Western District of New York

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Matthew A. Urquhart, 33, of Seneca Falls, NY, who was convicted of possession of child pornography, was sentenced to serve to 44 months in prison and 10 years supervised release by U.S. District Judge Elizabeth A. Wolford.

Assistant U.S. Attorney Kyle P. Rossi, who handled the case, stated that FBI Special Agents identified the defendant actively trading child pornography from a trailer residence in Seneca Falls. Subsequently, FBI agents assisted by the Seneca Falls Police Department and Seneca County Sheriff’s Office, searched two residences that Urquhart occupied. Digital items belonging to Urquhart were seized. A forensic analysis determined that the defendant possessed multiple images and videos of child pornography, including images that depicted the sexual abuse of prepubescent minors. 

The sentencing is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert; the Seneca Falls Police Department, under the direction of Chief Stuart W. Peenstra; and the Seneca County Sheriff’s Office, under the direction of Sheriff W. Timothy Luce. 

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Tayvon Rosier, 32, of Rochester, NY, who was convicted of four counts of Hobbs Act robbery, was sentenced to serve to 92 months in prison by Chief U.S. District Judge Frank P. Geraci, Jr.

Assistant U.S. Attorney Sean C. Eldridge, who handled the case, stated that Rosier committed a series of armed robberies at Rochester stores in February 2018, including:

• On February 13, 2018, at the Family Dollar Store at 189 Portland Avenue, Rosier displayed what appeared to be a silver handgun, and demanded money from a store employee. Defendant left with approximately $246.48.
• On February 21, 2018, at the Malcho’s Market Sunoco at 480 Plank Road, Rosier displayed what appeared to be a silver handgun, and told an employee to “give me all the money and show me the tray.” The defendant left with approximately $117 from the store. 
• Also on February 21, 2018, at the Fast Trac at 4200 West Henrietta Road, Rosier displayed what appeared to be a silver handgun to a store employee and demanded money and cigarettes. The defendant left the store with approximately $207 in cash, and $781.50 in cigarettes.
• On February 25, 2018, at the 7-Eleven at 3995 West Henrietta Road, Rosier displayed what appeared to be a silver handgun, and demanded money and cigarettes from a store employee. Rosier left the store with approximately $45 in cash, and $714 in cigarettes.

The sentencing is the result of an investigation by the Rochester Police Department, under the direction of Chief La’Ron Singletary; the Monroe County Sheriff’s Office, under the direction of Sheriff Todd Baxter; and the Federal Bureau of Investigation, Major Crimes Task Force, under the direction of Special Agent-in-Charge Gary Loeffert.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Ricardo Casado, 31, of Rochester, NY, pleaded guilty to conspiracy to possess with intent to distribute, and distribution of, quantities of fentanyl and cocaine, before Chief U.S. District Judge Frank P. Geraci, Jr. The charge carries a maximum penalty of 20 years in prison, and a $1,000,000 fine.

Assistant U.S. Attorney Matthew T. McGrath, who is handling the case, stated that Casado was a member of a drug trafficking organization led by his brother, co-defendant Jose Casado. Between December of 2017 and May 15, 2019, the organization distributed large quantities of fentanyl, cocaine, and crack cocaine out of drug houses located on Clifford Avenue and Treyer Street in Rochester.

On January 25, 2019, Ricardo Casado sold 80 baggies of fentanyl and 80 baggies of cocaine in exchange for $600, on behalf of the drug trafficking organization.

The plea is the result of an investigation by the Rochester Police Department, under the direction of Chief La’Ron Singletary, and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division.

Sentencing is scheduled for January 10, 2020, at 11:00 a.m. before Judge Geraci.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Narriana Gray and Briana Gray, both 19 and of Hamburg, NY, were arrested and charged by criminal complaint with entry of goods by means of false statements, and possession of a controlled substance (marijuana). The charges carry a maximum penalty of two years in prison.  

Assistant U.S. Attorney Jeremiah E. Lenihan, who is handling the case, stated that according to the complaint, on Saturday, October 5, 2019, at approximately 9:21 p.m., the defendants attempted to enter the United States from Canada at the Peace Bridge Port of Entry. During primary inspection, the defendants told a Customs and Border Protection officer that they were hanging out at a bar and the casino in Niagara Falls, Ontario and gave a gave a negative declaration for drugs. A CBP officer smelled the odor of marijuana emanating from the vehicle and referred the defendants for secondary inspection. When asked once again if they had any marijuana or drugs on them, the defendants said no, but said they were hanging around people who were smoking at the casino.

The complaint further states that when questioned again by CBP officers, the defendants admitted to having marijuana concealed in their pants, which was purchased at marijuana dispensary in Niagara Falls, Ontario. In total, the defendants had approximately 76 grams of marijuana on them.

The defendants made an initial appearance before U.S. Magistrate Judge H. Kenneth Schroder, Jr and were released. 

The complaint is the result of an investigation by Customs and Border protection, under the direction of Director of Field Operations Rose Brophy, and Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.  

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CONTACT:  Barbara Burns

PHONE:         (716) 843-5817

FAX #:            (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Jason Bassett, 43, of  Rochester, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to filing a false tax return. The charge carries a maximum penalty of three years in prison and a $250,000 fine.

Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that the defendant owned and operated a paving and sealing company, which provided both personal and commercial sealing and paving services in the Rochester area. After receiving payment for services provided by the business, Bassett failed to deposit all of the income into the business bank account. The defendant would cash some business checks but never place them into the banking system. Also, Bassett did not advise his tax return preparer that he had cashed numerous business checks. As a result, the defendant knowingly caused the preparation of false personal income tax returns, Forms 1040, which failed to report the income that he did not deposit into the business bank account.

For the tax years 2012 through 2015, Bassett failed to report approximately $1,704,873.89 in income on his tax returns, which resulted in the defendant failing to pay approximately $378,331 in taxes to the Internal Revenue Service.

In addition, Bassett failed to withhold taxes from the wages of his employees, did not provide his employees W-2 forms, and did not report this on any other return required to be filed with the Internal Revenue Service.

The plea is the result of an investigation by the Internal Revenue Service, Criminal Investigations Division, under the direction of Special Agent-in-Charge Jonathan D. Larsen, New York Field Office.

Sentencing is scheduled for January 29, 2020, at 3:00 p.m. before Judge Wolford.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Raul Everado Ledesma Abarca, 36, of San Diego, California, who was convicted following a jury trial of: conspiring to possess with intent to distribute and distribute five kilograms or more of cocaine; possessing with intent to distribute five kilograms or more of cocaine; and maintaining a drug-involved premises, was sentenced to serve 324 months in prison by U.S. District Judge Elizabeth A. Wolford.

Assistant U.S. Attorneys Michael J. Adler and Jeremiah E. Lenihan, who handled the prosecution of the case, stated that between September 2014 and September 2016, the defendant, along with co-defendant Armando Ernesto Abarca and others, conspired to possess and distribute cocaine. The defendants rented a storage unit in Amherst, NY, to store the cocaine. The unit was rented on the same day that a 104 kilogram shipment of cocaine arrived in Buffalo. A total of 43 kilograms of cocaine were discovered after the unit was purchased at an auction due to delinquent rent payments. The fingerprints of both the defendant and Armando Abarca were discovered on items in the unit. 

Prior to the discovery of the cocaine in Amherst, the Abarcas were investigated for cocaine trafficking in Ohio. The Government presented evidence at trial of the seizure of 55 kilograms of cocaine in Dayton, OH, in a vehicle registered to a Buffalo, NY address. Approximately half of the 55 kilograms was intended for the defendant’s distribution operation based out of Columbus, OH. 

Armando Ernesto Abarca, 22, of Modesto, California, who was previously convicted of conspiring to possess with intent to distribute and distribute five kilograms or more of cocaine, was previously sentenced to serve 168 months in prison.

“These drug dealers operated a nationwide drug trafficking organization,” noted U.S. Attorney Kennedy. “Dedicated and talented law enforcement professionals working here in Western New York, assisted by law enforcement officers from across the country, were able to build a strong case and see to it that these individuals will not have the opportunity to peddle their poison in Western New Yorkers—or anywhere else in America—for years to come.”

The sentencing is the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division; Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly; the Internal Revenue Service, Criminal Investigations Division, under the direction of Special Agent-in-Charge Jonathan D. Larsen, New York Field Office; and the Amherst Police Department, under the direction of Chief John Askey. Additional assistance was provided by ICE-HSI in Los Angeles, California; DEA in Columbus, OH; and DEA in Dayton, OH. 

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Michael Wright, 56, of New York, NY, who was convicted of conspiracy to commit wire fraud and aggravated identity theft, was sentenced to serve 42 months in prison by U.S. District Judge Richard J. Arcara. The defendant was also ordered to pay $57,300 in restitution. 

Assistant U.S. Attorney Jonathan P. Cantil, who handled the case, stated that between December 2016 and September 2018, the defendant conspired with Jeriel Slay, Angela Slay, Sirr Wright, and others to defraud multiple victims. As a part of their scheme, Jeriel and Angela Slay, who are siblings, stole the identities of unsuspecting individuals and created fictitious Limited Liability Companies (LLCs), with company names indicating ownership by the victims. The defendants then opened bank accounts under the names of the LLCs and fraudulently transferred money from a victim’s actual bank account to the LLC bank account.  

For example, Jeriel Slay fraudulently obtained Victim 1’s name, address, birthdate, social security number, and other information, and then opened an LLC, and a bank account in the name of the fraudulent LLC. Jeriel Slay then contacted Victim 1’s legitimate financial institution and transferred money from Victim 1’s legitimate account via wire transfer to the fraudulent LLC bank account. Jeriel Slay, using device-making equipment, then created fraudulent driver’s licenses, fraudulent utility bills, and other identification documents in the name of Victim 1. The fraudulent driver’s license had Victim 1’s information but Michael Wright’s, image on the card. Using these fraudulent identification documents, defendant Wright went to the bank that serviced the fraudulent LLC bank account and withdrew the funds from that fraudulent account. Wright executed this scheme against approximately 10 victims, one of whom resides in the Western District of New York. The financial loss totaled $161,100.

Jeriel Slay, Angela Slay, and Sirr Wright were all previously convicted and are awaiting sentencing.

The sentencing is the result of an investigation by the Federal Bureau of Investigation, Buffalo Division, under the direction of Special Agent-in-Charge Gary Loeffert.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y.- U.S. Attorney James P. Kennedy, Jr. announced today that Nolan Rogers, 32, of Lisbon, CT, pleaded guilty before U.S. Magistrate Judge Marian W. Payson to possession of fentanyl. The charge carries a maximum penalty of one year in prison, and a fine of up to $100,000.

Assistant U.S. Attorney Sean C. Eldridge, who is handling the case, stated that the defendant was a resident at the Bath, NY Veterans Affairs Medical Center. On March 3, 2019, Rogers returned to the facility after a trip home to Connecticut, when he encountered a VA Police officer. During a pat-down, 20 small bags were removed by the officer from the defendant’s pocket, and Rogers told the officer that the bags contained fentanyl. Laboratory testing confirmed that the substance was fentanyl.

The plea is the result of an investigation by the Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, Northeast Field Office, under the direction of Special Agent-in-Charge Sean J. Smith; and the Bath Veterans Affairs Police Department, under the direction of Chief Joseph Day. Assistance was also provided by the Steuben County Sheriff’s Office, under the direction of Sheriff James L. Allard; and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division.

Sentencing is scheduled for November 11, 2019, at 11:00 a.m. before Judge Payson.

 

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Chanetel Garnett, 33, of Buffalo, NY, who was convicted of structuring transactions, was sentenced to serve 12 months in prison by Chief U.S. District Judge Frank P. Geraci, Jr.

Assistant U.S. Attorney Laura A. Higgins, who handled the case, stated that between August 8, 2016, and September 6, 2017, the defendant failed properly to report the deposit of more than $100,000 in a 12-month period into numerous Bank of America accounts. Over the 12 months, Garnett traveled to multiple Bank of America branch locations in the Buffalo area and made 165 cash deposits totaling $1,313,270. The defendant conducted as many as eight transactions at separate Bank of America branches in a single day. Garnett did so in order to evade reporting requirements regarding cash deposits in amounts of $10,000 or more. 

The sentencing is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge; Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly; the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division; the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert; the Erie County Sheriff’s Office, under the direction of Sheriff Timothy Howard; and the Buffalo Police Department, under the direction of Commissioner Byron Lockwood.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned an indictment charging Shelby Holcomb, 31, of Buffalo, NY, with being a felon in possession of ammunition. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.  

Assistant U.S. Attorney Justin G. Bish, who is handling the case, stated that according to the indictment, on June 12, 2019, investigators executed a search warrant at the defendant’s residence and recovered, among other things, 119 rounds of various caliber ammunition.

Holcomb was previously convicted of Robbery in Erie County Court in May 2007, and as a result, he is legally prohibited from possessing ammunition.

The indictment is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division; the Buffalo Police Department, under the direction of Commissioner Byron Lockwood; and the New York State Department of Parole.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.  

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that James A. Stivers, 65, of Lockport, NY, was arrested and charged by criminal complaint with possession of child pornography. The charge carries a mandatory minimum penalty of 10 years in prison, a maximum of 20 years, and a $250,000 fine.

Assistant U.S. Attorney Caitlin M. Higgins, who is handling the case, stated that according to the complaint, after tracing to the defendant an image of child pornography that was uploaded to the internet, investigators secured a search warrant for Stiver’s residence. During the execution of that warrant, investigators seized various computers, electronic devices, and electronic media. A preliminary review found some of the devices contained images of child pornography.

Stivers was previously convicted of Sexual Abuse in the First Degree in August 1995 in Niagara County Court, and is a registered sex offender.

The defendant made an initial appearance before U.S. Magistrate Judge H. Kenneth Schroeder, Jr. and is being held pending a detention hearing on October 21, 2019. 

The complaint is the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly. 

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Katherine Dejesus-Gonzalez, 36, of Niagara Falls, NY, pleaded guilty before Chief U.S. District Judge Frank P. Geraci, Jr. to conspiring to possess with intent to distribute and distribute, five kilograms or more of cocaine. The charge carries a mandatory minimum penalty of 10 years in prison, a maximum of life, and a fine of $10,000,000.

Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that between October 2017 and July 19, 2018, the defendant conspired with Edgar Joel Jimenez-Rodriguez, Jose Garcia-Santiago, and others to sell cocaine. On May 26, 2018, the New York State Police conducted a traffic stop of a vehicle being driven by co-conspirator Jose Garcia-Santiago. Dejesus-Gonzalez was a passenger. Troopers seized five kilograms of cocaine from the vehicle.

In addition, investigators intercepted conversations involving the defendant facilitating drug trafficking activities with her co-conspirators. In September 2017, the U.S. Postal Service intercepted packages arriving from Puerto Rico which were addressed to various residences in Niagara Falls. Postal inspectors seized approximately five kilograms of cocaine that were intended for the defendant and her co-conspirators.  One of the packages was addressed directly to the defendant’s home address. Another was addressed to the home of Garcia-Santiago. 

Edgar Joel Jimenez-Rodriguez and Jose Garcia-Santiago were previously convicted. Jimenez-Rodriguez has been sentenced, Garcia-Santiago is awaiting sentencing.

The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division; the Niagara Falls Police Department, under the direction of Superintendent Thomas Licata; and the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Lieutenant Kevin Reyes and Major Mary Clark.

Sentencing is scheduled for December 16, 2019, at 10:30 a.m. before Judge Geraci. 

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Matthew Bailer, 34, of Jamestown, NY, pleaded guilty before Chief U.S. District judge Frank P. Geraci, Jr. to receipt and possession of child pornography. The charges carry a mandatory minimum penalty of five years in prison, a maximum of life, and a $250,000 fine.

Assistant U.S. Attorney Elizabeth R. Moellering, who is handling the case, stated that on July 11, 2018, the Jamestown Police Department received a complaint from a parent that her minor children, Victim 1 and Victim 2, may have been sexually abused by the defendant. The parent stated that she was told by the defendant’s sister that a series of concerning pictures, sexual in nature, were sent on a Nokia cellular telephone that was used by the defendant.

Bailer was subsequently arrested on a warrant out of Missouri related to a burglary case. During a search of the Nokia cellular telephone, investigators recovered several hundred images of images of child pornography involving sexually explicit conduct by prepubescent and pubescent children.

The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, and the Jamestown Police Department, under the direction of Chief Harry Snellings.

Sentencing is scheduled for February 20, 2020, at 3:00 p.m. before Judge Geraci.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Joseph Chojnacki, 26, of Cheektowaga, NY, pleaded guilty before U.S. District Judge Richard J. Arcara to possession of child pornography involving a prepubescent minor. The charges carry a maximum penalty of 20 years in prison, and a $250,000 fine. 

Special Assistant U.S. Attorney Jeremy Murray, who is handling the case, stated that after receiving a tip of suspected child pornography from the National Center for Missing and Exploited Children, Homeland Security Investigations traced the suspected child pornography to the defendant, a New York State Corrections Officer. 

On May 9, 2019, a federal search warrant was executed at Chojnacki’s Louis Street residence. Investigators seized various computers, electronic devices, and electronic media. A total of approximately 3,814 images and 138 videos of child pornography were discovered on the defendant's electronic devices. Some of the images depicted prepubescent minors less than 12 years old, as well as sexual abuse or exploitation of an infant or toddler.

The plea is the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly.

Sentencing is scheduled for January 30, 2020, at 1:00 p.m. before Judge Arcara.  

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Zachary Feeterman, 24, of Tonawanda, NY, was arrested and charged by criminal complaint with possession of child pornography. The charge carries a mandatory minimum penalty of 10 years in prison, a maximum of 20 years, and a $250,000 fine.

Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that according to the complaint, on August 8, 2019, two Erie County Probation Officers were conducting a routine home visit at the defendant’s residence where they discovered a cellular telephone. In November 2015, Feeterman was convicted of Attempted Possession of a Sexual Performance by a Child less than 16 years old, and was a Level 1 Sex Offender on probation. As a result, he is prohibited from possessing a cell phone. 

During a search of the phone, the probation officers several anonymous chatting and social media applications. One of the applications was KEEPSAFE, a vault storage application that looks like a calculator. The application contained files with images and videos of child pornography. Investigators also found numerous other images and videos of child pornography on the phone. Some of the images and videos included prepubescent children and depictions of violence.

A detention hearing was held today before U.S. Magistrate Judge H. Kenneth Schroeder, Jr. and Feeterman was detained.

The complaint is the result of an investigation by members the Erie County Probation Department, under the direction of Commissioner Brian McLaughlin; the FBI's Child Exploitation Task Force, under the direction of Special Agent-in-Charge Gary Loeffert; and the Town of Tonawanda Police Department, under the direction of Chief James P. Stauffiger. 

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.  

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Jesus Santiago, 29, of Rochester, NY, pleaded guilty, before U.S. District Judge David G. Larimer, to being a felon-in-possession of a firearm. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.

Assistant U.S. Attorney Cassie Kocher, who is handling the case, stated that on July 2, 2018, the defendant, in exchange for $1,200, sold a loaded 9mm handgun to an individual working with law enforcement officers. Santiago also admitted to participating in a similar illegal gun sale in May, 2018. In 2016, the defendant was convicted of Attempted Criminal Possession of a Weapon in the Second Degree in Erie County Court, and as a result is legally prohibited from possessing a firearm or ammunition.   

The plea is the result of an investigation by the Rochester Police Department, under the direction of Chief La’Ron Singletary, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division.

Sentencing is scheduled for December 17, 2019, at 3:00 p.m. before Judge Larimer.

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CONTACT:  Barbara Burns

PHONE:         (716) 843-5817

FAX #:            (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Larry D. Brodie, Jr., 38, of Lackawanna, NY, pleaded guilty before U.S. District Judge Richard J. Arcara to possession with intent to distribute butyryl fentanyl. The charge carries a maximum penalty of 20 years in prison and a fine of $1,000,000.

Assistant U.S. Attorney Justin L. Bish, who is handling the case, stated that on April 4, 2019, a Lackawanna Police undercover officer contacted the defendant to arrange for a controlled purchase of heroin. Brodie then met with and sold the undercover officer approximately $100 of suspected heroin and $40 worth of crack cocaine.

The plea is the result of an investigation by the Lackawanna Police Department, under the direction of Chief James Michel, and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan.

Sentencing is scheduled January 30, 2020, before Judge Arcara.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Jacob Tunison, 30, of Olean, NY, who was convicted of receipt of child pornography, was sentenced to serve 188 months in prison by U.S. District Judge Richard J. Arcara.

Assistant U.S. Attorney Wei Xiang, who handled the case, stated that in November of 2018, Tunison used Facebook to communicate with a minor female who was less than 16 years old. The defendant sent numerous lewd images of himself to the minor and solicited the minor to produce and send various images of herself to him.

The sentencing is the result of an investigation by the Cuba Police Department, under the direction of Chief Dustin Burch, and the Federal Bureau of Investigation, Jamestown Office, under the direction of Special Agent-in-Charge Gary Loeffert.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Christopher Johnson, 47, of Rochester, NY, who was convicted of receipt of child pornography, was sentenced to serve 121 months in prison and 15 years supervised release by U.S. District Judge Charles J. Siragusa. The defendant was also ordered to pay $3,000 in restitution to victims.  

Assistant U.S. Attorney Kyle P. Rossi, who is handling the case, stated that Johnson was arrested in June 2018, after distributing child pornography to an undercover FBI Agent via the Internet. That arrest prompted law enforcement officers to execute a search warrant at the defendant’s residence in Rochester. Investigators seized Johnson’s computers which contained approximately 52,372 images and 316 videos of child pornography. Some the videos and images depicted the sexual abuse of infants and toddlers.  

The sentencing is the result of an investigation by members the FBI's Child Exploitation Task Force, under the direction of Special Agent-in-Charge Gary Loeffert.

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CONTACT:   Barbara Burns
PHONE:   (716) 843-5817
FAX #:   (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Adam C. McFadden pleaded guilty before U.S. District Judge Elizabeth A. Wolford to wire fraud. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine. On April 1, 2019, McFadden previously pleaded guilty to unrelated wire and tax fraud charges.

Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that the defendant was the executive director of Quad A for Kids. Founded in 1994, Quad A for Kids provides after-school and extended-day learning programs at some Rochester City School District elementary schools. The four A’s in Quad A for Kids represent the well-rounded programming it delivers to the students: academics, athletics, arts, and achievement. Quad A for Kids operates as a separate entity funded through the Rochester Area Community Foundation Initiatives Inc. (RACF). 

The defendant was the Executive Director for Quads A for Kids between 2004 and 2014. From 2014 to September 2016, McFadden served as an independent contractor for Quad A for Kids. From September 2016 until 2019, the defendant returned to his position as the Executive Director of Quad A for Kids.

Between February 2012 and December 2018, McFadden submitted fraudulent invoices and receipts to the RACF for reimbursements in the approximate amount of $131,163.00.  The funds were used, in part, for the defendant’s personal benefit, including to pay personal debts. Specifically, McFadden created fraudulent invoices purportedly from: an individual for various computer and IT related services that were never provided; an entity that provided various sports, fitness and related products and services; entities that provided grant writing and related services; and Amazon, Walmart and Staples. After the submission of the fraudulent invoices, the RACF reimbursed the defendant personally or paid the various entities used by the defendant. The entities then used the money to pay debts owed by the defendant.

In addition, in August 2017 and February 2018, the defendant created fraudulent $4,000.00 invoices from the North East Area Development Association (NEAD) to Quad A for Kids, purportedly for training services provided by NEAD to Quad A for Kids.  Although the training services were never performed by NEAD, McFadden caused Quad A for Kids to pay NEAD $8,000.00. NEAD then fraudulently paid the defendant $7,000.00 of the $8,000.00 that NEAD had fraudulently received.  

“This defendant previously pleaded guilty to defrauding Rochester Housing Charities, and with today’s plea, he now stands convicted of defrauding yet another not-for-profit agency,” stated U.S. Attorney Kennedy. “While these not-for-profits were created to serve the economically disadvantaged and the youth of our community—defendant diverted funds away from those in need in our community and into his own pocket.  That he would do so while serving as a Rochester City Councilman is particularly egregious, as such behavior is more consistent with that of a public parasite than it is of a public servant.”   
         
The plea is the result of an investigation by the Federal Bureau of Investigation, Rochester Office, under the direction of Special Agent-in-Charge Gary Loeffert; the Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent-in-Charge Brad Geary; and the Internal Revenue Service, Criminal Investigations Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge, New York Field Office.

Sentencing is scheduled for February 12, 2020, at 3:00 p.m. before Judge Wolford.

# # # #

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Angel Gonzalez-Reyes, 27, of Rochester, NY, pleaded guilty today before U.S. District Judge Elizabeth A. Wolford to being a felon in possession of a firearm and ammunition. The charge carries a maximum penalty of 10 years in prison, and a fine of $250,000, or both.

Assistant U.S. Attorney Charles Moynihan, who is handling the case, stated that Gonzalez-Reyes was arrested on June 15, 2019, after New York State Police troopers attempted a routine traffic stop of a car the defendant was driving in Rochester. Gonzalez-Reyes drove away from the troopers and a chase ensued.  The defendant crashed his car into the yard of a house on Kohlman Street and ran before being apprehended by Rochester Police Department officers in the area. While searching the car, officers found a .40 caliber semiautomatic pistol along with ammunition for the handgun.    

Gonzalez-Reyes was convicted in United States District Court in Puerto Rico in 2013 of conspiracy to possess with intent to distribute cocaine. As a result, he is legally prohibited from possessing a firearm and ammunition.
  
The matter was brought by the United States Attorney’s Office as part of its Project Safe Neighborhoods (PSN) initiative.  PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

The plea is the result of an investigation by the New York State Police, under the direction of Major Eric Laughton; the Rochester Police Department, under the direction of Chief La’Ron Singletary; and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division.

Sentencing is scheduled for January 22, 2020, at 1:00 p.m. before Judge Wolford.

# # # #

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned a 33-count indictment charging Keonna Davis, 32, of Buffalo, NY, with wire fraud, mail fraud, and aggravated identity theft. The charges carry a maximum penalty of 20 years in prison and a $500,000 fine.

Assistant U.S. Attorney Jonathan P. Cantil, who is handling the case, stated that between September and December 2017, the defendant worked as a disaster recovery specialist for the United States Small Business Administration (SBA). The SBA provides low-interest disaster relief loans to help businesses and homeowners recover from federally declared disasters such as Hurricane Harvey and Hurricane Irma. In her role as a disaster recovery specialist, Davis spoke directly with loan applicants to assist in processing their loan applications. The defendant also had access to the SBA’s loan application database. 

It is alleged that Davis abused her position at the SBA by stealing the identities of multiple disaster relief loan applicants, who were victims of Hurricane Harvey or Irma, and by using, and attempting to use, the victims’ identities fraudulently to enrich herself. She did so by opening new accounts using victim information, adding herself to existing victim accounts, using victim information to apply for loans, and purchasing goods using victim accounts. In the course of this scheme, Davis is alleged to have attempted to obtain, among other things, a $4,900 loan for a French bulldog, a $15,000 loan for plastic surgery, and a $35,000 personal loan.

The defendant was arraigned today before U.S. Magistrate Judge H. Kenneth Schroeder, Jr. and released on conditions.

The indictment is the result of an investigation by the United States Postal Inspection Service, under the direction of Inspector-in-Charge Joseph W. Cronin of the Boston Division.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.  

# # # #

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y.-U.S. Attorney James P. Kennedy, Jr. announced today that Felix Calderon-Valcarcel, 29, of Orchard Park, NY, pleaded guilty before U.S. District Judge Lawrence J. Vilardo to conspiracy to possess with intent to distribute, and distribution of, five kilograms or more of cocaine, and possession of firearms in furtherance of drug trafficking. The charges carry a mandatory minimum penalty of 10 years, a maximum of life, and a fine of $10,000,000.

Assistant U.S. Attorney Laura A. Higgins, who is handling the case, stated that between May 2018 and September 2018, law enforcement officers conducted a series of controlled buys and payments from the defendant. In addition, between July 2018 and February 2019, officers seized approximately 8.5 kilograms of cocaine and $52,000 in U.S. currency from postal parcels shipped from Puerto Rico to various locations in the Western District of New York, Florida, Alaska, Georgia, and Pennsylvania using the United States Postal Service. The shipments were made to the defendant or to a co-conspirator. Additionally, the investigation identified $55,700 in U.S. currency and/or money orders shipped in parcels from the defendant or co-conspirators to Puerto Rico as payment to the source of supply for the cocaine

In March 2019, the Lackawanna Police Department obtained a state search warrant for Calderon-Valcarcel’s residence on East Abbott Road, his person, and his vehicle. On March 26, investigators conducted a car stop in advance of executing the search warrant for the defendant’s person. When investigators approached Calderon-Valcarcel, he was observed sitting in the driver’s seat counting approximately $10,000 of U.S. currency. The defendant was detained. A search of the vehicle resulted in the recovery of approximately a kilogram of cocaine. Investigators then executed the search warrant of the defendant’s residence and recovered approximately four kilograms of cocaine and a 9mm firearm.

The defendant also directed co-conspirators to perform various tasks in furtherance of the objectives of the conspiracy, including taking receipt of packages, opening a P.O. box, purchasing money orders, mailing packages containing cash or money orders, and accepting cash payments from lower-level distributors and customers of the organization for drugs distributed by Calderon-Valcarcel.

The plea is the result of an investigation by the Federal Bureau of Investigation, Buffalo Office, under the direction of Special Agent-in-Charge Gary Loeffert; the U.S. Postal Inspection Service, under the direction of Boston Division Inspector-in-Charge Joseph W. Cronin; the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division; The Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division; the Orchard Park Police Department, under the direction of Chief E. Joseph Wehrfritz; the Lackawanna Police Department, under the direction of Chief James Michel; and the Hamburg Police Department, under the direction of Chief Gregory Wickett.

Sentencing is scheduled for February 14, 2020, before Judge Vilardo.

# # # #

 

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Joshua Levine, 23, of Lancaster, NY, pleaded guilty before U.S. District Judge Lawrence J. Vilardo to conspiracy to distribute heroin and fentanyl. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine. 

Assistant U.S. Attorneys Joseph M. Tripi and Charles J. Volkert, Jr., who are handling the case, stated that between June 2013 and March 23, 2017, the defendant conspired with Robert Moore and others to distribute heroin in the City of Buffalo and surrounding suburbs. Levine was a user of the heroin and fentanyl he obtained from Moore, but during the course of the conspiracy, he also re-distributed some of the drugs to other users for profit.

On February 18, 2017, Levine received a quantity of heroin and fentanyl from Moore, which Levine, in turn, distributed to an individual identified as B.G., who thereafter died as the result of an overdose.
During the course of the investigation, law enforcement officers from the Amherst, Lancaster, and Buffalo Police Departments, and the New York State Police and DEA, conducted 11 controlled purchases of fentanyl and butyryl fentanyl from co-defendant Robert Moore. Additionally, on February 23, 2017, law enforcement officers with the Amherst Police Department conducted a controlled purchase of fentanyl from Joshua Levine. On March 16, 2017, law enforcement officers conducted search warrants at Robert Moore’s residence on Glenwood Drive in Williamsville, NY, and also at Joshua Levine’s residence on Aurora Street in Lancaster, NY. A quantity of fentanyl with identical drug packaging was discovered at each of those residences. Both Robert Moore and Joshua Levine were arrested the day of the search warrants. 

Robert Moore was previously convicted and is awaiting sentencing. Two other co-defendant, Reese Moore and Kevin Abernathy, were also previously convicted and are also awaiting sentencing.

The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Ray Donovan, Special Agent-in-Charge, New York Field Division; the Amherst Police Department, under the direction of Chief John C. Askey; the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Major Mary Clark, and Lieutenant Kevin Reyes; the Lancaster Police Department, under the direction of Chief William J. Karn, Jr.; the Buffalo Police Department Narcotics Squad, under the direction of Commissioner Byron C. Lockwood; the Lockport Police Department, under the direction of Interim Police Chief Steve Preisch; the Depew Police Department, under the direction of Chief Jerome Miller; the Niagara County Sherriff’s Office and the Niagara County Drug Task Force, under the direction of Sheriff James Voutour; the Erie County Sherriff’s Office, under the direction of Sheriff Timothy Howard; and Homeland Security Investigations, under the direction of Special Agent-in Charge Kevin Kelly.

Sentencing is scheduled for February 14, 2020, before Judge Vilardo.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Andrew Campbell, 33, of Albion, NY, pleaded guilty before U.S. District Judge Richard J. Arcara to possession of child pornography. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.

Assistant U.S. Attorney Elizabeth R. Moellering, who is handling the case, stated in July 2018, an individual contacted the Orleans County Sheriff's Office after discovering a disturbing video on a desktop computer that belonged to the defendant. The witness and Campbell lived together on and off and Campbell left the computer at the residence when he was made to vacate the residence by the witness in June 2018. In addition to the desktop computer, Witness 1 also turned over a laptop computer and hard drive.

A forensic analysis of the desktop, laptop, and hard drive revealed more than 65 image files and more than 20 videos containing child pornography. Some of the images depicted the sexual abuse or exploitation of an infant or toddler, and other depictions of violence.

The plea is a result of an investigation by the Orleans County Sheriff's Office, under the direction of Sheriff Randy Bower, and the Federal Bureau of Investigation, Buffalo Office, under the direction of Special Agent-in-Charge Gary Loeffert.

Sentencing is scheduled for January 29, 2020, at 1:00 p.m. before Judge Arcara.

# # # #

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr., of the Western District of New York, together with David J. Freed, U.S. Attorney for the Middle District of Pennsylvania, announced today that Perry Santillo, 39, of Rochester, NY, pleaded guilty, before Chief U.S. District Judge Frank P. Geraci, Jr. for the Western District of New York, to conspiracy to commit mail fraud, mail fraud, and conspiracy to launder money. The charges carry a maximum penalty of 20 years in prison and a $1,000,000 fine. As part of his plea in the Western District of New York, Santillo has also agreed to plead guilty to a mail fraud charge, which is also relating to his Ponzi scheme activities, that is currently pending against him in the Middle District of Pennsylvania. That charge carries a maximum penalty of 20 years and a $500,000 fine.

Assistant U.S. Attorney John J. Field, who is handling the case in the Western District of New York, and Assistant U.S. Attorney Sean A. Camoni, who is handling the case in the Middle District of Pennsylvania, stated that between January 2008 and June 2018, the defendant conspired with an individual identified as C.P., and others, to obtain money through an investment fraud commonly known as a Ponzi scheme. Specifically, in 2007, Santillo and C.P., as equal partners, formed a business known as Lucian Development in Rochester. Prior to approximately July 2007, Lucian Development raised millions of dollars from investors in Rochester, and elsewhere, by soliciting investments for City Capital Corporation, a business operated by Ephren Taylor. In July 2007, Santillo and C.P. were advised by Ephren Taylor that their investors’ money had been lost. In response, in August 2007, Santillo and C.P. agreed to acquire the assets and debts of City Capital Corporation. The acquisition proved financially ruinous, with the amount of the acquired debt far exceeding the value of the acquired assets. Taylor was later prosecuted and convicted of operating a Ponzi scheme.

Subsequently, Santillo and C.P. chose not to disclose the truth to investors that their money, entrusted to Lucian Development for investment in City Capital Corporation, was gone. Instead, the defendant and C.P. continued to solicit ever-increasing amounts of money from new investors in an unsuccessful attempt to recoup the losses.  In order to find potential investors to solicit and defraud, Santillo and C.P. purchased businesses from established investment advisors or brokers who were looking to exit their businesses. Between approximately 2008 and September 2017, Santillo and C.P., using money obtained from prior investors, purchased the businesses of at least 15 investment advisors or brokers, located in Tennessee, Ohio, Minnesota, Nevada, California (5 businesses), Florida, South Carolina (2 businesses), Texas, Pennsylvania, Maryland, and Indiana.

The investment offerings pitched by Santillo and C.P. consisted principally of unsecured promissory notes and preferred stock issued by various entities controlled by Santillo and C.P. Potential investors were offered an apparent array of investment options to create the illusion of a diversified investment portfolio. Those investment options included products issued by purported issuers such as First Nationle Solutions (FNS), Percipience Global Corporation, United RL Capital Services, Boyles America, Middlebury Development Corporation, and NexMedical Solutions, among others. None of these issuers had substantial bona fide business operations or used investor money in the manner and for the purposes represented to investors. To the extent that an issuer may have had some minor legitimate business activities, it was not profitable and insufficient revenues were generated to pay investors any returns (let alone return the principal amounts of their investments). Santillo, and others, sold fraudulent investments from these issuers to investors who were told that the money received would be used to conduct the purported business of each respective issuer. In fact, however, such issuers were the defendant’s various Ponzi schemes. Santillo, and others working with him, fraudulently induced investors to invest at least $46,000,000 in the First Nationle offering since February 2012, $22,000,000 in the Percipience offering since July 2012, and $25,000,000 in the United RL offering since March 2015.

Over the years, to keep the Ponzi scheme from being detected, a substantial portion of incoming new investor monies were depleted by making promised interest and other payments to earlier investors. Most of the rest of incoming investor money was used by Santillo, C.P. and other co-conspirators: to finance lavish lifestyles of the conspirators, their families and associates; to expand the scheme by purchasing investment advisor/brokerage businesses to obtain access to fresh investors; and to pay operating expenses – salaries for a sales force and administrative staff, office rents and related expenses, housing for employees, and interest on loans—all of which were used to keep the scheme going and maintain a façade of legitimate business operations.

Very little investor money was deployed in productive investments, and when so deployed, the investments yielded meager income and were not profitable, or failed altogether.  The Ponzi scheme was headquartered and based out of locations in Rochester, with a number of satellite offices around the country. Administrative and banking functions were largely performed out of Rochester. The conspiracy employed a variety of sales people, including Santillo and C.P., who traveled around the country to meet with and solicit new investors. In the Middle District of Pennsylvania, Santillo, and others, conducted their fraud scheme under the guise of an investment business located in Scotrun, Monroe County, using various business names, including Advice and Life Group, Poconos Investments, First American Securities, and Financial Planners Group of America.

Between January 2012 and June 19, 2018, Santillo and C.P. obtained at least $115.5 million from approximately 1000 investors. By the time the scheme collapsed in late-2017/early 2018, Santillo and C.P., doing business through an array of corporate entities, had returned approximately $44.8 million to investors as part of their scheme, but continued to owe investors approximately $70.7 million in principal.

Among the Rochester/Pennsylvania victims area victims of the Ponzi scheme were the following:

• A resident of Webster, NY with a total asset value of $94,341.89 with a fictitious company known as First Nationle Solutions (FNS), which, as of December 31, 2017, was worthless or close to worthless, and
• A resident of Victor, NY and his wife invested approximately $221,758.67 with FNS and Middlebury Development. The couple received three payments of $2500 but lost approximately $214,258.67.
• Since May 2015, Santillo and others fraudulently raised at least $3,000,000 from approximately 30 investors in Pennsylvania, including the MDPA.  

Santillo and C.P. controlled hundreds of different business bank accounts opened under numerous different business names at various financial institutions, including but not limited to Bank of America, Citizens Bank, Genesee Regional Bank and ESL Federal Credit Union. Santillo and C.P. directed and authorized the transactions that occurred in the accounts, including deposits, withdrawals, check writing and funds transfers. The various bank accounts were used to transfer money from one account to another.  Incoming investor money was routinely transferred through several accounts before the funds were finally spent on whatever purpose Santillo and/or C.P. authorized. By moving investors funds through various accounts in various entity names, Santillo and C.P. were able to, conceal and obscure the fact that new investor money was being used to repay earlier investors, finance the operations of the Ponzi scheme, and fund their lifestyles.

“Today’s announcement reaffirms the shared commitment that United States Attorney’s Office’s across the country have to discovering those who hide behind deceptive fraud schemes in an effort to bilk investors out of their hard earned money and savings,” noted U.S. Attorney Kennedy. “This investigation and these pleas should make clear to fraudsters everywhere that you cannot hide and that we will work together across jurisdictions to find you and to bring you to justice.”

“As he did in districts throughout the country, Perry Santillo came to the Middle District of Pennsylvania and purchased a business from a trusted investment advisor for the sole purpose of finding new victims to exploit,” said U.S. Attorney Freed. “This massive nationwide fraud was committed for one simple reason – to enrich Santillo and his confederates. This was a scam from day one, and Santillo and the others knew it.  Thankfully, federal law enforcement was on the case.  I want to particularly thank my friend and colleague U.S. Attorney J.P. Kennedy and his team for their hard work on this case and commend all of the federal agencies involved for their industry and cooperative efforts.”

“The United States Postal Inspection Service is committed to protecting consumers from falling victim to fraud, including illegitimate investment schemes,” stated Postal Inspector-in-Charge Joseph W. Cronin. “Along with our law enforcement counterparts, Postal Inspectors will always pursue individuals who utilize the US Mail to steal the hard earned money of our customers through false and misleading representations."

“Greed fueled Perry Santillo’s crimes and became the common thread throughout this investigation,” said Gary Loeffert, Special Agent-in-charge of the FBI Buffalo Office. “Everyone touched by his greed will forever feel the painful consequences. Santillo’s plea serves as a teachable moment for those criminals who believe they can stay ahead of their Ponzi schemes.”

“Defendants like Perry Santillo lure innocent investors by taking full advantage of their trust and hopes for a better financial future,” said Michael T. Harpster, Special Agent- in-Charge of the FBI’s Philadelphia Division. “As victims envision their nest eggs growing, these scammers are diverting, even pocketing, that hard-earned money. The FBI and our law enforcement partners will continue to bring such financial fraud to light, and its perpetrators to justice.”

IRS-CI Special Agent in Charge Jonathan D. Larsen said, “Tracing the complex flow of money between hundreds of bank accounts is vital in unraveling a Ponzi scheme such as the one perpetrated by Mr. Santillo, and we are proud of the excellence displayed by our team. The collaboration and partnership of our skilled financial investigators and prosecutors provides a formidable adversary in the fight for victims as seen in this case.”   

“Perry Santillo, Jr., conspired with his co-defendants by engaging in a Ponzi scheme that swindled unwitting investors out of tens of millions of dollars in retirement savings. The investors liquidated their retirement accounts to invest with companies Santillo and his-co-conspirators operated.  We will continue to work with our law enforcement partners to protect the integrity of employee benefit plans,” said Michael C. Mikulka, Special Agent-in-Charge, New York Region, U.S. Department of Labor Office of Inspector General.

“The alleged acts by the perpetrator endangered the financial security of hard-working, innocent New Yorkers and their families,” said Superintendent of Financial Services Linda A. Lacewell. “Anyone who commits insurance fraud by definition is acting against the interest of consumers. I commend the investigative work by DFS in coordination with fellow law enforcement agencies for apprehending the suspect.”

The plea is the result of an investigation by the United States Postal Inspection Service, under the direction of Inspector-in-Charge Joseph W. Cronin of the Boston Division; the Federal Bureau of Investigation, Buffalo Division, under the direction of Special Agent-in-Charge Gary Loeffert, and FBI Scranton Division; the Internal Revenue Service, Criminal Investigation Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge; the U.S. Department of Labor, Office of Inspector General, Office of Investigations – Labor Racketeering and Fraud, under the direction of Michael C. Mikulka, Special Agent-in-Charge, New York Region, the New York State Department of Financial Services, under the direction of Superintendent Linda A. Lacewell; and the Securities and Exchange Commission.

Sentencing in the Western District of New York is scheduled for March 6, 2020, before Chief Judge Geraci. The arraignment date in the Middle District of Pennsylvania has not yet been set.

# # # #

 

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Thomas Ingrassia, 31, of Webster, NY, pleaded guilty Chief U.S. District Judge Frank P. Geraci, Jr. to possession of child pornography. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.

Assistant U.S. Attorney Meghan K. McGuire, who is handling the case, stated that investigators discovered the defendant sharing child pornography on a peer-to-peer file sharing network. Law enforcement officers executed a search warrant at Ingrassia’s residence and seized his electronic devices. A forensic analysis recovered 125 images and 18 videos containing child pornography, some of which depicted violence and the sexual abuse minors. 

The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert.

Sentencing is scheduled for January 24, 2020, before Judge Geraci.  

# # # #

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Kaden Sylvester, 24, of Rochester, NY, who was convicted of the online enticement of a minor, was sentenced to serve 144 months in prison, and 15 years supervised release, by Chief U.S. District Judge Frank P. Geraci, Jr.

Assistant U.S. Attorney Kyle P. Rossi, who handled the case, stated that in September 2018, the FBI learned that Sylvester was engaged in online chats with other individuals who were actively trading child pornography. During the chats, the defendant distributed child pornography to an undercover FBI Special Agent. Based on this information, a search warrant was executed at Sylvester’s suspected residence. Further investigation revealed that the defendant had also sexually abused a child entrusted to his care, and produced child pornography involving the child. 

The sentencing is the result of an investigation by the FBI's Child Exploitation Task Force, under the direction of Special Agent-in-Charge Gary Loeffert.

# # # #

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y.- U.S. Attorney James P. Kennedy, Jr. announced today that Sean Humby, 31, of Rochester, NY, pleaded guilty before Chief U.S. District Judge Frank P. Geraci, Jr. to possession of child pornography involving prepubescent minors. The defendant was previously convicted of sexual abuse of a child and as a result faces a mandatory minimum penalty of 10 years in prison, a maximum penalty of 20 years, a lifetime period of supervised release, and a $250,000 fine. 

Assistant U.S. Attorney Kyle P. Rossi, who is handling the case, stated that in 2008, Humby was convicted of sexually abusing three minors in Monroe County and sentenced to serve 108 months in prison. The defendant was released on parole in 2016. On August 24, 2018, New York State Parole Officers conducted a routine search of Humby’s residence, during which they discovered the defendant with a cellular phone, in violation to his parole conditions. Humby was taken into custody. A forensic analysis determined that the cell phone contained child pornography. 

The plea is the result of an investigation by the FBI's Child Exploitation Task Force, under the direction of Special Agent-in-Charge Gary Loeffert, and the New York State Division of Parole, under the direction of Acting Commissioner Anthony J. Annucci.

Sentencing is scheduled for January 31, 2019, before Judge Geraci.

# # # #

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Charity Lee, 38, of Rochester, NY, pleaded guilty before Chief U.S. District Judge Frank P. Geraci, Jr. to possession with intent to distribute cocaine and being a felon in possession of a firearm and ammunition. The charges carry a maximum penalty of 20 years in prison and a $1,000,000 fine.

Assistant U.S. Attorney Cassie Kocher, who is handling the case, stated that on July 12, 2018, law enforcement officers executed a search warrant at the defendant’s residence.  During the search, they recovered approximately 124 grams of cocaine, materials commonly used to package narcotics for sale, three firearms, one of which had an obliterated serial number, and a variety of ammunition.

In 2000, Lee was convicted of Criminal Possession of a Controlled Substance in the Fifth Degree. As a result, she is legally prohibited from possessing firearms and ammunition. 

The plea is the result of an investigation by the Rochester Police Department, under the direction of Chief La’Ron Singletary, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division. 

Sentencing is scheduled for January 17, 2020, at 11:00 a.m. before Judge Geraci.

# # # #

CONTACT:  Barbara Burns

PHONE:         (716) 843-5817

FAX #:            (716) 551-3051

 

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Samuel McFarland, 55, of Rochester, NY, who was convicted of two counts of smuggling goods into the United States, was sentenced to serve 24 months’ probation by U.S. District Judge David G. Larimer.

Assistant U.S. Attorney Sean C. Eldridge, who handled the case, stated that on April 10, 2017, Customs and Border Protection officers at the John F. Kennedy International Airport intercepted a package coming from Hong Kong that was addressed to the defendant. The package contained 3,012 counterfeit Viagra pills and 190 counterfeit Cialis pills.

On January 8, 2018, CBP officers at the Rochester International Airport intercepted a package coming from China that was also addressed to McFarland’s residence. That package contained 100 bottles which included 30 counterfeit Cialis pills in each. The manifest for the package of 3000 counterfeit pills falsely listed the contents as “free trade sample” and claimed the package contained 50 plastic bottles valued at $1.00 each. Thereafter, on January 25, 2018, Homeland Security Investigations conducted a controlled delivery at the defendant’s residence of the package intercepted on January 8, 2018. McFarland answered the door and signed for the package. Federal agents then approached the house and executed a federal search warrant.

The defendant admitted to agents that he ordered both the April 2017 package and the January 2018 package, knowing that they contained counterfeit pills. An analysis of McFarland’s cellular phone revealed several searches for “fake Viagra,” related searches for pictures of real and counterfeit Viagra pills, searches for terms such as “package us customs detainment,” and photos that were cached from websites including “how to get Viagra for $1.”

The sentencing is the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly; Customs and Border Protection, under the direction of Director of Field Operations Rose Brophy; and the Food and Drug Administration, Office of Criminal Investigations, under the direction of Special Agent-in-Charge Jeffrey Ebersole, New York Field Office.

# # # #

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Giovanni Deleon, 27, of Rochester, NY, who was convicted of conspiracy to distribute 400 grams or more of fentanyl, was sentenced to serve 60 months in prison by U.S. District Judge David G. Larimer.

Assistant U.S. Attorney Cassie Kocher, who is handling the case, stated that between August 2018 and December 2018, the defendant conspired to distribute fentanyl.  In furtherance of the conspiracy, Deleon distributed quantities of fentanyl to customers and assisted in obtaining quantities of fentanyl to be distributed in the Western District of New York.

The sentencing is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge John B. Devito; the Rochester Police Department, under the direction of Chief La’Ron Singletary; U.S. Border Patrol, under the direction of Patrol Agent in Charge Luis R. Tafoya; the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert; and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Kimberly Dumbleton, 47, of Casselberry, FL, pleaded guilty before Chief U.S. District Judge Frank P. Geraci, Jr. to conspiracy to distribute heroin and fentanyl. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.

Assistant U.S. Attorney Cassie Kocher, who is handling the case, stated that between 2016 and December of 2018, the defendant conspired with others to sell heroin and fentanyl to customers at 774 Smith Street in Rochester, NY. 

The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, and Rochester Police Department, under the direction of Chief La’Ron Singletary.

Sentencing is scheduled for January 10, 2020, at 10:00 a.m. before Judge Geraci.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Adam Schutz, 36, of Rochester, NY, who was convicted of possession with intent to distribute fentanyl, and possession of a firearm in furtherance of a drug trafficking crime, was sentenced to serve 72 months in prison by U.S. District Judge David G. Larimer.

Assistant U.S. Attorney Matthew T. McGrath, who handled the case, stated that on January 30, 2019, and officer with the New York State Division of Parole Supervision and others conducted a compliance search of the defendant’s parole-approved residence on Myrtle Street in Rochester. During a search of Schutz’s bedroom, parole officers recovered a 9mm handgun loaded with nine rounds of 9mm ammunition in the magazine; a second firearm magazine loaded with 10 additional rounds of 9mm ammunition; a clear plastic bag containing a quantity of fentanyl; a bag containing approximately 80 individual doses of LSD; a digital scale; a white plastic grocery bag containing five boxes of 9mm cartridges, two handgun holsters; as well as a .40 caliber handgun loaded with nine .40 caliber cartridges in an attached magazine.

The sentencing is the result of an investigation by the Rochester Police Department, under the direction of Chief La’Ron Singletary, the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge John B. Devito, and the New York State Division of Parole.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a Emanuel Guobadia, 43, of Atlanta, Georgia, who was convicted following a jury trial of wire fraud and identity theft, was sentenced to serve 120 months in prison by U.S. District Judge Elizabeth A. Wolford. 

Assistant U.S. Attorneys Melissa Marangola and Richard Resnick, who prosecuted the case, stated that the defendant obtained the personal information of thousands of individuals across the country and used that information to file over 880 fraudulent tax returns. The refunds were transferred through victims’ accounts in Rochester, NY and laundered into the Guobadia’s bank account in Georgia.
In total, the defendant attempted to obtain $2,800,000 in fraudulent tax refunds. The Internal Revenue Service denied most of the requests.

“People who try to defraud the IRS are cheating all other law-abiding taxpayers,” said U.S. Attorney Kennedy. “They are committing a crime, and as today’s sentence shows, they are risking serious jail time. Fittingly, once out of jail, they will still owe the taxes and—following interest and possible civil penalties—then some.”

The sentencing is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent-in-Charge Jonathan D. Larsen, New York Field Office.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Tyrone Jiggetts, 48, of Rochester, NY, who was convicted of being a felon in possession of a firearm, was sentenced to serve 12 months in prison by Chief U.S. District Judge Frank P. Geraci, Jr.

Assistant U.S. Attorney Cassie M. Kocher, who handled the case, stated that on May 6, 2019, the defendant possessed a 12 gauge double-barrel shotgun at a gas station at 799 West Main Street in Rochester. In 1991, Jiggetts was convicted of Robbery in the Third Degree, and in 2004, he was convicted of Attempted Grand Larceny in the Third Degree. As a result, the defendant is legally prohibited from possessing a firearm.

The case was brought by the U.S. Attorney’s Office as part of its Project Safe Neighborhoods (PSN) initiative. PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

The sentencing is the result of an investigation by the Rochester Police Department, under the direction of Chief La’Ron Singletary, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge John B. Devito.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Steven Fetterman, 36, of Jamestown, NY, who was convicted of possession of child pornography, was sentenced to serve 100 months in prison and 30 years supervised release by U.S. District Judge Lawrence J. Vilardo.

Assistant U.S. Attorney Jonathan P. Cantil, who handled the case, stated that on November 19, 2015, the defendant possessed 1,720 videos and 13,838 images of child pornography. Approximately 44 videos and 95 images involved prepubescent minors or minors under the age of 12, as well as depictions of violence.

Fetterman previously engaged in a pattern of activity involving the sexual abuse or exploitation of a minor. In 2000, the defendant forced Victim 1, a minor, to engage in oral sex. Also, between 2001 and 2003, the defendant attempted to fondle Victim 2.

The sentencing is the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y.--U.S. Attorney James P. Kennedy, Jr. announced today that Martha Aguirre, 47, of Westminster, California, who was convicted of narcotics conspiracy and money laundering conspiracy, was sentenced to serve 150 months in prison by U.S. District Judge Lawrence J. Vilardo.

Assistant U.S. Attorney Wei Xiang, who handled the trial, stated that the defendant was a member of a transnational drug trafficking organization that utilized contacts and a source of supply whose territory included Mexico, Arizona, California, and elsewhere. The source of supply was the Sinaloa Cartel, led by Joaquín “El Chapo” Guzmán and Ismael “El Mayo” Zambada.

Aguirre was convicted, along with co-defendant Juan Alfaro, following a jury trial in March 2019. Martha Aguirre’s brother Herman E. Aguirre was the leader of the organization. 

Aguirre and Juan Alfaro used “front” companies to launder over $12,000,000 in drug proceeds from Buffalo to Los Angeles, including Triton Foods, Inc. and Kamora Investment Enterprises, Inc., which were located in the State of California. Another fictitious company, Corral Seafoods, LLC, registered in the State of New York, was allegedly located in Cheektowaga, NY, but proved to be completely fake.

Using these companies, Aguirre and Juan Alfaro disguised kilogram quantities of heroin, fentanyl, and cocaine on invoices and other documents as “Sea Cucumbers.”  The local organization trafficked thousands of kilograms of illegal narcotics throughout the United States, including Lockport, Niagara Falls, and Buffalo.

During the course of the investigation, law enforcement officers seized over $5,000,000 worth of illegal narcotics, including:

•           52.5 kilograms of cocaine; •           17.5 kilograms of heroin; and
•           8.5 kilograms of fentanyl

Aguirre is one of 17 defendants convicted in this case. Juan Alfaro was sentenced to serve 120 months in prison.

"Today’s sentence represents just deserts for the principals of a once flourishing, multi-million dollar, international drug trafficking conspiracy that was operating under cover of a food distribution business,” noted U.S. Attorney Kennedy. “The volume of drugs moved by this organization endangered the health and welfare of countless Americans, including many here in Western New York. I commend the work of the federal, state, and local law enforcement officers from across our country who, together with the tremendous prosecutors in this Office, worked tirelessly to deliver justice to 17 individuals who delivered poison and pain throughout our Nation.”

The sentencing is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge, New York Field Office; the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division; Homeland Security Investigations, under the direction of Special-Agent-in Charge Kevin Kelly; the Niagara County Drug Task Force, under the direction of Sheriff James Voutour; the Buffalo Police Department, under the direction of Commissioner Byron Lockwood; the Lockport Police Department, under the direction of Acting Chief Steven Preisch; the Montebello, California Police Department, the Nebraska State Patrol, and the DEA, Los Angeles.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Raul Abidel Martinez, 39, of Rochester, who was convicted of being a felon in possession of firearms and ammunition, was sentenced to serve 54 months in prison by Chief U.S. District Judge Frank P. Geraci. Jr.

Assistant U.S. Attorney Katelyn M. Hartford, who handled the case, stated that on December 4, 2018, the defendant possessed firearms, including a .38 caliber revolver, a 12 gauge shotgun, and an AM-15 rifle, as well as 56 rounds of various caliber ammunition. Specifically, Martinez possessed the .38 caliber revolver in his waistband, and the 12 gauge shotgun in a backpack, while he was in the vicinity of 1215 Wall Road in Webster, NY. The defendant also possessed the AM-15 rifle and ammunition at his residence on Portland Avenue in Rochester.

Previously, in November 2007, Martinez was convicted on a federal charge of being a felon in possession of a firearm and sentenced to serve 46 months in prison. Subsequently, on March 26, 2015, the defendant was convicted on a federal bank robbery charged and sentenced to serve an additional 51 months in prison plus nine months in prison on a violation of supervised released.  As a result of those federal convictions, Martinez is legally prohibited from possessing a gun.

The sentencing is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division; the Webster Police Department, under the direction of Chief Joseph Rieger; the U.S. Probation Department, under the director of Chief Probation Officer Anthony SanGiacomo, and the Rochester Police Department, under the direction of Chief La’Ron Singletary. 

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Janet Flores, 44, of Rochester, NY, pleaded guilty to being a felon in possession of a firearm, before U.S. District Judge David G. Larimer. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.

Assistant U.S. Attorney Cassie Kocher, who is handling the case, stated that on May 30, 2018, the defendant, acting together with others, sold an AM-15 rifle to a confidential source in exchange for $1,100 in cash. Previously, in September 2017, Flores was convicted of Attempted Criminal Possession of a Controlled Substance in the Third Degree, and is legally prohibited from possessing a firearm. 

The plea is the result of an investigation by the Rochester Police Department, under the direction of Chief La’Ron Singletary, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito.

The case was brought by the U.S. Attorney’s Office as part of its Project Safe Neighborhoods (PSN) initiative. PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

Sentencing is scheduled for December 19, 2019, at 3:00 p.m. before Judge Larimer.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Christopher Harrison, 25, of Rochester, NY, who was convicted of conspiracy to possess with intent to distribute, and distribution of, 40 grams or more of fentanyl, and 28 grams or more of crack cocaine, cocaine, and heroin, was sentenced to serve 94 months in prison by Chief United States District Court Judge Frank P. Geraci, Jr.

Assistant U.S. Attorney Matthew T. McGrath, who handled the case, stated that the defendant conspired with Michael Wyatt, who would obtain quantities of fentanyl, cocaine, and heroin from various suppliers, and Andre Cunningham. After obtaining the drugs, Wyatt and Cunningham supervised and directed the distribution and sale of them to individual drug users. Harrison was responsible for processing, breaking down, and re-packaging the controlled substances into smaller quantities to be sold to individual drug users out of houses at 218 Emerson Street and 131 Saratoga Avenue in Rochester. The defendant was also responsible for selling the controlled substances to individual buyers. At times, Harrison also “cooked” the crack cocaine.

Michael Wyatt and Andre Cunningham were previously convicted and are awaiting sentencing.

The sentencing is the result of an investigation by Bureau of Alcohol, Tobacco, Firearms & Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division; the Monroe County Sheriff’s Office, under the direction of Sheriff Todd K. Baxter; and the Rochester Police Department, under the direction of Chief La’Ron D. Singletary. Additional assistance was provided by the Monroe County District Attorney’s Office, under the direction of District Attorney Sandra Doorley. 

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Robert W. Wood, 49, of Corning, NY, pleaded guilty before Chief U.S. District Judge Frank P. Geraci, Jr. to possession of child pornography. The charge carries a mandatory minimum penalty of 10 years in prison, a maximum of 20 years, and a $250,000 fine.

Assistant U.S. Attorney Meghan K. McGuire, who is handling the case, stated that in 2011, the defendant was convicted of possession of child pornography and sentenced to 24 months in prison and 15 years supervised release. While on supervised release, members of the U.S. Probation Department made an unannounced visit to Wood’s residence and found an unauthorized smart phone in his possession.

A search of the phone revealed that the defendant was in possession of over 2,300 images and over 20 videos of child pornography, some of which depicted the sexual abuse of infants and toddlers.

The plea is the result of an investigation by the Federal Bureau of Investigations, under the direction of Special Agent-in-Charge Gary Loeffert, and the U.S. Probation Department, under the direction of Chief Probation Officer Anthony SanGiacomo.

Sentencing is scheduled for January 10, 2020, before Judge Geraci.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Demetrius Jackson, 43, of Rochester, NY, who was convicted of possession with intent to distribute cocaine, and possession of a firearm and ammunition by a convicted felon, was sentenced to serve 51 months in prison by U.S. District Judge Charles J. Siragusa.

Assistant U.S. Attorney Charles Moynihan, who handled the case, stated that Jackson was arrested after police officers served a court-authorized search warrant at his residence on Wadsworth Street in Rochester, and found controlled substances and a loaded firearm. 

While searching the location, police officers found a green container with 10 small zip-lock bags of cocaine in a bedroom which Jackson later admitted belonged to him.  In the same bedroom, secreted in a crawl space, officers found a Taurus .45 caliber semiautomatic handgun which was loaded with 11 rounds of ammunition. In the living room, officers found a black container with additional quantities of cocaine, heroin and marijuana.  A digital scale, typically used to weigh drugs for distribution, was located on a kitchen counter.

Jackson spoke with officers after he was arrested and admitted he was selling cocaine through a window in the residence. He said he had been selling cocaine for several weeks to earn money and acquired the handgun by exchanging cocaine for it.

The matter was brought by the United States Attorney’s Office as part of its Project Safe Neighborhoods (PSN) initiative.  PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

The sentencing is the result of an investigation by the Rochester Police Department, under the direction of Chief La’Ron Singletary, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that two Brazilian citizens living in Canada, Tiago Mello-Lima, 32, and Renan Portela Bandeira De Souza, 32, have been charged by a federal grand jury in a 13-count indictment which charges them with conspiracy to bring aliens to the United States, alien smuggling for commercial advantage and private financial gain, and bringing an alien to the United States at a place other than a designated port of entry. Mello-Lima faces a mandatory minimum sentence of five years in prison and a maximum of 15 years if convicted. De Souza faces a mandatory minimum sentence of three years in prison and a maximum of 10 years if convicted.

Assistant U.S. Attorney Charles Kruly, who is handling the case, stated that according to the indictment, between approximately August 2018 and April 28, 2019, the defendants conspired together and with others to bring aliens to the United States, knowing that these individuals were aliens, at places other than designated ports of entry. Mello-Lima allegedly smuggled six aliens to the United States for commercial advantage and private financial gain, while De Souza is accused of smuggling two aliens into the United States. 

Renan Portela Bandeira De Souza was arraigned before U.S. Magistrate Judge Jeremiah J. McCarthy and is being held pending a detention hearing on October 10, 2019. Tiago Mello-Lima will be scheduled for arraignment at a later date.

The indictment is the result of an investigation by U.S. Border Patrol, under the direction of Chief Patrol Agent Eduardo Payan, and Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Ross Susco, 34, of East Meadow, NY, pleaded guilty before U.S. District Judge Charles J. Siragusa to possession of child pornography, including prepubescent images. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.

Assistant U.S. Attorney Melissa M. Marangola, who is handling the case, stated that between March 8 and March 27, 2018, the defendant possessed images of child pornography on a desktop computer. Susco received the images over the internet. Some of the images depicted prepubescent minors, including a one-year old child.

On March 8 and March 12, 2018, the defendant communicated on the internet with an undercover Homeland Security Special Agent. During those communications, Susco sent the agent two videos containing child pornography. Both videos depicted prepubescent girls engaging in sexually explicit conduct with an adult.   

The plea is the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly. 

Sentencing is scheduled for December 16, 2019, at 10:15 a.m. before Judge Siragusa.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned an indictment charging Anthony Allee, 28, and Tashira Allee, 36, both of Medina, NY, with maintaining a drug-involved premises, possession of firearms in furtherance of drug trafficking, unlawful possession of a short-barreled shotgun, and unlawful possession of a short-barreled rifle. The charges carry a mandatory minimum penalty of 10 years in prison and a maximum of life. In addition, Anthony Allee is charged with possession with intent to distribute, and distribution of, marijuana, hydrocodone, and cocaine, unlawful possession of a machinegun, and unlawful possession of a stolen firearm, which carry a mandatory minimum penalty of 30 years in prison and a maximum of life.

Assistant U.S. Attorney Justin G. Bish, who is handling the case, stated that according to the indictment and a previously filed complaint, on July 22, 2019, a search warrant was executed at the defendants’ residence on Ridge Road in Medina. Investigators seized 11 firearms, numerous articles of property reported as stolen, marijuana, pills believed to be controlled substances, ammunition, scales, bags, and other items of evidence including Tashira Allee's cell phone. The firearms included a Taurus Judge pistol that had been reported stolen in the Town of Tonawanda.

Investigators also searched a barn located behind the main house. Inside, a safe was located. Within the safe, officers recovered prescription pill bottles containing pills, and a loaded Colt .45 ACP pistol. Also seized from the barn were digital scales with white powder residue, plastic bags, ammunition, an SKS rifle and magazine, a Ruger model 10-22 carbine, and marijuana.

The defendants were arraigned before U.S. Magistrate Judge H. Kenneth Schroeder, Jr. Tashira Alee was released on conditions. Anthony Allee continues to be detained. 

“Under federal law, individuals engaged in drug trafficking activities may not lawfully possess firearms,” stated U.S. Attorney Kennedy. “When they do, however, and when the firearms possessed include stolen guns, machine guns, and sawed-off shotguns and rifles, it suggests that not only are such firearms possessed for an unlawful purpose but for a nefarious and extremely dangerous one as well.”

“Drug trafficking and gun violence are a menace on our communities and will not be tolerated,” said HSI Special Agent-in-Charge Kevin Kelly. “The dismantling of a drug-trafficking operation and seizure of high-powered weapons have a direct, immediate, and positive impact on the quality of life here in Buffalo.”

The indictment is the result of an investigation by the Orleans County Sheriff’s Office, under the direction of Sheriff Randy Bower; Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly; the Niagara County Drug Task Force, under the direction of Sheriff James Voutour; the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge James B. Devito; the New York State Police, under the direction of Major Edward Kennedy; and the Orleans County District Attorney’s Office, under the direction of District Attorney Joseph Cardone.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty. 

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Paul Carroll, of Rochester, NY, who was convicted of conspiracy to defraud an agency of the United States in connection with food stamps, was sentenced by U.S. District Judge David G. Larimer to serve two years’ probation, to include eight months home confinement. The defendant was also ordered to pay restitution totaling $82,066. 

Assistant U.S. Attorney Richard A. Resnick, who handled the case, stated that the defendant Carroll conspired with co-conspirator David Sobczyk and others to commit food stamp fraud.

Congress established the Federal Food Stamp Program in 1977 to alleviate hunger and malnutrition. In 2008, the program was renamed the Supplemental Nutrition Assistance Program (SNAP program), which uses federal tax dollars to subsidize low-income households, helping low-income individuals and families to maintain more nutritious diets by increasing the food purchasing power of eligible households. The USDA Food and Nutrition Service (FNS) administers the SNAP program through retail food stores or food truck delivery business (FTDB) that have been approved for participation in the SNAP program to sell food in exchange for the SNAP program benefits.

A business that accepts the SNAP program benefits must do so only in connection with retail sales of eligible food products, and must be authorized by FNS as a retail food store or FTDB. According to USDA regulations, most edible items, except for prepared foods, vitamins and medicines, are eligible for purchase with food stamp benefits. Items such as beer, cigarettes, paper goods, soaps, and detergents are ineligible for purchase with food stamp benefits. It is also against the SNAP program regulations to allow customers to pay for merchandise on credit with EBT SNAP/food stamps. Federal law specifies that a purchase made utilizing the SNAP program benefits must be tax exempt. Food stamp benefits may not lawfully be exchanged for cash.

In 1991, Carroll applied to FNS and received authorization to operate a business, Carroll Services, which received the SNAP program benefits. Carroll Services operated a FTDB. Contrary to the regulations, procedures, and policies governing the administration of the SNAP program benefits, the defendant operated his FTDB as a “for credit” operation, whereby he allowed beneficiaries to purchase items from him “on credit,” obtained from the beneficiaries their identifying information, including EBT card number, PIN number, and social security number, and thereafter caused funds to be deducted from the beneficiaries’ SNAP benefits accounts on the date that the benefits were available on the beneficiaries’ EBT cards.

In November 2015, David Sobczyk also applied to FNS and received authorization to operate a business, Sobczyk Services, which received the SNAP program benefits. Sobczyk Services operated a FTDB. Sobczyk also operated his FTDB as a “for credit” operation. Carroll provided Sobczyk with the vehicle to use for his FTDB, and Sobczyk made monthly payments to Carroll for the vehicle, who knew that the FTDB was being operated as a “for credit” operation contrary to program policies.

David Sobczyk was previously convicted and sentenced to serve two years probation and ordered to pay restitution totaling $82,066. He also forfeited $33,991.41.

The sentencing is the result of an investigation by the U.S. Department of Agriculture, Office of Inspector General, under the direction of Special Agent-in Charge Bethanne M. Dinkins, and the New York State Office of Inspector General, under the direction of Inspector General Letizia Tagliafierro.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817 www.usdoj.gov/usao/nyw   

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Danielle Ruger, 27, of Buffalo, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to conspiracy to possess with intent to distribute cocaine and crack cocaine. The charges carry a maximum penalty of 20 years in prison, and a $1,000,000 fine.

Assistant U.S. Attorneys Laura A. Higgins and Misha A. Coulson, who are handling the case, stated that in the early morning hours of June 3, 2018, the defendant was a passenger in a vehicle stopped by the Buffalo Police Department after it was observed committing traffic violations for excessive tinted windows and speeding. Co-defendant Brandon Cooley was driving the vehicle.

Officers searched the vehicle after detecting a strong odor of marijuana coming from it. Quantities of suspected cocaine and crack cocaine were recovered, along with marijuana, a scale, gloves, packaging, and seven cellphones.

Charges remain pending against Brandon Cooley. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.  

The plea is the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly, and the Buffalo Police Department, under the direction of Commissioner Byron Lockwood.

Sentencing is scheduled for February 27, 2020, before Judge Wolford. 

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Jose Velez, of Buffalo, NY, pleaded guilty before Senior U.S. District Judge William M. Skretny to distribution of heroin and fentanyl. The charge carries a maximum penalty of 20 years in prison, and a fine of $1,000,000. 

Assistant U.S. Attorney Justin Bish, who is handling the case, stated that between June 1 and July 12, 2017, the Drug Enforcement Administration conducted five undercover purchases of heroin and fentanyl from the defendant in exchange for cash.

The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division.

Sentencing is scheduled for January 8, 2020, before Judge Skretny.

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FEDERAL HEALTH CARE FRAUD TAKEDOWN IN NORTHEASTERN U.S. RESULTS IN CHARGES AGAINST 48 INDIVIDUALS

Three Plead Guilty to One of Largest Health Care Fraud Schemes Prosecuted Involving Fraudulent Telemedicine Networks Targeting Elderly Patients Nationwide

WASHINGTON – The Justice Department today announced a coordinated health care fraud enforcement action across seven federal districts in the Northeastern United States, involving more than $800 million in loss and the distribution of over 3.25 million pills of opioids in “pill mill” clinics.  The takedown includes new charges against 48 defendants for their roles in submitting over $160 million in fraudulent claims, including charges against 15 doctors or medical professionals, and 24 who were charged for their roles in diverting opioids.   

In addition to the new charges, today’s enforcement action also includes the guilty pleas of three corporate executives, including the Vice President of Marketing of numerous telemedicine companies and two owners of approximately 25 durable medical equipment companies, for their roles in causing the submission of over $600 million in fraudulent claims to Medicare.  This is one of the largest health care fraud schemes ever investigated by the FBI and the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) and prosecuted by the Department of Justice, which previously resulted in charges against 21 other defendants.  The enforcement action also includes three additional recent guilty pleas by other defendants.  In addition, the Centers for Medicare & Medicaid Services, Center for Program Integrity (CMS/CPI) announced today that all appropriate administrative actions would be taken based on these charges.  As part of the announcement in April, CMS/CPI announced that it took administrative action against 130 DME companies that submitted over $1.7 billion in claims to the Medicare program. 

Today’s enforcement actions were led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section in conjunction with its Medicare Fraud Strike Force (MFSF), as well as the U.S. Attorney’s Offices for the District of New Jersey, Eastern District of Pennsylvania, Western District of Pennsylvania, Eastern District of New York, Western District of New York, District of Connecticut and District of Columbia.  The MFSF is a partnership among the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG.  In addition, IRS-Criminal Investigations (IRS-CI), Department of Defense-Defense Criminal Investigative (DoD-DCIS), Food and Drug Administration-Office of Inspector General (FDA-OIG), U.S. Postal Service-Office of Inspector General (USPS-OIG), the Medicaid Fraud Control Unit and other federal and state law enforcement agencies participated in the operation.

The charges and guilty pleas announced today continue to target corporate health care fraud involving fraudulent telemedicine companies and the solicitation of illegal kickbacks and bribes from health care suppliers in exchange for the referral of Medicare beneficiaries for medically unnecessary durable medical equipment and other testing.  The charges also involve individuals contributing to the opioid epidemic, including medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department.   According to the Centers for Disease Control, approximately 115 Americans die every day of an opioid-related overdose.

Today’s arrests and guilty pleas come one-year after the Department of Justice announced the formation of the Newark/Philadelphia Regional Medicare Fraud Strike Force, a joint law enforcement effort that brings together the resources and expertise of the Health Care Fraud Unit in the Criminal Division’s Fraud Section, the U.S. Attorney’s Offices for the District of New Jersey and the Eastern District of Pennsylvania, as well as law enforcement partners.  The Strike Force focuses its efforts on aggressively investigating and prosecuting complex cases involving patient harm, large financial loss to the public fisc, and the illegal prescribing and distribution of opioids and other dangerous narcotics.

“Physicians and other medical professionals who fraudulently bill our federal health care programs are stealing from taxpayers and robbing vulnerable patients of necessary medical care.  The medical professionals and others engaging in criminal behavior by peddling opioids for profit continue to fuel our nation’s drug crisis,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “The Department of Justice will continue to use every tool at our disposal, including data analytics and traditional law enforcement techniques, to investigate, prosecute, and punish this reprehensible behavior and protect federal programs from abuse.”

“As today’s takedown demonstrates, this Strike Force has produced precisely what we hoped it would – and by that I mean tangible results,” said U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania.  “We have brought together a wealth of resources, knowledge, and subject-matter expertise – that of health care fraud prosecutors, civil enforcement assistant U.S. attorneys, data analysts, and law enforcement agencies – all working to stop fraud, waste, and abuse within our federal health care programs and to stem the tide of illegal opioid distribution.  These are top priorities of the Department of Justice and my Office, and our focus in this area continues to pay off.”

“Under the law, healthcare professionals are obligated to exercise appropriate care and judgment in the manner in which opiates are prescribed and distributed in order to ensure that such substances are, in fact, ‘controlled,’” said U.S. Attorney James P. Kennedy Jr. of the Western District of New York.  “When such professionals abandon that obligation and instead engage in acts of fraud and deceit, they will be prosecuted.”

“As alleged, defendants charged in the Eastern District of New York used fraud and deceit to steal Medicaid and Medicare funds meant to protect our elderly and most vulnerable residents,” stated U.S. Attorney Donoghue of the Eastern District of New York.  “As this initiative demonstrates, we will continue to bring to justice those that defraud our nation’s health care programs.” 

“We continue to work closely with our law enforcement partners to identify, investigate and eliminate fraud, waste and abuse in the nation’s federal healthcare programs,” said Deputy Administrator and CPI Center Director Alec Alexander.  “In this case, CMS will take swift administrative action against providers responsible for fraudulent billings to federal healthcare programs.  CMS is committed to protecting vulnerable beneficiaries from exploitation and safeguarding taxpayer dollars.”

“The FBI does not care about your status in life, your professional standing, your level of income, or your personal connections when you break the law," said Assistant Special Agent in Charge Wayne Jacobs of the FBI’s Newark Field Office.  “If you try to scam the system, if you exploit your professional license just to pad your pockets, if you mortgage your morals just to inflate your bank account, you will only find yourself in deeper debt.  We are committed to protecting the public; we are intent on rooting out fraud and corruption; we are duty-bound to track down and arrest anyone who is breaking our federal laws.  Don’t be next.”

“Healthcare fraud is not a victimless crime—with unscrupulous providers preying on Medicare beneficiaries and taxpayers alike.  Especially insidious is the fraud committed by healthcare professionals who are trusted to provide needed, quality services to patients,”  said Special Agent in Charge Scott J. Lampert of HHS-OIG.  “With our law enforcement partners, our agency will continue to thoroughly investigate medical providers and others involved in healthcare fraud.”

“The physicians who chose to violate their oaths to “Do no harm” are nothing more than drug dealers wearing a white lab coat,” said Special Agent in Charge Susan A. Gibson of the Drug Enforcement Administration’s New Jersey Field Division.  “They have turned their backs on those most vulnerable.  We will continue to vigorously pursue these doctors who violate the faith and trust of those who need help.”

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Among those charged in the District of New Jersey are the following:

Elliot Loewenstern, 56, of Boca Raton, Florida, the vice president of marketing of purported call centers and telemedicine companies, pleaded guilty on Sept. 24, 2019, for his role in one of the largest health care fraud schemes ever investigated by the FBI and HHS-OIG and prosecuted by the Department of Justice, which resulted in charges in April 2019 against 24 defendants.   Loewenstern pled guilty to one count of conspiracy to defraud the United States and pay and receive health care kickbacks, and one count of solicitation of health care kickbacks.  Loewenstern was the Vice President of Marketing of PCS CC LLC and a marketer for Video Doctor USA (Video Doctor) and Telemed Health Group LLC (AffordADoc) (collectively, the Video Doctor Network).  In connection with his plea agreement, Loewenstern admitted causing the submission of over $424 million in fraudulent claims that resulted from the solicitation of illegal kickbacks and bribes in exchange for the referral of brace orders to brace providers.  In connection with his guilty plea, Loewenstern admitted that he and others agreed to solicit and receive illegal kickbacks and bribes from patient recruiters, brace suppliers and others in exchange for the arranging for doctors to order medically unnecessary orthotic braces for beneficiaries of Medicare and other insurance carriers.  The beneficiaries were contacted through an international telemarketing network that lured hundreds of thousands of elderly and/or disabled patients into a criminal scheme that crossed borders, involving call centers in the Philippines and throughout Latin America, Loewenstern stated.  Loewenstern admitted that many of these orders were written after only a short telephone call between the health care provider and the beneficiary, with whom the health care provider had no prior doctor-patient relationship.  In addition, Loewenstern admitted that he was aware that the owners and other executives of the Video Doctor Network schemed to defraud investors and others by making false and fraudulent representations that the Video Doctor Network was a legitimate telemedicine enterprise that made revenue of “$10 million per year” and “20 percent profit” from payments by beneficiaries who enrolled in a membership program and paid for the telemedicine consultations.  These statements were false because revenue was obtained by the Video Doctor Network through the receipt of illegal kickbacks and bribes, Loewenstern admitted.  In connection with his plea agreement, Loewenstern agreed to pay $200 million in restitution to the United States, as well as forfeit assets and property traceable to proceeds of the conspiracy to defraud the United States.  Loewenstern’s sentencing is set for Jan. 9, 2020, before U.S. District Judge Madeline Cox Arleo of the District of New Jersey, who accepted his plea.  Loewenstern was charged along with Creaghan Harry, 51, of Highland Beach, Florida, and Lester Stockett, 52, of Medellin, Colombia, in an indictment charging one count of conspiracy to defraud the United States and pay and receive health care kickbacks and four counts of health care kickbacks.  Stockett and Harry were separately charged with one count of conspiracy to commit money laundering.  Stockett, the Chief Executive Officer, previously entered a plea of guilty to one count of conspiracy to defraud the United States and one count of money laundering.  The case against Harry is pending.  Trial has not been set.  The case was investigated by FBI, HHS-OIG, and IRS-CI.  The case is being prosecuted by Acting Assistant Chief Jacob Foster and Trial Attorney Darren Halverson of the Criminal Division’s Fraud Section.

Joseph DeCoroso, M.D., 62, of Toms River, New Jersey, pleaded guilty for his role in a $13 million conspiracy to commit health care fraud and separate charges of health care fraud for writing medically unnecessary orders for durable medical equipment (DME), in many instances without ever speaking to the patients, while working for two telemedicine companies.  Sentencing is set for Jan. 8, 2020.  The case was investigated by FBI Newark and HHS-OIG.  The case is being prosecuted by Acting Assistant Chief Jacob Foster and Trial Attorney Darren Halverson.

Nelly Petrosyan, 56, of New York, New York, the owner and operator of orthotic brace suppliers in New York, New York, was indicted  on one count of conspiracy to defraud the United States and to pay and receive health care kickbacks and three counts of payment of health care kickbacks.  The charges result from a $5.6 million conspiracy in which Petrosyan offered and paid kickbacks and bribes to several purported telemedicine companies in exchange for completed doctors’ orders of medically unnecessary orthotic braces for Medicare beneficiaries.  Petrosyan and her coconspirators concealed the fraud by entering into sham contracts and producing false invoices characterizing the kickbacks and bribes as payments for “marketing.”  The investigation was conducted by FBI Newark and HHS-OIG.  The case is being prosecuted by Trial Attorney Darren Halverson.

Alice Chu, M.D., 62, of Fort Lee, New Jersey, was indicted on one count of conspiracy to commit health care fraud and four counts of health care fraud.  The charges stem from Chu’s alleged submission of false and fraudulent claims to Medicare and private insurance companies for services that were medically unnecessary, never provided, not provided as represented or not eligible for reimbursement.  Chu was allegedly induced by a financial incentive to order expensive and medically unnecessary lab tests that were paid for by Medicare.  The investigation was conducted by FBI Newark, HHS-OIG, DOD-DCIS and FDA-OIC.  The case is being prosecuted by Trial Attorney Rebecca Yuan of the Fraud Section.

Aaron Williamsky 59, of Marlboro, New Jersey, and Nadia Levit, 40, of Englishtown, New Jersey, owners of approximately 25 durable medical equipment companies, pleaded guilty on Sept. 18 and Sept. 25, respectively, for their participation in a health care fraud scheme related to their payment of kickbacks in exchange for doctors’ orders for medically unnecessary orthotic braces.  Levit’s conduct admittedly caused losses in excess of $120 million and Williamsky’s conduct admittedly caused losses in excess of $170 million.  Williamsky also pleaded guilty to a money laundering conspiracy related to his attempt to conceal at least $1.65 million of the proceeds of the fraud.  The case was investigated by FBI, HHS-OIG, and IRS-CI.  The case is being prosecuted by Assistant U.S. Attorneys Sean Sherman and Stephen Ferketic of the District of New Jersey.

Bernard Ogon, M.D., 46, of Burlington, New Jersey, pleaded guilty on Sept. 25 to one count of health care fraud conspiracy for his participation in a vast compounded medication telemedicine conspiracy.  As part of the conspiracy, Ogon admittedly signed prescriptions for compounded medications (that is, medications with ingredients of a drug tailored to the needs of a particular patient) without having established a doctor-patient relationship, spoken to the patient or conducting any medical evaluation.  Ogon often signed preprinted prescription forms—with patient information and medication already filled out—where all that was required was his signature.  Then, instead of providing the prescription to the patient, Ogon would return the prescriptions to specific compounding pharmacies involved in the conspiracy.  Ogon was paid $20 to $30 for each prescription he signed, and his participation in the conspiracy caused losses to health care benefit programs of over $24 million, including losses to government health care programs of over $7 million.  The case was investigated by FBI Newark and HHS-OIG.  The case is being prosecuted by Assistant U.S. Attorney Jason Gould of the District of New Jersey.

Joseph Santiamo, 64, of Staten Island, New York, a physician specializing in internal medicine and geriatrics was charged for allegedly conspiring to distribute and dispense controlled substances, including oxycodone, in exchange for sexual favors, and outside the usual course of professional practice and not for a legitimate medical purpose.  The case is being prosecuted by Assistant U.S. Attorney Brian Urbano of the District of New Jersey.

Yana Shtindler, 44, of Glen Head, New York; Samuel “Sam” Khaimov, 47, of Glen Head, New York; Alex Fleyshmakher, 33, of Morganville, New Jersey; and Ruben Sevumyants 36, of Marlboro, New Jersey were indicted in connection with a scheme at Prime Aid Pharmacies (located in Union City, New Jersey and Bronx, New York) that included: (a) paying illegal bribes and kickbacks to doctors and doctors’ employees in exchange for prescription referrals to Prime Aid; (b) billing health insurance providers for medications that were never actually provided to patients; and (c) opening new pharmacies and concealing the true ownership of those pharmacies to obtain lucrative contracts they otherwise would not have obtained.  The scheme of billing for medications that were never dispensed to patients was so egregious that Prime Aid received reimbursement payments of over $65 million for prescription medications that it never even ordered from distributors or had in stock.  In total, Prime Aid’s multiple schemes defrauded Medicare, Medicaid, and private insurers out of at least $99 million.  The case is being prosecuted by Assistant U.S. Attorney Joshua Haber of the District of New Jersey.

Eduard “Eddy” Shtindler, 36, the owner and operator of Empire Pharmacy in West New York, New Jersey, was charged by criminal complaint for paying bribes to a psychiatrist in Hudson County, New Jersey, to induce the doctor to send prescriptions to Empire.  On occasion, Shtindler secreted cash bribes in pill bottles that were delivered to the doctor.  In exchange for these bribes, the doctor steered patients to Empire pharmacy. In addition, starting in 2015, Empire – at Shtindler’s direction – perpetrated a fraudulent scheme to induce doctors to send expensive specialty medication prescriptions to Empire. Specialty medications often required “prior authorization” before being approved for reimbursement by Medicare, Medicaid, and some private insurance providers.  To receive prior authorization approval more quickly and successfully than any other pharmacies, Empire employees, including two pharmacists, repeatedly falsified prior authorization forms for medications for various conditions, including psoriasis and Hepatitis C. In total, Empire defrauded Medicare and Medicaid out of at least $2 million.  The case is being prosecuted by Assistant U.S. Attorney Joshua Haber of the District of New Jersey.

Matthew S. Ellis, 53, of Gainesville, Florida; Edward B. Kostishion, 59, Lakeland, Florida; Kyle D. Mclean, 36, of Arlington Heights, Illinois; Kacey C. Plaisance, 38, of Altamonte Springs, Florida; Jeremy Richey, 39, of Mars, Pennsylvania, and Jeffrey Tamulski, 46, of Tampa, Florida were indicted in connection with a genetic testing health care fraud scheme.  Kostishion, Plaisance, and Richey operated Ark Laboratory Network LLC (Ark), a company that purported to operate a network of laboratories that facilitated genetic testing.  Ark partnered with Privy Health Inc., a company that McLean operated, and another company to acquire DNA samples and Medicare information from hundreds of patients through various methods, including offering $75 gift cards to patients, all without the involvement of a treating health care professional.  Ellis, a physician based in Gainesville, served as the ordering physician who authorized genetic testing for hundreds of patients across the country that he never saw, examined, or treated.  These included patients from New Jersey and various other states where Ellis was not licensed to practice medicine. Through this process, Ellis, Kostishion, Plaisance, and McLean submitted and caused to be submitted fraudulent orders for genetic tests to numerous clinical laboratories.  These orders falsely certified that Ellis was the patients’ treating physician and, in many cases, contained false information indicating that a patient had a personal or family history of cancer, when, in fact, the patient had no cancer history whatsoever.  In 2018 alone, Medicare paid clinical laboratories at least approximately $4.6 million for genetic tests that Ellis ordered in this manner.  In addition, Kostishion, Plaisance, Richey and Tamulski entered into kickback agreements with certain clinical laboratories under which the laboratories would pay Ark a bribe in exchange for delivering DNA samples and orders for genetic tests.  The bribe payments were based on the percentage of Medicare revenue that the laboratories received in connection with the tests.  Among other things, Kostishion, Plaisance, Richey, and Tamulski concealed these kickback arrangements through issuing sham invoices to laboratories that purportedly reflected services provided at an hourly rate even though the parties had already agreed upon the bribe amount, which was based on the revenue the laboratories received.  In 2018, the clinical laboratories paid Ark at least approximately $1.8 in bribes.  The case is being prosecuted by Assistant U.S. Attorney Bernard Cooney of the District of New Jersey.

Among those charged in the Eastern District of Pennsylvania are the following:

Timothy F. Shawl, 60, of Garnet Valley, Pennsylvania, a medical doctor, was charged with five counts of unlawful distribution of controlled substances.  He allegedly wrote prescriptions for controlled substances that were outside the usual course of professional practice and not for a legitimate medical purpose.  Shawl allegedly wrote prescriptions for controlled substances for patients without seeing, treating or examining them.  Shawl allegedly prescribed hundreds of prescriptions for oxycodone to approximately 16 patients amounting to over 29,000 oxycodone tablets.  The FBI conducted the investigation.  The case is being prosecuted by Trial Attorney Debra Jaroslawicz of the Fraud Section.

Neil K. Anand, M.D., 42, of Bensalem, Pennsylvania, and Asif Kundi, 31, Atif Mahmood Malik, 34, and Viktoriya Makarova, 33, all of Philadelphia, Pennsylvania,  Anand, a medical doctor, Kundi and Malik, unlicensed foreign medical school graduates, and Makarova, a nurse practitioner, were indicted on one count of health care fraud and one count of conspiracy to distribute controlled substances.  The charges stem from the defendants’ alleged submission of false and fraudulent claims to Medicare, health plans provided by the U.S. Office of Personnel Management (OPM) and Independence Blue Cross (IBC).  The claims allegedly were  for “Goody Bags,” bags of medically unnecessary prescription medications that were dispensed by non-pharmacy dispensing sites owned by Anand.  In total, Medicare, OPM and IBC allegedly paid over $4 million for the Goody Bags.  Patients were allegedly required to take the Goody Bags in order to receive prescriptions for controlled substances. Malik and Kundi allegedly wrote prescriptions for controlled substances using blank prescriptions that were pre-signed by Anand or Makarova.  Anand and Makarova allegedly prescribed over 10,000 prescriptions for Schedule II controlled substances, of which over 7,000 were for oxycodone totaling over 634,000 oxycodone tablets.  The investigation was conducted by the FBI, HHS-OIG, USPS-OIG and OPM.  The case is being prosecuted by Trial Attorney Debra Jaroslawicz.

Twelve indictments were unsealed involving charges against 12 people for allegedly possessing oxycodone with intent to distribute.  The indictments charge that, from September 2016 through June 2019, the 12 defendants all presented forged prescriptions for oxycodone to various pharmacies outside of Philadelphia, in order to obtain oxycodone to distribute to others.  The defendants, all from Philadelphia, drove many miles to pharmacies in Mt. Laurel, New Jersey, Marcus Hook, Pennsylvania, Drexel Hill, Pennsylvania, and Kennett Square, Pennsylvania.  The defendants are charged with at least two, and up to 32, counts of possession with intent to distribute oxycodone.  The defendants are charged with having received anywhere from 6,300 milligrams to 135,000 milligrams of oxycodone.  According to the indictments, the defendants would often travel together to the pharmacies to fill their forged prescriptions.   Charged were:  Lamar Dillard, 37; Jermaine Grant, 29; Katrina Tucker, 32; Maurice Bertrand, 31; Courtney Brockenborough, 34; Alan Alexander Harrison, 29; Abdullah Howard, 23; Jonathan Metellus, 32; Clinton Monte Bullock; Crystal Coleman, 31; Marques Russell, 35, and Joseph Michael Simmons, 31.  One defendant, Metellus, is also charged with one count of health care fraud, for allegedly using his Medicaid card to purchase prescription drugs with a forged prescription.  The case was jointly investigated by the DEA’s Tactical Diversion Squad, HHS-OIG, the Pennsylvania Department of State’s Bureau of Enforcement and Investigations, the Chester County District Attorney’s Office and the Easttown Township Police Department.   The cases are being prosecuted by Assistant U.S. Attorneys David E. Troyer, Elizabeth Abrams, Joan Burnes and Mary Kay Costello of the Eastern District of Pennsylvania.

Search and seizure warrants are being executed today at approximately six different locations.  The search and seizures are being executed by law-enforcement officers from six federal agencies, including HHS-OIG, the FBI, USPS-OIG, DOL-OIG, DOD and OPM.

Among those charged in the Eastern District of New York are the following:

Anna Steiner, M.D., also known as “Hanna Wasielewska,” 63, of Valatie, New York, a licensed anesthesiologist, was charged in a superseding indictment for an alleged $17.4 million health care fraud scheme related to the payment of kickbacks in return for the ordering of DME, prescription drugs and diagnostic tests that were not medically necessary and not the result of an actual doctor-patient relationship.  Steiner was originally indicted on July 9, 2019.  The case was investigated by FBI and HHS-OIG.  The case is being prosecuted by Fraud Section Trial Attorney Andrew Estes.

Dr. Denny Martin, 46, of New York, New York, a licensed Neurologist, was charged in a complaint for an alleged healthcare fraud scheme related to the billing of doctor home visits where none actually occurred.  The case is being prosecuted by Assistant U. S. Attorney William P. Campos.
 
Andrew Barrett, 60, of New City, New York, and his former wife, pharmacy owner Phyllis Pincus, 58, of New City, New York, were charged by indictment with healthcare fraud and false claims in a scheme where they billed insurers for medications not actually dispensed to patients.  In 2016, Barrett was sentenced to 43 months’ incarceration upon his guilty plea to tax fraud and healthcare fraud in which he billed insurers for medications not actually dispensed to patients.  He was excluded from participation in the Medicare and Medicaid programs for over 20 years.  The case is being prosecuted by Assistant U.S. Attorney William P. Campos. 

Kevin McMahon, 31, of Seaford, New York, a registered professional nurse, was charged in a misdemeanor information with possession of fentanyl, which he obtained through the course of his employment at Nassau University Medical Center.  McMahon will plead guilty to the information pursuant to a plea agreement and has agreed to surrender his nursing license at the time of his plea.  The case is being prosecuted by Assistant U.S. Attorney Erin E. Argo.
 
Among those charged in the Western District of New York are the following:

Jillian Marks, 37, of Orchard Park, New York, a licensed nurse practitioner, was charged with obtaining controlled substances through fraud, wrongful use of government seal, and identity theft.   With access to the Neighborhood Health Center in the City of Buffalo’s internal computer databases, the defendant allegedly abused her position and illegally accessed the Allscripts prescription prescribing portal.  Marks allegedly prescribed approximately 2,000 dosage units of controlled substances such as Adderall and Oxycodone, in the names of health center patients, which she then had filled and picked up at local pharmacies.  At one point, Marks allegedly forged a letter from the DEA in order to appear “good” to her employer and allegedly used the DEA seal illegally.  The DEA conducted the investigation.  The case is being prosecuted by Assistant U.S. Attorneys Michael J. Adler and Misha A. Coulson of the Western District of New York.

Karen Melton, 45, of Cuba, New York, was charged with obtaining controlled substances through fraud.  Melton, a medical secretary working for a physician in Olean, New York, was not licensed to prescribe controlled substances.  However, Melton allegedly used her access within the office to issue fraudulent prescriptions in her own name in both paper and electronic form.  The prescriptions were allegedly issued without a legitimate medical purpose.  Between September 2016 and May 2019, Melton allegedly issued 59 fraudulent prescriptions for controlled substances, including hydrocodone.  The DEA conducted the investigation.  The case is being prosecuted by Assistant U.S. Attorneys Michael J. Adler and Misha A. Coulson.

Among those charged in the District of Connecticut are the following:

Philippe R. Chain, M.D., has entered into a civil settlement agreement with the U.S. Attorney’s Office for the District of Connecticut, in which he will pay $300,000 to resolve allegations that he violated the False Claims Acts.  Chain, who currently practices medicine in Florida, previously practiced medicine in Connecticut and performed telehealth services from Connecticut for a telemedicine company located in Las Vegas, Nevada.  The telehealth services Chain provided involved prescribing compounded medications to TRICARE beneficiaries. TRICARE is the federal health care program for active duty military personnel, retirees, and their families.  The government alleges that Chain caused pharmacies to submit false claims for compounded medications to TRICARE by issuing or approving prescriptions which were invalid, because Chain did not speak with or examine the patients in question and did not have an established physician-patient relationship with them, in exchange for compensation paid to Chain.  This matter was investigated by the U.S. Department of Defense, Office of Inspector General,  Defense Criminal Investigative Service.  The case is being prosecuted by Assistant U.S. Attorney Richard M. Molot of the District of Connecticut.

Among those charged in the Western District of Pennsylvania are the following:

Emilio Ramon Navarro, M.D., 58, of Coal Center, Pennsylvania, was charged with unlawfully dispensing controlled substances and health care fraud.  Counts 1 – 28 of the Indictment allege that from April 2018 until April 2019, Navarro unlawfully distributed Oxymorphone and Oxycodone, Schedule II substances, to a person in return for sexual favors, either physically or by electronic communications, outside the usual course of professional practice and not for a legitimate medical purpose.  Navarro is also charged in Count 29 with health care fraud for causing fraudulent claims to be submitted to Medicaid for payments to cover the costs of the unlawfully prescribed controlled substances.  This case was investigated by the Western Pennsylvania Opioid Fraud and Abuse Detection Unit which includes: FBI, HHS-OIG, DEA, IRS-CI, Pennsylvania Office of Attorney General - Medicaid Fraud Control Unit, Pennsylvania Office of Attorney General – Bureau of Narcotic Investigations, USPS, Veterans Affairs-OIG, FDA-CI, OPM-OIG, and the Pennsylvania Bureau of Licensing.  Assistant U.S. Attorneys Robert S. Cessar and Mark V. Gurzo are prosecuting the case.  

Among those charged in the District of Columbia are the following:

Hope Falowo, a personal care aide, was charged by information with one count of healthcare fraud for her role in a $400,000 fraud scheme where she would bill Medicaid in the District of Columbia for services she never provided.  The case is being prosecuted by Counsel to the Chief of the Health Care Fruad Unit Amy Markopoulos.

Nkiru Uduji, a personal care aide, pleaded guilty to one count of health care fraud conspiracy charged in an August 2019 Information.   The charges stem from Uduji’s role in a $600,000 fraud scheme in which she billed for more than 24 hours in a day, for services that were not rendered, and for services that were procured by kickbacks.  The case is being prosecuted by Counsel to the Chief of the Health Care Fruad Unit Amy Markopoulos.
 
A complaint, information or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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