Northern District of Ohio
Press releases recorded for this federal judicial district.
Ohio Man Sentenced for Tax Evasion, Money Laundering and Operating an Illegal Gambling BusinessRead the Press Release
An Ohio man was sentenced to over seven years in prison today for tax, money laundering and gambling crimes arising out of his ownership and operation of illegal gambling businesses and related misconduct.
According to court documents and statements made in court, from 2009 through 2022, Steven Saris, 49, of Canton, Ohio, owned and operated multiple illegal gambling businesses in Northeast Ohio — including Café 62, Lucky’s, Winner’s World, Spin City and another business in Springfield, Ohio — as well as in Florida. Saris concealed his involvement in and income from these businesses by having others serve as nominee owners, and by destroying and directing others to destroy business records.
For tax year 2015, Saris filed a false tax return that did not report more than $1.4 million in income he received from his illegal gambling businesses. For tax years 2016 through 2021, Saris did not file tax returns or pay all the tax that he owed despite earning more than $9 million in income from his gambling businesses. During that time, Saris made only two nominal payments to the IRS in 2018 when he filed an application for an extension of time to file his 2017 return. Saris used his proceeds from the businesses to gamble millions at legal casinos and to acquire and renovate at least two residential properties located in Canton, Ohio.
Saris’ conduct caused a tax loss of $2,823,391.
In July 2018, law enforcement executed search warrants at multiple illegal gambling businesses and associated locations in Northeast Ohio. Following those search warrants, Saris made false statements to law enforcement. At the same time, Saris continued operating the illegal gambling businesses and did not disclose that to law enforcement. In August 2022, law enforcement executed a court authorized search warrant at Saris’ residence and for his cellphone. Upon learning of the search warrant for his cellphone, Saris told law enforcement that he did not know where it was located. Law enforcement recovered Saris’ cellphone from the water tank of a toilet in Saris’ residence.
In addition to his prison sentence, U.S. District Judge Donald C. Nugent for the Northern District of Ohio ordered Saris to serve three years of supervised release and pay $2,823,391 in restitution to the United States.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio made the announcement.
IRS Criminal Investigation; the Stark County, Ohio, Prosecutor’s Office; the U.S. Department of Treasury Office of Inspector General; Homeland Security Investigations; the Ohio Casino Control Commission and the Ohio Organized Crime Investigations Commission, Major Crimes Task Force investigated the case.
Trial Attorneys Sam Bean and Hayter Whitman of the Justice Department’s Tax Division and Assistant U.S. Attorney David Toepfer for the Northern District of Ohio prosecuted the case.
U.S. Attorney’s Office Kicks Off Gun Safety Initiative at Sept. 19 ProgramRead the Press Release
CLEVELAND – To help keep children, teens, and communities safe, the U.S. Attorney’s Office (USAO) for the Northern District of Ohio has launched an awareness and education initiative to inform the public about the importance of securing firearms and storing them safely. As part of this initiative, the USAO is partnering with the Richmond Heights Police Department to present an information session, “Safe Gun Storage Saves Lives,” Thursday, Sept.19, from 6-7:30 p.m., at the Richmond Heights Community Center, 27285 Highland Rd., Richmond Heights, OH 44120.
The City of Richmond Heights will host the program, but residents of all communities are invited to attend. Topics include data and trends regarding firearms-related accidents and self-imposed harm, focusing on children and teens in particular; the connection between these tragedies and unsafe firearms-storage practices; the effects that such tragedies have on both individual families and the broader public; a gun lock demonstration and distribution; and steps to help prevent firearms-related tragedies by following and encouraging safe firearms-storage practices.
The program features several speakers: U.S. Attorney Rebecca Lutzko for the Northern District of Ohio; firearms safety advocate Michelle Bell, the founder of M-Pac Cleveland, a local organization that aims to connect and support families affected by gun accidents and violence; MetroHealth Injury Prevention and Outreach Coordinator Anthony Zalewski, RN; Richmond Heights Police Chief Calvin Williams; and Richmond Heights Mayor Kim Thomas.
As part of the program, local police officers will distribute free gun locks; attendees will not need to provide any personal information to receive one. Officers will also exhibit other types of safe storage devices, demonstrate how to use them, and individually discuss safe storage options with attendees.
“When you make the choice to own a firearm, you owe it to your neighbors to do so responsibly. As a whole, our community must do a better job to ensure that we store firearms in a safe manner, where a curious child or a despondent adolescent cannot readily access them. In April, a three-year-old child in Brunswick died from a gunshot wound after he found a gun in his own home, and accidentally discharged it while playing with it. Just a month later, in May, a two-year-old toddler in Euclid similarly died when he accidentally shot himself after he found a firearm in his home. And just last week, a five-year-old boy in Utah died after—once again—finding his parent’s gun and accidentally shooting himself. Every one of these tragedies could have been prevented,” said U.S. Attorney Rebecca Lutzko for the Northern District of Ohio. “Instead, these children—and the thousands of people of all ages who use firearms to take their own lives each year—are gone, and their families’ lives are irrevocably changed. In launching this initiative, our goal is to protect children, at-risk teens, and young adults from grave danger in homes where firearms are present. Our kids’ safety is everyone’s joint responsibility.”
The Safe Storage campaign’s message coincides with National Suicide Prevention Month, recognized annually each September by the National Institute of Mental Health. The number of firearm-related suicides rose nationally by 20% across the population from 2012 to 2022. The highest increases were found among younger people, according to fatal injury data from the Centers for Disease Control (CDC).
The risk of accidents also increases when firearms are easy to find and access. From 2003 to 2021, 85% of children fatally injured were located at a house or apartment, and 56% of incidents occurred in their own homes, according to the CDC report “Unintentional Firearm Injury Deaths Among Children and Adolescents Aged 0-17 Years.” More than 70% of firearms used were stored loaded, and nearly 80% of firearms were stored unlocked and easily found on a bed, under a pillow, under a mattress, or inside or on top of a nightstand, according to the report.
“We’re calling on our community partners and the public to help us spread awareness of these largely preventable accidents and instances of self-harm,” said U.S. Attorney Lutzko. “Much like seatbelt education helps to save lives of those involved in car accidents, spreading the word about safe storage will help save lives of children, teens, and young adults, who we have a special duty to protect. Our goal is to amplify the message of responsible firearm ownership through this community-centered, public-safety strategy.”
The USAO has posted on its website a host of free community resources discussing safe storage practices and providing tools for community members to spread the word about safe storage practices and help encourage them. Among the items included are bulletin board flyers, adult and child’s safety pledge certificates, and owners’ firearms safety manuals. Visit justice.gov/usao-ndoh/safe-gun-storage to view them. The public is also encouraged to follow the USAO on Facebook (@usaondoh) and X (@NDOHnews) to reshare safe gun storage tips and information throughout the coming weeks.
Additional safe storage community programs are slated to be announced.
Ohio Man Sentenced to Prison After Pleading Guilty to Threatening to Kill Law Enforcement OfficersRead the Press Release
TOLEDO, Ohio – Aron McKillips, 30, of Sandusky, Ohio, was sentenced to 41 months in prison by Judge James G. Carr, after pleading guilty to interstate communication of threats and unlawful possession of a machine gun.
McKillips pleaded guilty to the offenses in court on April 9, 2024. According to court documents, from September 2021 to July 2022, McKillips made at least five online threats to harm or kill law enforcement officers. In one such threat, he submitted a photo he took from his residence while aiming a semi-automatic rifle at an officer who was parked in a police vehicle further down the street who was there to assist residents on an unrelated matter.
Additionally, McKillips unlawfully possessed a machine gun, specifically, a drop-in auto sear that could convert an AR-15 semi-automatic rifle into a fully automatic machinegun. Expert testing confirmed that the sear allowed multiple rounds to be fired with a single pull of the trigger.
The investigation preceding the indictment was conducted by the FBI Cleveland Division-Toledo Office. This case was prosecuted by Assistant U.S. Attorney Gene Crawford for the Northern District of Ohio.
If you witness threatening behavior toward members of law enforcement, visit tips.fbi.gov/home to submit a tip.
Pennsylvania Man Pleads Guilty to Traveling Across State Lines for Sexual Exploitation of a MinorRead the Press Release
AKRON, Ohio – Soumya Rudra, 41, of Whitehall, Pennsylvania, has pleaded guilty to traveling across state lines to engage in illicit sexual conduct with a minor and to possession of child sexual abuse materials (CSAM), also referred to as child pornography.
According to court documents, Rudra met the 14-year victim on a dating game app called “Kiss Kiss.” He then messaged her via Snapchat text and video calls throughout several months. Rudra drove more than 400 miles from Pennsylvania to Ohio in November 2023 to meet the victim. He transported her to a hotel where he proceeded to engage in criminal sexual activities. Investigators also discovered CSAM involving other minors on his electronic devices which were recovered at the hotel room.
Sentencing is scheduled for Dec. 11, 2024. Rudra faces a maximum penalty of 30 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The investigation was conducted by the FBI, Canton Field Office and the Wayne County Sheriff’s Office. Assistant U.S. Attorney Toni Beth Schnellinger Feisthamel for the Northern District of Ohio prosecuted the case.
To report child exploitation, please visit cybertipline.org, or call 1-800-843-5678, 24 hours a day, 7 days a week.
Ohio Man Sentenced to more than 7 years in Prison for Possession and Intent to Distribute Meth and FentanylRead the Press Release
AKRON, Ohio - Dion Dejournett, 29, of Akron, was sentenced to 90 months in prison by U.S. District Judge Bridget Meehan Brennan, after pleading guilty to two counts of possession of controlled substances with intent to distribute fentanyl and methamphetamine, and one count of possession of firearms to further the crime of drug trafficking. Dejournett was ordered to serve five years of supervised release following release from prison and will also forfeit drug-related assets including four pistols, a semi-automatic rifle and more than $6,000.
According to court documents, in June 2023, the Akron Police Department (APD) executed a search warrant at Dejournett’s apartment. Methamphetamine and fentanyl were recovered throughout the master bedroom, hidden in a closet, drawers, and under the bed, including fentanyl in plain sight on top of a dresser. Packaging materials, cutting agents, and a digital scale were also recovered. Numerous firearms, including several pistols and a semi-automatic rifle, were found at his residence and confiscated. APD later found additional fentanyl on Dejournett following his arrest. Laboratory testing confirmed that police seized a total of 116.39 grams of mixtures and substances containing fentanyl and 1,460.51 of mixtures and substances containing methamphetamine.
The investigation preceding the indictment was conducted by the Akron Police Department and the FBI.
The case was prosecuted by Assistant U.S. Attorney David Toepfer for the Northern District of Ohio.
If you have information about the drug-related manufacture, distribution or trafficking of controlled substances, submit an anonymous tip at dea.gov/submit-tip.
Ohio Man Sentenced for Dumping 7,000 Gallons of Hazardous Substance into Scioto River that Killed Thousands of FishRead the Press Release
TOLEDO, Ohio - Mark Shepherd, age 72, of Kenton, Ohio, has been sentenced to 12 months of probation, a $5,000 fine, and 150 hours of community service by U.S. Magistrate Judge Darrell A. Clay, after pleading guilty to violating the Clean Water Act by dumping pollutants and hazardous substances into waterways that killed thousands of fish in the Scioto River. He was also ordered to pay $22,508.60 to the Ohio Division of Wildlife.
According to court documents, on April 17, 2021, Shepherd discharged approximately 7,000 gallons of a hazardous, ammonia-containing substance into the Scioto River near Kenton, Ohio. The substance originated from Shepherd’s business facilities—Cessna Transport Inc. and A.G. Bradley Inc.—which he owned and operated in the Northern District of Ohio.
Local fisherman in Hardin County originally reported the fish kill in the area which is routinely used for recreational fishing. The Ohio Department of Natural Resources determined that the discharge killed 43,094 fish, including black bass, flathead catfish, sunfish, and minnows, valued at more than $22,000. The contaminants flowed approximately 18 miles downstream from where Shepherd illegally dumped it.
The fish kill led to concerns from wildlife officials who noted that bald eagles use the river as a food source. Eagle breeding pairs are known to build nests near the river to feed on fish. The concern has roots in history which showed that fish from contaminated waterways can poison animals who consume it. In the 1940s, the DDT insecticide used to control mosquitos and other insects, washed into waterways and contaminated fish. Bald eagles who fed on the fish were poisoned. The resulting decline in their numbers threatened the species with extinction. Bald eagles are no longer listed as an endangered species but remain protected under the Migratory Bird Treaty Act and the Bald and Golden Eagle Protection Act which prohibits killing, selling, or otherwise harming eagles, their nests or eggs. Officials continue to monitor the affected river area for harm to wildlife.
The case was investigated by wildlife officers with the Ohio Department of Natural Resources, the Ohio Attorney General’s Office-Environmental Enforcement Unit, the Ohio Environmental Protection Agency, the Ohio Bureau of Criminal Investigation, and the U.S. Environmental Protection Agency.
This case was prosecuted by Assistant U.S. Attorney Matthew Simko for the Northern District of Ohio.
If you have information or see activity that you believe is a potential or immediate environmental problem, please call the Ohio EPA 24-hour Hotline at 800-282-9378 or the U.S. EPA Emergency Number at 800-424-8802.
Commercial Trucker Who Transported Narcotics from Texas to Ohio Pleads GuiltyRead the Press Release
YOUNGSTOWN, Ohio – Javier Eduardo Gutierrez-Quintana, 47, of El Paso, Texas, has pleaded guilty to possession of 20 kilograms of cocaine with intent to distribute.
According to court documents, on May 31, 2024, Ohio State Highway Patrol (OSHP) officers encountered the defendant who was driving a commercial vehicle bearing a Texas license plate and registration. A second OSHP officer deployed a K-9 near the defendant’s vehicle, and it subsequently gave a positive signal for the odor of narcotics. The defendant consented to a search of the vehicle. Three black duffle bags containing 20 blue-taped packages were found during the search. Upon the discovery, Gutierrez-Quintana admitted to investigators that he knowingly transported 20 kilograms of narcotics from El Paso, Texas to the Youngstown, Ohio area, where he was scheduled to meet with an unknown person (or persons) and deliver the packages. Laboratory testing confirmed that the packages contained cocaine.
Sentencing is scheduled for Nov. 22, 2024. Gutierrez-Quintana faces a maximum penalty of 20 years in prison for possessing narcotics with intent to distribute. He also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The investigation was conducted by the DEA and the Ohio State Highway Patrol. Assistant U.S. Attorney David Toepfer for the Northern District of Ohio prosecuted the case.
If you have information about the drug-related manufacture, distribution or trafficking of controlled substances, submit an anonymous tip at dea.gov/submit-tip.
Websites Seized in Multi-national, Ransomware TakedownRead the Press Release
The U.S. Attorney’s Office for the Northern District of Ohio filed a complaint against a defendant known as “Brain,” believed to be based in Europe, and who is responsible for building a multi-national ransomware organization known as Radar. The complaint sought injunctive relief to prevent additional attacks on victims from occurring and authorized disruption of the ransomware by disabling domain names, servers and IP addresses associated with the criminal enterprise. Related ransomware domain names and servers in the United Kingdom and Germany were also disabled in a transnational coordinated effort.
Victims include businesses and organizations located in more than three dozen countries throughout the world. Among the victims in the northern district of Ohio were a trade union and a manufacturing company.
The complaint alleges that the defendant developed a highly sophisticated and destructive form of software, known as ransomware, and used it to engage in wire fraud and unlawful interception of electronic communications. This was accomplished by infecting victims’ computers which locked them out from accessing their own files. Ransomware administrators then demanded the victims to pay a ransom in order to unlock the files. Failure to pay the ransom could result in selling the victims’ data to nefarious third parties.
According to the FBI, monetary losses incurred by individuals and organizations are estimated to be in the millions. This is an ongoing investigation and the extent of the reach and damage inflicted is yet to be determined.
This case was investigated by the FBI Cleveland Division; the Bavarian State Criminal Police Office in Germany; the National Crime Agency of the United Kingdom; and the Prosecutor’s Office of Bamberg, Germany.
The case is being handled by Assistant U.S. Attorney Brendan Barker for the Northern District of Ohio.
To report ransomware attacks, visit ic3.gov or call 1-800-CALL-FBI (1-800-2255-324).
Ohio Man Sentenced to 16 Years in Prison for Possession and Distribution of Child Sexual Abuse MaterialsRead the Press Release
AKRON, Ohio – David Walker, 39, of Akron, was sentenced to 16 years in prison by U.S. District Judge Bridget Meehan Brennan, after pleading guilty to receipt, possession and distribution of child sexual abuse materials (CSAM), also referred to as child pornography. Walker was also ordered to serve 15 years of supervised release after serving his prison sentence.
Walker was an active participant on BitTorrent, an internet service that allows users to download content such as images and videos easily. It utilizes each user’s computer as a mini-server to facilitate computer-to-computer file sharing among users throughout the world. The technology allows thousands of people to download the same files without crashing the system which has made BitTorrent a commonly used protocol to share illegal files such as CSAM.
According to court documents, Walker received and distributed nearly 400 video files known to contain CSAM and exploitation of children. A computer tablet with CSAM files was recovered during the execution of a federal search warrant of his residence. Files were described to include male and female children of various ages under 17 including infants and toddlers. According to the National Center for Missing and Exploited Children, some of the victims were identified on the video files found in Walker’s seized computer tablet.
The investigation preceding the indictment was conducted by the FBI, the Hamilton County Sherriff’s Office, and the Brunswick Police Department.
The case was prosecuted by Assistant U.S. Attorney Yasmine Makridis for the Northern District of Ohio.
To report child sexual abuse, please visit cybertipline.org, or call 1-800-843-5678, 24 hours a day, 7 days a week.
Federal Court Permanently Prohibits Ohio Physician from Prescribing Opioids and Imposes $4.7M Judgment for Alleged Unlawful Opioid DistributionRead the Press Release
CLEVELAND – A federal court prohibited a Sandusky, Ohio-area physician from prescribing opioids and other controlled substances and ordered him to pay $4.7 million in a case alleging violations of the Controlled Substances Act (CSA) and the False Claims Act (FCA).
In a civil complaint filed in August 2018, the United States alleged that Gregory Gerber, MD, age 59, of Port Clinton, Ohio, who operated an office in Sandusky, unlawfully issued prescriptions without a legitimate medical basis for opioids and other controlled substances in violation of the CSA and the FCA. The complaint alleged that one patient died from an overdose of fentanyl patches prescribed by Gerber. The complaint further alleged that Gerber received kickback payments from a drug manufacturer as part of a scheme to unlawfully prescribe Subsys, a powerful opioid drug containing fentanyl, in violation of the FCA.
“Medical professionals who knowingly facilitate the abuse of opioids violate their legal obligations,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division. “The department will pursue justice against anyone who seeks to profit from unlawfully prescribing opioids.”
“All doctors must follow the law when prescribing opioids — their patients, and the public more generally, rely on such compliance,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Gerber’s patients trusted him. But instead of safeguarding that trust, Gerber accepted payments from a drug company in exchange for prescribing dangerous, addictive drugs and wrote thousands of prescriptions that were not for a legitimate medical purpose. Our office will use all available tools — civil and criminal — to fight the opioid epidemic and protect patients and their families so that doctors like Gerber do not profit from abusing our healthcare system.”
“Dr. Gerber betrayed the trust placed in him and willfully violated his oath to protect the public and the provisions of the Controlled Substance Act,” said Special Agent in Charge Orville O. Greene of the Drug Enforcement Administration (DEA)’s Detroit Field Division. “His reckless behavior contributed to the opioid crisis gripping the nation and brought suffering to many communities in northern Ohio. This ruling will hopefully deter other medical practitioners who are inclined to put profit over patient health and safety.”
“Health care professionals who exploit opioid addiction for financial gain do so at the risk of endangering their patients and undermining critical public health efforts to address the opioid epidemic,” said Deputy Inspector General Christian J. Schrank of Investigations of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG). “Working with our law enforcement partners, we will continue to work to ensure that bad actors are held accountable for such schemes in order to protect both patients and taxpayers.”
“Ignoring the law by distributing prescriptions to opioids for illicit profit harms the communities that physicians are meant to help,” said Executive Assistant Director Michael D. Nordwall of the FBI’s Criminal, Cyber, Response and Services Branch. “The FBI is glad that Gerber will not be able to prescribe controlled substances ever again.”
Gerber agreed to a consent judgment to settle the allegations in the complaint. The order entered by the court permanently prohibits Gerber from prescribing opioids or other controlled substances, permanently prohibits him from managing, owning or controlling any entity that dispenses controlled substances and requires Gerber to pay approximately $4.7 million under the FCA. Gerber was also sentenced in March to 42 months in prison and one year of home confinement in a related criminal case brought by the United States Attorney’s Office for the Northern District of Ohio.
U.S. District Judge Jeffrey J. Helmick entered the judgment and permanent injunction in U.S. District Court for the Northern District of Ohio. In August 2018, Judge Helmick issued a temporary restraining order and preliminary injunction prohibiting Gerber from prescribing opioids or other controlled substances.
The DEA, FBI, HHS-OIG, Ohio Attorney General’s Medicaid Fraud Control Unit, State of Ohio Board of Pharmacy and State Medical Board of Ohio investigated the case.
Assistant U.S. Attorneys Patricia Fitzgerald and Angelita Cruz Bridges for the Northern District of Ohio and Trial Attorney Scott B. Dahlquist of the Civil Division’s Consumer Protection Branch handled the case.
The claims made in the complaint are allegations that the United States would need to prove by a preponderance of the evidence if the case proceeded to trial.
View Consent Decree
U.S. Attorney’s Office Takes Part in “National Night Out” Aug. 6Read the Press Release
CLEVELAND - The U.S. Attorney’s Office (USAO) for the Northern District of Ohio will join dozens of community organizers and law enforcement partners to participate in “National Night Out” on Tuesday, Aug. 6, 2024, from 5-8 p.m. at Halloran Park, 3550 West 117th Street, Cleveland, 44111. The family-friendly event is free and open to the public. The event is held on the first Tuesday of August each year and is an opportunity for community members to meet and talk with those who keep our communities safe. Visitors to this outdoor event may take part in games and activities, pick up giveaways and snacks, and learn about the importance of safety in the community.
USAO personnel will be on hand to interact with and answer questions from members of the community and to highlight awareness about law enforcement initiatives such as Elder Financial Abuse scams.
“National Night Out has rallied neighborhood residents, law enforcement, and community leaders in the common goal of strengthening relationships to help prevent, deter, and address crime in our local community,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Our Office is proud to stand alongside our law enforcement colleagues to engage with our community members, support safer homes and streets, and work together to drive out crime.”
As the chief federal law enforcement official in the Northern District Ohio, it is the U.S. Attorney’s job to help coordinate a comprehensive law enforcement and crime prevention strategy for Northern Ohio. The office works with federal, state and local partners on wide-ranging investigations of groups and people that span county, state, and international boundaries.
National Night Out was established in 1984 by the Bureau of Justice Assistance through the U.S. Department of Justice’s Office of Justice Programs. The program is administered by the National Association of Town Watch, a nationwide non-profit organization.
Coordinated by local law enforcement and trained volunteers, National Night Out provides communities from coast to coast the chance to bring police and neighbors together under positive circumstances such as cookouts, festivals, parades, safety demonstrations, youth events, visits from emergency personnel, and more. National Night Out sends a message that neighbors are united and working together to keep their communities and each other safe.
For more information about law enforcement initiatives and programs, contact District Law Enforcement Coordinator Tom Weldon at 216-622-3600, or [email protected].
Six Plead Guilty to Pandemic Unemployment Assistance FraudRead the Press Release
CLEVELAND – Six people have pleaded guilty in a 33-count indictment with illegally obtaining nearly $3,000,000 in Federal Pandemic Unemployment Assistance (PUA) benefits using other people’s personal identifying information. The PUA program is overseen by the U.S. Department of Labor and was created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 to provide temporary benefits to workers who lost work for COVID-19-related reasons.
According to court documents, from March 2020 to August 2021, the defendants, Clarissa Cheney, 30, of Cleveland Heights; Kevin Gilmore, 38, of Beachwood; Tiara Henderson, 37, of Lakewood; Ladessa Battle, 29, of South Euclid; Lynard Mitchell, 39, of South Euclid; and Marcelys Jones, 29, of Cleveland Heights, submitted fraudulent applications for PUA benefits to the California Employment Development Department (EDD) and other state workforce agencies around the country.
“The pandemic created unprecedented financial challenges for millions of Americans who were unable to work because their employers were forced to cut back business operations or close entirely. PUA was intended to assist those individuals—workers in dire need of financial support while unemployed—yet these defendants stole millions of dollars from that program,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “These guilty pleas demonstrate our office’s commitment to prosecute and hold criminally responsible those who try to scam federal relief programs, waste our tax dollars, and steal the identities of others. We thank our law enforcement partners for helping us hold these defendants responsible for their crimes.”
The defendants falsified application details, such as employment history and residency, to appear eligible for PUA benefits. As a result, California EDD and other agencies approved nearly $3,000,000 in unemployment insurance benefits in the defendants’ names, and those of other individuals. The benefits were pre-loaded onto bank-issued debit cards and sent through the U.S. mail. After receiving the debit cards, some of the defendants used the cards to make cash withdrawals at various ATMs in the Northern District of Ohio.
“The deliberate and conniving actions to cheat a program designed to assist people who were affected by the Covid-19 pandemic is inexcusable,” said FBI Special Agent in Charge, Greg Nelsen. “Their actions, including exploiting the identities of a multitude of individuals, will have a profound and long-lasting impact. The FBI and our partners will continue to identify and investigate those who commit pandemic-related fraud and seek justice for the victims."
The defendants are scheduled to be sentenced in September and October 2024 and face a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.“The defendants engaged in an unemployment insurance (UI) fraud scheme that targeted multiple state workforce agencies. These individuals conspired to file fraudulent UI claims in the names of other individuals, diverting vital taxpayer resources away from unemployed American workers in dire need of UI benefits. These guilty pleas affirm the U.S. Department of Labor, Office of Inspector General’s commitment to protecting the integrity of the UI program. We are grateful for our many law enforcement partners, including the U.S. Attorney’s Office,” said Dana Johnson, Acting Special Agent in Charge, Great Lakes Region, U.S. Department of Labor, Office of Inspector General.
The Department of Labor, Office of Inspector General, and the FBI investigated this case. This case was prosecuted by Assistant U.S. Attorneys Alejandro Abreu and Scott Zarzycki.
Ohio Medical Doctor Sentenced to Prison for Health Care Fraud SchemeRead the Press Release
TOLEDO – Ankita Singh, 42, formerly of Maumee, Ohio, was sentenced to 26 months in prison by U.S. District Judge Jack Zouhary, for her role in a durable medical equipment (DME) scheme that defrauded the U.S. Department of Health and Human Services Medicare Program. She was also ordered to pay restitution in the amount of $4,470,931.02, serve two years of supervised release, and pay a special assessment fee of $600.
On Feb. 29, 2024, a jury found Singh guilty of six counts of health care fraud for signing false orders for orthotic braces, that patients never requested and did not need, as part of a DME scheme.
Beginning in 2019, Singh worked as an independent contractor for at least two companies, to purportedly provide “telehealth services,” and was paid a fee to conduct patient consultations. The consultations never took place. Telemarketers would cold call Medicare beneficiaries and tell them that orthotic braces would be provided to them at no cost. The beneficiaries were not previously Singh’s patients and she never spoke to them. Singh never saw them in person and did not conduct a telehealth visit. The telemarketers would prepare orders with the beneficiaries’ names, Medicare numbers, and purported diagnosis to support a false diagnosis that the braces were medically necessary. Orders were then electronically sent to Singh to affix her signature and certify that she was treating the Medicare beneficiary and affirm that the brace was medically necessary. Singh signed more than 11,000 prescriptions for orthotic braces for approximately 3,000 Medicare beneficiaries with whom she had no patient-physician relationship, and frequently ordered multiple braces for each patient, without ever having examined them.
As a result of Singh’s false orders, more than $8 million was billed to Medicare for orthotic devices that were not medically necessary. In all, Medicare paid approximately $4.47 million in claims for the fraudulent prescriptions that Singh signed.
This case was prosecuted by Assistant U.S. Attorneys Gene Crawford and Angelita Cruz Bridges for the Northern District of Ohio. The case was investigated by the U.S. Department of Health and Human Services (HHS) - Office of Inspector General, and the FBI.
To report suspected health care fraud, waste, abuse, or mismanagement of HHS programs, visit https://oig.hhs.gov/fraud/report-fraud/contact/ or call 1-800-447-8477.
Toledo Man Pleads Guilty to Robbery of Postal Employee at GunpointRead the Press Release
TOLEDO – Michael Bush, 22, of Toledo, Ohio, has pleaded guilty to robbery of mail, money, or other property of the United States, stealing mail collection box keys, and mail theft. The violations took place while a United States Postal Service (USPS) letter carrier was on a delivery route in July 2023.
According to court documents, an individual later identified as Bush, approached the carrier while they sat in a parked USPS truck on Ryewyck Drive in Toledo, Ohio. He grabbed keys for both the mail truck and the collection box and robbed the carrier at gunpoint of their personal cellphone and a USPS parcel scanner. A witness who observed the incident provided a description of the suspect to investigators. The Toledo Police Department (TPD) recovered surveillance video of the robbery and identified the vehicle involved in the theft as being registered to Michael Bush.
A large, black garbage bag containing U.S. Mail was recovered during a federal search warrant executed by the United States Postal Inspection Service (USPIS) and the TPD at Bush’s residence. Nearly 200 mail theft victims were identified. Inspectors also recovered several firearms and rifle magazines. The vehicle identified in the surveillance video was later recovered at a separate location where Bush’s aunt resides. Additionally, images recovered on Bush’s cellphone show him posing with large stacks of U.S. currency and firearms.
Update-Nov. 18, 2024:
Bush was sentenced on Nov. 18, 2024, to 66 months in prison by U.S. District Judge Jack Zouhary for robbery of mail, money or other property of the United States, stealing mail collection box keys, and mail theft. Restitution amount to be determined at a later date.
The case was prosecuted by Assistant United States Attorney Frank H. Spryszak for the Northern District of Ohio. The investigation preceding the indictment was a collaborative effort conducted by the United States Postal Inspection Service and the Toledo Police Department.
About the United States Postal Inspection Service (USPIS)
USPIS is the law enforcement branch of the United States Postal Service. To report mail theft or other crimes committed through, or towards, the United States Postal Service, call the USPIS at 1-877-876-2455 or visit uspis.gov/report. For more information about combatting mail theft visit uspis.gov/project-safe-delivery.
Rite Aid Corporation and Affiliates Agree to Settle False Claims Act and Controlled Substance Act Allegations Related to Opioid DispensingRead the Press Release
The Justice Department announced that Rite Aid Corporation (Rite Aid) and 10 subsidiaries and affiliates have agreed to settle the government’s allegations under the False Claims Act (FCA) and Controlled Substances Act (CSA) asserted in United States ex rel. White et al. v. Rite Aid Corp., et al., No. 1:21-cv-1239 (N.D. Ohio). Under the settlement, the government will be paid $7.5 million and have an allowed, unsubordinated, general unsecured claim of $401.8 million in Rite Aid’s bankruptcy case that is pending in the District of New Jersey. During the relevant time period, Rite Aid operated one of the country’s largest retail pharmacy chains with over 2,200 retail pharmacies in 17 states.
“Filling unnecessary prescriptions for powerful and addictive opioids, as the government alleged here, not only takes a toll on our communities, but also violates the law,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “As today’s settlement illustrates, the Justice Department is committed to holding pharmacies accountable for their role in the nation’s opioid crisis.”“Pharmacies and pharmacists have an affirmative legal duty to ensure that the prescriptions they fill are legitimate,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “When they disregard this responsibility and instead ignore red flags indicating that prescriptions for addictive painkillers are invalid, they violate the public’s trust and harm the community they are supposed to serve — all to make a buck. Our settlement with Rite Aid reinforces the Northern District of Ohio’s continued commitment to combatting the opioid crisis. My office and our law enforcement partners will continue to battle this epidemic by ensuring that corporate actors comply with their legal obligations, which help to restrict unwarranted public access to highly addictive medications, and thereby fight to keep vulnerable members of our communities from becoming addicted to opioids.”
The government’s complaint alleges that, from May 2014 through June 2019, Rite Aid knowingly dispensed at least hundreds of thousands of unlawful prescriptions for controlled substances that (1) lacked a legitimate medical purpose and were not issued in the usual course of professional practice and/or (2) were not valid prescriptions, were not for a medically accepted indication or were medically unnecessary. These unlawful prescriptions included, for example, prescriptions for the dangerous, highly diverted combination of drugs known as “the trinity,” prescriptions for excessive quantities of opioids, such as highly addictive oxycodone and fentanyl, and prescriptions issued by prescribers who Rite Aid pharmacists had repeatedly identified internally as suspicious and as writing unlawful, unnecessary prescriptions. The government further alleges that Rite Aid filled these prescriptions despite clear “red flags,” which highly indicated the prescriptions were unlawful and which pharmacists are trained to recognize. Rite Aid also allegedly ignored substantial evidence that its stores were dispensing unlawful prescriptions, including specific concerns raised by its pharmacists, and intentionally deleted internal notes about suspicious prescribers written by Rite Aid pharmacists, such as “writing excessive dose[s] for oxycodone,” and “DO NOT FILL CONTROLS.” By knowingly dispensing unlawful prescriptions for controlled substances, the government alleges that Rite Aid violated the CSA and, where Rite Aid sought reimbursement from federal healthcare programs, also violated the FCA.
Along with Rite Aid Corporation, the government’s complaint names as defendants the following Rite Aid subsidiaries: Rite Aid Hdqtrs Corp.; Rite Aid of Connecticut Inc.; Rite Aid of Delaware Inc.; Rite Aid of Maryland; Rite Aid of Michigan; Rite Aid of New Hampshire; Rite Aid of New Jersey; Rite Aid of Ohio; Rite Aid of Pennsylvania and Rite Aid of Virginia.
“Pharmacies and pharmacists have a critical responsibility to ensure controlled substances are dispensed lawfully and safely to the public. This includes highly addictive opioids as we continue to see the impact of the opioid crisis,” said Deputy Inspector General Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG is entering into a Corporate Integrity Agreement with Rite Aid, which includes a prescription drug claims review to have an Independent Review Organization determine whether prescription drugs are properly prescribed, dispensed, and billed. HHS-OIG will continue to work with our law enforcement partners to hold providers accountable that put the public at risk.”
“America continues to live through the worst opioid epidemic we have ever seen. Rite Aid contributed to this crisis by ignoring obvious red flags and dispensing hundreds of thousands of unnecessary opioids,” said Administrator Anne Milgram of the Drug Enforcement Administration (DEA). “DEA will continue to do everything in our power to protect the health and safety of Americans and to end the opioid epidemic.”
The civil settlement includes the resolution of claims that certain Rite Aid pharmacies in Washington State violated the CSA by filling prescriptions written by prescribers who lacked proper controlled substance prescribing authority. The settlement also resolves claims brought in 2019 under the qui tam, or whistleblower, provisions of the FCA by Andrew White, Mark Rosenberg and Ann Wegelin, who all previously worked for Rite Aid at various pharmacies. The FCA authorizes private parties to sue on behalf of the United States for false claims and share in any recovery and permits the United States to take over the lawsuit, as it did here in part. The relators will receive 17% of the government’s FCA recovery in this matter.
In addition to the civil settlement, Rite Aid has entered into agreements with DEA and HHS-OIG to address its obligations going forward. Rite Aid and DEA entered a memorandum of agreement (MOA) designed to increase communication between the company, its retailers and DEA. Employees will receive additional training to help them identify illegitimate prescriptions and minimize the risk of drug diversion. The MOA also requires Rite Aid to create and keep materials relevant to DEA investigations for a minimum of five years. Rite Aid further commits to implementing and managing an anonymous hotline for employees, patients and the public to report suspected illegal dispensing of highly diverted controlled substances as well as suspected violations of the CSA. Rite Aid has also entered into a corporate integrity agreement (CIA) with HHS-OIG. The CIA includes a prescription claims drug review to have an Independent Review Organization to determine whether prescription drugs are properly prescribed, dispensed and billed.
The settlement was approved on June 28 by the bankruptcy court as part of Rite Aid’s plan of reorganization, which is expected to become effective later this summer. The amount the government will recover on its unsecured claim under the settlement will depend on the ultimate amount of assets available to the bankruptcy estate for distribution to unsecured creditors.
The Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Ohio handled this matter. The DEA Cleveland Division, FBI Cleveland Field Office and HHS-OIG provided substantial assistance in the investigation.
Senior Trial Counsel Christopher Wilson of the Civil Division’s Fraud Section and Assistant U.S. Attorneys Patricia Fitzgerald, Elizabeth Berry and Kathryn Andrachik for the Northern District of Ohio handled the White matter. Trial Attorneys Mary Schmergel, Gregory Werkheiser and Ryan Lamb of the Civil Division’s Corporate/Financial Litigation Section handled the Rite Aid bankruptcy case.
This settlement illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the HHS at 800-HHS-TIPS (800-447-8477).
The claims asserted against the defendants are allegations only. There has been no determination of liability.
Settlement
Toledo Man Indicted for Robbery of Postal EmployeeRead the Press Release
TOLEDO – A federal grand jury has returned a three-count indictment charging Damere Wilson, 20, of Toledo, Ohio, with robbery of mail, money, or other property of the United States, stealing mail collection box keys, and mail theft. The violations allegedly took place while a United States Postal Service letter carrier was on a delivery route.
According to court documents, an individual approached the letter carrier on March 12, 2024, delivering mail at the Piccadilly Apartments in Oregon, Ohio. The letter carrier indicated a hard object was shoved into their back and the individual demanded the keys to the mailboxes. Wilson’s vehicle was observed fleeing the scene of the robbery through information gathered via surveillance videos which resulted in the execution of a search warrant at a duplex on Maplewood Avenue in Toledo.
The postal key stolen from the letter carrier, as well as more than 200 checks totaling thousands of dollars, were recovered during a search warrant execution. More than 100 mail theft victims were identified from throughout northern Ohio.
If convicted, Wilson’s sentence will be determined by the court after review of factors unique to this case, including his prior criminal record, if any, his role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases, it will be less than the maximum.
The case is being prosecuted by Assistant United States Attorney Frank H. Spryszak for the Northern District of Ohio. The investigation preceding the indictment was a collaborative effort conducted by the United States Postal Inspection Service (USPIS), and the the City of Oregon Police Division.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
To report mail theft or other crimes committed through, or towards, the United States Postal Service, call the USPIS at 1-877-876-2455 or visit https://www.uspis.gov/report.
Rite Aid Corporation and Elixir Insurance Company Agree to Pay $101M to Resolve Allegations of Falsely Reporting RebatesRead the Press Release
The Justice Department announced today that Rite Aid Corporation and Rite Aid subsidiaries, Elixir Insurance Company, RX Options LLC and RX Solutions LLC, have agreed to resolve allegations that they violated the False Claims Act (FCA) by failing to accurately report drug rebates to the Medicare Program. As part of the settlement, Elixir Insurance and Rite Aid will pay the United States $101 million, and RX Options and RX Solutions will grant the United States an allowed, unsubordinated, general unsecured claim for a total of $20 million in Rite Aid’s bankruptcy case pending in the District of New Jersey. The settlement is based on the companies’ ability to pay and was approved on June 28 by the bankruptcy court as part of Rite Aid’s plan of reorganization, which is expected to become effective later this summer. In addition to operating one of the country’s largest retail pharmacy chains, Rite Aid offered Medicare drug plans and pharmacy benefits manager (PBM) services through Elixir Insurance, RX Options and RX Solutions.
“Participants in Medicare’s drug program must accurately report price concessions, including drug manufacturer rebates, to ensure that the government receives the benefit of those concessions,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement reflects the Justice Department’s commitment to hold accountable entities that pursue their own financial interests at the expense of taxpayer programs.”
“Rite Aid and its Elixir subsidiaries lined their corporate pockets with millions of dollars of manufacturer rebates that should have been reported to Medicare,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Each of those dollars could have been used to benefit Americans with genuine health care needs. Our office will not tolerate deceptive health-insurance practices, and we will vigorously pursue those who violate the FCA.”
Under Medicare Part D, private entities known as Part D Plan Sponsors offer and administer insurance plans that provide prescription drug coverage to enrolled Medicare beneficiaries. Part D Sponsors must submit annual reports to the Centers for Medicare and Medicaid Services (CMS) with information about rebates and other remuneration the Plans received from drug manufacturers in connection with the Part D drugs provided to beneficiaries, which ensures that the government receives the benefit of any price concessions provided by drug manufacturers to purchasers of the drugs covered under the Part D plan. CMS relies on the reports in the annual reconciliation process that determines payments due to the Plans or CMS at the end of the year.
The settlement resolves allegations that, between 2014 and 2020, the defendants improperly reported to CMS portions of rebates received from manufacturers as bona fide service fees, even though manufacturers did not negotiate with the defendants to pay such fees. The United States further alleged that Elixir Insurance knew the retained rebates did not meet the regulatory definition of bona fide services fees.
“Truthful and accurate documentation in the delivery of health care goods or services is crucial to the integrity of federal health care programs,” said Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Improper submission of manufacturer drug rebates and fees by Part D Plan Sponsors for pharmaceutical products in order to make more money will not be tolerated. Collaborating with our law enforcement partners, HHS-OIG is committed to preventing and investigating health care fraud in Medicare and other taxpayer-funded health care programs.”
The civil settlement includes the resolution of claims brought in 2021 under the qui tam, or whistleblower, provisions of the False Claims Act by Glenn Rzeszutko, who previously worked for RX Options. The FCA authorizes a private party to sue on behalf of the United States and share in any recovery. The qui tam case is captioned United States ex rel. Rzeszutko v. Rite Aid Corporation et al., No. 5:21-CV-574 (N.D. Ohio). The relator’s share of these proceeds has not yet been determined.
The Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Ohio handled this matter, with substantial assistance from HHS-OIG and FBI Cleveland Division.
Trial attorneys Christopher Wilson and Dan Schiffer of the Civil Division’s Fraud Section and Assistant U.S. Attorney Jackson Froliklong for the Northern District of Ohio handled this matter. HHS-OIG and the FBI Cleveland Field Office provided substantial assistance in the investigation. Assistant Director Mary Schmergel and Trial Attorneys Gregory Werkheiser and Ryan Lamb of the Civil Division’s Corporate/Financial Litigation Section are handling the Rite Aid bankruptcy.
Today’s settlements illustrate the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).
The claims asserted against defendants are allegations only. There has been no determination of liability.
SettlementRite Aid Corporation and Elixir Insurance Company Agree to Pay $101M to Resolve Allegations of Falsely Reporting RebatesRead the Press Release
The Justice Department announced that Rite Aid Corporation and Rite Aid subsidiaries, Elixir Insurance Company, RX Options LLC and RX Solutions LLC, have agreed to resolve allegations that they violated the False Claims Act (FCA) by failing to accurately report drug rebates to the Medicare Program. As part of the settlement, Elixir Insurance and Rite Aid will pay the United States $101 million, and RX Options and RX Solutions will grant the United States an allowed, unsubordinated, general unsecured claim for a total of $20 million in Rite Aid’s bankruptcy case pending in the District of New Jersey. The settlement is based on the companies’ ability to pay and was approved on June 28 by the bankruptcy court as part of Rite Aid’s plan of reorganization, which is expected to become effective later this summer. In addition to operating one of the country’s largest retail pharmacy chains, Rite Aid offered Medicare drug plans and pharmacy benefits manager (PBM) services through Elixir Insurance, RX Options and RX Solutions.
“Participants in Medicare’s drug program must accurately report price concessions, including drug manufacturer rebates, to ensure that the government receives the benefit of those concessions,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement reflects the Justice Department’s commitment to hold accountable entities that pursue their own financial interests at the expense of taxpayer programs.”
“Rite Aid and its Elixir subsidiaries lined their corporate pockets with millions of dollars of manufacturer rebates that should have been reported to Medicare,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Each of those dollars could have been used to benefit Americans with genuine health care needs. Our office will not tolerate deceptive health-insurance practices, and we will vigorously pursue those who violate the FCA.”
Under Medicare Part D, private entities known as Part D Plan Sponsors offer and administer insurance plans that provide prescription drug coverage to enrolled Medicare beneficiaries. Part D Sponsors must submit annual reports to the Centers for Medicare and Medicaid Services (CMS) with information about rebates and other remuneration the Plans received from drug manufacturers in connection with the Part D drugs provided to beneficiaries, which ensures that the government receives the benefit of any price concessions provided by drug manufacturers to purchasers of the drugs covered under the Part D plan. CMS relies on the reports in the annual reconciliation process that determines payments due to the Plans or CMS at the end of the year.
The settlement resolves allegations that, between 2014 and 2020, the defendants improperly reported to CMS portions of rebates received from manufacturers as bona fide service fees, even though manufacturers did not negotiate with the defendants to pay such fees. The United States further alleged that Elixir Insurance knew the retained rebates did not meet the regulatory definition of bona fide services fees.
“Truthful and accurate documentation in the delivery of health care goods or services is crucial to the integrity of federal health care programs,” said Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Improper submission of manufacturer drug rebates and fees by Part D Plan Sponsors for pharmaceutical products in order to make more money will not be tolerated. Collaborating with our law enforcement partners, HHS-OIG is committed to preventing and investigating health care fraud in Medicare and other taxpayer-funded health care programs.”
The civil settlement includes the resolution of claims brought in 2021 under the qui tam, or whistleblower, provisions of the False Claims Act by Glenn Rzeszutko, who previously worked for RX Options. The FCA authorizes a private party to sue on behalf of the United States and share in any recovery. The qui tam case is captioned United States ex rel. Rzeszutko v. Rite Aid Corporation et al., No. 5:21-CV-574 (N.D. Ohio). The relator’s share of these proceeds has not yet been determined.
Trial attorneys Christopher Wilson and Dan Schiffer of the Civil Division’s Fraud Section and Assistant U.S. Attorney Jackson Froliklong for the Northern District of Ohio handled this matter. HHS-OIG and the FBI Cleveland Field Office provided substantial assistance in the investigation. Trial Attorneys Mary Schmergel, Gregory Werkheiser and Ryan Lamb of the Civil Division’s Corporate/Financial Litigation Section are handling the Rite Aid bankruptcy.
The settlements illustrate the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).
The claims asserted against defendants are allegations only. There has been no determination of liability.
Settlement
Rite Aid Corporation and Affiliates Agree to Settle False Claims Act and Controlled Substance Act Allegations Related to Opioid DispensingRead the Press Release
The Justice Department today announced that Rite Aid Corporation (Rite Aid) and 10 subsidiaries and affiliates have agreed to settle the government’s allegations under the False Claims Act (FCA) and Controlled Substances Act (CSA) asserted in United States ex rel. White et al. v. Rite Aid Corp., et al., No. 1:21-cv-1239 (N.D. Ohio). Under the settlement, the government will be paid $7.5 million and have an allowed, unsubordinated, general unsecured claim of $401.8 million in Rite Aid’s bankruptcy case that is pending in the District of New Jersey. During the relevant time period, Rite Aid operated one of the country’s largest retail pharmacy chains with over 2,200 retail pharmacies in 17 states.
“Filling unnecessary prescriptions for powerful and addictive opioids, as the government alleged here, not only takes a toll on our communities, but also violates the law,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “As today’s settlement illustrates, the Justice Department is committed to holding pharmacies accountable for their role in the nation’s opioid crisis.”
“Pharmacies and pharmacists have an affirmative legal duty to ensure that the prescriptions they fill are legitimate,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “When they disregard this responsibility and instead ignore red flags indicating that prescriptions for addictive painkillers are invalid, they violate the public’s trust and harm the community they are supposed to serve — all to make a buck. Our settlement with Rite Aid reinforces the Northern District of Ohio’s continued commitment to combatting the opioid crisis. My office and our law enforcement partners will continue to battle this epidemic by ensuring that corporate actors comply with their legal obligations, which help to restrict unwarranted public access to highly addictive medications, and thereby fight to keep vulnerable members of our communities from becoming addicted to opioids.”
The government’s complaint alleges that, from May 2014 through June 2019, Rite Aid knowingly dispensed at least hundreds of thousands of unlawful prescriptions for controlled substances that (1) lacked a legitimate medical purpose and were not issued in the usual course of professional practice and/or (2) were not valid prescriptions, were not for a medically accepted indication or were medically unnecessary. These unlawful prescriptions included, for example, prescriptions for the dangerous, highly diverted combination of drugs known as “the trinity,” prescriptions for excessive quantities of opioids, such as highly addictive oxycodone and fentanyl, and prescriptions issued by prescribers who Rite Aid pharmacists had repeatedly identified internally as suspicious and as writing unlawful, unnecessary prescriptions. The government further alleges that Rite Aid filled these prescriptions despite clear “red flags,” which highly indicated the prescriptions were unlawful and which pharmacists are trained to recognize. Rite Aid also allegedly ignored substantial evidence that its stores were dispensing unlawful prescriptions, including specific concerns raised by its pharmacists, and intentionally deleted internal notes about suspicious prescribers written by Rite Aid pharmacists, such as “writing excessive dose[s] for oxycodone,” and “DO NOT FILL CONTROLS.” By knowingly dispensing unlawful prescriptions for controlled substances, the government alleges that Rite Aid violated the CSA and, where Rite Aid sought reimbursement from federal healthcare programs, also violated the FCA.
Along with Rite Aid Corporation, the government’s complaint names as defendants the following Rite Aid subsidiaries: Rite Aid Hdqtrs Corp.; Rite Aid of Connecticut Inc.; Rite Aid of Delaware Inc.; Rite Aid of Maryland; Rite Aid of Michigan; Rite Aid of New Hampshire; Rite Aid of New Jersey; Rite Aid of Ohio; Rite Aid of Pennsylvania and Rite Aid of Virginia.
“Pharmacies and pharmacists have a critical responsibility to ensure controlled substances are dispensed lawfully and safely to the public. This includes highly addictive opioids as we continue to see the impact of the opioid crisis,” said Deputy Inspector General Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG is entering into a Corporate Integrity Agreement with Rite Aid, which includes a prescription drug claims review to have an Independent Review Organization determine whether prescription drugs are properly prescribed, dispensed, and billed. HHS-OIG will continue to work with our law enforcement partners to hold providers accountable that put the public at risk.”
“America continues to live through the worst opioid epidemic we have ever seen. Rite Aid contributed to this crisis by ignoring obvious red flags and dispensing hundreds of thousands of unnecessary opioids,” said Administrator Anne Milgram of the Drug Enforcement Administration (DEA). “DEA will continue to do everything in our power to protect the health and safety of Americans and to end the opioid epidemic.”
The civil settlement includes the resolution of claims that certain Rite Aid pharmacies in Washington State violated the CSA by filling prescriptions written by prescribers who lacked proper controlled substance prescribing authority. The settlement also resolves claims brought in 2019 under the qui tam, or whistleblower, provisions of the FCA by Andrew White, Mark Rosenberg and Ann Wegelin, who all previously worked for Rite Aid at various pharmacies. The FCA authorizes private parties to sue on behalf of the United States for false claims and share in any recovery, and permits the United States to take over the lawsuit, as it did here in part. The relators will receive 17% of the government’s FCA recovery in this matter.
In addition to the civil settlement, Rite Aid has entered into agreements with DEA and HHS-OIG to address its obligations going forward. Rite Aid and DEA entered a memorandum of agreement (MOA) designed to increase communication between the company, its retailers and DEA. Employees will receive additional training to help them identify illegitimate prescriptions and minimize the risk of drug diversion. The MOA also requires Rite Aid to create and keep materials relevant to DEA investigations for a minimum of five years. Rite Aid further commits to implementing and managing an anonymous hotline for employees, patients and the public to report suspected illegal dispensing of highly diverted controlled substances as well as suspected violations of the CSA. Rite Aid has also entered into a corporate integrity agreement (CIA) with HHS-OIG. The CIA includes a prescription claims drug review to have an Independent Review Organization to determine whether prescription drugs are properly prescribed, dispensed and billed.
The settlement was approved on June 28 by the bankruptcy court as part of Rite Aid’s plan of reorganization, which is expected to become effective later this summer. The amount the government will recover on its unsecured claim under the settlement will depend on the ultimate amount of assets available to the bankruptcy estate for distribution to unsecured creditors.
The Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Ohio handled this matter. The DEA Cleveland Division, FBI Cleveland Field Office and HHS-OIG provided substantial assistance in the investigation.
Senior Trial Counsel Christopher Wilson of the Civil Division’s Fraud Section and Assistant U.S. Attorneys Patricia Fitzgerald, Elizabeth Berry and Kathryn Andrachik for the Northern District of Ohio handled the White matter. Assistant Director Mary Schmergel and Trial Attorneys Gregory Werkheiser and Ryan Lamb of the Civil Division’s Corporate/Financial Litigation Section are handling the Rite Aid bankruptcy.
Today’s settlement illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the HHS at 800-HHS-TIPS (800-447-8477).
The claims asserted against the defendants are allegations only. There has been no determination of liability.
SettlementOhio Man Sentenced to Prison After Pleading Guilty to Filing False Tax Returns and Wire FraudRead the Press Release
TOLEDO – Jacques J. Eid, 56, of Perrysburg, Ohio, was sentenced to 30 months in prison by U.S. District Judge James G. Carr, after pleading guilty to filing false tax returns and wire fraud that defrauded educational and government entities. He was also fined $797,151.38 and ordered to pay restitution to the following: U.S. Department of Education, $14,760; Notre Dame Academy, $13,450; St. John’s Jesuit High School, $30,000; and the U.S. Department of Agriculture, $223,575.69.
Eid pleaded guilty to the offenses in court on March 1, 2024, where he admitted to filing false tax returns with the IRS by underreporting taxable income of nearly $880,000 earned as owner of a convenience store, Madison Market, and a restaurant, Le Pam Pam, in Toledo from 2012-2018. Before the district court-imposed sentence, Eid repaid all taxes and penalties owed to the IRS resulting from his tax offenses.
Eid also admitted falsifying his income on the U.S. Department of Education’s Free Application for Federal Student Aid, commonly known as FAFSA, for one of his children which was then used to determine aid packages at The University of Toledo and the University of Dayton. This resulted in fraudulently obtaining more than $11,000 in Pell Grants and $3,000 in Federal Supplemental Opportunity grants for college. Eid also falsified his income when seeking financial assistance for his children at two Toledo-area private schools, St. John’s Jesuit High School and Notre Dame Academy, ultimately receiving more than $40,000 collectively. His children would not have been entitled to receive financial aid if accurate income, assets, and net worth had been reported on applications.
“Eid lied on his tax returns to avoid paying the taxes he owed and to further another lie about his children needing financial aid,” said U.S. Attorney Rebecca Lutzko for the Northern District of Ohio. “Falsifying financial need takes away from students who genuinely need the assistance for their education, and the defendant shamelessly scammed the system so that his own family could benefit at the expense of others. Federal law enforcement agencies pay attention when persons lie about their finances, and we are pleased that the district court has held Eid accountable for his disgraceful conduct.”
Additionally, Eid admitted submitting a false application for his convenience store to become an authorized retailer for the U.S. Department of Agriculture’s SNAP Food Stamp Program. The application falsely stated that his spouse was the sole owner of the convenience store and that there were no other owners, even though Eid was the true owner of the business. He attempted to hide his ownership of the store so that it could accept food stamps. Eid was disqualified as a program retailer due to his prior conviction for seven counts of illegal use of food stamps or WIC program benefits in 2004. From 2008 to 2021 he operated Madison Market under the false pretense that he was not the owner. As a result of that misrepresentation, the store received more than $1 million in SNAP benefits which resulted in at least $220,000 in unlawful profits to the store.
This case was prosecuted by Assistant U.S. Attorney Gene Crawford for the Northern District of Ohio. The case was investigated by the Internal Revenue Service–Criminal Investigations, Department of Agriculture Office of Inspector General, and the Department of Education Office of Inspector General.
Ohio Man Sentenced for Trafficking Counterfeit GoodsRead the Press Release
Shane Burdue, 46, of Toledo, Ohio, was sentenced to 14 months in prison by U.S. District Judge Jack Zouhary trafficking in counterfeit goods. He was also ordered to serve two years of supervised release and pay $4,081.50 in restitution to the Coalition to Advance Protection of Sports Logos (CAPS).
Burdue began receiving international shipments, which included counterfeit goods, in July 2014 according to court documents. Between 2014 and 2023 more than 800 international shipments, mostly from China, were destined for various addresses associated with Burdue in Toledo. Several of these shipments, which contained counterfeit goods, were seized by U.S. Customs and Border Protection. He also received numerous Cease-and-Desist letters from CAPS, which is an alliance that coordinates trademark protection and enforcement matters for collegiate and national sports teams.
Despite the parcel seizures and receipt of Cease-and-Desist letters from CAPS, Burdue continued to sell counterfeit merchandise at different physical locations in Toledo, as well as online through the social media platform Facebook. Several of his Facebook accounts were deactivated when it was discovered he was dealing in counterfeit goods. Each time an account was deactivated, Burdue would create a new account to resume selling counterfeit goods through Facebook. In May 2023, authorities seized hundreds of items of counterfeit sports merchandise from his business, “Shane's Man Cave,” during a search warrant execution in Toledo. Items seized included counterfeit caps, jerseys and footwear which totaled more than $29,000 in Manufacturer’s Suggested Retail Price. The counterfeit merchandise violated intellectual property rights from Nike, Major League Baseball, the National Basketball Association, and the National Football League.
According to the “2021 Review of Notorious Markets for Counterfeiting and Piracy,” counterfeit goods can pose safety hazards for both consumers and workers due to a lack of regulatory oversight. The counterfeit trade has also been linked to child labor, forced labor, and other criminal activity.
This case was investigated by Homeland Security Investigations and was prosecuted by Assistant United States Attorney Frank H. Spryszak.
U.K. National Sentenced for Fraudulent Wine and Whiskey Scam that Targeted Older AmericansRead the Press Release
Casey Alexander, 27, of London, England, was sentenced to three years of probation by U.S. District Judge Solomon Oliver, after pleading guilty to conspiracy to commit wire fraud.
Alexander was ordered to pay $202,195.58 in restitution for his role in the scam to the victim investors.
According to court documents, Alexander and others involved, engaged in a cold-calling scheme to target elderly investors throughout the United States. They used aggressive and deceptive tactics and promised large returns if the victims participated in wine and whiskey investments. They told victims that they could buy a portfolio of fine wines and whiskeys on their behalf, and then hold the purchase in a bonded warehouse located in Europe until sold for a profit.
Alexander and his team were able to convince the victims across the country to wire funds or make checks out to one or more suspect companies to participate in the investment opportunities. After the initial investments were made, victims were encouraged, and eventually convinced, to continue investing in order to secure larger returns.
In 2020, a victim’s son notified the Highland Heights Police Department (HHPD) to report the scam which defrauded the victim out of more than $300,000 over an 18-month period. HHPD then discovered similar complaints from others throughout the United States who reported being victims of a “wine scam” after being asked to purchase wine as an investment.
This case was investigated by the FBI. To date, investigators have identified over 150 victims within the United States who collectively invested more than $13 million in the wine and whiskey fraud scheme.
This case was prosecuted by Assistant United States Attorney Brian McDonough for the Northern District of Ohio.
The investigation and prosecution of this case is in response to the Elder Justice Initiative Program originating from the Elder Abuse Prevention and Prosecution Act of 2017 (EAPPA). The mission of the EAPPA and Elder Justice Initiative is to support and coordinate the Department of Justice’s enforcement efforts to combat elder abuse, neglect, financial fraud, and scams that target the nation’s elderly population.
If you observe something that you believe might be fraudulent conduct involving an older adult, contact the dedicated National Elder Fraud Hotline at 1-833-FRAUD-11 or 1-833-372-8311 and visit the FBI’s IC3 Elder Fraud Complaint Center at IC3.gov to report it.
Related Links:
U.S. Attorney's Office Recognizes Elder Abuse Awareness Month
Public Service Announcement from U.S. Attorney Lutzko
Stay Aware of the Latest Scams
Attorney General Merrick B. Garland Announces New Northeast Ohio Crime Gun Intelligence Center in ClevelandRead the Press Release
Alongside state and local law enforcement partners in Cleveland, Attorney General Merrick B. Garland, Director Steven Dettelbach of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio announced the opening of a new Northeast Ohio Crime Gun Intelligence Center (CGIC) in Cleveland.
“The Northeast Ohio Crime Gun Intelligence Center will allow us to leverage our partnerships and technological innovation to solve gun crimes and to save lives,” said Attorney General Garland. “When it comes to investigating gun crimes, every day matters. Every day, another lead can run dry. Every day, a repeat shooter may shatter another family and another community. With this CGIC, it does not matter if a crime is committed in a city, a suburb, or a rural area. The law enforcement officers who investigate will have cutting-edge technology at their fingertips and a lineup of experts ready to assist.”
“Following on the success of last year’s intelligence-driven gun crime initiative, this Crime Gun Intelligence Center puts in the same room analysts, agents, cops, deputies, and both federal and state prosecutors,” said ATF Director Dettelbach. “They work together on the same cases using real time, state-of-the-art intelligence. Every morning, they review key evidence from the previous night’s shootings to identify the shooters. CGICs like this make homicide cases. CGICs like this stop the next shooting. And CGICs like this help stop the crime guns that are getting to the shooters. I want to commend the ATF Cleveland leadership and the many law enforcement agencies working together under one roof with a focus on real-time ballistics testing and crime gun tracing. I also want to thank the leadership here for coming together to protect Ohioans. Mayor Bibb, Attorney General Yost, County Executive Ronayne, Mayor Malik, and Governor DeWine have all supported a law enforcement presence in this CGIC. Without all of them, this CGIC does not happen. This level of partnership is truly exceptional. Chalk one up for the good guys in Ohio.”
CGICs are centralized law enforcement hubs that focus exclusively on investigating and preventing gun violence in local communities. They use cutting-edge technologies, including ATF’s National Integrated Ballistic Information Network (NIBIN) and eTrace systems, to rapidly develop and pursue investigative leads in order to drive case clearance rates up — which in turn can help drive violent crime rates down. They bring together, under one roof, the expertise of firearm evidence examiners, intelligence analysts, and investigators to rapidly collect, analyze, and share information about guns used in violent crimes. In total, ATF operates more than 60 CGICs nationwide.
“Prosecuting and preventing violent crime throughout our district is one core mission of the United States Attorney’s Office. And investigative data shows that the same guns are often used to commit multiple, different instances of violent crimes, without regard to city or county lines,” said U.S. Attorney Lutzko. “That is why we most effectively combat violent crime — and the illegal firearms trafficking that supports it — through strong regional partnerships, collaboration, and technology. The incredible capabilities of the Crime Gun Intelligence Center — and the federal, state, and local partnerships that make it possible — allow us to connect the dots between crimes so we can prosecute, convict, and lock up the bad actors who commit violent crimes and remove “crime guns” from the streets faster, so neither continue to endanger innocent people in neighborhoods throughout Northern Ohio.”
“ATF has long worked with our partners in the Cleveland area to reduce violent crime, including the use of NIBIN and other intelligence tools,” stated Daryl McCormick, Special Agent in Charge of ATF’s Columbus Field Division. “This CGIC represents both a broadening and deepening of that cooperation and commitment. We are broadening this intelligence approach to a regional level, recognizing that those perpetrating violence don’t respect civic boundaries. In addition, we are all committing to the timely and comprehensive entry of information, and the analysis and use of these intelligence tools, to ensure that every CGIC participating agency has the information that may provide investigative leads as quickly as possible. I firmly believe that this effort will help us identify, investigate, and prosecute those individuals who are harming our communities.”
The Northeast Ohio CGIC is the first CGIC located within an Organized Crime Drug Enforcement Task Force (OCDETF) Strike Force, which not only supports the use of Crime Gun Intelligence (GCI) but also applies proactive investigative work and incorporates the use of OCDETF funds and resources. The CGIC was designed to execute a two-pronged approach: an intelligence component, led by ATF, and an investigative component, led by Ohio High Intensity Drug Trafficking Areas program (HIDTA).
Over 30 agencies across federal, state, and local law enforcement are partners in this new CGIC, focusing on real-time comprehensive ballistics testing and firearms tracing, two of ATF’s fundamental pillars of Crime Gun Intelligence. Federal and state prosecutors are included as participants to ensure the charging process is timely and effective. The Northeast Ohio CGIC partners include ATF, the U.S. Attorney’s Office for the Northern District of Ohio, Cleveland Division of Police, Cuyahoga County Prosecutor’s Office, Cuyahoga County Sheriff’s Office, Ohio HIDTA, Ohio Narcotics Intelligence Center, Ohio Bureau of Criminal Investigation, Northeast Ohio Regional Fusion Center, Garfield Heights Police Department, Lakewood Police Department, Lorain Police Department, Ohio State Highway Patrol, Ohio Investigative Unit, and the Ohio Department of Rehabilitation and Correction/Ohio Adult Parole Authority. Six additional agencies support the CGIC but are located with ATF’s Akron and/or Canton Task Forces: Akron Police Department, Barberton Police Department, Canton Police Department, Portage County Sheriff’s Office, Summit County Sheriff’s Office, and the University of Akron Police Department. Nine additional agencies have designated a liaison to support the CGIC: Elyria Police Department, Euclid Police Department, Lake County Sheriff’s Office, Lorain County Sheriff’s Office, Maple Heights Police Department, Medina City Police Department, Medina County Sheriff’s Office, Solon Police Department, and Willoughby Police Department. Additionally, four federal agencies support the CGIC through their participation at the OCEDTF Strike Force: Homeland Security Investigations, Drug Enforcement Administration, FBI, and the U.S. Marshal’s Service.
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Attorney General Merrick B. Garland Announces New Northeast Ohio Crime Gun Intelligence Center in ClevelandRead the Press Release
Alongside state and local law enforcement partners in Cleveland, Attorney General Merrick B. Garland, Director Steven Dettelbach of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio today announced the opening of a new Northeast Ohio Crime Gun Intelligence Center (CGIC) in Cleveland.
“The Northeast Ohio Crime Gun Intelligence Center will allow us to leverage our partnerships and technological innovation to solve gun crimes and to save lives,” said Attorney General Garland. “When it comes to investigating gun crimes, every day matters. Every day, another lead can run dry. Every day, a repeat shooter may shatter another family and another community. With this CGIC, it does not matter if a crime is committed in a city, a suburb, or a rural area. The law enforcement officers who investigate will have cutting-edge technology at their fingertips and a lineup of experts ready to assist.”
“Following on the success of last year’s intelligence-driven gun crime initiative, this Crime Gun Intelligence Center puts in the same room analysts, agents, cops, deputies, and both federal and state prosecutors,” said ATF Director Dettelbach. “They work together on the same cases using real time, state-of-the-art intelligence. Every morning, they review key evidence from the previous night’s shootings to identify the shooters. CGICs like this make homicide cases. CGICs like this stop the next shooting. And CGICs like this help stop the crime guns that are getting to the shooters. I want to commend the ATF Cleveland leadership and the many law enforcement agencies working together under one roof with a focus on real-time ballistics testing and crime gun tracing. I also want to thank the leadership here for coming together to protect Ohioans. Mayor Bibb, Attorney General Yost, County Executive Ronayne, Mayor Malik, and Governor DeWine have all supported a law enforcement presence in this CGIC. Without all of them, this CGIC does not happen. This level of partnership is truly exceptional. Chalk one up for the good guys in Ohio.”
CGICs are centralized law enforcement hubs that focus exclusively on investigating and preventing gun violence in local communities. They use cutting-edge technologies, including ATF’s National Integrated Ballistic Information Network (NIBIN) and eTrace systems, to rapidly develop and pursue investigative leads in order to drive case clearance rates up — which in turn can help drive violent crime rates down. They bring together, under one roof, the expertise of firearm evidence examiners, intelligence analysts, and investigators to rapidly collect, analyze, and share information about guns used in violent crimes. In total, ATF operates more than 60 CGICs nationwide.
“Prosecuting and preventing violent crime throughout our district is one core mission of the United States Attorney’s Office. And investigative data shows that the same guns are often used to commit multiple, different instances of violent crimes, without regard to city or county lines,” said U.S. Attorney Lutzko. “That is why we most effectively combat violent crime — and the illegal firearms trafficking that supports it — through strong regional partnerships, collaboration, and technology. The incredible capabilities of the Crime Gun Intelligence Center — and the federal, state, and local partnerships that make it possible — allow us to connect the dots between crimes so we can prosecute, convict, and lock up the bad actors who commit violent crimes and remove “crime guns” from the streets faster, so neither continue to endanger innocent people in neighborhoods throughout Northern Ohio.”
“ATF has long worked with our partners in the Cleveland area to reduce violent crime, including the use of NIBIN and other intelligence tools,” stated Daryl McCormick, Special Agent in Charge of ATF’s Columbus Field Division. “This CGIC represents both a broadening and deepening of that cooperation and commitment. We are broadening this intelligence approach to a regional level, recognizing that those perpetrating violence don’t respect civic boundaries. In addition, we are all committing to the timely and comprehensive entry of information, and the analysis and use of these intelligence tools, to ensure that every CGIC participating agency has the information that may provide investigative leads as quickly as possible. I firmly believe that this effort will help us identify, investigate, and prosecute those individuals who are harming our communities.”
The Northeast Ohio CGIC is the first CGIC located within an Organized Crime Drug Enforcement Task Force (OCDETF) Strike Force, which not only supports the use of Crime Gun Intelligence (GCI) but also applies proactive investigative work and incorporates the use of OCDETF funds and resources. The CGIC was designed to execute a two-pronged approach: an intelligence component, led by ATF, and an investigative component, led by Ohio High Intensity Drug Trafficking Areas program (HIDTA).
Over 30 agencies across federal, state, and local law enforcement are partners in this new CGIC, focusing on real-time comprehensive ballistics testing and firearms tracing, two of ATF’s fundamental pillars of Crime Gun Intelligence. Federal and state prosecutors are included as participants to ensure the charging process is timely and effective. The Northeast Ohio CGIC partners include ATF, the U.S. Attorney’s Office for the Northern District of Ohio, Cleveland Division of Police, Cuyahoga County Prosecutor’s Office, Cuyahoga County Sherrif’s Office, Ohio HIDTA, Ohio Narcotics Intelligence Center, Ohio Breau of Criminal Investigation, Northeast Ohio Regional Fusion Center, Garfield Heights Police Department, Lakewood Police Department, Lorain Police Department, Ohio State Highway Patrol, Ohio Investigative Unit, and the Ohio Department of Rehabilitation and Correction/Ohio Adult Parole Authority. Six additional agencies support the CGIC but are located with ATF’s Akron and/or Canton Task Forces: Akron Police Department, Barberton Police Department, Canton Police Department, Portage County Sheriff’s Office, Summit County Sheriff’s Office, and the University of Akron Police Department. Nine additional agencies have designated a liaison to support the CGIC: Elyria Police Department, Euclid Police Department, Lake County Sheriff’s Office, Lorain County Sheriff’s Office, Maple Heights Police Department, Medina City Police Department, Medina County Sheriff’s Office, Solon Police Department, and Willoughby Police Department. Additionally, four federal agencies support the CGIC through their participation at the OCEDTF Strike Force: Homeland Security Investigations, Drug Enforcement Administration, FBI, and the U.S. Marshal’s Service.
Men Who Robbed Postal Employee Indicted on ChargesRead the Press Release
A federal grand jury has returned a three-count indictment charging Amihr Curtis, 23, Zenesto Martin, Jr., 25, and Christian Proby, 25, all of Lima, Ohio, with interference of commerce by robbery, robbery of mail, money, or other property of the United States, and stealing keys used by the Postal Service for the deposit of mail. The violations allegedly took place in November 2023, in Lima, Ohio, while a United States Postal Service letter carrier was on a delivery route. Curtis and Martin, Jr., were also indicted for one count of mail theft.
If convicted, the defendants’ sentence will be determined by the Court after review of factors unique to this case, including the prior criminal record, if any, the defendants’ role in the offenses, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases, it will be less than the maximum.
Sentencing for all three defendants is scheduled for June 20, 2025.
The investigation preceding the indictment was a collaborative effort conducted by the United States Postal Inspection Service and the Lima Police Department.
The case is being prosecuted by Assistant United States Attorney Frank H. Spryszak.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The Postal Inspection Service is the federal agency with jurisdiction for investigating crimes against postal carriers and crimes involving the U.S. Mail. Anyone having information about blue collection box thefts or thefts or attempted thefts of mail carriers or mail should contact USPIS at 1-877-876-2455. All information will be kept confidential.
Update Feb. 21, 2025:
Addition of sentencing date
Justice Department Secures Agreement from Ohio Landlords to Resolve Claims of Sexual Harassment Against Female TenantsRead the Press Release
The Justice Department announced today that Joseph Pedaline and YLP LLC, who owned and managed residential rental properties in Youngstown, Ohio, have agreed to pay $199,000 to resolve a lawsuit alleging that they violated the Fair Housing Act. The department’s lawsuit alleged that Joseph Pedaline sexually harassed female tenants from at least 2009 to at least 2020, and that YLP LLC was liable for Pedaline’s conduct during the period in which it owned and managed the properties.
“No one should ever have to fear sexual harassment when they sign a lease, pay their rent or simply spend time in their home,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Landlords who sexually harass tenants violate the Fair Housing Act, and the Justice Department will continue to hold landlords accountable for this egregious conduct.”
“This consent decree bars Pedaline from ever again having the ability to rent property to others, and thus prevents him from ever again subjecting Ohio tenants to sexual harassment and discrimination in return for a place to live,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “This resolution should serve as a strong reminder to all landlords that they must comply with all aspects of the Fair Housing Act and may not engage in discriminatory behavior that violates the security, safety and wellbeing of their tenants.”
Under the consent decree entered by the U.S. District Court for the Northern District of Ohio, Pedaline and YLP LLC must pay $189,000 to former tenants harmed by Pedaline’s discriminatory conduct and must pay a $10,000 civil penalty to the federal government. Pedaline and YLP LLC must also take steps to vacate any adverse judgments and repair the credit of tenants who were evicted after refusing Pedaline’s advances. The consent decree also bars future discrimination, permanently bars Pedaline from managing residential rental properties, mandates Fair Housing Act training and requires reporting regarding compliance with the consent decree’s terms.
The department’s lawsuit alleged that Joseph Pedaline subjected multiple female tenants to sexual harassment. According to the complaint, Pedaline subjected tenants to unwelcome sexual comments, entered the homes of female tenants without their consent, touched female tenants without their consent, offered to excuse late or unpaid rent in exchange for sexual acts and took adverse housing-related actions against female tenants who refused his sexual advances. The department’s complaint also alleged that YLP LLC was liable for Pedaline’s discriminatory conduct while it owned and managed the rental properties.
Individuals who may have been victims of sexual harassment at rental dwellings owned or managed by Joseph Pedaline or YLP LLC can email [email protected] or call 1-833-591-0291 (press 1 for English, press 2 for sexual harassment and then press 01 for United States v. Joseph Pedaline to leave a message).
If you are a victim of sexual harassment by another landlord or have suffered other forms of housing discrimination, call the Justice Department’s Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected] or submit a report online. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.
Reports may also may be made by contacting the Department of Housing and Urban Development at 1-800-669-9777 or by filing a complaint online.
The Justice Department’s Sexual Harassment in Housing Initiative is led by the Civil Rights Division, in coordination with U.S. Attorneys’ Offices across the country. The initiative seeks to address and raise awareness about sexual harassment by landlords, property managers, maintenance workers, loan officers and other people who have control over housing. Since launching the initiative in October 2017, the department has filed 42 lawsuits alleging sexual harassment in housing and recovered nearly $17 million for victims of such harassment.
U.S. Attorney’s Office for the Northern District of Ohio recognizes World Elder Abuse Awareness DayRead the Press Release
Rebecca C. Lutzko, U.S. Attorney for the Northern District of Ohio, joins national, state, and local leaders in recognizing June 15, 2024, as World Elder Abuse Awareness Day. Since 2006, leaders and organizations around the world have commemorated this day to promote awareness and increase understanding of the many forms of elder abuse and the resources available to those at risk.
Highlighting the partnership between law enforcement and the public, U.S. Attorney Lutzko emphasized the importance of awareness and education.
“Elder abuse often takes the form of fraud. Together with our law enforcement partners, we aggressively investigate and prosecute individuals, organizations, and networks who lie to older adults in our community, attempting to steal money from them through a scam,” said U.S. Attorney Lutzko. “Every day, more and more scammers pretend to call or email from a government entity or well-known business and attempt to obtain personal identity and financial information from older adults and others, which they then use to commit financial crimes. We hope that by bringing awareness to this issue, more of us will look out for our family and friends who might be the target of such a crime, and report it to federal, state, or local authorities.”
Elder abuse is an act that knowingly, intentionally, or negligently causes or creates a serious risk of harm to an older person by a family member, caregiver, or other person who is in or creates a trust relationship. Such harm may be financial, physical, sexual, or psychological. The Justice Department maintains a variety of programs and initiatives to combat elder abuse.
The Justice Department’s Transnational Elder Fraud Strike Force includes federal and state agencies that work together to investigate and prosecute foreign-based schemes that target older Americans. This initiative also provides the public with information to guard against both traditional scams, like tech-support fraud, as well as trending schemes, such as romance scams.
Some fraudsters take a different tack in abusing older adults, using them as unwitting money mules to move the proceeds of illegal activity that they have already committed. Preying on the good will or financial vulnerability of their targets, scammers recruit people, many times older victims, to participate in schemes to move money from the scammers' crimes, in ways that avoid notice. Scammers might recruit people to act as money mules through online job ads or social media postings, seeking people to send or receive money or packages, or to open accounts and forward money. The Justice Department’s Money Mule Initiative identifies and addresses this type of activity to disrupt these fraud schemes, and helps people learn how to recognize the signs of suspicious activity.
The U.S. Attorney’s Office for the Northern District of Ohio continues to work with federal, state, and local law enforcement partners to investigate and prosecute elder-abuse crimes that touch our District. Most recently, the Office prosecuted a case in which two men ran a “grandparent scam” where they pretended to be a relative, or an attorney for a relative, and claimed that the family member needed money for bail to get out of jail. This scheme caused the victims a combined loss of more than $383,932. In another case, a lottery scheme took more than $260,000 from older adults. The fraudsters contacted people by mail or phone and told them that they had won a lottery or sweepstakes. But they required the victims to pay upfront fees or taxes to claim the purported “prize.” In yet another instance, the Office prosecuted a woman for forging the victim’s signature on a power of attorney form so she could take money from the victim’s financial accounts. In each case, these fraudsters caused older adults and their families financial loss and emotional turmoil.
To help older individuals and their families identify and avoid fraudulent activity, the Justice Department provides periodic Senior Scam Alerts with information about the tactics used in specific schemes. For example, in Social Security Administration Impostor schemes, scammers impersonate government administrators and tell victims that there has been suspicious activity in connection with their social security account, or that their account is suspended, and claim that the victim must provide their Social Security number for confirmation. In Tech Support scams, fraudsters contact victims, sometimes through internet pop-up messages, to warn about non-existent computer problems. They then ask that the victim give them remote access to their computer and the fraudster will lie and say their computer has a problem, and then demand large sums of money for unnecessary services to fix the “problem.” In Lottery scams, telemarketers falsely notify victims that they have won a sweepstakes and tell them they must first pay fees for shipping, insurance, customs duties, or taxes before they can claim their prizes.
To learn more about the Department’s elder-justice efforts, please visit the Elder Justice Initiative page.
In addition, representatives of the U.S. Attorney’s Office for the Northern District of Ohio periodically speak about elder-fraud issues at community presentations throughout northern Ohio. If an organization is interested in coordinating such a presentation, they can contact the U.S. Attorney’s Office at (216) 622-3600 or at [email protected].
Finally, if you observe something that you believe might be fraudulent conduct involving an older adult, contact the dedicated National Elder Fraud Hotline at 1-833-FRAUD-11 or 1-833-372-8311 and visit the FBI’s IC3 Elder Fraud Complaint Center at IC3.gov to report it.
Ohio Man Sentenced to Imprisonment for Animal Crushing Videos and Possession and Transportation of Child Sexual Abuse MaterialsRead the Press Release
TOLEDO - Lucas Russell Vanwoert, 27, of Celina, Ohio, was sentenced to 97 months (more than eight years) in prison by U.S. District Judge James R. Knepp, II for possession and transportation of child pornography, transportation of obscene materials and creating an animal crush video. Vanwoert was additionally ordered to serve 15 years of supervised release, required to register as a sex offender, and is prohibited from owning or possessing a pet in the future.
Vanwoert created an animal crush video in 2022 with intent to distribute according to court documents. An animal crush video is defined as any photograph, motion picture, film, video or digital recording, or electronic image that depicts actual conduct in which one or more living non-human mammals, birds, reptiles, or amphibians is intentionally crushed, burned, drowned, suffocated, impaled, or otherwise subjected to serious bodily injury, or bestiality and is obscene.
Authorities seized three severely emaciated dogs that Vanwoert was abusing, and one recently deceased dog in the backyard of the residence. Authorities also seized several electronic devices that were found to contain videos of child pornography, which involved prepubescent children, as well as animal crush videos, as part of an executed search warrant at Vanwoert’s residence in Celina. At least one of Vanwoert’s dogs was used to create the animal crush videos.
Homeland Security Investigations Agent Jason Guyton was the lead investigator. This case was prosecuted by Assistant United States Attorneys Sara Al-Sorghali and Michelle M. Baeppler.
United States Reaches over $310 Million Settlement with Norfolk Southern to Address Harms Caused by East Palestine Train DerailmentRead the Press Release
The Justice Department and Environmental Protection Agency (EPA) announced a settlement valued at over $310 million with Norfolk Southern Railway Company holding the company accountable to address and pay for the damage caused by the Feb. 3, 2023, train derailment in East Palestine, Ohio. If the settlement is approved by the U.S. District Court for the Northern District of Ohio, Norfolk Southern will be required to take measures to improve rail safety, pay for health monitoring and mental health services for the surrounding communities, fund long-term environmental monitoring, pay a $15 million civil penalty and take other actions to protect nearby waterways and drinking water resources.
Together with other response costs and rail safety enhancements, Norfolk Southern estimates that it will spend more than $1 billion to address the contamination and other harms caused by the East Palestine derailment and improve rail safety and operations.
In the hours following the derailment, EPA personnel arrived on site and they have remained there to ensure that the people of East Palestine are protected and have the most up-to-date information. In those early days, EPA Administrator Michael S. Regan promised that Norfolk Southern would be held accountable for its actions. Since then, as EPA and the Justice Department pursued a strong enforcement action to deliver on that commitment, EPA has continued to stay engaged in the community, directing cleanup activities, collecting air, water and soil samples and participating in community meetings. The Administration has led a robust, multi-agency effort – including the Department of Transportation, the Federal Emergency Management Agency and the Department of Health and Human Services – to fulfill the President’s commitment to “supporting the people of East Palestine and all those affected in surrounding areas of Ohio and Pennsylvania every step of the way.”
“The President issued an executive order which promised to address the disaster’s long-term effects and to hold Norfolk Southern responsible for its train derailing and the burning of hazardous chemicals in East Palestine. This settlement helps fulfill that promise,” said Acting Associate Attorney General Benjamin C. Mizer. “Importantly, those who will most directly benefit from this settlement are those who were most directly affected by the disaster. And the rail safety commitments will help prevent future catastrophic railway events.”
“No community should have to experience the trauma inflicted upon the residents of East Palestine,” said EPA Administrator Michael S. Regan. “That’s why President Biden pledged from the beginning that his Administration would stand with the community every step of the way. Today’s enforcement action delivers on this commitment, ensures the cleanup is paid for by the company, and helps prevent another disaster like this from happening again. Because of this settlement, residents and first responders will have greater access to health services, trains will be safer, and waterways will be cleaner.”
“The human cost from the Norfolk Southern train derailment disaster was high and continues today,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “That is why we worked to include funding in this agreement for a community health program. Notably, this settlement also secures significant resources to complete cleanup in and around East Palestine as well as measures to detect and address potential rail safety risks.”
“Norfolk Southern’s train derailment and massive chemical spill onto East Palestine’s grounds and into its waterways jeopardized the safety and health of residents, damaging their homes, their lives, and the environment,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “That is why the Department of Justice diligently worked to hold Norfolk Southern responsible for this disaster by quickly filing suit and negotiating a resolution that protects residents’ interests. This settlement requires Norfolk Southern to fund a community health program that monitors and treats individual medical needs stemming from the disaster. It also requires the company to fund the clean-up efforts, to restore the region’s waterways and habitats, and to monitor the drinking water system to ensure it is safe. And it requires them to implement numerous additional safety measures throughout the United States in an effort to prevent another railway community from suffering losses like those East Palestine experienced. While these remedies cannot fully address the impact of this disaster, they are a positive step toward healing and recovery.”
Today’s settlement follows a complaint filed by the United States against Norfolk Southern in March 2023 for unlawful discharges of pollutants and hazardous substances caused by the train derailment. In February 2023, EPA issued a unilateral administrative order, holding Norfolk Southern accountable for the damage done to the community. The order required cleanup of spilled substances and impacted soils, as well as payment of all costs to the U.S. government. EPA also issued an order under the Clean Water Act to clean up oil spilled into the surrounding waterways. Since then, EPA has been directing and overseeing the extensive cleanup activities.
In total, Norfolk Southern estimates that it will spend more than $1 billion to address the contamination caused by the East Palestine derailment and improve rail safety and operations. The amount includes this settlement with the United States valued at over $310 million, as well as around $780 million in environmental response costs incurred by Norfolk Southern. Norfolk Southern has estimated its costs since the derailment will exceed $200 million in rail safety enhancements, including those required by this settlement.
To help ensure that no community goes through what East Palestine residents have faced, the settlement also requires Norfolk Southern to improve coordination with government officials and other stakeholders during emergency responses. Specifically, Norfolk Southern will create and adopt a procedure for coordinating with first responders and government officials, where appropriate, before restoring and reopening tracks for use after a derailment involving spilled hazardous material. Norfolk Southern will also create and adopt a procedure for coordinating with government officials and other stakeholders in advance of any vent and burn proposed by the company.
Under the settlement, Norfolk Southern has agreed to:
- Spend an estimated $235 million for all past and future cleanup costs, so that cleanup efforts can continue and the company, rather than taxpayers, covers the cost.
- Pay $25 million for a 20-year community health program that includes medical monitoring for qualified individuals, mental health services for individuals residing in affected counties as well as first responders who worked at the site, and a community facilitation plan to assist community members in using the benefits of the program.
- Spend approximately $15 million to implement long-term monitoring of groundwater and surface water for a period of 10 years.
- Pay $15 million for a private drinking water monitoring fund that will continue the existing private drinking water well monitoring program for 10 years.
- Implement a “waterways remediation plan,” with an estimated budget of $6 million, for projects in Leslie Run and Sulphur Run that will prioritize addressing historical pollution, reducing non-point source pollution through infrastructure upgrades and stormwater management projects and restoring aquatic and riparian habitat.
- Pay a $15 million civil penalty to resolve the alleged violations of the Clean Water Act
- Pay $175,000 for natural resource damages, to be used by the United States to restore, rehabilitate, replace or acquire the equivalent of the natural resources injured as a result of the derailment.
In addition, the consent decree requires Norfolk Southern to undertake projects to improve the safety of transporting hazardous materials by rail, which will include installation of additional devices to detect overheated wheel bearings early enough to prevent derailments like the one that happened in East Palestine. All told, Norfolk Southern has estimated its costs dating from the derailment will exceed $200 million in rail safety enhancements.
The proposed settlement was lodged in the U.S. District Court for the Northern District of Ohio by the Environmental Enforcement Section of the Justice Department’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Northern District of Ohio. It is subject to a minimum 30-day public comment period and final court approval. The details of today’s settlement are available on the Justice Department’s website: www.justice.gov/enrd/consent-decrees.
Additional Background
EPA is committed to protecting the health and safety of East Palestine and surrounding communities. EPA personnel have been on site since the initial hours of the train derailment, and the agency continues to provide residents the most up-to-date information via the website, welcome center, community meetings, newsletters and more.
Immediately following the train derailment, EPA established a 24/7 air monitoring and sampling network. EPA also began coordinating with state and local officials to monitor environmental impacts on the community. Over the course of the response, EPA has collected over 115 million air monitoring data points and over 45,000 air, water and soil samples, giving the agency confidence in the safety of air, water and soil in the community. Since the evacuation was lifted, no sustained chemicals of concern have been found in the air.
To date, more than 177,000 tons of contaminated soil and more than 69 million gallons of wastewater have been removed from the community and work continues to remove contamination from area creeks and soil sampling at the derailment site to ensure all contamination has been remediated.
Justice Department Sues Two Organizations and Seven Individuals for Physically Obstructing Access to Reproductive Health Services in Violation of the FACE ActRead the Press Release
The Justice Department filed a federal lawsuit today in the Northern District of Ohio against two organizations and seven individuals for violating the Freedom of Access to Clinic Entrances (FACE) Act. The FACE Act prohibits anyone from using force, threats of force or physical obstruction against any person because they are seeking or providing reproductive health services.
The complaint alleges that the defendants, two organizations – Citizens for a Pro Life Society and Red Rose Rescue – and seven individuals – Laura Gies, Lauren Handy, Clara McDonald, Monica Miller, Christopher Moscinski, Jay Smith and Audrey Whipple – violated the FACE Act on June 4 and 5, 2021, by engaging in physical obstruction at two Ohio reproductive health facilities to prevent the facilities from providing, and patients from receiving, reproductive health care services. The complaint seeks compensatory damages, monetary penalties and injunctive relief as provided by the FACE Act.
“Obstructing people from accessing reproductive health care and physically obstructing providers from offering it are unlawful,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Congress passed the FACE Act 30 years ago this month in response to acts of violence, threats of violence and physical obstruction at reproductive health clinics in our country. The Civil Rights Division is committed to enforcing federal law to protect the rights of those who seek and those who provide access to reproductive health services.”
“Federal and state laws protect access to reproductive health care services,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Individuals have the right to access facilities in Ohio to make decisions about their own bodies, health and futures, in consultation with health care providers, free from force, threats of force, intimidation or physical obstruction. Our office remains committed to enforcing the FACE Act to protect these important rights of both individuals and providers, whether or not the services provided include abortion care options, as they do here. We encourage anyone with information about potential FACE Act violations to contact our office.”
The Civil Rights Division's Special Litigation Section and the U.S. Attorney’s Office for the Northern District of Ohio are handling the case.
Civil rights complaints can be submitted online at civilrights.justice.gov.
Anyone in imminent danger should call 911 or local police. Contact your local FBI field office by calling 1-800-CALL-FBI (or 1-800-225-5324) or via tips.fbi.gov.
Anyone in the Northern District of Ohio may report potential FACE Act or other civil rights violations by calling the Civil Rights Hotline at 855-365-2485.
Justice Department Sues Two Organizations and Seven Individuals for Physically Obstructing Access to Reproductive Health Services in Violation of the FACE ActRead the Press Release
The Justice Department filed a federal lawsuit today in the Northern District of Ohio against two organizations and seven individuals for violating the Freedom of Access to Clinic Entrances (FACE) Act. The FACE Act prohibits anyone from using force, threats of force or physical obstruction against any person because they are seeking or providing reproductive health services.
The complaint alleges that the defendants, two organizations – Citizens for a Pro Life Society and Red Rose Rescue – and seven individuals – Laura Gies, Lauren Handy, Clara McDonald, Monica Miller, Christopher Moscinski, Jay Smith and Audrey Whipple – violated the FACE Act on June 4 and 5, 2021, by engaging in physical obstruction at two Ohio reproductive health facilities to prevent the facilities from providing, and patients from receiving, reproductive health care services. The complaint seeks compensatory damages, monetary penalties and injunctive relief as provided by the FACE Act.
“Obstructing people from accessing reproductive health care and physically obstructing providers from offering it are unlawful,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Congress passed the FACE Act 30 years ago this month in response to acts of violence, threats of violence and physical obstruction at reproductive health clinics in our country. The Civil Rights Division is committed to enforcing federal law to protect the rights of those who seek and those who provide access to reproductive health services.”
“Federal and state laws protect access to reproductive health care services,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Individuals have the right to access facilities in Ohio to make decisions about their own bodies, health and futures, in consultation with health care providers, free from force, threats of force, intimidation or physical obstruction. Our office remains committed to enforcing the FACE Act to protect these important rights of both individuals and providers, whether or not the services provided include abortion care options, as they do here. We encourage anyone with information about potential FACE Act violations to contact our office.”
The Civil Rights Division's Special Litigation Section and the U.S. Attorney’s Office for the Northern District of Ohio are handling the case.
Civil rights complaints can be submitted online at civilrights.justice.gov.
Anyone in imminent danger should call 911 or local police. Contact your local FBI field office by calling 1-800-CALL-FBI (or 1-800-225-5324) or via tips.fbi.gov.
Anyone in the Northern District of Ohio may report potential FACE Act or other civil rights violations by calling the Civil Rights Hotline at 855-365-2485.
Cleveland Clinic to Pay over $7 Million to Settle Allegations of Undisclosed Foreign Sources of Funding on NIH Grant Applications and ReportsRead the Press Release
The Cleveland Clinic Foundation (CCF) has agreed to pay $7,600,000 to resolve allegations that it violated the False Claims Act (FCA) by submitting to the National Institutes of Health (NIH) federal grant applications and progress reports in which CCF failed to disclose that a key employee involved in administering the grants had pending and/or active financial research support from other sources.
The settlement resolves allegations that CCF made false statements to NIH, a component of the Department of Health and Human Services (HHS), in connection with three federal grant awards. Despite NIH requirements to do so, CCF repeatedly failed to disclose that the employee who it designated as the Principal Investigator on each grant had pending and/or active grants from foreign institutions that provided financial assistance to support the employee’s research and already obligated that employee’s research time. CCF falsely certified that the grants submissions were true and accurate.
NIH requires full transparency in applications and throughout the life of the grants it awards. This includes a requirement that grant applicants disclose all sources of research support, from any source, on grant applications and on follow-up documents relating to grant awards. NIH uses this information to determine if the applicant has the time necessary to allocate to the proposed research project, and if the research proposal has other sources of funding that are duplicative. It also assists NIH in determining if an applicant’s financial interests may affect its objectivity in conducting research.
The settlement also resolves allegations that CCF violated NIH password policies by permitting CCF employees to share passwords. Some of the false submissions wherein CCF failed to disclose the Principal Investigator’s foreign grant support were made by CCF employees who were inappropriately given access to NIH’s online grant reporting platform.
“Each year, NIH awards federal grants to support research to improve public health, but those funds are limited and the grant process is competitive. Every entity or person who seeks such grant money must strictly play by the rules. As stewards of taxpayer dollars, our Office takes seriously its responsibility of ensuring that grant recipients fully and accurately report all required information to NIH so that it may properly award its limited funds to deserving institutions,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Today’s settlement illustrates the importance of being truthful at every stage of the grants process.”
In addition to the $7.6 million settlement, NIH has imposed Specific Award Conditions on all CCF’s grants for a one-year period. Federal regulations allow NIH to impose Specific Award Conditions on grant recipients, including on recipients that do not comply with the terms of a federal award. In this case, NIH is requiring a high-level CCF employee to personally attest to the truth, completeness, and accuracy of all “other grant support” information CCF provides to NIH. CCF must also develop a corrective action plan that includes an assessment of internal controls related to other grant support and foreign-component reporting; create a mandatory training program addressing requirements for disclosing other grant support, research security, and cyber security; and develop an improvement plan for its internal controls, ensuring that CCF has oversight at the institutional level to confirm that the information its Principal Investigators disclose is true, complete, and accurate, among other requirements. The Specific Award Conditions will begin Oct. 1, 2024, and remain in effect through Sept. 30, 2025, or until NIH is satisfied that CCF has successfully completed the Corrective Action Plan.
“The accuracy of information reported in applications and other documentation related to federal grants is critical to ensuring that these limited funds are utilized in the most efficient and effective manner and that the integrity of the application process is upheld,” said Special Agent in Charge Mario M. Pinto, of the United States Department of Health and Human Services Office of Inspector General (HHS-OIG). “Our agency is committed to ensuring that those who submit false statements in grant applications are identified and investigated, in cooperation with our federal law enforcement partners.”
A cooperative effort between HHS-OIG, the FBI, and the U.S. Attorney’s Office for the Northern District of Ohio resulted in the resolution obtained in this matter. Assistant United States Attorneys Michelle Heyer and Elizabeth Berry investigated the matter on behalf of the U.S. Attorney’s Office.
This settlement illustrates the government’s emphasis on combating fraud. If you have information regarding potential fraud, waste, abuse, or mismanagement in the U.S. Department of Health and Human Services’ programs, please file a report with OIG's Hotline. You can submit your tip or complaint online at https://oig.hhs.gov/fraud/report-fraud/ or contact the OIG Hotline at 1-800-447-8477. The claims resolved by the settlement are allegations only and there has been no determination of liability.
Cleveland Clinic Settlement Agreement Fully Executed.pdfBank Employee Indicted on Charges of Bank Fraud and Identity TheftRead the Press Release
CLEVELAND – A federal grand jury has returned a 17-count indictment charging Yue Cao, 34, of Winfield, Illinois, accusing him of bank fraud, aggravated identity theft, and engaging in monetary transactions in criminally derived property in connection with a scheme to steal funds from identity theft victims’ accounts at the bank where he worked.
According to the indictment, from between approximately May 2022 to April 2023, Cao allegedly engaged in a scheme to defraud the Ohio-based bank where he worked, and its customers, by transferring funds from those customers’ accounts to ones that Cao controlled, including accounts he had established in the customers’ names, all without their knowledge or authorization. He diverted the money stolen from the customer accounts for his personal use.
Cao was a quantitative modeling analyst at the bank and used his position to locate customers who had not yet enrolled in online banking services, primarily targeting elderly customers as identity theft victims. Without the victims’ knowledge, Cao created email addresses in their names and enrolled their accounts in online banking without their knowledge. By setting up online banking, he both obtained control of the victims’ accounts and ensured that bank statements and other notices about the accounts would be sent to the email addresses he controlled. Cao then used the victims’ personal identifying information to open unauthorized bank accounts and brokerage accounts in their names. Cao used his control of these accounts to set up at least $2.1 million in unauthorized online transfers from the victims’ true accounts to the unauthorized accounts he had opened in the victims’ names and to Cao’s own financial accounts.
An indictment is only a charge and not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum, and, in most cases, it will be less than the maximum.
The investigation was conducted by the FBI Cleveland Division. The case is being prosecuted by Assistant United States Attorney Edward Brydle.
Trucking Company Operator Indicted for Tax EvasionRead the Press Release
CLEVELAND – A federal grand jury has returned a seven-count indictment charging Alice F. Martin, 59, of Louisville, Ohio accusing her of attempting to evade the assessment of income taxes from 2013 through 2018. Martin is also accused of attempting to evade the payment of previously taxes, penalties, and interest from 2011 through 2013, all tied to Martin Logistics, a trucking company which she owned and operated.
According to the indictment, Martin set forth a plan to phase out Martin Logistics after it became burdened with tax debt in order to make herself, and Martin Logistics, uncollectable to the Internal Revenue Service. Martin directed one of her employees to open a new company, TSA Transportation, which would serve as Martin’s nominee trucking business. Beginning January 2013, contracts for trucking services were primarily bid under TSA Transportation’s name, but the income TSA Transportation received was directly deposited into a bank account for another entity that Martin owned and controlled, A.F. Martin. In addition, Martin placed Martin Logistics’ assets, including trucks and trailers, into the name of yet another Martin-owned company, Martin Global.
From around 2013 to 2018, Martin directed approximately $18 million in gross receipts associated with TSA Transportation contracts to be deposited into the A.F. Martin banking account. Despite this, Martin regularly failed to file individual and corporate tax returns related to her trucking entities or and failed to pay the taxes on her income. Martin also made several misrepresentations to the IRS related to the finances of Martin Logistics. After her fraudulent scheme was discovered, Martin caused several more misrepresentations to be made to the IRS related to the filing status of her income tax returns.
Martin received over $3.6 million in unreported taxable income resulting in her evading the IRS’s assessment of approximately $1.2 million in taxes due between 2013 and 2018.
An indictment is only a charge and not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum, and, in most cases, it will be less than the maximum.
The investigation was conducted by the IRS-Criminal Investigations. The case is being prosecuted by Assistant United States Attorney Edward Brydle.
Ohio man pleads guilty to dumping 7,000 gallons of hazardous substance-contaminated wastewater into Scioto RiverRead the Press Release
TOLEDO - An Ohio man pleaded guilty to violating the Clean Water Act by dumping pollutants and hazardous substances into waterways that killed thousands of fish in the Scioto River.
According to court documents, on April 17, 2021, Mark Shepherd, age 72, Kenton, Ohio, negligently, and without a permit or in violation of a permit, discharged into the Scioto River near Kenton, Ohio, approximately 7,000 gallons of a substance containing ammonia, a pollutant and hazardous substance. The substances originated from Shepherd’s facilities—Cessna Transport Inc. and A.G. Bradley Inc.—which he owned and operated in the Northern District of Ohio, Western Division.
The Ohio Department of Natural Resources determined that the discharge killed 43,094 fish, including black bass, flathead catfish, sunfish, and minnows, valued at $22,508.60. The contaminants flowed approximately 18 miles downstream from where Shepherd illegally dumped it.
“This type of behavior is unacceptable,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “The Scioto River is home to abundant fish and other wildlife, and it is a valuable community resource, flowing through more than 230 miles of Ohio. As the guilty plea demonstrates, anyone caught illegally discharging substances into our district’s waterways that harm our environment will face prosecution. Our office is committed to preserving our natural resources for Ohio communities to enjoy for generations to come.”
The fish kill was originally reported by a local fisherman in Hardin County. The area in which the dumping occurred is routinely used for recreational fishing. According to the Ohio Environmental Protection Agency, in 2009, a water quality sample not far from the fish kill site listed the area as “Generally High-Quality Water.”
“Illegal dumping of pollutants into the Scioto River in Hardin County, Ohio not only violated the Clean Water Act, but also harmed aquatic species,” said Special Agent in Charge Tyler Amon of EPA’s Criminal Investigative Division in Ohio. “This guilty plea illustrates EPA’s and its partners commitment to protecting the environment and ensuring accountability for those that fail to abide by our nation’s environmental laws.”
“There’s a right way and a wrong way to do business – and when your business pollutes Ohio’s natural resources, you will be held accountable,” Ohio Attorney General Dave Yost said. “I’m grateful for our many partners who work together to keep our land, water and air clean.”
Sentencing is slated for Aug. 12, 2024.
The case is being prosecuted by Assistant U.S. Attorney Matthew Simko. The case was investigated by the Ohio Department of Natural Resources, the Ohio Attorney General’s Office-Environmental Enforcement Unit, the Ohio Environmental Protection Agency, the Ohio Bureau of Criminal Investigation, and the U.S. Environmental Protection Agency.
If you have information or see activity that you believe is a potential or immediate environmental problem, please call the Ohio EPA 24-hour Hotline at 800-282-9378 or the U.S. EPA Emergency Number at 800-424-8802.
Forum provides best practices and resources to prevent and respond to hate crimes that target religious institutionsRead the Press Release
In an effort to prevent hate crimes that target religious institutions, and to prepare faith-based leaders and congregation members with strategies for responding when faced with such security issues, the U.S. Attorney’s Office for the Northern District of Ohio, the U.S. Department of Justice Community Relation Services (“CRS”) Midwest Regional Office, and the Cleveland Field Office of the FBI is facilitating a free event, “Protecting Places of Worship,” held on Wednesday, May 29, from 10 a.m. to 1 p.m. at Mt. Olive Missionary Baptist Church, 3290 E. 126th St., Cleveland, OH 44120. Registration is open to the public by calling the Public Affairs Officer of the United States Attorney’s Office at 216-622-3807.
“Protecting Places of Worship” is a half-day forum that will provide information about religion-focused hate crimes; how to best report such incidents; federal and state hate crimes laws; law enforcement threat assessments; ways to protect places of worship from potential hate crimes and other threats of violence; and other strategies for combatting hate and extremism. This program brings together federal and local law enforcement, federal and local prosecuting attorneys, civil rights organizations, and community organizations to discuss these issues. The forum’s goal is to share strategies and other information to help communities of faith effectively address and respond to bias incidents and hate crimes that affect their places of worship.
Discussion topics include:
- Existing federal and state hate crime statutes, and increasing public awareness of hate crimes reporting procedures and prosecutions.
- Analysis of hate crime data and trends, including recent examples of hate crimes targeting places of worship.
- Strategies for responding to active-shooter incidents.
- Best practices for assessing the physical security of places of worship and identifying potential security concerns, along with competitive grant opportunities and other strategies to address those concerns.
- Interfaith panel discussion to foster dialogue and collaboration among diverse religious communities, and to share strategies these organizations have used to address bias incidents.
All sessions will be followed by Q & A.
Featured speakers include those from the following organizations: U.S. Attorney’s Office for the Northern District of Ohio; FBI, Cleveland Field Office; Cuyahoga County Prosecutor’s Office; Anti-Defamation League Cleveland; U.S. Department of Homeland Security, Cybersecurity and Infrastructure Security Agency; and the Federal Emergency Management Agency.
Panelists include leaders from Cleveland’s Islamic, Sikh, and Hindu communities, the Jewish Federation of Cleveland, and the Catholic Diocese of Cleveland. The Mount Pleasant Ministerial Alliance is hosting this event.
This event is part of the U.S. Department of Justice’s United Against Hate initiative. For questions or more details about the event, contact Executive Assistant U.S. Attorney Edward Feran at 216-622-3709 or [email protected].
About CRS
Established by Title X of the Civil Rights Act of 1964, CRS’ expanded its services under the Matthew Shepard and James Byrd, Jr., Hate Crimes Prevention Act of 2009. As a component of the United States Department of Justice, CRS serves as “America’s Peacemaker,” offering support to communities experiencing tension or conflict due to differences of race, color, natural origin, gender, gender identity, sexual orientation, religion, and disability. Through its services, CRS enhances the ability of community members to independently and collaboratively prevent and resolve future conflicts by fostering knowledge, understanding and communication.CRS Programs
The primary objectives of all CRS programs are to assist parties in conflict by fostering understanding of various perspectives, facilitating the exchange of information regarding resources and best practices, and aiding communities as they identify and implement solutions. CRS conciliation specialists maintain impartiality and refrain from taking sides among disputing parties. Instead, they facilitate the process, empowering those involved to develop their own mutually agreeable solutions.Camp Administrators Reminded to Comply with the Disabilities Act This SummerRead the Press Release
CLEVELAND - To help ensure that children with disabilities receive the opportunity to attend summer camp, the U.S. Attorney’s Office for the Northern District of Ohio recently notified numerous summer camps in the region to remind them of their obligations under the Americans with Disabilities Act (“ADA”). The U.S. Attorney’s Office serves the 40 northern counties of Ohio from offices located in Cleveland, Toledo, Akron, and Youngstown.
Under the ADA, summer camps, both private and those run by municipalities, must make reasonable modifications to enable campers with disabilities to participate fully in all camp programs and activities. This means that children with disabilities are entitled to attend and participate in any camp or activity that non-disabled children attend, that camps must evaluate each child on an individual basis, and that camps must train their staff to ensure that they understand the ADA’s requirements. Camps are also obligated to pay for the cost of any reasonable modifications necessary for disabled children to participate in camp activities. Parents should not be charged any additional fee beyond standard camp enrollment costs.
“Summer camps are a wonderful way to allow children to explore their interests, discover their strengths, build confidence in their abilities, and become part of a community,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “Camp administrators in our district must afford these opportunities equally to all children, regardless of whether they have a disability, and must take the steps necessary to accommodate a disability-based need when that can be reasonably accomplished. Our district is committed to the fair and just enforcement of the ADA, and we are proud to play a pivotal role in ensuring that people with disabilities have equal access and opportunities to participate fully in our community.”
Additional information about the ADA is available at www.ada.gov, or by contacting the ADA information line at 800-514-0301 (voice) or 1-833-610-1264 (TTY). You may contact the Office of the U.S. Attorney for the Northern District of Ohio regarding ADA issues at 216-622-3600 or [email protected].
Ohio Man Pleads Guilty to Operating an Illegal Gambling Business and Tax FraudRead the Press Release
An Ohio man pleaded guilty today to tax evasion, operating an illegal gambling business and two counts of money laundering associated with his ownership and operation of illegal gambling businesses in Northeast Ohio.
According to court documents and statements made in court, from 2009 through 2022, Steven Saris, 49, of Canton, Ohio, owned and operated multiple illegal gambling businesses in Northeast Ohio including Café 62, Lucky’s, Winner’s World and Spin City. He also owned and operated such businesses in Springfield, Ohio, and throughout Florida. Saris concealed his involvement in these businesses by arranging for others to serve as nominee owners.
For tax year 2015, Saris filed a false tax return that did not report more than $1.4 million in income he received from his gambling businesses. For tax years 2016 through 2021, Saris did not file tax returns or pay all the tax that he owed despite earning more than $8.5 million in income from his gambling businesses. During that time, Saris made only two nominal payments in 2018 when he filed an application for an extension of time to file his 2017 return. Saris used his proceeds from the illegal gambling businesses to gamble millions at legal casinos and to acquire and renovate at least two residential properties located in Canton, Ohio.
Saris’ conduct caused a tax loss to the IRS of $2,823,391.
In July 2018, law enforcement executed search warrants at multiple illegal gambling businesses and associated locations in Northeast Ohio. Following those search warrants, Saris made false statements to law enforcement. At the same time he was making false statements to law enforcement, Saris continued operating the illegal gambling businesses in Ohio and did not disclose these operations to law enforcement. In August 2022, law enforcement executed a court authorized search warrant at Saris’ residence and for his cell phone. Upon being told of the search warrant for his phone, Saris told law enforcement that he did not know the location of his cell phone. Law enforcement recovered Saris’ cell phone from the water tank of a bathroom toilet in Saris’ residence.
Sentencing for Saris is scheduled for Aug. 8. He faces a maximum penalty of 10 years in prison for the counts of money laundering and five years in prison for both tax evasion and for operating an illegal gambling business. Saris also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio made the announcement.
IRS Criminal Investigation, Homeland Security Investigations, the Department of Treasury’s Office of Inspector General, Stark County Prosecutor’s Office, Ohio Casino Control Commission and Ohio Organized Crime Investigations Commission-Major Crimes Task Force investigated the case.
Trial Attorneys Sam Bean and Hayter Whitman of the Justice Department’s Tax Division and Assistant U.S. Attorney David Toepfer for the Northern District of Ohio prosecuted the case.
Ohio Man Sentenced for Tax Fraud ConspiracyRead the Press Release
An Ohio man was sentenced today to one year and one day in prison for conspiring to defraud the United States.
According to court documents and statements made in court, from 2016 through 2022, Christopher Karasarides conspired with his father, Christos Karasarides Jr., to defraud the United States by helping his father conceal assets from the IRS. Christos Karasarides, who was convicted by a jury in January for related tax crimes, owed the IRS millions of dollars that it was trying to collect. To thwart those efforts, Christopher helped his father hide assets from the IRS by storing $239,000 of his father’s cash in a safety deposit box in Christopher’s name. Christopher also served as a nominee owner for his father’s businesses, signed and delivered false promissory notes and filed false tax returns.
In addition to his prison sentence, U.S. District Judge Donald C. Nugent for the Northern District of Ohio ordered Christopher Karasarides to serve three years of supervised release and pay $1.5 million in restitution to the United States.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio made the announcement.
IRS Criminal Investigation, Homeland Security Investigations, the Department of Treasury’s Office of Inspector General, Stark County Prosecutor’s Office, Ohio Casino Control Commission and Ohio Organized Crime Investigations Commission-Major Crimes Task Force investigated the case.
Trial Attorneys Sam Bean and Hayter Whitman of the Justice Department’s Tax Division and Assistant U.S. Attorney David Toepfer for the Northern District of Ohio prosecuted the case.
Local men sentenced to imprisonment for illegal trafficking in firearmsRead the Press Release
CLEVELAND – Willie Earl Jackson, age 26, of Cleveland, and Shane Plats, 31, of Ashtabula, were sentenced to imprisonment by U.S. District Judge John. R. Adams. Jackson had earlier pled guilty to engaging in the business of dealing firearms without a federal firearms license and trafficking in firearms. Plats had earlier plead guilty to engaging in the business of dealing firearms. Jackson received an 84-month prison sentence, followed by 3 years of supervised release, and was ordered to pay a $200 special assessment. Plats was sentenced to 18 months imprisonment, followed by 2 years of supervised release, and ordered to pay a $100 special assessment.
The United States Attorney’s Office (“USAO”) prosecuted these two cases under the new criminal provisions of the Bipartisan Safer Communities Act, which Congress enacted and the President signed in June 2022. The Act is the first federal statute specifically designed to target the unlawful trafficking and straw-purchasing of firearms. These are the first two cases brought under the Act and sentenced in this district.
According to court documents, Plats and Jackson were previously employed as corrections and detention officers for the Cuyahoga County Juvenile Court. Between May and July of 2023, Plats sold at least 7 Palmetto Armory Dagger Compact 9mm pistols to Jackson, after Plats first purchased those pistols from a federal firearms licensee, knowing that Jackson intended to resell the firearms to others. Plats admitted he did not have a federal firearms license and illegally sold the firearms for profit.
In turn, between June and August 2023, Jackson sold over 35 firearms to undercover agents who posed as gun buyers seeking to purchase firearms on the street. The firearms that Jackson sold included semi-automatic rifles and pistols, including at least one with an obliterated serial number. Jackson conducted most of these transactions in retail establishment parking lots and other public spaces, often from his car. Jackson offered to sell agents prohibited firearms such as “Glock switches,” also referred to as “machinegun conversion devices,” offered to remove serial numbers from the guns he sold, and sold agents a rifle that NIBIN-data showed was associated with three separate shootings.
Jackson was previously under investigation by the ATF. In 2022, the ATF served Jackson with a warning letter that advised him that it was unlawful to buy a firearm for someone else—often referred to as “straw purchasing.” The ATF sent this letter to Jackson after it discovered, through tracing data, that firearms Jackson had previously purchased were later recovered in connection with crimes. Despite the warning, Jackson continued to illegally traffic in firearms from June through August 2023.
Jackson and Plats were 2 of more than 65 individuals who the USAO charged as a part of a 3-month, violent-crime-reduction initiative in Cleveland last summer led by the ATF and the USAO, with cooperation from other federal, state, and local law enforcement partners. These charges stemmed from extensive, targeted, and sustained efforts by law enforcement to clamp down on illegal firearms trafficking, use, and associated violence in Greater Cleveland.
“The new Bipartisan Safer Communities Act improves our ability to keep illegal firearms out of our neighborhoods and communities,” said United States Attorney Rebecca C. Lutzko. “This new tool in our toolkit targets illegal gun sales. It makes crystal clear that anyone who tries to make money by selling firearms or otherwise selling guns regularly must obtain a federal firearms license and run required background checks on those making the purchase. It also will help reduce the temptation for those who may legally purchase firearms to buy and then sell them to just anyone. Unfortunately, we often see firearms, initially bought through legal channels, later recovered in connection with a crime. We are confident this statute will help put a stop to that.”
“These defendants were both charged with violating the Gun Control Act by selling firearms without a license,” stated Daryl S. McCormick, Special Agent in Charge of ATF’s Columbus Field Division. “By facilitating the flow of firearms to those who are prohibited from possessing them, they bear responsibility for the violence those firearms cause in our community. I hope this sentence serves as a warning to others who might consider doing this – ATF and our law enforcement partners will work to find you, as well, and hold you accountable for your actions.”
The investigation preceding the indictment was conducted by the ATF and ATF Task Force Officers, many from the Cleveland Division of Police, with significant help from other federal, state, and local law enforcement partners. Assistant United States Attorney Kelly L. Galvin prosecuted these cases.
Cleveland man sentenced to more than 30 years in prison for his role in large-scale drug trafficking organizationRead the Press Release
AKRON – Brandon Bryant, 28, of Cleveland, was sentenced 365 months (more than 30 years) in prison by U.S. District Judge John R. Adams, after pleading guilty to conspiracy to distribute and possess with intent to distribute controlled substances, distribution of controlled substances, possession with intent to distribute controlled substances, and use of a communications facility in furtherance of a drug felony. Bryant was ordered to serve a lifetime term of supervised release following his release from prison, and will also forfeit drug-related assets, including a Rolex watch, $13,093 in U.S. Currency, and two vehicles.
According to court documents, Bryant was a member of a large-scale fentanyl trafficking organization that operated on Cleveland’s eastside between September 2019 and February 2022. Bryant received large amounts of fentanyl from his codefendant Devonn Fair. Bryant then redistributed that fentanyl to customers in the Cleveland area. Fair and Bryant maintained multiple residences on the east side of Cleveland for the purpose of distributing and storing controlled substances. The organization drew fentanyl customers from as far away as Trumbull, Medina, Wayne, and Lorain Counties.
Bryant was one of 24 defendants charged in this indictment. All 24 defendants have been convicted and sentenced. Other defendants previously sentenced in this case include:
• Devonn Fair, who was the organization’s primary fentanyl supplier and also sold fentanyl to customers (sentenced to 420 months in prison)
• Ramel Drew, who sold fentanyl to the organization’s customers (sentenced to 327 months in prison)
• Branea Bryant, who laundered the organization’s drug proceeds (sentenced to 290 months in prison)The investigation preceding the indictment was conducted by the Federal Bureau of Investigation’s Cartel, Gang, Narcotics, and Laundering Task Force (CGNL) and the Internal Revenue Service Criminal Investigation Division (IRS-CID), with assistance from the Cleveland Division of Police, the Cuyahoga County Sheriff’s Office, the Ohio Investigative Unit, the Ohio State Highway Patrol, the Cleveland Heights Police Department, the Southeast Area Law Enforcement Task Force (SEALE), the ATF, the U.S. Marshal’s Service, the DEA, and the Cuyahoga County Regional Forensic Science Laboratory.
This case was prosecuted as part of an Organized Crime Drug Enforcement Task Force (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations.
The specific mission of the OCDETF Cleveland Strike Force (SF) is to disrupt and dismantle major criminal organizations and subsidiary organizations, including criminal gangs, transnational drug cartels, racketeering organizations, and other groups engaged in illicit activities that present a threat to public safety and national security and are related to the illegal smuggling and trafficking of narcotics or other controlled substances, weapons, humans, or the illegal concealment or transfer of proceeds derived from such illicit activities in the Northern District of Ohio. The OCDETF Cleveland SF is comprised of agents and officers from the Federal Bureau of Investigation, the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Homeland Security Investigations, the United States Marshals Service, U.S. Postal Inspection Service, Internal Revenue Service, U.S. Border Patrol, and the Cleveland Division of Police, and the prosecution is being led by the Office of the United States Attorney for the Northern District of Ohio.
The case was prosecuted by Assistant United States Attorneys James Lewis, Joseph Dangelo, and James Morford.
Jury Convicts Self-Described Civil Rights Activist from Toledo of Wire Fraud and Money LaunderingRead the Press Release
TOLEDO – Sir Maejor Page, 35, of Toledo, was found guilty of wire fraud and three counts of money laundering by a jury after a six-day trial before U.S. District Judge Jeffrey Helmick.
According to court documents and testimony, in 2016, Page created a Facebook page for “Black Lives Matter of Greater Atlanta” (“BLMGA”) and registered this organization as a domestic non-profit with the Georgia Secretary of State Corporation’s Division. In 2017, the IRS approved Page’s request granting BLMGA tax-exempt status under Section 503(c)(3) of the tax code, but dissolved this status in 2019. Page nonetheless accepted donations after falsely portraying BLMGA to the public as a legitimate charity engaged in social justice work, when in fact, it was not. Instead, Page used the money that individual donors gave to BLMGA not for social justice causes, but rather to buy items for his own personal use, such as a house and furniture. Page also committed money-laundering crimes when he bought these items with the donations that he fraudulently obtained.
“The United States Attorney’s Office prioritizes the prosecution of white-collar criminal conduct, particularly conduct involving deceptive schemes that selfishly exploit a charitable donor’s goodwill for personal gain,” said United States Attorney Rebecca C. Lutzko, for the Northern District of Ohio. “The donors to BLMGA thought they were giving their hard-earned money to a cause they believed in. But instead of using it to support that cause, Page used it for himself. The jury’s verdict is a warning to every fraudster that when you misrepresent how donations or other money given to you in trust will be used, you will be prosecuted and punished.”
"Preying on the generosity of the public for personal gain is cold and calculated," said FBI Cleveland Special Agent in Charge Greg Nelsen. "The FBI and it's white-collar crime division along with our federal, state, and local partners will continue to aggressively find and investigate criminals who believe they can deceive others through shady business practices."
No sentencing date has been set.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Gene Crawford and Rob Melching.
Ohio Financial Planner Sentenced to Prison for Promoting an Illegal Charitable Contribution Tax ShelterRead the Press Release
A financial planner from Cleveland was sentenced to 20 months in prison for conspiring to defraud the United States by promoting an illegal tax shelter scheme involving false charitable deductions.
According to court documents and statements made in court, Rao Garuda was the president and chief executive officer of Associated Concepts Agency Inc. He promoted a fraudulent tax shelter known as the “Ultimate Tax Plan” or the “Advanced Legacy Plan” that was organized, marketed and sold by his co-conspirator, Michael Meyer.
They marketed the scheme as a way for high-income clients to reduce their taxes by claiming deductions for charitable donations that the organizers knew were fraudulent. In particular, Garuda and others promoted the scheme as a way for clients to receive the deduction without relinquishing ownership or control over the assets the clients purported to have donated. Garuda continued to sell the scheme despite being warned by several attorneys that the scheme was illegal.
Garuda also assisted clients in backdating documents so that clients could claim purported donations on their prior years’ tax returns.
In April 2018, the Justice Department filed a civil suit against Meyer seeking to enjoin him from continuing to promote the Ultimate Tax Plan. As part of that litigation, the Justice Department issued civil subpoenas to Garuda’s clients. In response, Garuda created false, backdated documents and directed clients to submit them to the Justice Department. In April 2019, a federal district court permanently enjoined Meyer from organizing, promoting, marketing or selling the Ultimate Tax Plan.
In addition to his prison sentence, U.S. District Judge Bridget Meehan Brennan for the Northern District of Ohio ordered Garuda to serve three years of supervised release and to pay $1,506,399 in restitution.
Cullen Fischel, Associated Concepts’ chief operating officer, was sentenced to four months in prison, three years of supervised release and was ordered to pay $268,605 in restitution for his role in the scheme.
On April 10, Meyer was sentenced to eight years in prison for his role in the scheme.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio made the announcement.
IRS Criminal Investigation is investigating the case.
Assistant Chief Michael Boteler of the Tax Division and Assistant U.S. Attorney Elliott Morrison for the Northern District of Ohio are prosecuting the case.
Ohio Woman Sentenced for Violation of Freedom of Access to Clinic Entrances (FACE) Act Violation for Damaging Pregnancy CenterRead the Press Release
TOLEDO – Whitney Durant, AKA Soren Monroe, age 20, of Worthington, Ohio, was sentenced to two years of probation and a $2,000 dollar fine by Magistrate Judge Darrell A. Clay, after pleading guilty to one count of intentionally damaging a reproductive health care center, a violation of the Freedom of Access to Clinic Entrances Act (the “FACE Act”). Durant vandalized HerChoice, a reproductive health services clinic located in Bowling Green, Ohio, because the clinic offers pregnancy counseling, free pregnancy testing and ultrasounds, but not abortion services.
According to court documents and statements made in court, on April 15, 2023, Durant defaced the clinic’s building, spray painting the words, “LIARS,” “FAKE CLINIC,” “Fund Abortion,” “Abort God,” and “Jane’s Revenge.” Durant was a Bowling Green State University student at the time of this conduct.
“The United States Attorney’s Office is committed to neutrally enforcing federal laws that protect uninterrupted access to all clinics providing reproductive health services, whether those clinics provide women with options that include abortion care or whether they solely encourage women to consider non-abortion alternatives,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “This prosecution and sentence demonstrate that we will not tolerate efforts to impede patient access to the reproductive health care of their choice by someone who intentionally defaces or otherwise damages a clinic providing such services. The First Amendment protects peaceful protests, not blatant vandalism.”
“Today’s sentencing serves as a reminder that intentionally damaging or destroying the property of a facility because it provides reproductive health services is a federal violation of the FACE Act,” said FBI Cleveland Special Agent in Charge Greg Nelsen. “The FBI and its local, state, tribal, and federal law enforcement partners will protect access to reproductive healthcare services for every American, thoroughly investigate FACE Act violators, and continue to aggressively pursue all violations of the statute.”
The FBI Cleveland Field Office, Toledo Resident Agency and Bowling Green Police Department investigated the case. Assistant U.S. Attorney Angelita Cruz Bridges and Wood County Prosecutor and Special Assistant U.S. Attorney Paul Dobson for the Northern District of Ohio prosecuted the case.
Anyone who has information about incidents of violence, threats and obstruction that target a patient or provider of reproductive health services or damage and destruction of reproductive health care facilities, should report that information to the FBI at https://tips.fbi.gov/.
15 Gang Members Indicted for Drug Trafficking and Firearms PossessionRead the Press Release
CLEVELAND – Federal, state, and local law enforcement officials announce the unsealing of a superseding indictment charging 15 members of the Fully Blooded Felons, a criminal street gang that was active in Northeast Ohio and in the Ohio prison system. The gang members were charged for their roles in a drug trafficking conspiracy involving their importing and distributing fentanyl, methamphetamine, cocaine, and buprenorphine in Northeast Ohio, and their illegal possession of firearms. Three defendants have been in federal custody since December 2023. Authorities have arrested several newly charged defendants. They transported several of them to federal court in Cleveland, while the others are in custody elsewhere.
This announcement is made by United States Attorney Rebecca C. Lutzko, FBI Special Agent in Charge Gregory Nelsen, and Cleveland Division of Police Chief Dorothy Todd.
“The indictment alleges that Raven Mullins and other members of the Fully Blooded Felons operated an open-air drug market, distributing the deadliest types of drugs sold on Cleveland’s streets. This organization is charged not only with peddling such poisons in Cleveland’s Cedar Estates neighborhood, but also with actively plotting to recruit persons to infiltrate the Ohio prison system to distribute drugs there so gang members could reap the profits,” said United States Attorney Rebecca C. Lutzko. “This indictment and these arrests are a product of the dedication, cooperation, and tireless efforts of Northern District of Ohio federal, state, and local law enforcement partners who, working together, identified and disrupted this criminal organization. Because of these efforts, the many law-abiding members of the Cedar Estates neighborhood have a real opportunity to come together and make positive changes.”
“This operation and subsequent arrests underscore the FBIs mission to investigate, disrupt, and dismantle gangs not only in the larger cities across America, but also right here in northern Ohio,” said FBI Cleveland Special Agent in Charge Greg Nelsen. “Identifying criminal networks takes careful coordination and collaboration. We are proud to partner with the agencies that make up the FBI Safe Streets Gang Task Force, which includes the Cleveland Division of Police, Ohio Adult Parole Authority, and the Ohio Investigative Unit. In addition, the United States Marshals Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and Cleveland’s Third District played a major role in this operation. We thank them as well as our other federal, state, and local partners who work seamlessly together to protect our communities and keep offenders off the streets.”
The following defendants are charged in the 33-count superseding indictment:
Raven Mullins, aka Dunny, aka Dun, 34, Cleveland, Ohio
Henry Burchett, aka Noodles, aka Noo, 39, Cleveland, Ohio
Cortez Tyree, aka Seed, 34, Cleveland, Ohio
Rodney Linson, aka Scrap, 37, Willoughby Hills, Ohio
Elijah Johnson, aka Loon, 36, Unknown
Demarcus Elliott, aka Moo, 37, Westlake, Ohio
Dontez Hammond, aka Donny, 35, Cleveland, Ohio
Jeffrey Lee, aka Fatty, 23, Cleveland, Ohio
Jerrell Jones-Ferrell, aka Ruga, 25, Cleveland, Ohio
Jerry Mullins, aka B. Money, 32, Cleveland, Ohio
Devonte Johnson, aka D Nut, aka Nut, 31, Cleveland, Ohio
Jerome Williams, aka Jay, 29, Cleveland, Ohio
Christepher Horton, aka Cam, aka Killa, 40, Erie, Pennsylvania
Deeundra Perkins, aka Drizzy, 32, Unknown
Deon Blackwell, aka White Boy, 37, Cleveland, OhioThe defendants were all charged in a conspiracy to distribute and possess with intent to distribute controlled substances. Additionally, six defendants were charged with possession with intent to distribute controlled substances offenses, five defendants were charged with illegal possession of firearms, and five defendants were charged with possessing firearms in furtherance of drug trafficking crimes. One defendant was charged with interstate travel in aid of racketeering, and 11 defendants were charged with using a communications facility to facilitate a felony drug offense.
The superseding indictment alleges that between as early as January 2022, and continuing through April 2, 2024, the defendants did knowingly and intentionally conspire with each other to distribute and possess with the intent to distribute mixtures and substances containing fentanyl, a Schedule II controlled substance, methamphetamine, a Schedule II controlled substance, cocaine, a Schedule II controlled substance, cocaine base (“crack”), a Schedule II controlled substance, and buprenorphine, a Schedule III controlled substance.
According to court documents, Raven Mullins and other defendants operated an organized gang hierarchy that committed violent acts, possessed and transferred firearms, and distributed controlled substances in Northeast Ohio. The Fully Blooded Felons used two apartments at the Cedar Estates in Cleveland, Ohio, to store controlled substances and firearms and to distribute different controlled substances to customers. Subordinate gang members used a grassy area immediately adjacent to the Cedar Estates, and the area surrounding the 28th Street Liquor Store, to distribute controlled substances to customers at the direction of Raven Mullins and other high-ranking members. The superseding indictment alleges that Elijah Johnson travelled to Texas and Arizona to obtain kilogram quantities of pills containing fentanyl, which he then supplied to Fully Blooded Felon members for distribution in Northeast Ohio. Additionally, the superseding indictment alleges that the Fully Blooded Felons operated a drug smuggling and distribution ring inside numerous Ohio state prisons and federal detention centers.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, each defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum, and, in most cases, it will be less than the maximum.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations.
The specific mission of the OCDETF Cleveland Strike Force is to disrupt and dismantle major criminal organizations and subsidiary organizations, including criminal gangs, transnational drug cartels, racketeering organizations, and other groups engaged in illicit activities that present a threat to public safety and national security and are related to the illegal smuggling and trafficking of narcotics or other controlled substances, weapons, humans, or the illegal concealment or transfer of proceeds derived from such illicit activities in the Northern District of Ohio. The OCDETF Cleveland Strike Force consists of agents and officers from the Federal Bureau of Investigation, the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Homeland Security Investigations, the United States Marshals Service, the U.S. Postal Inspection Service, the Internal Revenue Service, the U.S. Border Patrol, and the Cleveland Division of Police. The prosecution is being led by the Office of the United States Attorney for the Northern District of Ohio.
The investigation preceding the superseding indictment was conducted by the Federal Bureau of Investigation, Safe Streets Task Force, the Cleveland Division of Police’s Third District and Gang Impact Unit, the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Ohio State Highway Patrol, the Ohio Adult Parole Authority, the Ohio Department of Rehabilitation and Correction, and the Ohio Investigative Unit. The United States Marshals Service coordinated the arrests of those defendants apprehended.
This case is being prosecuted by Assistant U.S. Attorneys Robert J. Kolansky and Paul E. Hanna, with assistance from Trial Attorneys Brian W. Lynch and Alyssa Levey-Weinstein of the Justice Department’s Violent Crime and Racketeering Section.
Medina and Cleveland Men Charged with Fraudulently Obtaining $4.2 Million in Covid Relief FundsRead the Press Release
CLEVELAND - A federal grand jury in Cleveland returned a 13-count indictment charging two individuals for their alleged roles in a scheme to fraudulently obtain approximately $4.2 million in COVID-19 relief funds guaranteed by the U.S. Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Joseph Oloyede, 61, of Medina, Ohio and Edward Oluwasanmi, 61, of Willoughby, Ohio are charged with conspiracy to commit wire fraud, wire fraud, and money laundering offenses.
According to the indictment, from in or around April 2020, and continuing through on or about February 28, 2022, Oloyede and Oluwasanmi devised a scheme to defraud the SBA and financial institutions by obtaining COVID-19 relief funds from the SBA’s Economic Injury Disaster Loan (EIDL) program and the Paycheck Protection Program (PPP) under false pretenses. The indictment states that Oloyede and Oluwasanmi submitted PPP and EIDL loan applications containing false information for entities under their control and submitted falsified tax and wage documents to support these applications. The indictment alleges that they obtained approximately $1.2 million in SBA funds for Oluwasanmi’s entities and $1.7 million for Oloyede’s entities. Oloyede is also alleged to have submitted falsified PPP and EIDL loan applications in the names of other co-conspirators and confederate borrowers and their businesses, obtaining approximately $1.3 through those applications, for a total of at least $4.2 million obtained through the fraud.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt. If convicted, the Defendant’s sentence will be determined by the Court after review of factors unique to this case, including the Defendant’s prior criminal record, if any, the Defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum, and in most cases, it will be less than the maximum.
This investigation was conducted by the U.S. Department of Transportation – OIG, as part of the Pandemic Response Accountability Committee Fraud Task Force, Cleveland FBI, and IRS – Criminal Investigation. This case is being prosecuted by Assistant U.S. Attorney Edward Brydle.
Justice Department Secures Settlement with Ohio Manufacturing Company to Resolve Alleged Discrimination Against National GuardsmanRead the Press Release
The Justice Department announced today that it has resolved its lawsuit against U.S. Development Corporation, doing business as Akro-Plastics, on behalf of Ohio National Guardsman Staff Sergeant Nicholas Whitman. The department alleged that Akro-Plastics violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) when it failed to promote Sergeant Whitman to a human resources position based on his military service obligation and constructively discharged him on his return from military service.
“Federal law safeguards the civilian employment rights of our nation’s servicemembers and ensures that their career opportunities aren’t harmed because of their military duties,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Employers must ensure that servicemembers receive all career advancements that they deserve.”
“American servicemembers make great sacrifices to protect our citizens and the freedoms, liberties and civil rights that we all enjoy,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “The U.S. Attorney’s Office for the Northern District of Ohio is committed to protecting all its citizens from discrimination, including servicemembers who employers discriminate against by denying them deserved workplace opportunities because of their past, present or future military service.”
According to the complaint, Sergeant Whitman started working at Akro-Plastics in June 2022. He applied for a human resources job in September 2022 and went through three interviews. Supervisors and officials knew about his upcoming three-month military deployment and repeatedly cited it as the reason for not promoting him. From December 2022 to April 2023, Sergeant Whitman fulfilled his military duties with the National Guard. Following his deployment, he returned to work for a short while before being forced to leave due to hostility from Akro-Plastic’s management. Under the settlement agreement, Akro-Plastics will pay Sergeant Whitman monetary damages. The company will also revise its polices, practices and trainings to prevent violations of USERRA.
The Department of Labor (DOL) referred this matter to the Justice Department following an investigation by its Veterans’ Employment and Training Service.
The Civil Rights Division’s Employment Litigation Section continues to work collaboratively with the DOL to protect the jobs and benefits of military members. The Justice Department gives high priority to the enforcement of servicemembers’ rights under USERRA. Additional information about USERRA can be found at www.justice.gov/crt/laws-we-enforce and www.justice.gov/servicemembers, as well as on the DOL’s website at www.dol.gov/agencies/vets/programs/userra.
Three Area Men Arrested in Postal Robbery CaseRead the Press Release
CLEVELAND – Rebecca C. Lutzko, United States Attorney for the Northern District of Ohio announced that a federal grand jury sitting in Cleveland returned a five count indictment charging Devin Sims, Michael Williams, and Teontaey Thomas with aiding and abetting each other in Robbery of Mail or Property of the United States and Stealing Keys Adopted by the Post Office. Two of the men, Sims and Williams, are also charged with Brandishing a Firearm During a Crime of Violence and Theft of Mail. Sims alone is charged with Possession of Stolen Mail.
A joint investigation by the United States Postal Inspection Service, FBI and South Euclid Police Department led to the arrest of Devin Sims, 19, of Cleveland Heights, on December 8, 2023, Michael Williams, 19, of University Heights, and Teontaey Thomas, 20, of Cleveland, on March 20, 2023.
The three individuals were charged for their roles in a robbery that involved the use of a firearm of a postal carrier on November 7, 2023. It is alleged that during the robbery the carrier’s key, which opens blue mailboxes belonging to the United States Postal Service, was stolen. On or about November 11, 2023, Sims and Williams accessed a blue mailbox in South Euclid, Ohio using the key and stole checks that were previously deposited in the mail.
The United States Postal Inspection Service is aggressively investigating cases involving theft from postal carriers and the U.S. Mails.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation was conducted by United States Postal Inspection Service, FBI and the South Euclid Police Department. The case is being prosecuted by Assistant U.S. Attorney Scott Zarzycki.
The Postal Inspection Service is the federal agency with jurisdiction for investigating crimes against postal carriers and crimes involving the U.S. Mail. Anyone having information about blue collection box thefts or thefts or attempted thefts of mail carriers or mail should contact USPIS at 1-877-876-2455. All information will be kept confidential.
Justice Department Secures Settlement with Ohio Manufacturing Company to Resolve Alleged Discrimination Against National GuardsmanRead the Press Release
The Justice Department announced today that it has resolved its lawsuit against U.S. Development Corporation, doing business as Akro-Plastics, on behalf of Ohio National Guardsman Staff Sergeant Nicholas Whitman. The department alleged that Akro-Plastics violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) when it failed to promote Sergeant Whitman to a human resources position based on his military service obligation and constructively discharged him on his return from military service.
“Federal law safeguards the civilian employment rights of our nation’s servicemembers and ensures that their career opportunities aren’t harmed because of their military duties,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Employers must ensure that servicemembers receive all career advancements that they deserve.”
“American servicemembers make great sacrifices to protect our citizens and the freedoms, liberties and civil rights that we all enjoy,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “The U.S. Attorney’s Office for the Northern District of Ohio is committed to protecting all its citizens from discrimination, including servicemembers who employers discriminate against by denying them deserved workplace opportunities because of their past, present or future military service.”
According to the complaint, Sergeant Whitman started working at Akro-Plastics in June 2022. He applied for a human resources job in September 2022 and went through three interviews. Supervisors and officials knew about his upcoming three-month military deployment and repeatedly cited it as the reason for not promoting him. From December 2022 to April 2023, Sergeant Whitman fulfilled his military duties with the National Guard. Following his deployment, he returned to work for a short while before being forced to leave due to hostility from Akro-Plastic’s management. Under the settlement agreement, Akro-Plastics will pay Sergeant Whitman monetary damages. The company will also revise its policies, practices and trainings to prevent violations of USERRA.
The Department of Labor (DOL) referred this matter to the Justice Department following an investigation by its Veterans’ Employment and Training Service.
The Civil Rights Division’s Employment Litigation Section continues to work collaboratively with the DOL to protect the jobs and benefits of military members. The Justice Department gives high priority to the enforcement of servicemembers’ rights under USERRA. Additional information about USERRA can be found at www.justice.gov/crt/laws-we-enforce and www.justice.gov/servicemembers, as well as on the DOL’s website at www.dol.gov/agencies/vets/programs/userra.
Toledo Area Man Sentenced to 94 Months in Prison for Covid FraudRead the Press Release
CLEVELAND – Terrence L. Pounds, 47, of Holland, Ohio was sentenced to 94 months in prison by U.S. District Judge Pamela Barker after earlier pleading guilty to conspiracy to commit wire fraud, wire fraud and money laundering. He was also ordered to pay $4,239,940.43 to the U.S. Small Business Administration (SBA) and serve 3 years of supervised release.
According to court documents, from March 2020 through December 2020, Pounds and his co-defendants devised a scheme to obtain SBA-financed loans from the Economic Injury Disaster Loans (EIDL) program and the Paycheck Protection Program (PPP) under false pretenses.
Pounds, who was the leader of the conspiracy, arranged for others to provide him with their personal identifying information, which he then used to apply for EIDL loans in their names.
While Pounds listed those individuals as the business owner or applicant in most applications, he repeatedly made the same false statements in numerous applications submitted both for himself and for others. He claimed, for example, that each applicant operated a non-profit organization that was a “Faith-Based Organization” or a “Church” with, among other traits, $1,000,000 in revenue and 15 employees. Based on this false information, the SBA approved many of these loan applications. Pounds often received a share of the loan proceeds as payment for obtaining the loan.
Pounds used some of the money he made from this scheme—from both loans he received directly and payments received from others—to purchase a 2021 Chevrolet Tahoe, a 2021 Kia Telluride, a 2020 Hyundai Elantra and a 2020 BMW X4. Investigators seized those vehicles, and Pounds agreed to forfeit them.
Pounds submitted dozens of fraudulent EIDL loan applications collectively seeking more than $9.5 million in EIDL funds, with each application generally seeking approximately $150,000. The SBA approved and paid approximately $3.7 million in EIDL loans based on those applications. Pounds and his co-conspirators also submitted numerous fraudulent PPP loan applications, many of which were approved, raising the total of funds obtained by fraud to more than $4.2 million.
This investigation was conducted by the Cleveland FBI – Canton Resident Agency and the IRS – Criminal Investigations. This case is being prosecuted by Assistant U.S. Attorneys Elliot Morrison and Edward Brydle.
The public is encouraged to submit any allegations of COVID-19 fraud to the National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form.