. The site specialized in selling high-quality, custom-made counterfeit credit and debit cards (collectively, “payment cards”) as well as holographic overlays used to create fake driver’s licenses.

Roberson began selling counterfeit cards and related items as early as April 2011 and launched the fakeplastic website in June 2012. Roberson owned and operated the site with the assistance of Gonzalez and Rebaza. Since April 2011, Roberson and his conspirators fulfilled orders for approximately 69,000 counterfeit credit cards – both embossed and unembossed – more than 35,000 holographic stickers used to make counterfeit cards appear more legitimate and more than 30,000 state identification card holographic overlays. The orders – more than 3,600 parcels – were shipped through the U.S. mail.

Gonzalez was primarily responsible for manufacturing the counterfeit payment cards, packaging the contraband for mailing and placing U.S. Express Mail envelopes in the mail for delivery to the fakeplastic customers. The conspirators used a storage facility in Florida to store supplies and to manufacture the counterfeit payment cards and Gonzalez frequently visited the storage unit to create the custom-embossed cards and to prepare mail packages. Law enforcement arrested Gonzalez on Dec. 4, 2013, while he was in the storage space – seizing computers, printers, counterfeit cards, an embosser and other contraband.

Rebaza was a “runner” for the criminal operation, responsible for picking up packages containing criminal proceeds and supplies from a “mail drop” for the fakeplastic website.

Colbert was a members-only customer of the website, who placed and received orders of counterfeit payment cards delivered to him through the mail. Law enforcement executed a search warrant on Jan. 3, 2014, at Colbert’s Charlotte residence seizing, among other things, 41 counterfeit payment cards embossed with Colbert’s name or the names of other individuals. Law enforcement also recovered a discarded U.S. Express Mail envelope sent from the fakeplastic website.

Using a conservative estimate of loss of $500 associated with each counterfeit payment card (derived from the federal sentencing guidelines estimation of loss associated with stolen payment card information), law enforcement estimates the losses associated with just the counterfeit payment cards trafficked by Roberson and his conspirators at more than $34.5 million. Roberson personally made more than $1.7 million from the scheme.

The fakeplastic website was used by various groups of criminals across the country often referred to as “carding” or “cash out” crews. These crews buy stolen payment card numbers and related information – referred to as “track data” or “dumps” – which typically appear on the magnetic stripe on the back of legitimate payment cards. Illegal vendors of that information usually get it through hacking or skimming operations involving the installation of specialized equipment at ATM locations or point-of-sale terminals. The stolen data is ultimately put on a blank card and used to make unauthorized transactions.

More sophisticated cash out operations use custom-made counterfeit payment cards embossed with the same account numbers that have been encoded on the back of the card, and often acquire fake identification cards in order to reduce the likelihood of detection from law enforcement.

The criminal underground has evolved from fractured, regional operations to an Internet-based market where buyers and sellers across the globe can advertise, purchase and transmit stolen track data. The fakeplastic website brought the physical tools needed by cash out operations to the world of e-commerce, as it eliminated the need for crews to purchase expensive hardware.

By December 2013, the site had more than 400 members. Members with access to the fakeplastic website and seeking to purchase counterfeit payment cards could browse the website’s available counterfeit card templates. Members could then choose whether to input specific information to be embossed on the cards and whether they wanted additional authentication features – such as holographic stickers.

At one time the website accepted Liberty Reserve online currency, but shortly after federal charges against Liberty Reserve were made public in the Southern District of New York in May 2013, the fakeplastic website stopped accepting that currency and began accepting Bitcoin, a cryptographic-based digital currency. As set forth on the site’s “news” section, Bitcoin was viewed as a “safe” and “anonymous” method of payment for contraband.

The charges and maximum potential penalties for each count are as follows:

Roberson: charged with conspiracy to commit wire fraud; penalty: 30 years and $1 million fine or twice the gain or loss from the offense.

Gonzalez, Rebaza and Colbert: charged with conspiracy to commit mail fraud, wire fraud and bank fraud; penalty: 30 years and $1 million fine or twice the gain or loss from the offense.

Roberson, Gonzalez and Rebaza: charged with conspiracy to traffic in counterfeit goods or services; penalty: 10 years and $2 million fine or twice the gain or loss from the offense.

Roberson: charged with conspiracy to commit fraud and related activity in connection with authentication features; penalty: 20 years and $250,000 fine or twice the gain or loss from the offense

U.S. Attorneys Tompkins and Fishman credited inspectors of USPIS, under the direction of Inspector in Charge Keith Fixel in Charlotte and Maria L. Kelokates in Newark; special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and special agents of the Charlotte Division of the U.S. Secret Service under the direction of Special Agent in Charge Russell F. Nelson for the ongoing investigation. The Computer Crimes and Intellectual Property Section of the Justice Department’s Criminal Division is a partner in the prosecution.

U.S. Attorney Tompkins also thanked Chief Kevin Lovelace and the Rutherfordton, N.C. Police Department for the department’s vital role in this case. Chief Lovelace stated, “I would like to commend the efforts of all of our officers involved with this case in ensuring that the information they obtained was shared with the appropriate agencies. Communication between law enforcement agencies plays a vital role in resolving many cases.”

The government is represented in the Western District of North Carolina by Assistant U.S. Attorneys Tom O’Malley and Ben Bain-Creed and in the District of New Jersey by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section and Assistant U.S. Attorney Andrew Kogan, both of the office’s Economic Crimes Unit, and Barbara Ward of the office’s Asset Forfeiture and money laundering unit; and in Washington by CCIPs Trial Attorney Evan Williams.

The charges and allegations contained in the various charging instruments are merely accusations and the defendants are considered innocent unless and until proven guilty.

The charges and allegations contained in the various charging instruments are merely accusations and the defendants are considered innocent unless and until proven guilty.

Gonzalez et al Superseding Indictment
The Colbert Complaint
The Roberson Complaint
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Exhibit L
Exhibit M
Exhibit N
Exhibit O

 

Defendant Delivered Fraudulent Emissions Certificate to Undercover Agents in Exchange for Cash

CHARLOTTE, N.C. – A Gastonia man was sentenced late Wednesday, January 22, 2014, to serve six months in prison for producing a fraudulent vehicle emissions certificate to undercover agents, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Frank D. Whitney also sentenced Mohammed Hafeez Awan, 52, of Gastonia, to three years of supervised release, six months of which Awan will spend in home confinement. Awan was also ordered to perform 50 hours of community service and to a pay a $1,000 fine.

U.S. Attorney Tompkins is joined in making today’s announcement by Special Agent in Charge Maureen O’Mara of the U.S. Environmental Protection Agency, Criminal Investigation Division (EPA-CID), Atlanta Area Office; Greg McLeod, Director of the North Carolina State Bureau of Investigation (NC SBI); and Steven M. Watkins, Director of the North Carolina Division of Motor Vehicles License and Theft Bureau (NC DMV License & Theft Bureau).

According to court records and yesterday’s sentencing hearing, Awan is the former owner of Prestige Car Care (Prestige), an automobile repair shop and state licensed vehicle emissions station in Charlotte. In 2005, as a result of a state investigation into illegal emissions inspections, it was determined that Awan and his employees conducted the fraudulent inspections, commonly referred to as “clean scanning,” by connecting Prestige’s emission testing equipment into a designated surrogate vehicle that would pass the state’s emission testing requirements. As a result of that investigation, the NC DMV License & Theft Bureau suspended Prestige’s safety/emissions inspection license for a period of 11 years.

According to yesterday’s sentencing hearing, in September 2011, while Awan’s shop was no longer able to conduct emissions inspections, Awan conspired with Jassim Juburi, a former employee of Central Auto Inspection & Repair in Charlotte to continue this practice. According to court documents, law enforcement agents working undercover paid Awan $150.00 in exchange for a fraudulent vehicle emissions certificate and without ever producing a vehicle to be inspected. The fraudulent emissions test and certificate were generated by Awan’s co-conspirator, Jassim Juburi, a former employee of Central Auto Inspection & Repair in Charlotte. Juburi was previously sentenced to an 18-month prison term for conducting more than 530 illegal “clean scan” inspections.

The Clean Air Act requires vehicle emission inspections in geographic regions that exceed national ambient air quality standards. According to the EPA, the Charlotte metropolitan area exceeds the 8-hour standard set for Ozone, a potent irritant that can cause lung damage and other types of respiratory problems.

In March 2012, Awan pleaded guilty to one count of conspiracy to violate the Clean Air Act by conducting false vehicle emissions inspections. Awan was ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.

The investigation of this case was conducted by the EPA’s criminal investigation division, NC SBI’s Diversion and Environmental Crimes Unit, and NC DMV License & Theft Bureau, with assistance from the North Carolina Division of Air Quality, Mobile Sources Compliance Branch. The prosecution was handled by Assistant United States Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.

The Defendants Were Caught In ATF And IRS-CI Undercover Investigation Involving More Than 486,000 Cartons Of Purportedly Stolen Cigarettes Worth Over $20 Million

CHARLOTTE, N.C. – Five of twelve conspirators charged with running a cigarette smuggling ring in North and South Carolina were sentenced in U.S. District Court on Wednesday, January 22, 2014 on cigarette trafficking and money laundering charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The smuggling ring was uncovered over the course of “Operation Burn Notice,” a multi-agency investigation into the interstate transport and sales of stolen property and money laundering in Charlotte and Greensboro, N.C. and Columbia, S.C.

Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department join U.S. Attorney Tompkins in making today’s announcement.

Chief U.S. District Judge Frank D. Whitney handed down the federal sentences ranging from 14 months to 18 years in prison:

• Kamal Zaki Qazah, 35, of Columbia, S.C., was sentenced to 18 years in prison followed by two years of supervised release and ordered to forfeit property associated with his offenses.

• Tha’er Ismail Ayyad, 48, of Kernersville, N.C., was sentenced to 41 months in prison followed by two years of supervised release. Ayyad, a Jordanian national, was also convicted of one count of visa fraud and will be deported upon completion of his sentence.

• Ahmed Ibrahim, age 48, of Columbia, S.C., was sentenced to 30 months in prison followed by two years of supervised release.

• Ziad Hashem Najjar, 47, of Greensboro, N.C., was sentenced to 24 months in prison followed by two years of supervised release.

• Ahmed Samy Hosney Kareem, 35, of Matthews, N.C., was sentenced to 14 months in prison followed by two years of supervised release.

The final defendant in the conspiracy, Nasser Kamal Alquza, 48, of Mt. Pleasant, N.C., will appear before Judge Whitney on January 30, 2014, for his final sentencing and pending forfeiture of property associated with his offenses.

According to the sentencing hearings, trial evidence and other court records:

From about August 2009 to November 2011, the co-conspirators engaged in a cigarette smuggling conspiracy that trafficked more than 486,000 cartons of cigarettes across North and South Carolina with an estimated retail value of $20 million. The co-conspirators paid more than $9.3 million in cash for cigarettes they believed to be stolen from Virginia and Tennessee, and profited by selling them to a network of retail businesses and associates willing to purchase the illegally obtained cigarettes at prices far below market value. The co-conspirators laundered their criminal proceeds through businesses owned by Kamal Qazah and Nasser Alquza in Columbia, S.C.

Kamal Zaki Qazah and Nasser Kamal Alquza were convicted of multiple counts of conspiracy on February 4, 2013, after a seven-day jury trial in federal district court in Charlotte.

The other six defendants involved in the conspiracy were previously sentenced as follows:

• Khaled Fadel Ibrahim, 50, of Charlotte, was sentenced to 60 months in prison and two years of supervised release.

• Wael Mahmoud Salem, 38, of Oakland Gardens, N.Y. was sentenced to 27 months in prison and one year of supervised release.

• Jose Calderon-Silver, 38, of New York, N.Y., was sentenced to one month in prison, six months of home confinement and one year of supervised release.

• Zafer Ramadan Kafozi, 48, of Charlotte, was sentenced to 18 months in prison and two years of supervised release.

• Hesham Rahman, 46, of Charlotte, was sentenced to 21 months in prison and two years of supervised release.

• Murad Ayyad, 33, of Charlotte, was sentenced to one year of probation.

Defendants Qazah, Alquza and Tha’er Ayyad are currently in federal custody. The remaining defendants will be ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.

U.S. Attorney Tompkins thanked ATF, IRS-CI and CMPD for their investigation of the case. The prosecution was handled by Assistant United States Attorneys Mike Savage and Jennifer Dillon of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – A Charlotte woman was sentenced on Tuesday, January 22, 2013, by U.S. District Court Judge Frank Whitney to 41 months in prison to be followed by three years of supervised release for carrying out a six-year mail fraud scheme against her employer, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The defendant was also ordered to pay restitution in the amount of $737,733.

U.S. Attorney Tompkins is joined in making today’s announcement by Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.

According to filed court documents and court proceedings, Maureen Barbara Mallon, 67, of Charlotte, pleaded guilty in July 2011 to one count of mail fraud. Court documents show that Mallon was employed by an insurance company in Charlotte, as the company’s accounts payable/receivable manager and later as its office manager. From 2004 to 2010, Mallon engaged in a scheme to defraud her employer, court records indicate. According to court documents, Mallon’s position at the insurance company gave her full access to the company’s operating account and made her responsible for various administrative and financial tasks, including processing invoices and remitting payments of insurance premiums to insurance companies underwriting client policies for Mallon’s employer.

Court records indicate that beginning in March 2004 Mallon began issuing duplicate insurance premium payments from her employer’s operating accounts. According to court documents, Mallon would mail one check to the underwriting insurance company and deposit a duplicate check into her personal bank account. Filed court documents show that the duplicate company check was usually made payable to “Amwins Brokerage of the Carolinas,” which was an underwriting insurance company that did business with Mallon’s employer. To facilitate the deposit of the fraudulent checks, Mallon changed the name on the personal bank account to “Maureen B Mallon DBA Amwins Brokerage,” court records show.

According to court records and proceedings, over the course of six years, Mallon deposited approximately $730,000 into her personal bank account, and used the money for personal expenditures, including vehicle expenses and residential rental payments. Mallon was ordered to self-report to the Federal Bureau of Prisons to begin her sentence upon the designation of a federal facility. All federal sentences are served without the possibility of parole.

The investigation was handled by the FBI. The case was prosecuted by Assistant United States Attorney Mark T. Odulio of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – U.S. District Court Judge Robert J. Conrad, Jr. sentenced today Parker Antron Coleman, 28, of Charlotte to 30 years in prison for marijuana trafficking and money laundering, plus a consecutive 30 years for firearms offenses, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Coleman was also ordered to serve 10 years of supervised release.

U.S. Attorney Tompkins is joined in making today’s announcement by Brock D. Nicholson, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Atlanta and the Carolinas and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department.

According to evidence presented at his trial and other court records, Coleman was the head of a drug trafficking conspiracy that transported and distributed more than four tons of marijuana in the Charlotte area. Court records indicate that Coleman’s suppliers were linked to California-based members of the “Mexican Mafia” drug trafficking organization. According to trial evidence and filed court documents, the drug organization had “couriers” who used commercial flights to travel between the two states, each time transporting approximately $50,000 in cash to California, and returning to Charlotte with approximately 100 pounds of marijuana in checked baggage. An accomplice working at the airport in California assisted the couriers with passing their luggage containing the drugs through airport security. Coleman convinced friends and family members, among others, to act as couriers for him, as well as his own probation officer who became a “lieutenant” in his drug organization. Trial evidence demonstrated that couriers for the organization made well in excess of 100 such round trips.

Court records indicate that on November 2, 2010, law enforcement recovered $117,595 at the airport from two of Coleman’s couriers and approximately 30 pounds of marijuana from the South Park residence of one of Coleman’s co-conspirators. Upon executing a search warrant on the same day, law enforcement also recovered $92,577 in cash, a semi-automatic handgun, large quantities of drug trafficking paraphernalia and money laundering evidence from Coleman’s residence. Coleman initially denied owning the residence however, law enforcement recovered information that tied the property to the defendant, including business records, photographs, and exotic fish and aquarium equipment worth over $15,000.

On November 16, 2010, law enforcement arrested Coleman and seized two handguns hidden in a secret compartment in Coleman’s luxury SUV. Coleman is a convicted felon and is therefore prohibited from carrying and/or owning a firearm.

Coleman’s prosecution stems from operation “Goldilocks,” an Organized Crime Drug Enforcement Task Force (OCDETF) investigation that began in January 2009 and has resulted in the federal prosecution of approximately 70 individuals involved in the drug conspiracy.

“Coleman trafficked tons of marijuana into Charlotte and profited from spreading drugs in the city he grew up in. Today’s sentence is the capstone to a multi-year international drug trafficking investigation that has dismantled a major drug organization and has landed over 60 defendants in federal prison,” said U.S. Attorney Tompkins.

“As the head of a significant drug trafficking organization in Charlotte, the defendant controlled the smuggling and distribution of large amounts of marijuana," said Brock D. Nicholson, special agent in charge of HSI Atlanta, who oversees agency investigations in Georgia and the Carolinas. “Working with great partners and teamwork under the Organized Crime Drug Enforcement Task Force model, HSI special agents and Charlotte-Mecklenburg officers have disrupted and dismantled this cell and crippled their operations in North Carolina and California.”

“I commend our agency partners for all their hard work and diligence in helping to dismantle and disrupt drug trafficking activities between here and California,” said Chief Rodney Monroe, Charlotte-Mecklenburg Police Department. “With the turn of events, there is now one less drug trafficking organization plaguing our community.”

Coleman’s sentence was enhanced due to prior felony convictions. He has been in local federal custody since his November 2010 arrest and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a facility. Federal sentences are served without parole.

U.S. Attorney Tompkins credited special agents of ICE HSI and CMPD officers for the investigation leading to today’s sentence. The prosecution was handled by Assistant United States Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.

The Defendants Falsely Promised Victims Huge Profits From Trading In The Commodities Futures Market

CHARLOTTE, N.C. – Two Charlotte men were sentenced late Thursday, January 17, 2013, for carrying out two separate Ponzi schemes involving trading in the commodities futures market, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.

Joining U.S. Attorney Tompkins in making today’s announcement are Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and North Carolina Secretary of State Elaine F. Marshall.

Mitchell Huffman

Mitchell Brian Huffman, 52, of Charlotte, was sentenced by Chief U.S. District Court Judge Robert J. Conrad, Jr. to serve 60 months in prison, followed by three years of supervised release. Huffman was also ordered to pay restitution to his victims, the final amount of which will be determined by the Court within 60 days. During the sentencing hearing, Judge Conrad also ordered the defendant to forfeit approximately $2.5 million the Court deemed as proceeds of Huffman’s criminal conduct.

In September 2011, Huffman pleaded guilty to engaging in a $2.5 million Ponzi scheme. According to filed court documents and court proceedings, from 2006 through in or about March 2011, Huffman raised approximately $3.2 million dollars from his victims by falsely claiming that he was generating annual rates of return between 100% to 150% using his proprietary trading program to trade in the commodities futures market.

Based on information in court documents and court proceedings, Huffman directed his victims to transfer their funds to his personal bank account. Court records show that of the $3.2 million Huffman fraudulently obtained from his victims, he only utilized a little over 50% of the funds (approximately $1.7 million) to engage in trading activities. To conceal the fraudulent scheme, Huffman generated bogus monthly statements to his victims which falsely reflected fictitious profits from trading activities, when in fact Huffman sustained massive losses. During this time, Huffman made also Ponzi payments of approximately $834,160 to victim investors, falsely representing that these payments were profits from trading activity.

Huffman also used the victims’ funds, without their knowledge or consent, for personal expenses, including to purchase multiple vehicles, take luxurious vacations, and to make charitable contributions.

At the sentencing hearing, Judge Conrad said that Huffman took away “retirements, college educations funds and houses” from his victims and caused them to go through “financial hardships and depression.”

Robert Moss

Robert S. Moss, 49, also of Charlotte, was sentenced to 57 months in prison followed by three years of supervised release, and was ordered to pay $1,460,121 as restitution. Moss pleaded guilty in September 2011 to one count of commodities fraud, for engaging in a $1.5 million Ponzi scheme. From at least in or about 2001 through in or about February 2009, Moss solicited investments totaling approximately $3.1 million from victims nationwide. Court records show that Moss lured his victims by falsely claiming that he was generating substantial profits through options trading in the commodities futures market. Filed documents indicate that Moss told his victims that he had not had a losing year trading since 1993, that he generated annual returns of between 22% and 41% annually, and that none of his investors had ever lost any capital. In fact, between 2003 and 2009, Moss suffered losses of $342,264 in the commodities futures market. Moss also advised the victims that his liquid assets were more than three times the size of his trading account when in fact they were not.

According to filed documents and statements made during court proceedings, in exchange for their investment Moss provided his victims with promissory notes either guaranteeing annual rates of return of 16 to 18%, or a variable rate tied to the level of Moss’ trading profits. To conceal his scheme, Moss made Ponzi payments to his victims totaling $1.6 million and falsely represented that these payments were the result of successful trading profits. In addition, Moss unlawfully used money invested by the victims for personal expenditures such as mortgage payments, groceries, and other household expenses.

Both Huffman and Moss have been ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.

The investigation of Huffman was handled by the FBI. The investigation of Moss was handled by the FBI and the Securities Division of the N.C. Secretary of State’s office. U.S. Attorney Tompkins also acknowledges the invaluable assistance of the Commodities Futures Trading Commission in both cases.

Both cases are related to the work of Charlotte’s Securities and Financial Crimes Task Force, a group made up of the FBI, the securities division of the N.C. Secretary of State’s office, the N.C. Attorney General's Office, the IRS criminal division, the U.S. Postal Inspection Service, the Mecklenburg County District Attorney's Office, the Securities and Exchange Commission, and the U.S. Attorney’s Office. The multi-agency Task Force promotes collaboration between the agencies in the fight against corporate fraud, insider trading, accounting fraud, market manipulation schemes, and other finance-related crimes.

The prosecutions were handled by Assistant United States Attorney Mark T. Odulio, of the U.S. Attorney’s Office in Charlotte.

A Charlotte Woman Was Charged With Maintaining Drug-Involved Premises

CHARLOTTE, N.C. – Nine Charlotte men were arrested today on federal drug charges during an early morning roundup conducted by the Drug Enforcement Administration and the Charlotte Mecklenburg Police Department, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.

U.S. Attorney Tompkins is joined in making today’s announcement by Harry S. Sommers, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD).

Today’s arrests and indictment are the result of “Operation Enderly Park,” a six-month investigation conducted jointly by the DEA and CMPD to target and reduce violent crime in Mecklenburg County, with special emphasis placed on Enderly Park neighborhood in northwest Charlotte.

The defendants were apprehended early morning on Friday and were charged with multiple counts of conspiracy to possess with intent to distribute crack cocaine, marijuana and cocaine. The federal indictment was filed on Wednesday, January 16, 2013, and was unsealed today in U.S. District Court in Charlotte following the arrests.

Those arrested and charged today are Theodore Falls, 38, Maurice Crawford, 32, Derrick Lowery, 31, Derrick Owens, 35, Aaron Ligon, 48, Mario Wilson, 23, Cadaryl Drayton, 25, Curtis Smith, 36, and Lavar Rodgers, 31, all of Charlotte. Mary Falls, 70, also of Charlotte, was arrested and charged today with one count of maintaining drug-involved premises. Another defendant named in the indictment, Nathaniel Washington, 30, of Charlotte, has not been arrested yet.

In making today’s announcement U.S. Attorney Tompkins thanked the DEA and CMPD for today’s successful operation. U.S. Attorney Tompkins noted, “Today’s arrests are the result of a coordinated effort of law enforcement partners to focus our resources on a hot spot for drug trafficking. I want to assure the public that we remain steadfast in our commitment to making our streets safer and to prosecuting those who spread drugs in our communities.”

“Those involved in drug trafficking are simply delivering deadly doses of poison to the community. The perpetrators who distribute these dangerous and deadly chemicals deserve to be prosecuted to the fullest extent of the law and that is what happened with this case today. I would like to thank our law enforcement partners who helped make this investigation a success,” said Special Agent in Charge Sommers, of DEA’s Atlanta Field Division.

“The Charlotte-Mecklenburg Police Department and our partner agencies will continue to be diligent in letting criminals know that these neighborhoods are not a safe haven for their illegal activities,” said Chief Rodney Monroe, Charlotte-Mecklenburg Police Department. “We are committed to utilizing all our resources to impact crime in the community.”

All defendants, except Ligon and Smith, had their initial appearances today in U.S. District Court before U.S. Magistrate Judge David S. Cayer and were detained pending their detention hearings. The defendants charged with drug conspiracy face a statutory minimum prison term of five years and a maximum of 40 years, and a $5 million fine. Mary Falls faces a maximum prison term of 20 years and a $500,000.

The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The investigation is being handled by the DEA and CMPD. The prosecution for the government is being handled by Assistant U.S. Attorney Dana Washington of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – A former minister pleaded guilty today in North Carolina to engaging in illicit sexual conduct in Haiti, announced Assistant Attorney General Lanny A. Breuer, U.S. Attorney for the Western District of North Carolina Anne M. Tompkins and Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas.

Larry Michael Bollinger, 67, of Gastonia, N.C., pleaded guilty before U.S. District Judge David S. Cayer in the Western District of North Carolina to two counts of engaging in illicit sexual conduct in a foreign place. Bollinger was charged in an indictment filed on May 15, 2012.

According to filed court documents and court proceedings, Bollinger was a former Lutheran minister who performed missionary work in Haiti. Court records show that Bollinger regularly travelled to Haiti and served as the Haiti director for a Lutheran charity. Bollinger admitted that from about August 2009 to October 2009, he sexually molested four Haitian females, between the ages of 11 and 16. According to court records, one of the victims said that Bollinger offered to give her food and money in exchange for sexual acts.

Bollinger has been in federal custody since he was charged in May 2012. Each count of engaging in illicit sexual conduct in a foreign place carries a maximum penalty of 30 years in prison and a $250,000 fine. A sentencing date for Bollinger has not been set yet.

The case is being prosecuted by Assistant U.S. Attorney Kimlani M. Ford of the Western District of North Carolina and Trial Attorney Michael W. Grant of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). The investigation was conducted by ICE-HSI.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

Another Former City Employee Pleads Guilty to Embezzling Over $92,900

CHARLOTTE, N.C. – A criminal bill of information was filed today in U.S. District Court charging Cherryville’s former Finance Director, Bonny Verley Alexander, with embezzling over $435,000 from the City of Cherryville, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Another former Cherryville employee, Jennifer Neal Hoyle, has also been charged with embezzling over $92,900 from the city.

Alexander, 58, and Hoyle, 34, both of Cherryville, have agreed to plead guilty to the charges stemming from a joint federal and state investigation into misappropriated city funds.

Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Greg McLeod, Director of the State Bureau of Investigation (NC SBI), and Chief James W. Buie of the Gaston County Police Department join U.S. Attorney Tompkins in making today’s announcement.

According to the bill of information and the filed plea agreement, up until her retirement in December 2011, Alexander was employed by the City of Cherryville as its Finance Director and supervised the city’s Finance Department. In that capacity, Alexander oversaw the city’s accounting, financial reporting and treasury divisions, as well as the city’s revenue collections and customer service departments. As the Finance Director, Alexander also had access to and was able to process payroll payments to Cherryville employees, direct payments for city expenses, issue checks on behalf of the city, remove cancelled checks from the city’s records and make adjustments to Cherryville’s electronic accounting systems, court records indicate.

From about August 2005 through December 2011, Alexander embezzled at least $435,294 of Cherryville’s funds and used the money to pay personal expenses. Court documents show that Alexander made weekly payroll payments to herself which were more than 300% of her authorized net pay from the city. In total, Alexander embezzled approximately $309,594 from the City of Cherryville in this manner.

Court records also show that Alexander used city funds to pay for personal expenses, including shopping and travel expenses, she charged on her personal American Express credit card by issuing checks from the City of Cherryville made out to American Express. According to filed documents, Alexander issued the city checks and forged on those checks the signature of another Cherryville employee who was the authorized signatory on the account. Then, to avoid detection, after the forged checks had cleared and were returned by the bank, Alexander would remove them from the city’s records, court documents show. Alexander issued and forged a total of 26 checks from the City of Cherryville totaling approximately $97,000 to pay off personal charges on her American Express card.

Hoyle, a former Senior Customer Service Representative/Utility Supervisor for the City of Cherryville, has been charged with and has agreed to plead guilty to three counts of federal program fraud for embezzling approximately $92,922 from the City of Cherryville. According to the federal charging document and the filed plea agreement, Hoyle was responsible for the collection and posting of utility payments made by Cherryville utilities customers. Hoyle, who reported to Alexander, was terminated in May 2012.

According to filed court documents, beginning in January 2008 through May 2011 Hoyle embezzled approximately $92,922 from the City of Cherryville by taking cash payments made by customers paying their utilities bills for her own use. Court records show that Hoyle would accept the cash payments from the customers and issue paper receipts. Hoyle would credit the customers’ accounts with the payment, keep the cash, and then, using her supervisory override privileges, would go in the computer system and delete the transaction, court records show. Court records also show that, in order to avoid any potential customer complaints, Hoyle would create entries in the “extra charge” journal in which she would “write off” the cash amount the customers paid so that bills containing the embezzled amount would not be issued, records show. According to the bill of information, Hoyle’s fraud was uncovered when a customer questioned the duplicate charges on her bill and brought in her paper receipt as proof of payment, after Hoyle had failed to convert the customer’s cash payment as a “write off” in the “extra charge” journal.

Alexander is charged five counts of program embezzlement. She has agreed to plead guilty to the charges and faces a maximum term of 10 years in prison and a $250,000 fine per count. Hoyle has agreed to plead guilty to three counts of program fraud. She faces a maximum prison term of 10 years and a $250,000 fine per count. The defendants’ initial appearances and plea hearings will be scheduled by the U.S. District Court.

The investigation into Alexander was handled by the FBI and SBI. The investigation into Hoyle was handled by the FBI, SBI and the Gaston County Police Department. The prosecution is handled by Michael Savage, of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – On Tuesday, January 14, 2014, Chief U.S. District Judge Frank D. Whitney sentenced a Charlotte woman to 24 months in prison for committing tax fraud and mortgage fraud, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Tega Burns, 41, of Charlotte, was also ordered to serve two years under court supervision following her prison term and to pay $201,039.43 in restitution to IRS, $57,450.00 in restitution to Bank of America, and $48,483.00 in restitution to CIT Group Consumer Finance.

U.S. Attorney Tompkins is joined in making today’s announcement by Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service - Criminal Investigation Division (IRS-CID).

Burns, a/k/a Tega Foy, was the owner of Family Homecare Services, a Charlotte-based company that provided in-home care services in the area from 2007 through 2011. According to filed court documents and yesterday’s sentencing hearing, Burns failed to pay a large part of the employment taxes her company owed for the relevant tax years. Specifically, court records show that during the relevant time period, Burns had an outstanding liability of more than $200,000 relative to the employment taxes. According to statements made during sentencing, Burns utilized nominees, including her son and her step-father, to hide funds from the IRS and to evade payment of the outstanding taxes.

Court records also show that in May 2007, Burns obtained mortgage loans using false information – including fake employment documentation from her company – to purchase two homes in the name of another individual. Both of these homes were eventually foreclosed on, with losses to the banks.

In July 2012, Burns pleaded guilty to one count of failure to account for and pay over employment tax and one count of making a false statement on a loan application.

Burns will be ordered to begin her prison sentence and be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.

The investigation was conducted by IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Jenny Grus Sugar of the U.S. Attorney’s Office in Charlotte.

Defendant Made False Statements To Federal Authorities During Investigation Of Client Indicted on Drug Conspiracy Charges

GREENVILLE, S.C. – Charles Anderson, an attorney in Anderson, S.C., pleaded guilty to obstruction charges in federal court today before U.S. District Judge Michelle Childs in Greenville, S.C., announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.

Harry S. Sommers, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Greenville District Office, and Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas join U.S. Attorney Tompkins in making today’s announcement.

According to court documents and today’s plea hearing, Anderson, 44, pleaded guilty to one count of making materially false statements to a department or agency of the United States. Court records show that Anderson represented Lonnie Maddox, who is currently facing federal drug charges in South Carolina, stemming from a large-scale cocaine conspiracy. Court records indicate that on five occasions from February 21 to March 15, 2013, Anderson lied to federal agents concerning his knowledge of the whereabouts of two vehicles Maddox had purchased with the illegal proceeds of his drug dealings.

According to the charging documents and information presented in court, Anderson knew where Maddox’s Yukon Denali sport utility vehicle was located, but repeatedly denied this fact to DEA and HSI agents. Anderson further lied to law enforcement about his participation in moving the Denali, which was ultimately recovered at the residence of Anderson’s law partner. Court records also show that Anderson initially lied to federal agents about possessing another one of Maddox’s vehicles, a classic Chevrolet Chevelle. Anderson later admitted to law enforcement that he had in fact possessed the Chevelle but then lied about the location from where he had obtained the vehicle.

“Lawyers are officers of the court, sworn to protect the law and adhere to a professional code of ethics. Anderson’s actions were illegal, unethical but most importantly compromised the integrity of our legal system. Any attorney who puts personal gain above professional responsibility has no business practicing law,” said U.S. Attorney Tompkins.

Harry S. Sommers, the Special Agent in Charge of the DEA Atlanta Field Division commented, “Drug trafficking often leads to morally debased actions of those involved, which was the case during this investigation. This attorney was licensed to practice law, but this does not mean that he was above the law. Now, the full measure of the justice system will appropriately deal with his criminal actions. This investigation would have not been possible without the collaborative efforts of our local, state and federal law enforcement counterparts.”

“Mr. Anderson overstepped his role as a zealous advocate for his client, which led him afoul of the law,” said Brock D. Nicholson, Special Agent in Charge of ICE Homeland Security Investigations in Georgia and the Carolinas. “By lying to federal investigators, Mr. Anderson betrayed his responsibilities as an officer of the court and will pay a heavy price for his malfeasance.”

Anderson has been released on bond. At sentencing, he faces a maximum prison term of five years, a $250,000 fine, or both. A sentencing date has not yet been set.

The case was investigated jointly by the DEA and HSI. The prosecution is being handled for the government by Assistant U.S. Attorney J. George Guise of the U.S. Attorney’s Office for the Western District of North Carolina in Charlotte, upon recusal of the U.S. Attorney’s Office for the District of South Carolina.

CHARLOTTE, N.C. – James William Lewis, Jr., 31, of Kings Mountain, N.C. faces federal charges in connection with the December 12, 2013 armed robbery of a Charlotte area Jack in the Box restaurant, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.

U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department.

A federal criminal complaint filed today in U.S. District Court charges Lewis with one count of Hobbs Act robbery. According to the criminal complaint, on December 12, 2013, Lewis entered the restaurant and asked the manager for money while brandishing a weapon. The manager handed Lewis cash and Lewis fled the scene.

Lewis is currently in federal custody. His initial appearance is set for today at 2:00 p.m. before U.S. Magistrate Judge David S. Cayer. The statutory maximum sentence for Hobbs Act robbery is 20 years imprisonment and a $250,000 fine.

The charges contained in the complaint are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The investigation is handled by the FBI and CMPD. The prosecution is being handled for the government by Assistant U.S. Attorney George Guise of the U.S. Attorney’s Office in Charlotte.

Conspiracy With Cartel Connections Involved Over 700 Kilograms Of Cocaine

CHARLOTTE, NC B A Charlotte federal jury convicted today Pedro Oscar Dieguez, also known as “The Cuban,” 48, of Indian Trail, N.C., on cocaine trafficking and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.

U.S. Attorney Tompkins is joined in making today’s announcement by Harry S. Sommers, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Sheriff Eddie Cathey of the Union County Sheriff’s Office (UCSO), and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department (CMPD).

According to filed court documents and evidence presented at trial:

From about 2004 through 2013, Dieguez – a Cuban national – and his co-conspirators obtained more than 700 kilograms of cocaine from Mexican cartels (or other sources of supply with connections to cartels), transported it using trucks to the Charlotte area, and redistributed it for ultimate sale as crack cocaine. The current street value of that amount of cocaine is in excess of $21,000,000. Dieguez conspired to launder the drug proceeds through bank accounts and the purchase of expensive exotic horses, which he kept on his 16-acre ranch residence in Indian Trail. The defendant also used his ranch to offload shipments of drugs. Following a four-day trial, the Charlotte jury convicted Dieguez of conspiracy to distribute and to possess with intent to distribute cocaine and conspiracy to launder proceeds of drug trafficking.

Dieguez has been in the federal custody since April 24, 2013. Dieguez faces a statutory mandatory minimum sentence of 10 years to life in prison, and a fine of up to $10,000,000. A sentencing date has not been set yet.

The case was investigated by the DEA in Charlotte, UCSO, and CMPD. The prosecution was handled by Assistant U.S. Attorney Steven R. Kaufman.

Fraudster Bought Luxury Vehicles and Jewelry with Stolen Funds

CHARLOTTE, N.C. – A Charlotte man pleaded guilty today for his involvement in a health care fraud scheme that attempted to defraud Medicaid of at least $3.4 million for sham mental and behavioral health services, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.

U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID).

Ronnie Lorenzo Robinson, 36, of Charlotte, pleaded guilty today before U.S. Magistrate Judge David S. Cayer to two counts of health care fraud. At today’s plea hearing, Robinson admitted that from in or about 2007 to in or about 2011, he engaged in a scheme to defraud Medicaid of at least $3.4 million in fraudulent reimbursement payments from false claims submitted to Medicaid. According to filed court documents and statements made in court, Robinson owned and operated Peaceful Alternative Resources, Inc. (PAR), which held itself out as a non-profit provider of mental health and mentoring services and maintained offices in Charlotte, Mooresville and Greensboro, N.C. Robinson and his company defrauded Medicaid by submitting false claims to Medicaid stating that licensed clinicians allegedly employed by PAR had performed services when those clinicians had not. The claimed services, if provided at all, were provided by unlicensed individuals who were not approved by Medicaid to provide such services and, in many instances, the claimed services were not provided at all.

According to filed documents, Robinson and his company misappropriated the Medicaid provider numbers of at least three licensed clinicians who performed some work for PAR. Robinson then used these Medicaid provider numbers to seek reimbursement for services that the licensed clinicians did not perform. Court documents indicate that Robinson obtained Medicaid beneficiary information from other organizations. Although employees associated with PAR sometimes provided services to the Medicaid recipients, these services typically were not provided by licensed professionals and were little more than mentoring services, which Medicaid does not reimburse. Court documents indicate that Robinson attempted to defraud Medicaid of approximately $3.4 million and received approximately $3.1 million in payments.

During the course of the investigation, law enforcement agents seized a 2004 Land Rover Range Rover HSE, a 2007 Chevrolet Suburban, a 2007 Mercedes S550 and a 1 5/8 carat oval ladies diamond ring, purchased with money fraudulently obtained from Medicaid. Agents also seized a classic 1972 Chevrolet Chevelle-Malibu, a 2006 Chrysler 300 and approximately $660,000 in funds in connection with the fraud. Robinson has agreed to forfeit all of these assets as part of his plea.

“This type of blatant abuse of a federally-funded system simply will not be tolerated,” said U.S. Attorney Tompkins. “The money Robinson stole from Medicaid was intended to cover the medical expenses of needy North Carolinians, including children, not to fund the defendant’s penchant for cars and jewelry. My office will continue to hold accountable those who engage in schemes that rip off government health care programs supported by taxpayer dollars.”

“Health care fraud increases costs for everyone and degrades the integrity of our health care system. The FBI is committed to rooting out this type of fraud and holding those accountable who attempt to illegally manipulate the system that so many Americans count on,” said John A. Strong, Special Agent in Charge of the Charlotte Division of the FBI.

“Fraud like this hurts patients who really need care, wastes tax dollars, and drives up health care costs for everyone. Our investigators and attorneys will continue to work with their federal partners to go after health care fraud,” said Attorney General Roy Cooper, who oversees North Carolina’s MID.

At sentencing, Robinson faces a maximum term of 10 years in prison and a $250,000 fine for each count of conviction. In his plea agreement, Robinson has agreed to pay full restitution to Medicaid for any losses resulting from his criminal scheme. The final restitution amount will be determined by the Court at Robinson’s sentencing hearing, which has not been scheduled yet. Robinson remains on bond pending sentencing.

The investigation into Robinson was handled by the FBI and MID. The prosecution was handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte.

The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

If you suspect Medicare fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.

Woman Steals Identity of Therapist to Submit False Claims to Medicaid

CHARLOTTE, N.C. – A Shelby woman pleaded guilty today for her involvement in a health care fraud scheme that defrauded Medicaid of $8 million for sham mental and behavioral health services, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to defrauding Medicaid, Victoria Finney Brewton, 37, of Shelby, N.C., also pleaded guilty to stealing a therapist’s identity to commit the fraud and to filing a false tax return.

U.S. Attorney Tompkins is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID); Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.

Brewton pleaded guilty today before U.S. Magistrate Judge David Keesler to seven counts of health care fraud and health care fraud conspiracy, one count of aggravated identity theft and one count of filing a false tax return. At today’s plea hearing, the defendant admitted that from 2008 to 2012, Brewton, her co-defendant Linda Radeker, also of Shelby, and others submitted in excess of $8 million in false claims to Medicaid. According to filed court documents and statements made in court, Brewton operated a series of after-school and summer childcare programs in Shelby. Brewton recruited juvenile Medicaid recipients to her childcare programs by promising that the program would be free for Medicaid recipients. After Brewton obtained the children’s and families’ Medicaid recipient numbers, she used this information to fraudulently bill Medicaid for mental and behavioral health services which were never provided.

According to the criminal information, Brewton was not licensed or qualified to provide mental and behavioral health services and she was not approved by Medicaid. Instead, Brewton enlisted the assistance of other complicit Medicaid-approved providers, such as Linda Radeker, and in other instances, stole the identity of Medicaid-approved providers, in order to accomplish the fraud. Court documents indicate that Brewton conspired with Radeker, a licensed professional counselor enrolled with North Carolina Medicaid, to submit claims to Medicaid making it appear that Radeker had provided the claimed mental and behavioral health services when, in fact, Radeker did not provide any of the services. Radeker and Brewton then split the Medicaid payments 50/50 for these false claims.

Filed documents also indicate that Brewton hired licensed therapist K.S.M. in October 2010 to provide services at Brewton’s company, Healing Hearts. Although K.S.M. provided some mental and behavioral health services while she worked at Healing Hearts, Brewton submitted false and fraudulent claims to Medicaid through K.S.M.’s Medicaid provider number far in excess of the services actually provided by K.S.M. In or about October 2011, K.S.M. left Healing Hearts after learning that Brewton had submitted false claims through K.S.M.’s Medicaid provider number. Thereafter, Brewton misappropriated K.S.M.’s identity, specifically her Medicaid provider number, in order to continue to submit fraudulent claims to Medicaid after K.S.M. was no longer employed at Healing Hearts. Specifically, the defendant admitted that on or about October 27, 2011, Brewton submitted an Electronic Funds Transfer Authorization Agreement to Medicaid directing that reimbursements for claims submitted through K.S.M.’s provider numbers be deposited into a bank account held and controlled by Brewton. From in or about April 2011 to May 2012, Brewton submitted in excess of $1.8 million in false claims through K.S.M.’s provider number which K.S.M. did not provide. According to court documents, Brewton also misused the Medicaid provider numbers of other therapists employed by her companies in order to submit false claims to Medicaid through their numbers.

As part of her plea, Brewton also admitted that she defrauded the United States by filing a false tax return for the year 2009 which intentionally failed to report the income Brewton received from her scheme to defraud Medicaid. She also failed to file tax returns for 2010 and 2011, which further masked the income from her fraud scheme. Brewton agreed to forfeit a 2005 Dodge Magnum which was seized as the proceeds of fraud during the investigation.

Brewton, who was released on bond, faces a mandatory two years in prison consecutive to any other term of imprisonment and a $250,000 fine for the aggravated identity theft charge, a maximum term of 10 years in prison and a $250,000 fine for the health care fraud charges, and a maximum term of three years in prison and a $250,000 fine for the filing of a false tax return charge. In her plea agreement, Brewton has agreed to pay full restitution to Medicaid for any losses resulting from her criminal scheme. The final restitution amount will be determined by the Court at Brewton’s sentencing hearing, which has not been scheduled yet.

Radeker pleaded guilty to charges of health care conspiracy and money laundering on September 13, 2012 and is awaiting sentencing.

The investigation into Brewton was handled by the FBI, MID, IRS, and HHS-OIG. Special Assistance to the Task Force was provided by the North Carolina Division of Medical Assistance, Program Integrity Section. The prosecution was handled by Assistant U.S. Attorneys Kelli Ferry and Jenny Grus Sugar of the U.S. Attorney’s Office in Charlotte.

The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistleblower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447- 8477 (1-800-HHS-TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.

Woman Steals Identity of Therapist to Submit False Claims to Medicaid

CHARLOTTE, N.C. – A Shelby woman pleaded guilty today for her involvement in a health care fraud scheme that defrauded Medicaid of $8 million for sham mental and behavioral health services, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to defrauding Medicaid, Victoria Finney Brewton, 37, of Shelby, N.C., also pleaded guilty to stealing a therapist’s identity to commit the fraud and to filing a false tax return.

U.S. Attorney Tompkins is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID); Roger A. Coe, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.

Brewton pleaded guilty today before U.S. Magistrate Judge David Keesler to seven counts of health care fraud and health care fraud conspiracy, one count of aggravated identity theft and one count of filing a false tax return. At today’s plea hearing, the defendant admitted that from 2008 to 2012, Brewton, her co-defendant Linda Radeker, also of Shelby, and others submitted in excess of $8 million in false claims to Medicaid. According to filed court documents and statements made in court, Brewton operated a series of after-school and summer childcare programs in Shelby. Brewton recruited juvenile Medicaid recipients to her childcare programs by promising that the program would be free for Medicaid recipients. After Brewton obtained the children’s and families’ Medicaid recipient numbers, she used this information to fraudulently bill Medicaid for mental and behavioral health services which were never provided.

According to the criminal information, Brewton was not licensed or qualified to provide mental and behavioral health services and she was not approved by Medicaid. Instead, Brewton enlisted the assistance of other complicit Medicaid-approved providers, such as Linda Radeker, and in other instances, stole the identity of Medicaid-approved providers, in order to accomplish the fraud. Court documents indicate that Brewton conspired with Radeker, a licensed professional counselor enrolled with North Carolina Medicaid, to submit claims to Medicaid making it appear that Radeker had provided the claimed mental and behavioral health services when, in fact, Radeker did not provide any of the services. Radeker and Brewton then split the Medicaid payments 50/50 for these false claims.

Filed documents also indicate that Brewton hired licensed therapist K.S.M. in October 2010 to provide services at Brewton’s company, Healing Hearts. Although K.S.M. provided some mental and behavioral health services while she worked at Healing Hearts, Brewton submitted false and fraudulent claims to Medicaid through K.S.M.’s Medicaid provider number far in excess of the services actually provided by K.S.M. In or about October 2011, K.S.M. left Healing Hearts after learning that Brewton had submitted false claims through K.S.M.’s Medicaid provider number. Thereafter, Brewton misappropriated K.S.M.’s identity, specifically her Medicaid provider number, in order to continue to submit fraudulent claims to Medicaid after K.S.M. was no longer employed at Healing Hearts. Specifically, the defendant admitted that on or about October 27, 2011, Brewton submitted an Electronic Funds Transfer Authorization Agreement to Medicaid directing that reimbursements for claims submitted through K.S.M.’s provider numbers be deposited into a bank account held and controlled by Brewton. From in or about April 2011 to May 2012, Brewton submitted in excess of $1.8 million in false claims through K.S.M.’s provider number which K.S.M. did not provide. According to court documents, Brewton also misused the Medicaid provider numbers of other therapists employed by her companies in order to submit false claims to Medicaid through their numbers.

As part of her plea, Brewton also admitted that she defrauded the United States by filing a false tax return for the year 2009 which intentionally failed to report the income Brewton received from her scheme to defraud Medicaid. She also failed to file tax returns for 2010 and 2011, which further masked the income from her fraud scheme. Brewton agreed to forfeit a 2005 Dodge Magnum which was seized as the proceeds of fraud during the investigation.

Brewton, who was released on bond, faces a mandatory two years in prison consecutive to any other term of imprisonment and a $250,000 fine for the aggravated identity theft charge, a maximum term of 10 years in prison and a $250,000 fine for the health care fraud charges, and a maximum term of three years in prison and a $250,000 fine for the filing of a false tax return charge. In her plea agreement, Brewton has agreed to pay full restitution to Medicaid for any losses resulting from her criminal scheme. The final restitution amount will be determined by the Court at Brewton’s sentencing hearing, which has not been scheduled yet.

Radeker pleaded guilty to charges of health care conspiracy and money laundering on September 13, 2012 and is awaiting sentencing.

The investigation into Brewton was handled by the FBI, MID, IRS, and HHS-OIG. Special Assistance to the Task Force was provided by the North Carolina Division of Medical Assistance, Program Integrity Section. The prosecution was handled by Assistant U.S. Attorneys Kelli Ferry and Jenny Grus Sugar of the U.S. Attorney’s Office in Charlotte.

The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistleblower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447- 8477 (1-800-HHS-TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.

The Gaston County Man Abused Minors While On Mission Trips In Haiti

CHARLOTTE, N.C. – U.S. District Judge Robert J. Conrad, Jr. sentenced a former minister to 25 years in prison today for engaging in illicit sexual conduct while on mission trips in Haiti, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina and Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas.

Larry Michael Bollinger, 68, of Gastonia, N.C., was also ordered to serve a lifetime under court supervision following his prison term and to register as a sex offender. Bollinger pleaded guilty in January 2013 to two counts of engaging in illicit sexual conduct in a foreign place.

According to filed court documents and today’s sentencing hearing, Bollinger was a former minister who performed missionary work in Haiti. Court records show that Bollinger travelled regularly to Haiti because of his involvement with the Lazarus Project, a charity that supports two charitable organizations in the country, the Hope House and The Village of Hope School. According to court records and court proceedings, from in or about August 2009 to October 2009, Bollinger sexually molested four Haitian females, between the ages of 11 and 16. Court records indicate that one of the victims said that Bollinger offered to pay her food and money in exchange for sexual acts.

“Bollinger is a sexual predator who used his missionary work as a cover to hide the heinous sexual abuse he perpetrated on the innocent children of an impoverished country. Prosecutors and law enforcement worked tirelessly to bring this monster to justice, and even though today’s sentence cannot undo the harm Bollinger inflicted upon his young victims, it is a clear message that our justice system will protect children beyond our borders,” said U.S. Attorney Tompkins.

“The defendant betrayed the trust placed in him by his congregation, his charity and, most importantly, by the children he was supposedly helping in Haiti,” said Brock D. Nicholson, Special Agent in Charge of HSI Atlanta, who oversees Georgia and the Carolinas. “For the damage he has caused in these young lives, the defendant has earned every minute of this sentence. HSI special agents will continue to stand strong against child predators who prey upon the innocent, no matter where those children might be found.”

Judge Conrad called Bollinger’s crimes “heinous” before handing down the 25 year prison term following a daylong sentencing hearing. The final restitution amount to Bollinger’s victims will be determined by the Court within the next 90 days.

Bollinger has been in federal custody since he was charged in May 2012. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.

The investigation was conducted by ICE-HSI. The case is being prosecuted by Assistant U.S. Attorney Kimlani M. Ford of the Western District of North Carolina and Trial Attorney Michael W. Grant of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS).

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.