Eastern District of Pennsylvania
Press releases recorded for this federal judicial district.
Philadelphia Used Car Salesman Charged with Stealing over $2.5 Million from Customers Who Sought Wheelchair Accessible VehiclesRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Edward Scott Rock, 47, of Philadelphia, Pennsylvania was arrested and charged by Indictment on charges of mail and wire fraud for conducting a non-delivery sales scheme in which Rock accepted payment for, but failed to deliver, automobiles to approximately 120 purchasers.
The Indictment alleges that between 2019 and 2023, Edward Scott Rock obtained used vehicles from automobile auctions, and then listed and advertised them for sale on the Internet. The majority of vehicles sold by Rock to victims were accessible vehicles equipped for wheelchair-users or people with disabilities. Despite signing bills of sale for the vehicles, and accepting payment, Rock did not deliver the vehicles as agreed upon. In total, Rock defrauded approximately 120 victims across 36 states, and caused losses exceeding $2.5 million. Approximately two-thirds of Rock’s victims were persons with a physical or mobility disability, persons over the age of 65, or businesses which provided transportation services to those populations.
On several occasions, Edward Scott Rock sold the same vehicle to multiple customers. After agreeing to sale terms and accepting payment from a customer for a particular vehicle, Rock continued to list, sell, and accept payment for that same vehicle again, this time from a new victim-purchaser. In one instance, Rock agreed to sell a particular vehicle – a wheelchair-accessible 2017 Ford T150 van – to 13 different buyers over an 11-month period between February 2022 and January 2023. Despite accepting 13 payments from 13 different buyers and collecting over $260,000 all for the same vehicle, Rock only delivered the vehicle to one buyer (albeit without proper title). Rock failed to deliver the vehicle to the other 12 victims, who had all also purchased and paid for the vehicle.
If convicted, the defendant faces a maximum possible sentence of 170 years’ imprisonment, a 5-year period of supervised release, a $2,750,000 fine, and restitution and forfeiture.
The case was investigated by the Federal Bureau of Investigation, with assistance from the Philadelphia Police Department, Major Crimes, Auto Squad, and the Pennsylvania Office of Attorney General, Bureau of Consumer Protection. The case is being prosecuted by Assistant United States Attorney Samuel S. Dalke.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Love Park Carjacker Sentenced to Ten YearsRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Michael Boyer, 31, of Philadelphia, Pennsylvania was sentenced to 10 years in prison and three years of supervised release by United States District Court Judge Timothy J. Savage for carjacking.
On May 22, 2022, the defendant used a realistic-looking BB gun with a laser sight to carjack two men sitting in a car next to Love Park in Philadelphia. Evidence introduced at trial showed the defendant told the two men to leave the keys in the car and further stated “Do you want to get shot?” when one victim tried to grab a backpack. The victim identified the defendant, in part, because he was shirtless during the carjacking and had a large “Uptown” tattoo on his chest.
Only twelve hours later, Philadelphia Police officers located the defendant and his accomplice driving the stolen car in West Philadelphia. When officers tried to stop them, the two men led police on a high-speed chase that ended when the men crashed after striking a teenager on a bicycle. The two men were arrested after a foot chase following the crash.
“Today's sentencing sends a message to would be carjackers and reaffirms our ongoing commitment to keeping our citizens safe,” said U.S. Attorney Romero. "This carjacking at Love Park garnered a great deal of attention, and equally worthy of attention is the resulting ten-year sentence that will be served by Michael Boyer in federal prison. We will continue working with our partners and proudly serving as part of the joint carjacking task force led by the Philadelphia Police Department in making sure violent individuals are held accountable when they threaten the safety of the community.”
“The crimes committed by the defendant were reckless and dangerous. The defendant not only threatened an individual with bodily harm, but he also led the Police on a vehicle pursuit in which the defendant struck an innocent teenager riding their bicycle” said ATF Special Agent in Charge Eric DeGree. “I want to thank the Philadelphia Police Department and the United States Attorney’s office for their continuing support of the Carjacking Task Force and bringing the defendant to justice.”
The case was investigated by the Philadelphia Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and is being prosecuted by Special Assistant United States Attorney Brian Doherty and Assistant United States Attorney Christopher E. Parisi.
Philadelphia Man Convicted by Jury Trial for Several CarjackingsRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Amir Wilson, 22, of Philadelphia, Pennsylvania, was convicted by a jury of conspiracy, two counts of carjacking, and using or carrying a firearm during a crime of violence arising from his role in two carjacking incidents that took place in Philadelphia in May 2021.
On the evening of May 15, 2021, at approximately 10:30 p.m., Wilson and others pulled alongside a man on his way to work, produced guns, and demanded his keys while holding him at gunpoint. The group then fled the scene in their original vehicle and the victim’s carjacked vehicle. Hours later, on May 16, 2021, at approximately 3:00 a.m., Wilson and others pulled alongside two men who were leaving a graduation celebration for a friend. The carjackers again produced guns and demanded the keys to that victim’s vehicle and fled the scene in the two cars. A short time later, members of the Philadelphia Police Department spotted the carjacked vehicle and attempted to stop it. The vehicle fled from police, leading them on a high-speed chase that was discontinued for safety reasons. Police found the second victim’s car abandoned a short time later.
On May 16, 2021, at approximately 5:15 p.m., members of the Philadelphia Police Department were on routine patrol and spotted the first victim’s vehicle. They attempted to stop the car, but it fled from police, leading them on another chase. Police caught up to the car after it struck another vehicle and crashed through a fence at Germantown and Hunting Park Avenues and saw Wilson flee from the car on foot. He was apprehended a short time later. Digital and forensic evidence linked Wilson to the two carjacking incidents.
“Amir Wilson’s guilty verdict reaffirms our ongoing commitment to keeping our citizens safe,” said U.S. Attorney Romero. This case is another excellent example of ATF’s continued efforts working with our partners and proudly serving as part of the joint carjacking task force led by the Philadelphia Police Department. We will continue working with our local, state, and federal partners in making sure violent individuals are held accountable when they threaten the safety of the community.”
“The type of violent crimes committed by the defendant are the very reason the carjacking task force was created,” said ATF Special Agent in Charge Eric DeGree. “The ATF will continue to support the Philadelphia Police Department and the United States Attorney’s Office, as we seek to create a safer city for the citizens of Philadelphia.”
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorneys Priya T. De Souza and Martin E. Howley, Jr.
BioTelemetry and LifeWatch to Pay More than $14.7 Million to Resolve False Claims Act Allegations that LifeWatch Billed More Expensive Services than Physicians Intended to OrderRead the Press Release
PHILADELPHIA – BioTelemetry, Inc. and its subsidiary, LifeWatch Services, Inc., headquartered in Malvern, Pennsylvania and Rosemont, Illinois, respectively, have agreed to pay $14,734,628 to resolve allegations that they violated the False Claims Act when LifeWatch, through its marketing and enrollment process for remote cardiac monitoring services, knowingly submitted false claims to federal health care programs for a higher level of remote cardiac monitoring service than physicians had intended to order or which was medically necessary, thus resulting in a higher level of reimbursement to LifeWatch.
Specifically, the United States contends that, during the period July 1, 2014 through December 31, 2020, Defendants marketed LifeWatch’s ACT-3L device (also known as the LifeStar ACT-3L and the MCT-3L) to doctors as being capable of performing three different types of heart monitoring services: Holter, event monitoring, and telemetry. Of these, Holter provided the lowest rate of reimbursement from federal healthcare programs, and telemetry provided the highest rate of reimbursement.
The United States contends that Defendants knew the design of LifeWatch Connect (the online enrollment portal for this device) caused unwitting clinical staff to select options that would enroll the patient in telemetry, even when the doctor intended to order a less expensive service. The United States also contends that Defendants’ sales personnel instructed clinical staff to select these options—even when Defendants knew the clinic’s physicians intended to order event monitoring for many or all patients—and then provided and billed for telemetry services. Defendants also allegedly disregarded notes clinics included in their enrollments that specifically requested event monitoring and did not consistently comply with clinics’ instructions about the appropriate handling of their enrollments, even after such issues were brought to Defendants’ attention.
Companies that bill Medicare and other federal healthcare programs must ensure that they are billing for the services actually ordered by medical providers, rather than the most expensive service,” said Jacqueline C. Romero, United States Attorney for the Eastern District of Pennsylvania. “This office will continue to pursue cases that will reduce costs for the government while ensuring that patients receive consistent and quality care, as prescribed by their physicians.”
“Companies are required to submit accurate claims based on patient needs,” said Maureen R. Dixon, Special Agent in Charge of the Philadelphia Regional Office of the Department of Health and Human Services, Office of the Inspector General. “HHS-OIG will continue to work with the U.S. Attorney’s Office and our law enforcement partners, to investigate allegations of the False Claims Act.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Michael Pelletier, an individual employed by one of Defendants’ customers, and SFP I, LLC. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam cases are captioned United States ex rel. SFP I, LLC v. LifeWatch Corp., et al., No. 2:19-cv-2169 (E.D. Pa.) and United States ex rel. Pelletier et al. v. LifeWatch Services, Inc., et al., No. 2:18-cv-11391 (D.N.J.). The EDPA qui tam resolved for $1.78 million.
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the United States Attorney’s Offices for the Eastern District of Pennsylvania and the District of New Jersey, with assistance from HHS-OIG, the Department of Defense’s Defense Criminal Investigative Service, the Department of Veterans Affairs Office of Inspector General and the Office of Personnel Management’s Office of Inspector General.
The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The EDPA matter was handled by Assistant U.S. Attorney Erin Lindgren and Auditor Dawn Wiggins.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
United States Files Statement of Interest to Prevent Discrimination and Ensure Access to Treatment for Opioid Use Disorder in Pennsylvania JailsRead the Press Release
Philadelphia, PA – United States Attorney Jacqueline C. Romero announced today that the United States Department of Justice has filed a Statement of Interest in federal court to clarify state and local jails’ obligations under the Americans with Disabilities Act (ADA) to provide inmates with access to medication to treat opioid use disorder (OUD).
The Justice Department filed its Statement in the matter of Strickland v. Delaware County et al., a private action alleging that a jail denied methadone to an inmate who was taking it for OUD in accordance with a doctor’s prescription prior to being incarcerated. The lawsuit alleges that the jail banned methadone to all inmates except those who were pregnant and taking methadone prior to incarceration. As the Justice Department explains in its Statement, the ADA prohibits a jail from categorically denying an incarcerated person access to OUD medications without individually assessing whether such medication is medically necessary to treat their disability.
“My office is dedicated to fighting the opioid epidemic with every tool that we have,” said U.S. Attorney Romero. “That includes enforcing the ADA to remove discriminatory barriers to treatment for OUD. Today’s Statement of Interest reminds jails and prisons about their obligations to address the needs of individuals with OUD and comply with the ADA.”
“Jails and prisons are on the frontlines of the opioid epidemic,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Individuals with substance use disorders who are in desperate need of treatment pass through these facilities daily. The ADA requires that jails individually assess the medical needs of each of these individuals and not categorically deny access to the Food and Drug Administration-approved OUD medications that many may need to effectively treat their disability.”
The Justice Department’s submission of this Statement furthers its broader efforts to combat discrimination against individuals with OUD and to remove discriminatory barriers to treatment. The United States has entered into settlements with jails and prisons in Pennsylvania and across the country to increase access to OUD medication, including in Allegheny County, Pennsylvania, Eastern Kentucky, and Massachusetts. It has also brought enforcement actions to combat discrimination against individuals with OUD in court supervision programs in Pennsylvania and Massachusetts. And it has issued public guidance on the ADA’s protections for those with OUD.
Assistant U.S. Attorney and Deputy Civil Chief for Civil Rights Lauren DeBruicker handled this matter for the Eastern District of Pennsylvania, in collaboration with attorneys from the Disability Rights Section of the Justice Department’s Civil Rights Division.
For more information about the Justice Department’s work to address discrimination against individuals with opioid use disorder, please visit: https://www.ada.gov/topics/opioid-use-disorder/. For more information on the ADA, please call the Department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov. If you believe you have been discriminated against based on disability and wish to file a complaint, please visit www.ada.gov/file-a-complaint/. Anyone in the Eastern District of Pennsylvania may also report civil rights violations to the U.S. Attorney’s Office for the Eastern District of Pennsylvania by calling 215-861-8555 or emailing [email protected].
Justice Department Files Statement of Interest in Case Alleging Pennsylvania Jail Unlawfully Denied Access to Medication to Treat Opioid Use DisorderRead the Press Release
The Justice Department filed a statement of interest today explaining how the Americans with Disabilities Act (ADA) applies to the provision of medications for opioid use disorder (OUD) in jails and prisons. The statement of interest was filed in Strickland v. Delaware County, a lawsuit pending in the U.S. District Court for the Eastern District of Pennsylvania alleging that a county jail violated the ADA by denying an individual access to methadone that was medically necessary to treat his OUD.
“People held in our nation’s jails and prisons, including those with substance use disorders, do not surrender their civil rights at the jailhouse door,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The ADA requires that jails and prisons individually assess the medical needs of people with disabilities and not categorically deny access to the Food and Drug Administration (FDA) approved OUD medications that many need to effectively treat their disability. The Justice Department will continue to enforce federal civil rights laws to ensure the rights of people with disabilities are protected.”
“My office is dedicated to fighting the opioid epidemic with every tool that we have,” said U.S. Attorney Jacqueline Romero for the Eastern District of Pennsylvania. “That includes enforcing the ADA to remove discriminatory barriers to treatment for OUD. Today’s statement of interest reminds jails and prisons about their obligations to address the needs of individuals with OUD and comply with the ADA.”
The Strickland lawsuit alleges that the George W. Hill Correctional Facility in Delaware County, Pennsylvania, unlawfully denied an incarcerated person access to methadone that he was taking to treat OUD under the supervision of a qualified medical provider before his incarceration. The lawsuit also alleges that the jail had a policy of providing methadone only for pregnant individuals and requiring all other individuals who were on methadone when entering the jail to undergo medically supervised withdrawal.
Through the statement of interest, the department explains that the ADA prohibits jails from categorically restricting access to FDA-approved OUD medications, like methadone, without individually assessing whether the person being denied access needs that medication to effectively treat their disability. The statement then sets out why this is required by the ADA and its regulations and aligns with broad consensus in the medical community, including the FDA and the Substance Abuse and Mental Health Services Administration.
The ADA prohibits state and local governments from discriminating against individuals with disabilities and protects people in recovery from OUD, including individuals who are taking OUD medication at the direction of a medical provider.
The Justice Department’s submission of this statement of interest furthers its broader efforts to combat discrimination against individuals with OUD and to remove discriminatory barriers to treatment. The Justice Department has issued public guidance on the ADA’s protections for those with OUD. It has entered into multiple settlements with jails and prisons to increase access to OUD medication, including recent agreements in Allegheny County, Pennsylvania; Eastern Kentucky; and Massachusetts. It has undertaken enforcement efforts to combat discrimination against individuals with OUD in court supervision programs in Pennsylvania and Massachusetts. It has also entered numerous settlements to address discriminatory barriers to treatment for OUD outside of the criminal justice context, including barriers related to employment, professional licensing, social services and healthcare.
The Civil Rights Division’s Disability Rights Section filed this statement of interest in collaboration with the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
For more information about the Justice Department’s work to address discrimination against individuals with opioid use disorder, please visit www.ada.gov/topics/opioid-use-disorder/. For more information on the Civil Rights Division, please visit www.justice.gov/crt. For more information on the ADA, please call the department’s toll-free ADA Information Line at 1-800-514-0301 (TTY 1-833-610-1264) or visit www.ada.gov. If you believe you have been discriminated against based on disability and wish to file a complaint, please visit www.ada.gov/file-a-complaint/.
U.S. Attorney’s Office Hosts Faith Leaders Forum as Part of Department of Justice’s United Against Hate InitiativeRead the Press Release
Philadelphia, PA – On Thursday, December 7, 2023, the United States Attorney’s Office for the Eastern District of Pennsylvania hosted faith leaders from across the region at the National Constitution Center to learn about resources for protecting houses of worship and preventing acts of hate, United States Attorney Jacqueline C. Romero announced today.
Church, mosque, synagogue, and temple leaders met with members of federal, state, and local law enforcement agencies to learn how federal and state laws are used to prosecute people who harm or threaten places of worship and their congregants, understand how and when to report acts of religious violence and discrimination, and get the resources and build the connections needed to combat and prevent acts of hate. U.S. Attorney Romero hosted the forum as part of the Department of Justice’s United Against Hate initiative.
“With religious-based violence and threats of violence on the rise across the country, our partnerships with our faith and other community leaders are essential,” said U.S. Attorney Romero. “Our ability to prosecute hate crimes to the fullest extent of the law depends on members of the community being willing to report acts of hate to our law enforcement partners for investigation. And one of the best ways to prevent crime fueled by religious bias is to be sure faith-based leaders have the information and resources they need to help protect their places of worship and their congregations, and help them forge connections with their fellow community leaders and law enforcement to help make our communities stronger than hate. That’s what our United Against Hate initiative, and today’s event, are all about.”
U.S. Attorney Romero was joined at the event by Kate McGowan, Supervisory Special Agent at the Federal Bureau of Investigation, Charles Phillips, Regional Director of the U.S. Department of Justice Community Relations Service, and representatives from the U.S. Department of Homeland Security and the Pennsylvania Attorney General’s Office of Civil Rights. Members of the Pennsylvania State Police, the Philadelphia Police Department, and the Philadelphia Commission on Human Relations were also in attendance and shared remarks.
The United Against Hate initiative will continue well into the new year, U.S. Attorney Romero confirmed. “I will continue to meet with groups concerned about hate-motivated attacks and discrimination, and to work with these groups and our law enforcement partners to build the strong, safe, and resilient communities that people of all backgrounds—religious and otherwise—deserve,” she said.
If you have information about a possible threat to a place of worship or believe you are a victim of or a witness to a hate crime, contact your local law enforcement agency (911), then the FBI at tips.fbi.gov or 1-800-CALL-FBI. You can also report a hate crime, find resources, and learn more about the Department of Justice’s hate crimes prevention and enforcement work by visiting www.justice.gov/hatecrimes. Additional resources for houses of worship are available at www.cisa.gov.
Federal Jury Convicts Former IBEW Local 98 Business Manager John Dougherty and Former Local 98 President Brian Burrows of Conspiracy, Embezzlement of Union Funds, and Tax FraudRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that John Dougherty, 63, of Philadelphia, PA and Brian Burrows, 63, of Mount Laurel, NJ, were convicted today by a federal jury of numerous charges related to their embezzlement of funds belonging to Local 98 of the International Brotherhood of Electrical Workers (“Local 98”).
John Dougherty previously served as the Business Manager of Local 98, and Brian Burrows served as the president of Local 98. In January 2019, a federal grand jury indicted Dougherty, Burrows, and four other union employees with multiple federal offenses connected to their illegal use of Local 98 funds for personal and other unauthorized expenses, contrary to the provisions of IBEW’s constitution, the by-laws of Local 98, and the beneficial interests of Local 98’s members. The Indictment also charged Dougherty and Burrows with concealing the embezzlement of Local 98’s funds by filing false labor management reports with the U.S. Department of Labor, and with tax fraud by failing to report their personal use of the funds on their tax returns.
Today, the federal jury convicted Dougherty of one count of conspiracy to embezzle the funds of Local 98, 33 counts of embezzlement of funds from Local 98, 24 counts of wire fraud by participating in a scheme to defraud Local 98 of its money, four counts of signing and submitting false labor management forms that concealed the embezzlement of Local 98 funds, and three counts of filing false federal income tax returns. The jury convicted Burrows of 13 counts of embezzlement of funds from Local 98, four counts of signing and submitting false labor management forms that concealed the embezzlement of Local 98 funds, and three counts of filing false federal income tax returns.
In December 2022, four other employees of Local 98 pleaded guilty to charges related to the embezzlement of Local 98’s funds. Michael Neill, former Training Director of Local 98’s Apprentice Training Fund, Niko Rodriguez, an employee of the Apprentice Training Fund, and Brian Fiocca, an office employee with Local 98, pleaded guilty to embezzlement of Local 98’s funds. Marita Crawford, who previously served as Local 98’s Political Director, pleaded guilty to wire fraud, the object of which was to obtain money from Local 98 through false and fraudulent representations. The four former employees are currently scheduled to be sentenced later this month.
The same Indictment also charged John Dougherty with multiple crimes involving honest services fraud bribery, which the Court earlier ordered severed from the embezzlement charges and tried first. The Indictment charged that Dougherty and co-defendant Robert Henon defrauded the City of Philadelphia and its citizens of the right to Henon’s honest services as a member of City Council. In November 2021, a federal jury convicted Dougherty of one count of conspiracy to commit honest services fraud and seven counts of honest services wire fraud.
“The members of Local 98 trusted Dougherty and Burrows to faithfully manage and protect the union’s funds; the defendants did exactly the opposite – they stole from their own members, and violated that trust.” said U.S. Attorney Romero. “Today’s verdict demonstrates the consequences of such dishonesty and theft, which involved egregious and repeated violations of trust and misuse of funds for personal benefit. I want to thank our federal and state law enforcement partners for their tireless cooperation in bringing this case to trial.”
“After decades at the top, John Dougherty grew to believe he was Local 98 — and completely entitled to misuse its money as his own,” said Wayne A. Jacobs, Special Agent in Charge of the FBI’s Philadelphia Division. “In doing so, Dougherty repeatedly betrayed the electrical union’s members, those thousands of workers who trusted him to act on their behalf and for their benefit. Local 98’s rank and file are clear victims of his greed and these crimes. If you think about it, though, after his convictions at both trials, there aren’t many folks around here who aren’t John Dougherty’s victims. His corrupt acts harmed this city, he cheated taxpayers, and he stole from his own hard-working electricians. Justice means finally holding him accountable for the damage done.”
“The consequences to those who betray the public trust is evident by today’s convictions,” said Yury Kruty, Special Agent in Charge of IRS-Criminal Investigation. “IRS-Criminal Investigation is proud to have provided its financial expertise in this investigation, and we, along with our law enforcement partners and the Department of Justice, will continue to aggressively investigate individuals who engage in money laundering, tax fraud, or other types of white-collar crimes.”
“Today’s verdict sends an important message to all those entrusted with protecting benefit plan assets. Regardless of title or position, the U.S. Department of Labor will hold fiduciaries to the highest standards of accountability to protect the employee benefits of America’s workers, ” said Cristina O’Brien, Philadelphia Regional Director of the U.S. Department of Labor’s Employee Benefits Security Administration.
“By any measure, the crimes John Dougherty and Brian Burrows committed are extraordinarily serious offenses. Labor leaders have a fiduciary responsibility to the members they represent. Dougherty and Burrows violated that responsibility and turned Local 98 and its members – whose interests they were supposed to protect – into victims, when they treated the union and its assets as their own personal piggy banks – harming the union and its members. The Office of Labor-Management Standards will continue to work with its law enforcement partners to protect unions and their members by bringing to justice, and seeking restitution from, any official who chooses to use union funds for their own benefit,” said OLMS District Director Kevin Smallwood.
Burrows faces up to 83 years in prison. Dougherty, in combination with the 2021 conviction, faces up to 901 years in prison. Sentencing for Dougherty has been scheduled for March 20, 2024 at 10:00 a.m. and for Burrows on March 21, 2024 at 10:00 a.m.
The case was investigated by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation, the U.S. Department of Labor Employee Benefits Security Administration, the U.S. Department of Labor Office of Labor Management Standards, the U.S. Department of Labor Office of Inspector General, and the Pennsylvania State Police, with assistance from the Pennsylvania Attorney General’s Office. The case is being prosecuted by Assistant United States Attorneys Frank Costello, Chief of the Corruption & Civil Rights Unit; Bea Witzleben, Co-Chief of Trials; Jason Grenell; and Anthony Carissimi.
Philadelphia Pharmacy Pays $165,000 to Resolve Allegations of Failing to Maintain Proper Inventory and Documentation of its Controlled SubstancesRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Fountain Hill Pharmacy will pay $165,000 to resolve allegations that it failed to comply with various record-keeping requirements for controlled substances.
Fountain Hill Pharmacy, a Philadelphia pharmacy wholly owned by pharmacists Nicholas Chaffier and Tracy Chaffier, is a registered retail pharmacy authorized to purchase and dispense Schedule II-V controlled substances. The settlement announced today resolves allegations that between October 2019 and November 2022, Fountain Hill Pharmacy failed to maintain complete and accurate records of controlled substances and failed to take a biennial inventory in violation of the Controlled Substances Act (“CSA”), and specifically, 21 C.F.R. §§ 1304.21(a) and 1304.11(d). Specifically, the settlement resolves allegations that Fountain Hill Pharmacy failed to maintain appropriate inventories of controlled substances including Oxycodone 5mg, Oxycodone 15mg, Oxycodone 30mg, Oxycodone APAP 5mg, Oxycodone APAP 7.5 mg, and Oxycodone APAP 10 mg.
In addition to the $165,000 penalty, Fountain Hill Pharmacy is also now subject to a number of monitoring requirements, including the reporting of controlled substance purchasing, dispensing, and prescribing to the Drug Enforcement Administration (DEA), as well as sharing Standard Operating Procedures pertaining to all aspects of purchasing, storing, and distributing controlled substances. In addition, Fountain Hill Pharmacy is responsible for initiating and conducting appropriate training pertaining to DEA regulations for all current and newly hired employees responsible for handling and/or having access to controlled substances.
“Controlled substances, especially opioids, pose extraordinary risks to communities in this district,” said U.S. Attorney Romero. “When pharmacies are granted the privilege of purchasing controlled substances, they also accept the significant responsibility of ensuring that controlled substances are used for a legitimate, medical purpose. As a result, they must maintain the records necessary for accountability and transparency. When this does not happen, we will work with our law enforcement partners, and use all available enforcement tools, to hold these pharmacies responsible.”
“Pharmacies are entrusted with the dispensing of powerful prescription painkillers such as oxycodone. With that responsibility comes the obligation to properly safeguard and keep proper inventory over these same drugs,” said Thomas Hodnett, Special Agent in Charge of the Drug Enforcement Administration’s Philadelphia Field Division. “Civil settlements and the monitoring requirements imposed against Fountain Hill Pharmacy help to ensure that these safeguards are met.”
This investigation was conducted by the Drug Enforcement Administration’s Philadelphia Field Division. For the United States Attorney’s Office, Assistant United States Attorney Deborah W. Frey, and Auditor Andrew Schobert.
Cambria County Area Agency on Aging Agrees to Pay over $122,000 to Resolve False ClaimsRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced today that Cambria County Area Agency on Aging (CCAAA) has agreed to pay $122,461.53 to resolve claims arising from CCAAA’s administration of community service grants funded through AmeriCorps.
In 2016 and 2017, CCAAA administered an AmeriCorps Foster Grandparent Program (FGP) grant, which places seniors in school and community settings to serve alongside youth with exceptional needs. This program provides a small hourly stipend, based on the hours served, to the volunteers providing valuable community services to underserved children. AmeriCorps awards CCAAA grant funds to pay the stipends as well as some or all of the grantee’s administrative costs to operate the program.
From 2016 to 2017, CCAAA allegedly failed to properly administer the AmeriCorps grant by directing its FGP staff to double or triple volunteer hours on timesheets and thus pay inflated, unearned stipends to volunteers. Volunteers were also allegedly awarded “bonus” hours for service activities that they did not perform.
In addition, CCAAA allegedly charged unrelated, unsupported, and misallocated costs to the grant and inflated travel (mileage) costs attributable to grant funds. After receiving a complaint, CCAAA engaged its auditors to review the expenditures, and that review identified some of the above improper practices that diverted AmeriCorps funds. Nevertheless, CCAAA failed to timely notify AmeriCorps of the findings or return the misspent funds, as required.
“It is important for participants in federally funded programs to be transparent and honest about how those funds are used. When a grant recipient misuses funds, the beneficiaries in need, such as underserved youth here, are deprived of the opportunities those funds are meant to provide,” said U.S. Attorney Romero.
“CCAAA’s decision to use its grant to pay Foster Grandparent volunteers for hours that they did not serve deprived the community of services intended for its benefit. The non-profit’s inability to account for federal funds violated the trust that the public places in AmeriCorps Seniors grantees,” said Stephen Ravas, AmeriCorps’ Acting Inspector General. “We thank the U.S. Attorney’s Office for its partnership in protecting the integrity of national service.”
This investigation was conducted jointly by the United States Attorney’s Office for the Eastern District of Pennsylvania and AmeriCorps’ Office of Inspector General. Assistant United States Attorneys Anthony St. Joseph and Paul W. Kaufman handled the investigation and settlement.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Allentown Man Facing Federal Charges for Armed Robbery SpreeRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Rubiel Perez, 29, of Allentown, Pennsylvania was arrested and charged by Indictment with two counts of Hobbs Act robbery, one count of attempted Hobbs Act robbery, and two counts of using, carrying, and brandishing a firearm during and in relation to a crime of violence, in connection with three armed robberies that occurred over the course of two days in Lehigh County, Pennsylvania.
The Indictment alleges that on March 28, 2023, the defendant entered a 7-Eleven convenience store on Union Boulevard in Allentown, pointed a firearm at a store employee, and stole $937 before fleeing. The following night, the defendant targeted a 7-Eleven convenience store on South Fourth Street in Allentown. There, he pointed a handgun at a store employee and threatened him, before stealing $150 from the store. Also on March 29th, the defendant entered a 7-Eleven on West Tilghman Street in South Whitehall Township, and attempted to rob the store by pointing a firearm at the store employee and threatening him.
If convicted, the defendant faces a maximum possible sentence of life in prison and a mandatory minimum of 14 years in prison.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Allentown Police Department, and the South Whitehall Township Police Department. The case is being prosecuted by Assistant United States Attorney Robert W. Schopf.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Rare, Wrongfully Obtained Manuscript to Be Returned to PeruRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero and FBI Philadelphia Special Agent in Charge Wayne A. Jacobs announced today that the Rosenbach Museum & Library (“the Rosenbach”) voluntarily transferred to the custody of the FBI a sixteenth-century manuscript for return to the Archivo General de la Nación del Perú, the Peruvian national archives. This rare six-page document, dated June 28, 1599, is a contract for the formation of the first theatrical company in the Americas in Lima, Peru and had been in the Rosenbach’s collection for almost a century.
In 2017, at the request of the Republic of Peru and in coordination with the Bureau of Educational and Cultural Affairs of the United States Department of State, the FBI Art Crime Team and the United States Attorney’s Office began an investigation as to whether these manuscript pages in the Rosenbach collection had been wrongfully removed from a sixteenth-century bound volume in the Peruvian national archives. The Rosenbach cooperated fully in this investigation and concluded that the manuscript, which had been purchased in the 1920s by its founder, Dr. A.S.W. Rosenbach, had been removed from the bound volume in the archives at some time prior to Dr. Rosenbach’s purchase.
“Thanks to the dedicated work and coordination of our Office and our FBI partners, this manuscript will be returned to its rightful place in the Peruvian national archives,” said U.S. Attorney Romero.
“It’s always incredibly gratifying when the FBI’s Art Crime Team is able to recover precious cultural property,” said Wayne Jacobs, Special Agent in Charge of the FBI’s Philadelphia Division. “We look forward to the day when this rare document is fully repatriated to the government of Peru and its archives. This case exemplifies the Bureau’s continued commitment to preserving the pieces of cultural heritage that help bring history to life.”
The United States Attorney’s Office and the FBI acknowledge the cooperation and assistance of the Rosenbach in this matter and are making arrangements for the repatriation of the manuscript pages to the Republic of Peru.
New York Man Sentenced to Life in Prison for Double HomicideRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Jason Rivera, 38, of Brooklyn, New York was sentenced to life in prison today for his role in the kidnapping, extortion, and murder of two Philadelphia drug dealers after a jury found Rivera guilty on all counts following a trial in October 2022.
In the summer of 2014, defendant Jason Rivera and two associates, John Dao and Trung Lu, were recruited by members of the “Born To Kill” street gang to forcibly collect money from three marijuana dealers who had failed to pay a substantial drug debt.
The victims in this case, brothers Vu and Viet Huynh, and their friend Tan Voong, were drug dealers from the Philadelphia area who sold large quantities of marijuana. Their friend, Tam Le, introduced the Huynh brothers to a gangster from New York, Lam Trieu. Le and Trieu were members of a street gang called Born to Kill ("BTK"). Lam Trieu, in turn, arranged for his supplier in California, known by his nickname "Fat Man," to supply large quantities of marijuana to the Huynh brothers. Allegedly, the Huynh brothers owed Trieu and “Fat Man” more than $30,000, and Voong owed “Fat Man” more than $300,000. Though “Fat Man” and Trieu were their suppliers, the victims did not pay them all the money they were owed.
"Fat Man" pressed Lam Trieu to collect the money which he was owed. When Tam Le either could not or would not collect the money, Lam Trieu recruited three drug trafficking associates, John Dao, Trung Lu, and Jason Rivera to get the money from the Huynh brothers and Voong. Dao, Lu, and Rivera understood that they would use force and threats of force to collect the debt owed for the sale of marijuana. In exchange, Lam Trieu promised to pay Dao, Lu, and Rivera a percentage of the money recovered.
A few days before the murders, Dao, Lu, and Rivera traveled to Philadelphia where they met with Tam Le and Minh Nguyen. Dao, Lu, and Rivera then unsuccessfully attempted to locate the victims to force them to pay their drug debts.
Finally, on August 26, 2014, Tam Le, a member of BTK, lured the victims to his home in southwest Philadelphia, where Rivera, Dao, and Lu assaulted the victims and restrained them with duct tape and zip ties. Rivera searched Voong’s car and confiscated $40,000 in U.S. currency. At this point, Dao, Lu, and Rivera believed that their work was completed. LU gave some of the money to Tam Le. Dao and Lu intended to steal the victims' luxury vehicles which were parked outside and return to New York. However, Tam Le wanted to murder the victims fearing that the victims would return to his home to seek revenge if they remained alive. When Tam Le and Minh Nguyen started putting buckets of roofing cement into a van, Dao and Lu understood that Tam Le intended to kill the victims. Dao, Lu, and Rivera believed that Tam Le was a BTK "brother" of Lam Trieu, which made him the on-scene commander. Dao, Lu, and Rivera went along with Tam Le's plan.
They then transported the three victims to the Schuylkill River, weighed down their bodies, stabbed them, and dumped all three into the river. Vu Huynh and Viet Huynh died in the river, but Tan Voong miraculously managed to crawl out of the river and flag down a passing motorist on Kelly Drive for assistance. Upon their return to New York, Rivera, Dao, and Trieu were each paid several thousand dollars each using the money they took from the victims.
In addition to this case, five defendants were federally indicted for this crime. John Dao, Lam Trieu, and Minh Nguyen pleaded guilty for their respective roles in these offenses and have all been sentenced by the Court. "Fat Man" pleaded guilty to a drug trafficking offense in the Southern District of New York. Tam Le was convicted of murder and related offenses after a trial in Philadelphia County and sentenced to death. Another defendant, Hai Nguyen, pleaded guilty to making statements to the FBI concerning his efforts to assist Tam Le flee after the murders. Trung Lu is a fugitive who apparently resides in Vietnam. The FBI is offering of $50,000 for information leading to the arrest of Trung Lu.
“After the initial investigation and arrests were made in this case which resulted in state charges for two individuals involved with these murders and attempted murder, the trail on the other individuals who helped them went nearly cold,” said U.S. Attorney Romero. “But thanks to the persistent efforts and dogged determination of the FBI and other law enforcement partners, our Office was able to charge these remaining individuals, get them off the streets, and bring them to justice for their crimes.”
“Stopping crimes as shockingly violent as this one is a top priority of our Office,” said U.S. Attorney Romero. “Thanks to the partnership of the FBI and Philadelphia Police Department, we were able to bring Rivera to justice for his crimes.”
“The brutality of the crimes committed by Rivera and his co-conspirators is stunning,” said Wayne A. Jacobs, Special Agent in Charge of the FBI’s Philadelphia Division. “I’d like to commend FBI Philadelphia’s Organized Crime Task Force for their years of hard work to help bring these men to justice. However, our work is not done. So long as Trung Lu, also charged in connection with these crimes, remains at large, we will not stop in our efforts to hold him accountable.”
The case was investigated by the Federal Bureau of Investigation with assistance from the Philadelphia Police Department. The case is being prosecuted by Assistant United States Attorney Robert J. Livermore.
Fourteen Members of Cocaine Distribution Ring Charged with Drug Trafficking and Firearms OffensesRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced today the unsealing of a 21-count Superseding Indictment charging 14 individuals with drug trafficking and firearms offenses. The defendants are members of a drug trafficking group led by defendant Herbert Robinson (“Robinson DTG”).
The Superseding Indictment alleges that the defendants, several of whom had prior drug trafficking offenses, distributed hundreds of kilograms of cocaine in the Philadelphia area and elsewhere from at least February 2019 to January 2021. As alleged in the Superseding Indictment, Robinson and other high-ranking members of the DTG regularly traveled internationally to meet with drug suppliers in Mexico, Colombia, and Jamaica. During the course of the investigation, law enforcement seized approximately 169 kilograms of cocaine, $8.26 million in cash drug proceeds, and four firearms.
The individuals charged include:
- Herbert Robinson, 48, of Lower Gwynedd, PA
- Samyre Washington, 38, of Wyncote, PA
- Ross Brooks, 48, of Philadelphia, PA
- Melvin Butler, 60, of Compton, CA
- Marcus Washington, 43, of Philadelphia, PA
- Marvin Watson, 44, of Glen Mills, PA
- Randall Overton, 39, of Philadelphia, PA
- Frank Singleton, 50, of Upper Darby, PA
- James Leonard Flack, Jr., 54, of Philadelphia, PA
- Kashon Adade, 36, of Lansdowne, PA
- Antonio Simmons, 49, of Gahanna, OH
- Von Oscar Tyler, 56, of Temple Hills, MD
- Gilberto Alaniz, 34, of Mercedex, TX
- L.B. Nelson, 44, of Inglewood, CA
Thirteen defendants have pleaded guilty. The remaining defendant, a fugitive, passed away after the Superseding Indictment was returned. Several members of the Robinson DTG pleaded guilty to additional drug charges, money laundering, and tax crimes, charged via three separate Informations in the Eastern District of Pennsylvania.
The case was investigated by the Drug Enforcement Administration, Internal Revenue Service, and Philadelphia District Attorney’s Office, with assistance from Pennsylvania State Police – SHIELD Unit, Delaware State Police, New Jersey State Police, Philadelphia Police Department, and Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorney Francis A. Weber.
Two Texans Found Guilty of Conspiracy to Sell Sanctioned Iranian PetroleumRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Zhenyu (“Bill”) Wang, 42, of Dallas, Texas, and Daniel Ray Lane, 42, of McKinney, Texas, were convicted at trial on charges of attempting to violate the International Emergency Economic Powers Act (“IEEPA”), conspiracy to violate IEEPA, and conspiracy to commit money laundering based on their attempt to transact in sanctioned Iranian petroleum and launder the proceeds.
At trial, the evidence showed that in 2019 and early 2020, the defendants engaged in a conspiracy to purchase petroleum from Iran, in violation of economic sanctions imposed by the United States under IEEPA. They then planned to mask the origins of the petroleum and sell it to a refinery in China. The defendants also attempted to conceal their illegal transactions by obtaining foreign passports, engaging in sham contractual agreements, and conspiring to launder the proceeds of the sale through shell entities and offshore financial accounts. For example, Lane offered to use the mineral rights that his company sold to launder proceeds for the Iranian sellers. In addition, Wang arranged for bribe payments to be paid the Chinese officials and bankers.
“As shown at trial, the defendants schemed to buy Iranian oil, hide its origins, and sell it to a refinery in China in clear disregard for U.S. sanctions against the Teheran regime,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “We will not tolerate anyone who violates our sanctions laws and imperils national security for personal profit. Like the defendants today, those who try will be held to account.”
“The defendants in this case flouted the national security interests of the United States by directly violating economic sanctions,” said U.S. Attorney Romero. “Conspiring to violate sanctions and commit money laundering in the process is a serious offense, and will not be tolerated.”
“For financial gain, these co-conspirators sought to evade sanctions put in place to protect the United States’ national security,” said Richard Langham, Acting Special Agent in Charge of the FBI’s Philadelphia Division. “A criminally bad idea, as this verdict clearly shows. The FBI will bring all our investigative resources to the table to halt such harmful acts.”
Wang and Lane face each a maximum statutory penalty of 45 years in prison total, five years for conspiracy to violate IEEPA and twenty years for each for attempting to violate the IEEPA and conspiracy to commit money laundering. The defendants are scheduled to be sentenced on February 29, 2024.
The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorneys Patrick Murray and Mary Crawley with valuable assistance provided by Beau Barnes and David Recker of the National Security Division’s Counterintelligence and Export Control Section.
Two Men Found Guilty of Conspiracy to Sell Sanctioned Iranian PetroleumRead the Press Release
Zhenyu “Bill” Wang, 42, of Dallas, and Daniel Ray Lane, 42, of McKinney, Texas, were convicted at trial on Nov. 15 on charges of attempting to violate the International Emergency Economic Powers Act (IEEPA), conspiracy to violate IEEPA, and conspiracy to commit money laundering in connection with their attempt to transact in sanctioned Iranian petroleum and launder the proceeds.
According to evidence presented at trial, in 2019 and early 2020, the defendants engaged in a conspiracy to purchase petroleum from Iran, in violation of economic sanctions imposed by the United States under IEEPA. They then planned to mask the origins of the petroleum and sell it to a refinery in China. The defendants also attempted to conceal their illegal transactions by obtaining foreign passports, engaging in sham contractual agreements, and conspiring to launder the proceeds of the sale through shell entities and offshore financial accounts. For example, Lane offered to use the mineral rights that his company sold to launder proceeds for the Iranian sellers. In addition, Wang arranged for bribe payments to be paid the Chinese officials and bankers.
“These defendants schemed to buy Iranian oil, hide its origins, and sell it to a refinery in China in disregard of U.S. sanctions against Iran,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Justice Department will not tolerate those who would violate U.S. sanctions and imperil our national security for personal profit.”
“The defendants in this case flouted the national security interests of the United States by directly violating economic sanctions,” said U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania. “Conspiring to violate sanctions and commit money laundering in the process is a serious offense and will not be tolerated.”
“For financial gain, these co-conspirators sought to evade sanctions put in place to protect the United States’ national security,” said Acting Special Agent in Charge Richard Langham of the FBI Philadelphia Field Office. “A criminally bad idea, as this verdict clearly shows. The FBI will bring all our investigative resources to the table to halt such harmful acts.”
Wang and Lane, as well as three co-conspirators, were originally charged by complaint in February 2020, and the defendants and two co-conspirators were indicted on the above charges in August 2020. Wang and Lane face each a maximum penalty of 45 years in prison: five years for conspiracy to violate IEEPA and 20 years for each attempting to violate the IEEPA and conspiracy to commit money laundering counts. The defendants are scheduled to be sentenced on Feb. 29, 2024.
The FBI investigated the case.
Assistant U.S. Attorneys Patrick Murray and Mary Crawley for the Eastern District of Pennsylvania are prosecuting the case, with valuable assistance provided by Trial Attorney Beau Barnes of the National Security Division’s Counterintelligence and Export Control Section.
New Jersey Man Convicted of Tax Evasion in Securities Fraud SchemeRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Joseph Cammarata, 49, of Monmouth Beach, New Jersey was found guilty on November 15, 2023, on five counts of tax evasion following a two-week trial in the District of New Jersey before U.S. District Judge Peter G. Sheridan.
According to documents filed in this case and the evidence at trial:
Cammarata and two conspirators, David Punturieri and Erik Cohen, were the principals of Alpha Plus Recovery, a claims aggregator firm based in Old Bridge, New Jersey. Punturieri and Cohen previously pleaded guilty to tax evasion, fraud, and money laundering charges.
Cammarata, Punturieri, and Cohen used Alpha Plus Recovery to make false and fraudulent claims on the proceeds of securities fraud class action settlements and SEC enforcement actions. They falsely claimed that corporate clients of Alpha Plus Recovery had purchased shares of securities that were the subject of the lawsuits and enforcement actions. In reality, the supposed clients, which were entities actually controlled by the defendants, had not purchased the subject securities and were not entitled to any recovery from the settlements or enforcement actions. To substantiate their false claims, the defendants created fraudulent brokerage and other financial documents to provide to claims administrators. Cammarata and his partners then transferred the fraudulently obtained funds into accounts that they controlled, stealing more than $39 million from 2015 to 2019.
Cammarata’s share of the illegally obtained fraud proceeds amounted to more than $18 million. Cammarata failed to declare or pay taxes on income of $1.72 million in 2015; $2.56 million in 2016; $4.82 million in 2017; $3.56 million in 2018; and $3.35 million in 2019. Cammarata hid this income, which he received through corporate entities, from his accountant in order to conceal these sums from the IRS.
“Last year, a jury in the Eastern District of Pennsylvania found that Cammarata and his partners engaged in a multi-year fraud in order to steal over $40 million,” said U.S. Attorney Romero. “Cammarata then concealed more than $16 million of his proceeds of that fraud from the IRS. The verdict in the New Jersey case makes clear that those who hide income gained by fraud will face the same consequences as those who try to evade their tax obligations from legal sources of income. Thanks to the dedicated efforts of the investigators and prosecutors on this case, this defendant has been brought to justice for the full scale of his criminal conduct.”
“This defendant has now been convicted by two separate juries of serious crimes,” U.S. Attorney Philip R. Sellinger said. “First, he was convicted by a jury in Philadelphia federal court for his role in a scheme to defraud investors out of millions of dollars. Now, a Trenton jury has convicted him of hiding from the IRS the more than $16 million he pocketed as he tried to avoid paying his fair share of taxes. Cammarata will now be held to account for his crimes at sentencing.”
“Year after year, Joseph Cammarata and his partners stole millions from legitimate victim investors entitled to class action settlement funds and hid the illegal proceeds from the IRS,” said Richard Langham, Acting Special Agent in Charge of the FBI’s Philadelphia Division. “Cammarata used the funds to support his lavish lifestyle, including the use of private jets, the purchase of expensive homes, luxury cars, and yachts, and even the maintenance of a private island in The Bahamas. As investigators closed in, Cammarata doubled down on his lies in order to perpetuate the fraud and evade taxes. What Cammarata didn’t know was that Special Agents from the FBI and Postal Inspectors were methodically building a case based on his emails and on phone calls where he and his business partners conspired to lie to claims administrators and the IRS. The FBI is proud to have assisted the IRS in bringing Cammarata to justice.”
“IRS Criminal Investigation special agents are specially equipped to follow the complex financial trail left by criminals, and we are dedicated to holding those accountable for crimes committed,” said Tammy Tomlins, Special Agent in Charge of the IRS Newark Field Office. “Mr. Cammarata and his partners stole millions from his victims. IRS Criminal Investigation Special Agents are committed to working with our law enforcement partners to hold account fraudsters like the defendant.”
“A jury in New Jersey found Joseph Cammarata guilty of defrauding thousands of investors of settlement proceeds and hiding his illegal income from the IRS,” said Christopher Nielsen, the Inspector in Charge of the Philadelphia Division of the Postal Inspection Service. “Since 2014, Mr. Cammarata and his co-conspirators used the United States Mail to submit thousands of fraudulent claims to civil security fraud settlement funds, depriving actual harmed investors of money that they should have received. They collected over $43 million in fraudulent payments and failed to report their newfound income to the IRS. From 2015 to 2019, Mr. Cammarata collected over $18 million in the scheme and falsified his tax returns each year to hide his illegal income and his involvement in the scheme. I want to thank the agents from the FBI and the IRS who worked alongside Inspectors from my office in Philadelphia to uncover this scheme. I would also like to thank the Assistant United States Attorneys who supported the investigation and saw the prosecution through.”
Each count of tax evasion is punishable by up to five years in prison. Sentencing has not yet been scheduled.
Cammarata was previously convicted in the Eastern District of Pennsylvania (EDPA) of conspiracy to commit wire fraud and mail fraud, wire fraud, money laundering conspiracy, and money laundering in connection with this scheme. On June 6, 2023, the Honorable Chad F. Kenney sentenced Cammarata to 10 years in prison on those charges. Because Cammarata filed his taxes from New Jersey, the tax evasion case was brought in the District of New Jersey and prosecuted by EDPA Assistant United States Attorneys David J. Ignall and Paul G. Shapiro, who also tried the earlier case.
The case was investigated by the Internal Revenue Service, Criminal Investigation Division, the Federal Bureau of Investigation, the United States Postal Inspection Service, and the United States Securities and Exchange Commission, with trial support from the U.S. Attorney’s Office for the District of New Jersey.
Pennsylvania Guardian Gloria Byars & Her Co-Conspirator Found Guilty of Stealing from Elderly WardsRead the Press Release
PHILADELPHIA –United States Attorney Jacqueline C. Romero announced that Gloria Byars, 62, of Aldan, PA and Carlton Rembert, 69, of Hampton, VA were both found guilty for their roles in a scheme to defraud elderly, incapacitated people of over $1 million. Byars entered a guilty plea on the eve of trial, pleading guilty to conspiracy, wire fraud, money laundering, and tax fraud. Her co-conspirator and brother Carlton Rembert proceeded to trial and after a four-day trial, a jury found Rembert guilty of conspiracy, bank fraud, and wire fraud.
Between 2012 and 2018, Byars and her co-conspirators stole the life savings from dozens of incapacitated wards while Byars served as their court-appointed guardian. Prior to operating her own guardianship company, Byars was an office manager for a guardianship company in Delaware County that was appointed to care for wards in Pennsylvania. As office manager, and then as guardian herself through her own company, Byars had unfettered access to wards’ property including bank accounts, pensions, real estate, retirement accounts, and other assets. Byars stole money from the wards’ bank accounts by writing unauthorized checks to companies she controlled, or to shell companies controlled by her co-conspirators, Rembert and Alesha Mitchell. Rembert and Mitchell assisted Byars in the theft by opening bank accounts in their home state of Virginia in the names of shell companies purporting to be medical services companies. Rembert and Mitchell deposited dozens of checks containing stolen ward money into their shell business bank accounts, withdrew over $500,000 in cash, and sent most of the stolen proceeds back to Byars, after keeping a share of the stolen ward money for themselves. Byars spent the stolen ward money on vacations, clothing, vehicles, gifts, and parties.
As part of Byars’ plea agreement, she agreed to forfeit 36 gold Krugerrand coins, valuable gold coins first minted in South Africa in the 1960s to introduce the country’s gold supply onto the world market. Byars stole several Krugerrand coins from the bank safe deposit box of one of her wards. Byars also stole over $756,000 from a retired federal employee’s Thrift Savings Plan. In total, Byars and her co-conspirators stole well over $1 million from at least 120 incapacitated people in the Eastern District of Pennsylvania.
Byars and Rembert face the following maximum possible sentences. For conspiracy to commit bank fraud and for bank fraud, the maximum sentence is 30 years’ imprisonment and a $1,000,000 fine. For wire fraud, the maximum sentence is 20 years’ imprisonment and a $250,000 fine. Byars also faces a maximum sentence of 20 years’ imprisonment and a $500,000 fine for money laundering and for filing a false tax return, the maximum sentence is 3 years’ imprisonment and a $250,000 fine.
“Byars and Rembert’s actions caused significant financial and emotional harm to their victims,” said U.S. Attorney Romero. “Fraud, particularly at the expense of vulnerable people, will not be tolerated.”
“Gloria Byars was entrusted with managing the assets of elderly folks unable to do so themselves,” said Richard Langham, Acting Special Agent in Charge of the FBI’s Philadelphia Division. “Instead, she abused her role as a guardian, poaching the nest eggs of these vulnerable wards, figuring they’d never even know. The FBI takes great satisfaction in bringing Byars and her co-conspirators to justice and preventing them from doing more harm. Elder fraud and abuse are simply unconscionable. If you think you’re being victimized like this or know someone who is, please reach out to the FBI – anonymously, if you like.”
“IRS-Criminal Investigation is committed to aggressively investigating individuals who engage in money laundering, tax fraud, or other types of white-collar crimes,” said IRS Criminal Investigation Special Agent in Charge Yury Kruty. “We, along with our law enforcement partners and the Department of Justice will continue to work to ensure that individuals who attempt to hide their criminal involvement will be held accountable.”
“The conviction of Gloria Byars and Carlton Rembert demonstrates the shared commitment of the Delaware County District Attorney’s Office and United States Attorney’s Office in pursuing justice for our most vulnerable residents. I want to thank the United States Attorney’s Office and Federal Bureau of Investigation for working with us on this important guardianship fraud prosecution. I would also like to thank Douglas Rhoads, Deputy District Attorney of Special Investigations, and Detective Edward Rosen of our Criminal Investigation Division for their work on this matter,” said Delaware County District Attorney Jack Stollsteimer.
The case was investigated by the Federal Bureau of Investigation, Delaware County District Attorney’s Office, Criminal Investigation Division, and the Internal Revenue Service, Criminal Investigation and is being prosecuted by Assistant United States Attorneys Tiwana Wright and Samuel Dalke.
Latest Prison Sentence in Unprecedented Firearms Trafficking OperationRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Charles O’Bannon, 25, of Villa Rica, Georgia, was sentenced to 33 months’ imprisonment for his role in a multi-conspirator firearms trafficking operation that flooded the City of Philadelphia with 292 guns over the course of five months.
United States District Court Judge John M. Younge sentenced O’Bannon for his role in this unprecedented firearms trafficking operation, which involved hundreds of firearms being straw purchased from federal firearms dealers in Atlanta, Georgia, and then transported across state lines for resale on the black market in the City of Philadelphia. This fact pattern is known as the “iron pipeline.” Dozens of firearms have since been recovered by law enforcement at crime scenes and elsewhere. The conspiracy’s guns have taken the lives of two Philadelphians and used to perpetrate violent crime, including shootings, carjackings, and drug trafficking.
Judge Younge had previously sentenced O’Bannon’s conspirators as follows:
- Edwin Burgos, 30, of Philadelphia, Pennsylvania, the leader of the Philadelphia side of the firearms trafficking operation, was sentenced to 120 months’ imprisonment.
- Fredrick Norman, 26, of Villa Rica, Georgia, the leader of the Atlanta side of the firearms trafficking operation, was sentenced to 99 months’ imprisonment.
- Ernest Payton, 31, of Philadelphia, Pennsylvania, was sentenced to 63 months’ imprisonment.
- Kenneth Burgos, 24, of Philadelphia, Pennsylvania, was sentenced to 75 months’ imprisonment.
- Roger Millington, 27, of Philadelphia, Pennsylvania, was sentenced to 48 months’ imprisonment.
- Stephen Norman, 25, of Villa Rica, Georgia, and brother of Fredrick Norman, was sentenced to 27 months’ imprisonment.
“An important piece of our commitment to stopping the illegal flow of guns through the ‘iron pipeline’ is charging crimes like straw purchasing,” said U.S. Attorney Romero. “The substantial prison sentences each defendant received in this case demonstrate that straw purchasing will carry significant consequences.”
“The defendants in this case flooded 300 firearms onto the streets of Philadelphia, a city already plagued with gun violence,” said ATF Special Agent in Charge Eric Degree. “We appreciate the support of the United States Attorney’s Office, the Philadelphia Police Department, the Pennsylvania State Police, and members of our Firearms Trafficking Task Force, which allowed us to dismantle this firearm trafficking organization.”
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and is being prosecuted by Assistant United States Attorney Priya T. De Souza.
Bucks County Man Pleads Guilty to “Ponzi” Schemes, Money Laundering, and Stealing over $6 Million in Federal Pandemic Relief FundsRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Stanislav Bril, 40, a/k/a “Stan Bril,” a/k/a “Slava Bril,” a resident of Jamison, Pennsylvania, entered a plea of guilty on October 30, 2023 before United States District Judge Gene E.K. Pratter to three counts of mail fraud, eleven counts of wire fraud, five counts of bank fraud, and five counts of money laundering, all arising from Bril’s operation of two different Ponzi schemes, his false applications for bank loans, his defrauding of the Small Business Administration’s Paycheck Protection Program (“PPP”) and Economic Injury Disaster Loan (“EIDL”) program, and related conduct.
“The U.S. Attorney’s Office will continue leading the charge with our law enforcement partners to hold Stanislav Bril and other fraudsters accountable for their schemes,” said U.S. Attorney Romero. “These fraud schemes impact us all, from individual investors to taxpayers. We also appreciated the public’s assistance and cooperation in bringing these cases.”
“Over the course of ten years, Bril perpetrated multiple fraud schemes, stealing variously from investors, a bank, and the U.S. government,” said Richard Langham, Acting Special Agent in Charge of the FBI’s Philadelphia Division. “Fortunately, the FBI and our partners are experts at ensuring criminals like him are held accountable.”
“IRS-Criminal Investigation is proud to have provided its financial expertise in this investigation,” said IRS Criminal Investigation Special Agent in Charge Yury Kruty. “We, along with our law enforcement partners and the Department of Justice, are committed to aggressively investigating individuals who engage in money laundering, tax fraud, or other types of white-collar crimes.”
From October 2011 to August 2014, Bril operated a “Ponzi” scheme through his company, Mortgage Consultant Group (“MCG”), obtaining over $1 million from investors and using much of these funds for his own benefit and to perpetuate the scheme. Bril approached investors and persuaded them to make capital loan investments in MCG. In his marketing materials and his sales pitches to investors, Bril falsely claimed that these investments would enable MCG to make loans on real estate and construction projects or enable MCG to make short-term, high interest loans. Bril falsely promised that investors would obtain regular returns, or “interest,” on their capital loan investments in MCG. Rather than use investors’ funds as promised, Bril used the vast majority of the funds to pay himself, his family, and his personal expenses – including his gambling losses at casinos – and to perpetuate his scheme by occasionally making “interest” payments to some investors.
From October 2018 to June 2021, Bril fraudulently obtained a $750,000 line of credit from a bank headquartered in Scranton, Pennsylvania for another company he created, The Bril Group, Inc. (“TBG”). In order to secure the line of credit, Bril made false statements about TBG’s business, the number of TBG employees he was hiring, and the intended use of the line of credit. Once he obtained the line of credit, Bril caused those funds to be spent on unauthorized purchases and laundered a significant portion of those funds through various bank accounts.
From April 2020 to March 2021, Bril fraudulently obtained over $6.7 million from the Small Business Administration’s Economic Injury Disaster Loan (“EIDL”) and Paycheck Protection Programs (“PPP”) by making false statements about the number of employees of, the wages and payroll taxes paid by, and the intended use of the loan proceeds by several companies that Bril created. Bril falsely claimed that these companies – TBG, MCG LOAN, and SAB Services LLC – had several hundred employees when in fact none of these companies had more than one employee. In his PPP and EIDL applications, Bril submitted allegedly historical tax forms with inflated payroll information for nonexistent employees that had never actually been filed. In addition, Bril falsely denied that there were criminal charges pending against him at the time of his applications. In fact, federal charges were already pending against Bril for his perpetration of the Ponzi scheme detailed above. Once he fraudulently obtained these funds, Bril wired them to other individuals, cryptocurrency platforms, and a title company towards a purchase of a Los Angeles condominium. Bril also laundered a significant portion of those funds through various bank accounts and transactions.
From July 2019 to at least August 2021, Bril revived MCG and used it to perpetrate yet another “Ponzi” scheme, obtaining millions of dollars in loans from several investors and using these funds for his own benefit and to perpetuate the scheme. Bril initially took short-term loans from investors and repaid investors with high interest rates to lull them into a false sense of security and to obtain larger loans from them. In his sales pitches to investors, Bril falsely claimed that their loans would enable MCG to make loans on real estate and construction projects and/or enable MCG to make short-term, high-interest loans. However, Bril provided investors with few details of these purported projects and declined to identify his purported borrowers. Bril often encouraged investors to “rollover” their loans into new deals rather than take their payouts per their agreements with Bril. When investors asked Bril whether he had any claims, lawsuits, or legal proceedings filed against him, Bril falsely answered in the negative despite his knowledge that federal charges were already pending against him for his perpetration of the earlier Ponzi scheme. When Bril began missing the agreed repayments to investors, Bril provided bogus explanations for his theft of their loans, including that he was waiting for a wire to clear, that he waiting for a check to be mailed from his bank, that he was looking for a new bank, that his new bank was giving him a “hard time,” and that he was suffering from a variety of health emergencies and personal tragedies that were somehow preventing him from making timely paying to the investors. Rather than use investors’ funds as promised, Bril used the funds to pay himself, his family, and his personal expenses – including trading in digital currencies – and to perpetuate his schemes by occasionally making “interest” payments to some investors.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation and is being prosecuted by Assistant United States Attorneys Vineet Gauri and Matthew T. Newcomer.
U.S. Attorney’s Office and WHYY Present Philadelphia Premiere of “Repairing the World: Stories from the Tree of Life” as Part of Fight Against HateRead the Press Release
Philadelphia, PA – On Thursday, October 19, 2023, community members and leaders gathered at the Suzanne Roberts Theatre to watch the first screening in Philadelphia of Repairing the World: Stories from the Tree of Life, United States Attorney Jacqueline C. Romero announced today. The documentary tells the story of Pittsburgh’s powerful community response to hate in the aftermath of the deadliest antisemitic attack in U.S. history. Next week marks the fifth anniversary of the attack.
“Through the voices of survivors, family members, diverse Pittsburgh residents, and leaders, Repairing the World shows the powerful display of unity in a moment of crisis, the resilience of a vibrant city, and a community working together to stand united against hate,” said U.S. Attorney Romero. “In this painful and challenging time in the world, it is a message that we all can learn from and put into action in our own communities.”
Following the screening, host and producer of WHYY’s “Morning Edition” Jennifer Lynn led a panel discussion that included Patrice O’Neill, the film’s producer and director, Alan Mallinger, whose mother was killed and sister was wounded in the shooting, and Maggie Feinstein, director of the 10.27 Healing Partnership. United States Attorney for the Western District of Pennsylvania Eric G. Olshan and members of the trial team that prosecuted and convicted the shooter were also in attendance and shared remarks.
The United States Attorney’s Office for the Eastern District of Pennsylvania hosted the screening and discussion as part of the Department of Justice’s United Against Hate Initiative, in partnership with WHYY and Not In Our Town. The American Jewish Committee, the Anti-Defamation League, the Board of Rabbis of Greater Philadelphia, HIAS Pennsylvania, the Jewish Federation of Greater Philadelphia, and the Weitzman National Museum of American Jewish History cosponsored the screening.
“Hate-based violence and threats hurt not just the victims; they destroy entire communities,” said U.S. Attorney Romero. “In addition to prosecuting these crimes to the fullest extent of the law, my Office, along with our community and law enforcement partners, will continue to shine a light on the impact of these crimes and work with our partners to build the community connections needed to prevent them.”
U.S. Attorney Olshan added, “We were proud to join our colleagues from the Eastern District of Pennsylvania for a viewing of this film, which showcases what those of us who worked on this case have witnessed firsthand for the last five years—the unbelievable strength and resolve of the entire victim community. We will continue to stand beside them in solidarity and to show that together we are stronger than hate.”
“Not In Our Town is honored to present this film to the Philadelphia community with the U.S. Attorney’s Office, WHYY, and our community partners,” said the film’s director and Not In Our Town CEO Patrice O’Neill. “The Pittsburgh community presents powerful lessons about how we can build alliances in our cities and towns that will help us become stronger than hate. We look forward to seeing how Pittsburgh’s story helps spark these discussions here in Philadelphia and across the country.”
WHYY will broadcast the film on Thursday, October 26, 2023, at 9:00 p.m., with an encore presentation on Sunday, October 29, 2023, at 12:30 p.m.
Learn more about the film by visiting https://repairingtheworldfilm.org/. Report suspected hate crimes first to your local law enforcement, then to the FBI at tips.fbi.gov or 1-800-CALL-FBI. You can also report a hate crime, find resources, and learn more about the Department of Justice’s hate crimes prevention and enforcement work by visiting www.justice.gov/hatecrimes.
Two Men Plead Guilty to Falsifying Documents Related to Testing of Equipment at Nuclear Power PlantsRead the Press Release
Two men pleaded guilty today for their roles in creating false calibration certificates in a matter within the jurisdiction of the Nuclear Regulatory Commission (NRC).
According to court documents, Miguel Marcial Amaro, 56, of Newark, Delaware, and Martin Ramos, 52, of Levittown, Pennsylvania, worked for a company that provided acoustic emissions (AE) testing to nuclear power plants to detect structural defects in the plant’s equipment. Following the testing, Marcial and Ramos helped create and transmit final testing reports to the owners of the plants which, among other things, contained calibration certificates for the equipment used.
Between 2010 and 2021, Marcial was responsible for ensuring that the company’s AE testing equipment was calibrated annually; Ramos worked under Marcial as an engineer. The two men created numerous false calibration certificates for AE testing equipment, and 15 of these false certificates were sent a total of 29 times to nuclear plant owners as part of final testing reports required by the NRC. The falsified calibration certificates were discovered in 2021 during an external audit.
“Today, we hold defendants accountable for deliberately attempting to bypass testing protocols that are essential to keeping nuclear power plants safe,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division (ENRD). “We will continue to use all available enforcement authorities to support NRC’s efforts to ensure that nuclear energy is safely created.”
“Many thanks to the NRC and the ENRD for partnering in enforcement and ensuring the accuracy of inspection reports critical to the safe operation of nuclear power plants,” said U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania. “My office takes safety matters such as these seriously, and these guilty pleas show that anyone seeking to evade nuclear testing protocols will be held accountable.”
“The NRC takes its mission of protecting public health and safety very seriously,” said Director Thomas G. Ashley Jr. of the NRC’s Office of Investigations. “It’s vital that employees at NRC-regulated entities act with integrity. Today’s announcement shows deliberate violations of NRC requirements will not be tolerated.”
Marcial and Ramos are scheduled to be sentenced on Jan. 25, 2024. Each faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The NRC’s Office of Investigation conducted the investigation.
Senior Trial Attorney Daniel Dooher and Trial Attorney Rachel M. Roberts of ENRD’s Environmental Crimes Section and Assistant U.S. Attorney Joan E. Burnes for the Eastern District of Pennsylvania are prosecuting the case.
United States Settles Kickback Allegations with Specialty Pharmacy BioTek reMEDys, Inc., its Owner Chaitanya Gadde, and Dr. David TabbyRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced today that BioTek reMEDys, Inc. (“BioTek”), located in New Castle, Delaware, and its Chief Executive Officer, Chaitanya Gadde, have agreed to pay $20 million based on BioTek’s ability to pay to resolve allegations that they violated the False Claims Act and the Anti-Kickback Statute by paying kickbacks to patients in the form of routinely waived copayments and to physicians in exchange for providing patient referrals to BioTek.
The government alleged that, from at least August 2015 through May 2020, BioTek, a specialty pharmacy that offers drugs and infusion services, routinely waived the copayments of Medicare and TRICARE patients to induce those patients to purchase its drugs and services. Many of the specialty drugs offered by BioTek were expensive and required patients to pay large copays. Understanding that these copays could deter patients from purchasing its drugs and services, the government alleged that BioTek engaged in a scheme, orchestrated and implemented by Gadde and others, to routinely waive these copays – without regard for whether the patients were experiencing financial hardship – to ensure a steady revenue stream for BioTek.
Today’s settlement also resolves allegations that BioTek provided remuneration in the form of gifts, dinners, and free administrative and clinical support services, to physicians – in particular, Dr. David Tabby, who operated a neurology practice in Bala Cynwyd, Pennsylvania – to induce those physicians to refer patients to BioTek. The government also alleged that Dr. Tabby knowingly solicited and accepted this remuneration in exchange for referring numerous patients to BioTek. Dr. Tabby has paid $480,000 to settle these allegations, based on his ability to pay.
When a Medicare beneficiary obtains a prescription drug covered by Medicare, the beneficiary may be required to make a partial payment, which may take the form of a copayment, coinsurance, or a deductible (collectively “copays”). Congress included copay requirements in the Medicare program in part to serve as a check on health care costs. The Federal Anti-Kickback Statute prohibits the offering, paying, soliciting, or accepting, directly or indirectly, any remuneration – which includes money or any other thing of value – to refer or arrange for the referral of items or services payable by any federal health care program. This prohibition extends to companies that routinely waive the copays of Medicare patients without determination of financial need. The Anti-Kickback Statute also extends to the payment of remuneration to physicians in exchange for patient referrals.
“BioTek allegedly provided improper physician inducements and covered up kickbacks for patient referrals by waiving co-pays,” said United States Attorney Jacqueline C. Romero. “These improper and corrupt business practices will not be tolerated in this District. Biotek’s alleged scheme, orchestrated and implemented by Gadde, Dr. Tabby, and others, to routinely waive these copays – without regard for whether the patients were experiencing financial hardship – ensured a steady revenue stream for BioTek and undermined patient care to citizens of this District. This Office will continue to invest itself in the pursuit of health care providers who violate the law for personal gain.”
“Kickbacks impose hidden costs on the health care system and compromise medical decision-making,” said Maureen R. Dixon, Special Agent in Charge with the U.S. Department of Health and Human Services Office of the Inspector General. “Alongside our law enforcement partners, HHS-OIG is committed to safeguarding the integrity of federal health care programs by, in part, holding individuals who unlawfully bill the programs accountable for their actions."
“The settlement agreement announced today demonstrates our ongoing commitment to work with our law enforcement partners to investigate healthcare fraud and protect TRICARE, the healthcare system for military members and their dependents,” stated Special Agent in Charge Patrick J. Hegarty of the Defense Criminal Investigative Service Northeast Field Office. “When health care companies pay physicians and submit false claims for improper referrals, they undermine the integrity of TRICARE and place an unnecessary financial burden on the program.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Shantae M. Wyatt and Latoya Sparrow, former BioTek employees. Under those provisions, a private party may file an action on behalf of the United States and receive a portion of any recovery. Wyatt and Sparrow will receive $4 million as their share of the settlement with BioTek and Gadde, and $91,200 as their share of the settlement with Dr. Tabby. The qui tam case is captioned United States of America ex rel. Wyatt et al. v. BioTek reMEDys, Inc., No. 19-6069 (E.D. Pa.). The relators are represented by David Bocian, Esq. and Asher Alavi, Esq. of Kessler Topaz Meltzer & Check, LLP.
The resolutions obtained in this matter were the result of a coordinated effort among the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, the United States Attorney’s Office for the Eastern District of Pennsylvania, the United States Attorney’s Office for the District of Delaware, the U.S. Department of Health and Human Services Office of the Inspector General, the Office of Inspector General for the Office of Personnel Management, and the Department of Defense Office of Inspector General, Defense Criminal Investigative Service.
The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800‑HHS‑TIPS (800-447-8477).
The matter was handled in the U.S. Attorney’s Office for the Eastern District of Pennsylvania by United States Attorney Jacqueline C. Romero, Deputy Chief Charlene Keller Fullmer, Assistant United States Attorney Judith Amorosa, and Auditor George Niedzwicki .
The claims asserted by the United States are allegations only and there has been no determination of liability.
Cigna Group to Pay $172 Million to Resolve False Claims Act AllegationsRead the Press Release
PHILADELPHIA– United States Attorney Jacqueline C. Romero announced that the Cigna Group (“Cigna”), a national insurer with corporate offices in Philadelphia, has agreed to pay $172,294,350 to resolve allegations that it violated the civil False Claims Act by submitting and failing to withdraw inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan enrollees in order to increase its payments from Medicare. Of this amount, Cigna will pay $135,294,350 to resolve allegations arising from an investigation based out of the Eastern District of Pennsylvania.
“Given the growth of Medicare Advantage plans, investigating fraud involving Medicare Part C is more important than ever. My office has prioritized combatting Medicare Advantage fraud, including applying data-driven investigative methods and working extensively with our law enforcement partners across the country,” said U.S. Attorney Jacqueline C. Romero of the Eastern District of Pennsylvania. “We will hold accountable those who report unsupported diagnoses to inflate Medicare Advantage payment, such as unsupported diagnosis codes for morbid obesity.” Indeed, earlier this year, this office announced another Medicare Advantage settlement in a different case: https://www.justice.gov/usao-edpa/pr/primary-care-physicians-pay-15-million-resolve-false-claims-act-liability-submitting.
Under the Medicare Advantage (“MA”) Program, also known as Medicare Part C, Medicare beneficiaries have the option of obtaining their Medicare-covered benefits through private insurance plans called MA Plans. Over half of our nation’s Medicare beneficiaries are now enrolled in MA Plans, and the government pays private insurers over $450 billion each year to provide for their care. The Centers for Medicare and Medicaid Services (“CMS”) pays the MA Plans a fixed monthly amount for each beneficiary who enrolls. CMS adjusts these monthly payments to account for various “risk” factors that affect expected health expenditures for the beneficiary, to ensure that MA Plans are paid more for those beneficiaries expected to incur higher healthcare costs and less for healthier beneficiaries expected to incur lower costs. To make these adjustments, CMS collects “risk adjustment” data, including medical diagnosis codes, from the MA Plans.
Cigna owns and operates MA Organizations that offer MA Plans to beneficiaries across the country. The United States alleges that Cigna submitted inaccurate and untruthful patient diagnosis data to CMS in order to inflate the payments it received from CMS, failed to withdraw the inaccurate and untruthful diagnosis data and repay CMS, and falsely certified in writing to CMS that the data was accurate and truthful. The settlement announced today resolves these allegations.
The United States contends that, for payment years 2014 to 2019, Cigna operated a “chart review” program, pursuant to which it retrieved medical records (also known as “charts”) from healthcare providers documenting services they had previously rendered to Medicare beneficiaries enrolled in Cigna’s plans. Cigna retained diagnosis coders to review those charts to identify all medical conditions that the charts supported and to assign the beneficiaries diagnosis codes for those conditions. Cigna relied on the results of those chart reviews to submit additional diagnosis codes to CMS that the healthcare providers had not reported for the beneficiaries to obtain additional payments from CMS. However, Cigna’s chart reviews also did not substantiate some diagnosis codes that were reported by providers and previously submitted by Cigna to CMS. Cigna did not delete or withdraw these inaccurate and untruthful diagnosis codes, however, which would have required Cigna to reimburse CMS. Thus, the United States alleges that Cigna used the results of its chart reviews to identify instances where Cigna could seek additional payments from CMS, while improperly failing to use those same results when they provided information about instances where Cigna was overpaid.
The United States further contends that, for payment years 2016 to 2021, Cigna knowingly submitted and/or failed to delete or withdraw inaccurate and untruthful diagnosis codes for morbid obesity to increase the payments it received from CMS for numerous beneficiaries enrolled in its MA plans. The medical records for individuals diagnosed as morbidly obese typically include one or more Body Mass Index (“BMI”) recordings. Individuals with a BMI below 35 cannot properly be diagnosed as morbidly obese. However, Cigna submitted or failed to delete inaccurate and untruthful diagnosis codes for morbid obesity for individuals lacking a BMI of 35 or above, and these codes increased the payments made by CMS.
In connection with the settlement, Cigna entered into a five-year Corporate Integrity Agreement (“CIA”) with the U.S. Department of Health and Human Services Office of Inspector General (“HHS-OIG”). The CIA requires that Cigna implement numerous accountability and auditing provisions. On an annual basis, top executives and members of the Board of Directors must make certifications about Cigna’s compliance measures, Cigna must conduct annual risk assessments and other monitoring, and an independent review organization will conduct multi-faceted audits focused on risk adjustment data.
“Today’s settlement shows our attention to and commitment in investigating all potential allegations of fraud against the Medicare Part C Program, no matter the complexity of the scheme,” said Maureen R. Dixon, Special Agent in Charge for HHS-OIG, Region III. “We will continue to partner with the United States Attorney’s Office to evaluate allegations brought under the False Claims Act to ensure the integrity of federal healthcare programs.”
The matter was handled in the Eastern District of Pennsylvania by Assistant U.S. Attorneys Deborah W. Frey and Matthew E. K. Howatt, Civil Chief Gregory B. David, auditor George Niedzwicki, and litigative consultants Lauren M. Cordrey and Priscilla Brandon, along with Civil Fraud Section attorney Carol L. Wallack and Assistant Director, Edward C. Crooke. HHS-OIG supported the investigation.
The remaining $37 million of the aggregate settlement amount above resolves allegations related to unsupported diagnoses for MA beneficiaries arising from Cigna’s home visit program. That separate settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act. That case is captioned United States ex rel. Cutler v. Cigna Corp., et al., No. 3:21-cv-00748 (M.D. Tenn.), which case was transferred from the Southern District of New York.
The investigation and resolution of this matter illustrate the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at https://oig.hhs.gov/fraud/report-fraud/ or 800-HHS-TIPS (800-447-8477).
The claims resolved by the settlement are allegations only and there has been no determination of liability.
The Boeing Company to Pay $8.1 Million to Resolve False Claims Act AllegationsRead the Press Release
The Boeing Company, headquartered in Arlington, Virginia, has agreed to pay $8,100,000 to resolve allegations that it violated the False Claims Act by submitting false claims and making false statements in connection with contracts with the U.S. Navy to manufacture the V-22 Osprey, a tiltrotor military aircraft.
The settlement announced today resolves allegations that from approximately 2007 through 2018, Boeing failed to comply with certain contractual manufacturing specifications in fabricating composite components for the V-22 at its facility in Ridley Park, Pennsylvania. Specifically, the government contends that Boeing failed to perform required monthly testing on autoclaves used in the composite cure process and was not in compliance with additional requirements related to the testing.
“The government expects contractors to adhere to contractual obligations to which they have agreed and for which they have been paid,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates our commitment to hold accountable contractors who violate such obligations and undermine the integrity of the government’s procurement process.”
“All government contractors have a responsibility to follow the obligations and protocols set forth by their contracts,” said U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania. “This office is committed to accountability and protection from false claims as shown in cases such as this.”
“Maintaining the integrity of the U.S. Department of Defense (DoD) supply chain is a top priority for the DoD Office of Inspector General’s Defense Criminal Investigative Service (DCIS),” said Special Agent in Charge Patrick J. Hegarty of the DCIS Northeast Field Office. “The DoD expects its contractors to adhere to contract specifications and provide quality products to the U.S. military. We are committed to working with our law enforcement partners to investigate allegations of contractors circumventing required testing protocols and submitting false claims during the DoD procurement process.”
“The integrity of the military procurement process, and ultimately warfighter safety and our national security, demand that our contractors comply strictly with manufacturing requirements, including protocols for equipment testing,” said Special Agent in Charge Greg Gross of the Navy Criminal Investigative Service (NCIS) Economic Crimes Field Office. “NCIS and our partners remain committed to rooting out any noncompliance with manufacturing specifications that threatens warfighter readiness.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by former employees of Boeing who worked in composites fabrication and autoclave operations with the V-22 program. Under the qui tam provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Roath et al. v. The Boeing Company, No. 16-cv-6547 (E.D. Pa.). The Relators will receive $1,539,000 in connection with the settlement.
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania, with assistance from the DCIS, Naval Criminal Investigative Service, as well as subject matter experts from the Defense Contract Management Agency and the Naval Air Systems Command.
This matter was handled by Trial Attorney Amy Likoff of the Civil Division and Assistant U.S. Attorneys Joel Sweet and David Degnan for the Eastern District of Pennsylvania.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
SettlementLocal Property Owner to Pay $90,458 to Resolve Alleged False Claims Act Violations Arising from HUD’s Housing Choice Voucher ProgramRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced today that a local property owner will pay $90,458 to settle allegations that he violated the False Claims Act by charging a low-income tenant more than the amount permitted under the property owner’s agreement with the government under the Housing Choice Voucher Program (Section 8).
The government alleges that under the Housing Choice Voucher Program, David Krmpotich of Montgomery County was permitted to charge rent in an amount agreed upon by Krmpotich, the tenant, and a public housing agency administering the rent subsidy program. Under the program rules and the parties’ lease, the tenant was required to pay Krmpotich rent equal to a portion of the tenant’s income, and the federal government was required to pay the balance of the agreed total rent. Krmpotich was prohibited from charging the tenant more than the tenant’s allocation of the total rent amount. Nevertheless, the government alleges Krmpotich demanded that the tenant pay an additional $125.00 to $185.00 per month in unlawful and undisclosed supplemental rent payments.
United States Attorney Romero stated, “A deal is a deal. Property owners receiving rent subsidies from government’s coffers must live with the deal they agree to and not secretly and illegally demand more from tenants, whether money or anything else of value. The conduct alleged here is an affront to the integrity of the Housing Choice Voucher Program – a program designed to promote safe and affordable housing for low-income tenants – and to the taxpayers who pay for the program. My office is committed to bring accountability to those who break the rules.”
“This settlement represents our commitment to protecting HUD beneficiaries from bad actors seeking to enrich themselves by preying on HUD-housing participants,” said Special Agent in Charge Shawn Rice of the U.S. Department of Housing and Urban Development, Office of Inspector General. “HUD OIG will continue to pursue and bring to justice landlords who fraudulently overcharge HUD-assisted tenants in violation of Federal law.”
The allegations against Krmpotich were brought to the attention of the United States by a whistleblower. The False Claims Act provides for whistleblowers to receive a portion of the amount recovered because of their disclosures. In this case, the whistleblower will receive $16,282 of the settlement proceeds.
The government’s investigation was led by Assistant United States Attorney Joel M. Sweet, Investigator Jeffrey Braun, and investigators from HUD OIG. The whistleblower lawsuit is captioned United States ex rel. Catherine Spearman Jackson v. David Krmpotich, No. 22-cv-1613 (E.D. Pa.).
The claims asserted by the United States are allegations only and there has been no determination of liability.
Boeing to Pay $8.1 Million to Resolve Alleged False Claims Act Violations Arising from Manufacture of V-22 Osprey AircraftRead the Press Release
The Boeing Company will pay $8,100,000 to settle allegations that it violated the False Claims Act by failing to adhere to critical manufacturing specifications in the production of composite parts for V-22 Osprey military aircraft, announced United States Attorney Jacqueline C. Romero.
The allegations against Boeing were brought to light by three whistleblowers who worked at Boeing’s manufacturing facility in Ridley Park, Pennsylvania.
The United States alleges that Boeing falsely certified to the government that it had complied with all manufacturing specifications for the fabrication of certain composite parts for the V-22 Osprey aircraft.
Composite parts for the V-22 Osprey are manufactured using a process that involves curing these parts in autoclaves. The autoclaves are large, precisely controlled chambers that regulate temperature and pressure over the extended period of time required to properly cure composite parts. Every composite part used in the V-22 must be cured at a particular temperature and pressure. The V-22 manufacturing specifications require Boeing to assure the accurate performance of the autoclaves by performing monthly temperature uniformity surveys, among other requirements. Temperature uniformity surveys are intended to verify that an autoclave is performing at expected temperatures or identify when an autoclave deviates from specified temperatures.
The United States contends that Boeing failed to comply with manufacturing specifications for certain V-22 composite parts manufactured at the Ridley Park facility. The government alleges that Boeing failed to conduct routine checks designed to ensure the consistent performance of autoclaves in which composite parts were cured. Specifically, the United States alleges that from 2007 through 2018 Boeing failed to perform monthly temperature uniformity surveys on autoclaves, failed to collect and analyze temperature uniformity survey data on a monthly basis, failed to verify that calibration and certification tags on autoclaves were current, and failed to direct random surveillance of autoclave processes – all in violation of the V-22 manufacturing specifications. The United States further alleges that Boeing failed to use appropriate thermal testing equipment and failed to maintain required documents concerning autoclave testing.
“Taxpayers deserve to get what they pay for, and members of our military deserve to know that no shortcuts have been taken in the manufacture of aircraft and other equipment upon which they depend. My office will continue to investigate vigorously all credible allegations of government contractors cutting corners and submitting false certifications in connection with payments from the Treasury,” said United States Attorney for the Eastern District of Pennsylvania Jacqueline C. Romero.
“Maintaining the integrity of the U.S. Department of Defense supply chain is a top priority for the Office of Inspector General’s Defense Criminal Investigative Service. The Department of Defense expects its contractors to adhere strictly to contract specifications when providing products to the U.S. military,” stated Patrick J. Hegarty, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office. Hegarty continued: “We are committed to working with our law enforcement partners and the U.S. Attorney’s Office for the Eastern District of Pennsylvania to investigate allegations of contractors circumventing required testing protocols and submitting false claims during the procurement process.”
“The integrity of the military procurement process, and ultimately warfighter safety and our national security, demand that our contractors comply strictly with manufacturing requirements, including protocols for equipment testing,” said Special Agent-in-Charge Greg Gross of the Navy Criminal Investigative Service Economic Crimes Field Office. “NCIS and our partners remain committed to rooting out any noncompliance with manufacturing specifications that threatens warfighter readiness.”
The False Claims Act provides for whistleblowers to receive a portion of the amount recovered because of their disclosures. In this case, the three whistleblowers collectively will receive $1,539,000 of the settlement proceeds.
The government’s investigation was led by Assistant United States Attorneys Joel M. Sweet and David A. Degnan, Auditor Dawn Wiggins, and Investigator Jeffrey Braun, all of the United States Attorney’s Office for the Eastern District of Pennsylvania, along with Trial Attorney Amy Likoff of the U.S. Department of Justice Commercial Litigation Branch, Fraud Section, and Special Agents of the Defense Criminal Investigative Service and the Navy Criminal Investigative Service. The whistleblower lawsuit is captioned United States ex rel. Robert C. Roath, et al. v. The Boeing Company, No. 16-cv-6547 (E.D. Pa.). The whistleblowers are represented by F. Emmett Fitzpatrick, III of Flamm Walton Heimbach and Joseph D. Mancano of Mancano Law, PLLC.
The settlement is not an admission by Boeing that it is liable under the False Claims Act.
United States Attorney Jacqueline C. Romero and HUD Inspector General Rae Oliver Davis Host a Safe Housing Seminar Focused on Promoting Health and Safety in HUD-Assisted HousingRead the Press Release
PHILADELPHIA, PA – United States Attorney Jacqueline C. Romero and the U.S. Department of Housing and Urban Development’s Inspector General Rae Oliver Davis hosted a Safe Housing Seminar today focused on promoting the health and safety of tenants living in HUD-assisted housing.
The seminar, which took place at the U.S. Attorney’s Office in Philadelphia as part of the HUD Office of Inspector General’s new community outreach initiative, focused on eliminating environmental hazards and combatting sexual misconduct in HUD-assisted housing. The topics included effective safe housing strategies, environmental justice concepts and issues, and how to recognize and report sexual misconduct in housing.
Participants included representatives from organizations who routinely work with vulnerable populations most likely to be impacted by environmental injustices, such as lead paint in their homes, or become victims of sexual harassment in housing by their landlords, property managers, maintenance staff, or other housing personnel in positions of authority. Organizations represented included local law enforcement agencies, legal aid offices, fair housing organizations, shelters, and transitional housing providers. Participants were encouraged to share their experiences, concerns, and expertise to build future partnerships and provide aid and assistance to beneficiaries when reporting matters related to health and safety in housing.
“My office and our investigative partners at HUD OIG are committed to the comprehensive environmental justice strategies aimed at reversing environmental inequities in underserved communities that rely heavily on HUD’s housing assistance programs,” said U.S. Attorney Romero. “Through our longstanding partnership, we will also continue to work together to enforce the Fair Housing Act by investigating and prosecuting discrimination in housing based on race, color, religion, national origin, sex, disability, and familial status. Sexual harassment is a form of sex discrimination prohibited by the Fair Housing Act, and together we will investigate and prosecute offenders taking advantage of tenants and prospective tenants in violation of the law.”
“Environmental justice violations and sexual harassment in housing are egregious violations of a person’s right to safe and fair housing under federal law,” Inspector General Oliver Davis said. “We are working closely with the U.S. Attorney’s Office to spread the word about ways to help victims who currently are experiencing these issues or who have been impacted by them in the past. Outreach events like the one we hosted today are an important way to increase awareness, share information, and build strong partnerships in the community to help call out and eliminate these problems together.”
If you or someone you know has information about environmental hazards and unsafe unit conditions in HUD-assisted housing or has been a victim of sexual harassment, sexual assault, or sexual exploitation—even if the events occurred years ago—report it to the HUD Office of Inspector General Hotline at 1-800-347-3735 or visit the website at www.hudoig.gov/hotline.
You may also contact the U.S. Department of Justice at 1-844-380-6178 or visit www.civilrights.justice.gov. Individuals who believe they may have been victims of environmental injustices or housing discrimination may also contact the U.S. Attorney’s Office at 615 Chestnut Street, Suite 1250, Philadelphia, PA 19106, ATTN: Environmental Justice Coordinator Erin Lindgren, [email protected], or Civil Rights Coordinator Lauren DeBruicker, [email protected].
HUD OIG Sexual Misconduct in Housing Public Service Announcement: www.youtube.com/watch?v=fqXSMjUZIZU
HUD OIG Environmental Justice Public Service Announcement: https://youtu.be/Xk4uExYYph0
DOJ Sexual Harassment in Housing Initiative: www.justice.gov/crt/sexual-harassment-housing-initiative
Statement of U.S. Attorney Jacqueline C. Romero on the Passing of JoAnne A. EppsRead the Press Release
On behalf of the U.S. Attorney’s Office for the Eastern District of Pennsylvania, I want to express how deeply saddened we are by the death of JoAnne A. Epps, Acting Temple University President. Acting President Epps is fondly remembered as a former Assistant U.S. Attorney from 1980 to 1985. She was an icon in the legal community, dedicating her life to public service, the rule of law, experiential legal education, equity and diversity in the profession, and the advancement of civil rights. She was tireless and passionate about the issues she held dear. We deeply mourn her passing and send our heartfelt condolences to her family in this difficult time.
On a personal note, JoAnne was a mentor and confidante. Today I mourn with countless women who had the pleasure of Joanne’s wise advice, mentorship, and counsel over the years. I am simply devastated by her passing.
Man Sentenced for Sexual Exploitation of a ChildRead the Press Release
A Pennsylvania man was sentenced today to 25 years in prison for manufacturing and attempting to manufacture child sexual abuse material (CSAM).
According to court documents, David Dunn, 57, of Red Hill, used the mobile applications Snapchat and Likee to coerce and entice a 10-year-old female to engage in sexually explicit conduct. Dunn told the victim he was 11 years old and sent the minor female CSAM depicting minor boys, which he had downloaded from the Dark Web. Dunn captured the CSAM he coerced the victim to create and sent it to another individual via Telegram. Two cell phones seized from Dunn’s home contained thousands of images and videos of CSAM.
Dunn pleaded guilty to one count of sexual exploitation of children.
Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania, and Acting Special Agent in Charge Richard Langham of the FBI Philadelphia Field Office made the announcement.
The FBI Philadelphia Field Office investigated the case.
Trial Attorney Kaylynn N. Foulon of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Kevin Jayne for the Eastern District of Pennsylvania prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Navmar Applied Sciences Corporation Agrees to Pay $4.4 Million to Resolve Claims of Double-Billing and Cost-Shifting Under U.S. Navy ContractsRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced today that Navmar Applied Sciences Corporation (NASC), headquartered in Warminster, Pennsylvania, has agreed to pay $4.4 million to resolve allegations that NASC violated the False Claims Act by knowingly and improperly double-billing and shifting certain labor and material costs under a series of contracts with the U.S. Department of the Navy. Separately, NASC has also agreed to resolve administrative claims arising out of an audit by the Defense Contract Audit Agency of NASC’s incurred cost proposals for Fiscal Years 2011, 2012, and 2013.
The United States’ allegations under the False Claims Act arise from a series of contracts, awarded by the Navy to NASC between 2010 and 2012, for enhanced intelligence, surveillance, and reconnaissance systems, hardware, maintenance technical support services, and the development and rapid deployment of various advanced sensors and Unmanned Aerial Systems.
The United States alleged that under those government contracts, NASC knowingly and improperly billed the Navy for certain labor and material costs on one contract, and then billed the same costs on another contract, and was improperly paid twice. The United States further alleged that in multiple instances, NASC knowingly and improperly shifted the costs of materials from one contract to another, to avoid cost ceilings and maximize payments from the government to which NASC was not entitled.
“This settlement demonstrates the Justice Department’s commitment to take appropriate action when it determines that taxpayer dollars have been doubled-billed and improperly accounted for,” said U.S. Attorney Romero. “Cases such as this one should be seen as a warning to defense contractors that false claims have no place in military purchasing.”
“Investigating allegations of cost mischarging on Department of Defense (DoD) contracts is a top priority for the Defense Criminal Investigative Service (DCIS), the law enforcement arm of the DoD Office of Inspector General,” stated Special Agent in Charge Patrick J. Hegarty, DCIS Northeast Field Office. “The DCIS is committed to working with the Naval Criminal Investigative Service and the Department of Justice to protect the integrity of the DoD procurement process. The Defense Contract Audit Agency’s Operations Investigative Support Division provided valuable expertise during this investigation.”
“Procurement fraud threatens military readiness and therefore poses a significant threat to our national security,” said Special Agent in Charge Gregory Gross of the NCIS Economic Crime Field Office. “NCIS remains committed to ensuring the good stewardship of U.S. taxpayer dollars by thoroughly investigating all allegations of fraud that damage the integrity of the Department of the Navy procurement process.”
The resolution obtained in this matter was the result of a coordinated effort between the United States Attorney’s Office for the Eastern District of Pennsylvania, the U.S. Department of Justice Civil Division, Commercial Litigation Branch, Fraud Section, with investigative assistance from the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, the Defense Contract Audit Agency, and the Defense Contract Management Agency.
The matter is being handled in the U.S. Attorney’s Office by Assistant U.S. Attorneys Landon Y. Jones and Mark J. Sherer, and Auditor Dawn Wiggins.
Former Naval Engineer Charged with Unlawful DisclosureRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Nicole K. Schuster, 32, of Revere, Massachusetts was charged by Information with disclosing contractor bid, proposal, and source information. Schuster was a mechanical engineer and “project lead” employed by the United States Department of the Navy (“the Navy”) at the Naval Foundry and Propeller Center in Philadelphia, Pennsylvania (the “NFPC”).
According to the Information, in or about early 2019, Schuster began working as the project lead on a solicitation for a procurement contract for a submarine propeller-making machine known as a VTC. During the contracting and bidding process, Schuster favored one company, identified in the information as “Company 1,” over other competing companies. Schuster urged her superiors to make the contract for this VTC a “sole source” contract for Company 1. That is, she requested that the contracting process should be established in a manner that would ensure that Company 1 would be awarded the procurement contract. The NFPC and Defense Logistics Agency agreed to favor Company 1 in this process but did not agree to prevent other companies from pursuing the contract. Rather, they established a process that allowed other contractors to submit information and compete for the contract.
The information further alleges that on or about September 14, 2019, Schuster sent a WhatsApp message to a representative of Company 1 expressing her “loyalty” to Company 1 and attaching to the message Company 2’s confidential and proprietary contractor bid, proposal, and source selection information for its VTC. The documents that Schuster provided to this representative of Company 1 were marked “SOURCE SELECTION INFORMATION,” “OFFICIAL USE ONLY,” and “[Company 2] Proprietary information.” The documents included cost and pricing data and proprietary information about manufacturing processes and techniques. This disclosure gave Company 1 a competitive advantage over Company 2 and other companies seeking to obtain the VTC contract.
On or about April 28, 2020, the procurement contract for the VTC was awarded to Company 1 for a total price of $15,254,608.
The case was investigated by the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service and the U.S. Naval Criminal Investigative Service, Economic Crimes Field Office, and is being prosecuted by Assistant United States Attorney Louis D. Lappen.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former Church Pastor Sentenced to Two Years in Prison for Committing Pandemic Loan FraudRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Rooldy Alexandre, 54, of Willingboro, NJ, was sentenced to 24 months of incarceration, three years of supervised release, and restitution in the amount of $662,454 by United States District Judge Gerald J. Pappert for committing pandemic loan fraud in the name of the church for which he served as a pastor and on behalf of other members of the church.
The defendant was charged with, and pleaded guilty to, two counts of wire fraud in connection with his submission of false applications for U.S. Small Business Administration pandemic loans that are also known as Paycheck Protection Program (“PPP”) loans. While he served as the pastor and only employee of a Philadelphia church, the defendant was responsible for the church’s finances and controlled the church’s bank accounts. After the COVID-19 pandemic began, he first applied for a PPP loan using accurate information for the church but was not satisfied with the amount of the loan offered. He then reached out to a person in Florida who had prepared false PPP applications for others and asked that person to help him prepare a new PPP application for the church. The Florida consultant submitted false information about the church in the new application, and based on that false information, the church received an inflated loan of over $260,000. The defendant took a significant portion of the fraudulent loan proceeds for himself. He later submitted a false second-draw PPP loan application on behalf of the church and worked with his sister, Christella Dorval, charged elsewhere, to divert proceeds of the $250,000 loan to himself for personal use.
The defendant also offered to help other members of the church to apply for PPP loans. On behalf of two other members, he submitted loan applications, but he falsified information about the applicants. The defendant lied to the applicants and claimed that a fake Florida consultant had prepared their applications, and that they owed him 25% of any loan proceeds. When the applicants received the inflated loan proceeds based on the information falsely submitted by the defendant, they paid the 25% “consultant” fee, but unbeknownst to them the defendant again worked with his sister, Dorval, to divert their payments to himself for his own personal use.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Nancy E. Potts.
Chester Housing Authority Director of Public Housing, His Chief Assistant, and Contractor Charged for Bribery and Fraud SchemesRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Norman D. Wise, 57, of Mullica Hill, NJ, Douglas E. Daniel, 65, of Philadelphia, PA, and Leonard F. Coleman, 53, of Paulsboro, NJ, were charged by Information with bribery and fraud charges related to two schemes: (1) a bribery scheme in which Coleman paid off Wise and Daniel in exchange for contracting work awarded to Coleman at the Chester Housing Authority (“CHA”); and (2) a fraud scheme in which Wise and Daniel created a contracting company that they used to fraudulently bill the CHA and obtain hundreds of thousands of dollars in proceeds. During the time they engaged in these offenses, Wise was the Director of Public Housing for the Chester Housing Authority and Daniel was the Housing Program Manager and Wise’s chief assistant.
According to the Information, from in or about July 2014 through in or about March 2022, defendant Coleman made bribe payments separately to Wise and Daniel in exchange for CHA contracting work awarded to his company, Coleman’s Contracting. To generate these bribe payments, Wise and Daniel inflated the amount charged on invoices that Coleman submitted to the CHA for work he performed for the CHA. Wise and Daniel then ensured that the CHA paid Coleman on the inflated invoices, and Coleman paid Wise and Daniel bribes in amounts covered by the inflated invoices. Coleman made these payments by depositing funds directly into the personal bank accounts of Wise and Daniel. In total, Coleman made approximately $76,400 in bribe payments to Wise and Daniel around the time that Coleman received approximately $2.5 million in revenue from the CHA.
According to the Information, from in or about January 2019 through in or about January 2023, in a separate scheme, Wise and Daniel together used a company they created, Trinity Management Group (“TMG”), to fraudulently bill the CHA for work TMG allegedly performed for the CHA. Most of the work for which TMG billed the CHA was (1) performed by salaried CHA employees during their regular work hours; (2) performed by other contractors who were paid for that work by the CHA; or (3) not performed at all. In particular, the fraudulent invoices included billing for landscaping, painting, window replacements, and other construction and renovation work at CHA facilities. This fraudulent billing resulted in losses to the CHA of approximately $544,967.
The case was investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development, Office of Inspector General, and is being prosecuted by Assistant United States Attorney Louis D. Lappen.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Neuroscience Company and Co-Founder/CEO Pay $445,000 to Resolve False Claims Act Allegations Related to Promotion of False Billing CodesRead the Press Release
Evoke Neuroscience, Inc., of New York will pay $225,000, and its co-founder/CEO David Hagedorn, Ph.D., of Jacksonville, North Carolina, will pay $220,000, to resolve alleged False Claims Act violations for causing the submission of false claims to Medicare by promoting false billing codes for a “brain health” device. The settlement was announced today by United States Attorney Jacqueline C. Romero of the Eastern District of Pennsylvania.
Dr. Hagedorn, a psychologist, co-founded Evoke as a startup in approximately 2009. Evoke sold its “eVox” device primarily to general practitioner physicians. The device involves a 20-60 minute in-office application of a helmet with electrodes that purports to test certain brain functions. During Evoke’s initial startup phase, Dr. Hagedorn selected six billing codes for the eVox device.
The settlement resolves allegations that from January 1, 2013 through May 31, 2021, Evoke and Dr. Hagedorn promoted to health care providers six false billing codes for Medicare reimbursement for the eVox device. By promoting false billing codes to health care providers, Evoke and Dr. Hagedorn caused the providers to submit false claims to Medicare. The United States contends that none of the codes were ever appropriate for the eVox device as applied because the codes generally require a longer testing time, a specialized environment (e.g., soundproof/dark room), and can only be administered by a relevant specialist. Moreover, the United States contends that Evoke and Dr. Hagedorn improperly encouraged health care providers to bill multiple codes for a single application of the eVox device. In 2018, coding consultants informed Evoke that many of the billing codes it was promoting were problematic, after which time Evoke stopped promoting the false codes.
“There is no ‘startup’ exception under the False Claims Act,” said U.S. Attorney Romero. “You will be held accountable if you knowingly promote false billing codes to others.”
This settlement resolves claims originally brought by Kevin Vance, M.D., and Angel Vance, R.N., of Madison, Mississippi to whom, among others, Evoke marketed the eVox system. The case was brought under the whistleblower, or qui tam, provisions of the False Claims Act. The Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. The Vances will receive $89,000 of the settlement proceeds.
The lawsuit is captioned United States ex rel. Dr. Kevin Vance and Angel Vance v. Evoke Neuroscience, Inc., No. 21-452 (E.D. Pa.). The qui tam suit was initially filed in the United States District Court for the Southern District of Mississippi, and was transferred to the Eastern District of Pennsylvania, where the U.S Attorney’s Office had previously settled a False Claims Act case with a local provider involving, among other things, use of eVox: https://www.justice.gov/usao-edpa/pr/neurosurgeon-medical-practice-director-pay-over-1-million-resolve-false-claims-act.
The case was handled by Assistant United States Attorneys Matthew E. K. Howatt and Joel M. Sweet of the United States Attorney’s Office for the Eastern District of Pennsylvania, along with Auditor Dawn Wiggins and Investigator Jeff Braun, and Assistant United States Attorneys Deidre Colson, Jennifer Case, and Civil Chief Angela Williams of the United States Attorney’s Office for the Southern District of Mississippi. The U.S. Department of Health and Human Services Office of the Inspector General supported the investigation.
The government’s pursuit of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477) or online at https://oig.hhs.gov/fraud/report-fraud.
All civil claims are allegations only. There has been no determination of civil liability.
Northeast Philadelphia Pharmacies and Their Owners Agree to Pay over $3.5 Million to Resolve False Claims Act LiabilityRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Future Pharmacy, Inc. (“Future”) and JJ Pharmacy, Inc. (“JJ”), and their respective owners, Arthur Kilimnik, Alexander Ferman, Mikhail Ferman, Leonard Kilimnik, and Aleksey (Alex) Orlov, have agreed to pay over $3,500,000 to the federal government to resolve allegations that they violated the False Claims Act by billing Medicare for prescription medications that were not actually dispensed. During the period January 1, 2012, to December 31, 2016, these medications included but were not limited to Lidocaine, Lidoderm, Advair Diskus, Nexium, Creon, and Abilify. Future Pharmacy and JJ Pharmacy have also agreed to a five-year federal healthcare exclusion, which will prohibit them from receiving payments from any federally funded health care insurer such as Medicare during the that time. The pharmacies have also surrendered their DEA Certificates of Registration and ceased operations.
As a majority owner of Future Pharmacy and minority owner of JJ Pharmacy, and a pharmacist, the government also contends that Arthur Kilimnik violated the Controlled Substances Act by: (a) failing to maintain complete and accurate records; (b) failing to separate Future Pharmacy’s Schedule II biennial inventory from its Schedule III-V biennial inventory; (c) failing to take appropriate inventory within a two-year period following Future Pharmacy’s last inventory; (d) receiving Schedule II supply from another company, Future Medical, and filling prescriptions generated by Future Medical without proper documentation; and (e) improperly allowing another individual to use Kilimnik’s Controlled Substance Ordering System username and password to order Schedule II controlled substances.
“Pharmacies and pharmacists have a responsibility to serve as gatekeepers of a closed system of prescription drug distribution. That responsibility was allegedly abused for profit here,” said U.S. Attorney Romero.
“Pharmacies are integral partners in patient care, and they are expected to act with integrity,” said Maureen Dixon, Special Agent in Charge of the Philadelphia Regional Office of the Department of Health and Human Services, Office of the Inspector General. “We take allegations of pharmacy fraud seriously, and today’s settlement reflects our commitment to working with our partners to ensure that taxpayer dollars are spent in an appropriate manner – on needed medications, not wasted on fraud and abuse.”
“Pharmacies are entrusted with the proper dispensing and safeguarding of controlled substances in their possession,” said Thomas Hodnett, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “The Controlled Substances Act mandates that pharmacists maintain accurate records and inventories to account for these drugs.”
The settled civil claims are allegations only. There has been no determination of civil liability.
The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General and the Drug Enforcement Agency. It was handled by Civil Chief Gregory B. David, Assistant U.S. Attorney Deborah W. Frey, and Auditor George Niedzwicki.
Leader of Multi-State Jewelry Theft Crew Sentenced to over 6 Years’ of Federal ImprisonmentRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Duanne Pierce, 60, of Philadelphia, Pennsylvania was sentenced to 77 months’ imprisonment, 3 years of supervised release, and $606,394.60 in restitution and other penalties by United States District Court Senior Judge Cynthia M. Rufe for conspiring to transport stolen property across state lines and interstate transportation of stolen property.
From May 2018 through February 2020, defendant Duanne Pierce led seven others in a conspiracy to commit 12 retail jewelry store thefts throughout the United States, transporting the stolen jewelry back to Philadelphia after the thefts, where the jewelry was generally resold to stores in the “Jewelers Row” section of the city. Pierce and his crew carried out these thefts all over the country, often committing multiple thefts from different jewelry stores in a single day. This sophisticated approach reduced the likelihood that the crew would be caught because of local law enforcement’s significant challenge in investigating these out-of-state perpetrators. Pierce participated in 11 thefts, and his role was to steal jewelry—including diamond rings and gold chains, often worth several thousand dollars each—from a display case or from the rear, employee-only area of a store, while his co-conspirators “distracted” sales associates. Pierce then resold the stolen jewelry to local jewelers in Philadelphia. The total retail value of the jewelry stolen by Pierce’s crew was approximately $612,670.59.
In March 2022, a federal grand jury returned a 10-count Indictment charging Duanne Pierce and codefendants Charles Tillery, Janel Pierce, Yolanda Fife, David Tillery, Telfa Wills, and Clifton Fleming with conspiracy to transport stolen property across state lines, in violation of 18 U.S.C. § 371 (Count 1), and interstate transportation of stolen property and aiding and abetting, in violation of 18 U.S.C. §§ 2314 and 2 (Counts 2 through 10). In March 2023, Pierce pled guilty to Counts 1 through 10 of the Indictment. Each of Pierce’s codefendants has also pled guilty.
"Thanks to the excellent work of the FBI and the many local police departments that assisted in this case," said U.S. Attorney Romero, "this prolific interstate robbery ring has been fully dismantled. Duanne Pierce’s sentence is the culmination of excellent cross-country collaboration among federal, state, and local law enforcement agencies."
“Duanne Pierce and his co-defendants were both prolific and strategic in their thefts, sometimes targeting multiple jewelry stores in the same day. Then they’d move on to a different city and do it again, hauling the stolen loot back to Philly to resell,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “Through the investigative efforts of the FBI and numerous law enforcement partners across the country, this crew has been dismantled and is being held accountable for their crimes. For his leadership role in the conspiracy, Pierce will now spend years in federal prison.”
The case was investigated by the Federal Bureau of Investigation, Lancaster (PA) Police Department, Plantation (FL) Police Department, Greenville (SC) Police Department, Concord (NC) Police Department, Anderson (SC) Police Department, Jackson County (GA) Sheriff’s Office, Knoxville (TN) Police Department, Manchester (CT) Police Department, Howard County (MD) Police Department, Arlington County (VA) Police Department, Indianapolis (IN) Metropolitan Police Department, and Miami Township (OH) Police Department, and is being prosecuted by Assistant United States Attorneys Jessica Rice, Katherine Shulman, and Kevin Jayne.
Thomas Jefferson University to Pay $2.7 Million to Resolve Allegations of Improper Use and Retention of Federal Student Loan FundsRead the Press Release
Philadelphia, PA – United States Attorney Jacqueline C. Romero announced today that Thomas Jefferson University will pay $2.7 million to resolve allegations that it misused and improperly retained federal funds intended to be used for student loans.
The allegations arise from a loan program established by Congress to address the nation’s shortage of primary care physicians. Under the program administered by the U.S. Department of Health and Human Services’ Health Resources and Services Administration (“HRSA”), the government issues a Primary Care Loan award to a medical school to establish a revolving loan account to provide loans on favorable terms to students willing to commit to practicing in primary care for ten years after completing their medical degree (a “PCL Fund”). Under the terms of the program, participating medical schools must loan monies in the PCL Fund to medical students who meet the program’s qualifications. The school is to add any earnings that accrue on the PCL Fund back into the fund, thereby increasing the monies available to lend and expanding the program’s impact. Any monies in the PCL Fund that exceed a school’s PCL Program lending needs must be returned to HRSA annually so they can be made available to students at other medical schools participating in the program.
The settlement resolves allegations that between 2009 and 2016, Jefferson invested nearly all of its PCL Fund with its endowment, and retained the resulting earnings for its own purposes, in violation of loan program terms. Specifically, the settlement resolves allegations that Jefferson improperly invested federal monies expressly intended to be loaned to qualified medical students to finance their medical education, and retained all returns gained from that investment. These actions allegedly violated HRSA student loan program requirements that: (1) program monies be used only for loans to students and program-related expenditures; (2) any excess cash in the PCL Fund (any amount of the monies not actively on loan or projected to be in the near future) be kept in federally insured accounts “whenever possible;” (3) all earnings accrued on the PCL Fund be placed into the fund to be used to further the program’s purpose; and (4) any excess funds not needed for student loans, including any earnings accrued on any idle funds, be returned to HRSA annually.
Jefferson returned approximately $5.6 million of excess cash in the PCL Fund to HRSA in 2017. The settlement announced today resolves claims relating to the earnings Jefferson is alleged to have gained as a result of its investment of the PCL Fund between 2009 and 2016, and its retention of those earnings, in violation of program terms.
“The Federal financial aid money in the Primary Care Loan program must be used for its intended purpose or returned to the program,” said U.S. Attorney Romero. “When a medical school wrongfully retains Primary Care Loan program funds that exceed its lending needs, it doesn’t just deprive students at other participating schools the opportunity to use that money to finance their educations. It deprives our communities of the very resource the program was implemented by Congress to provide—primary care physicians to keep them healthy and strong. Our office is dedicated to helping HRSA and our other federal partners maintain the integrity of their programs, and to ensure that taxpayer dollars are used for their intended public good and not private investment income.”
“When schools agree to participate in the Primary Care Loan program, they must carefully account for these federal funds to ensure that taxpayer dollars are used for public good. When a school wrongfully keeps these funds from the program, it prevents other recipients from using them to meet the primary care needs of the community,” said Maureen R. Dixon, Special Agent in Charge for the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “We will continue to work with our partners at HRSA and the U.S. Attorney’s Office to investigate allegations relating to any misuse—including wrongful retention—of federal funds.”
“HRSA takes proper management and oversight of financial assistance seriously,” said Cynthia Baugh, HRSA’s Associate Administrator of the Office of Federal Assistance Management and Chief Grants Management Officer. “We appreciate the collaboration with the U.S. Attorney’s Office and will continue to actively work with our law enforcement partners when we identify potential misuse of federal funds.”
The investigation was conducted by the Office of the Inspector General of the U.S. Department of Health and Human Services and the United States Attorney’s Office for the Eastern district of Pennsylvania. The investigation and settlement were handled by Assistant United States Attorney Lauren DeBruicker, Auditor Dawn Wiggins, and Fraud Investigator Jeffrey Braun.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Philadelphia Man Charged with Making False Statements in Terrorism InvestigationRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Kamal Fataliev, 19, of Philadelphia, was arrested and charged by indictment on charges of making false statements to federal agents. Specifically, the indictment alleges that, in May 2023, Fataliev made materially false statements to Federal Bureau of Investigation (“FBI”) special agents who were conducting an international terrorism investigation.
If convicted, the defendant faces a maximum possible sentence of 16 years in prison, three years of supervised release, a $500,000 fine, and a $200 special assessment.
The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Joseph A. LaBar and Trial Attorney Dmitriy Slavin of the United States Department of Justice, National Security Division, Counterterrorism Section.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Mississippi Man Charged with Cyberstalking and Making Antisemitic Threats Targeting Synagogues and Jewish-Owned BusinessesRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Donavon Parish, 28, of Hattiesburg, Mississippi, was arrested and charged by indictment on charges of cyberstalking and communicating interstate threats. The federal grand jury made a special finding that the defendant targeted his victims based on their actual and perceived religion.
The indictment alleges that during April and May 2022, the defendant used a Voice over Internet Protocol service to make a series of phone calls to synagogues and Jewish-owned businesses in the Eastern District of Pennsylvania. In these calls, the defendant allegedly spoke to individuals answering the telephone calls on behalf of their respective institutions, at which time he repeatedly referenced the genocide of approximately six million Jewish people during the Holocaust, stating, among other things, “Heil Hitler,” “all Jews must die,” “we will put you in work camps,” “gas the Jews,” and “Hitler should have finished the job.”
If convicted, the defendant faces a maximum possible sentence of 50 years’ imprisonment, three years of supervised release, a $2,500,000 fine, and a $1,000 special assessment.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by the United States Attorney’s Office for the Eastern District of Pennsylvania and the United States Department of Justice’s National Security Division (Counterterrorism Section), with assistance from the United States Department of Justice’s Civil Rights Division and the United States Attorney’s Office for the Southern District of Mississippi.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Man Arrested for Cyberstalking and Making Antisemitic Threats Targeting Synagogues and Jewish-Owned BusinessesRead the Press Release
Donavon Parish, 28, of Hattiesburg, Mississippi, was arrested today and charged by indictment for allegedly engaging in cyberstalking and communicating interstate threats. The indictment alleges the defendant targeted his victims based on their actual or perceived religion, that is, the Jewish faith.
According to the indictment, in April and May 2022, the defendant used a voiceover internet protocol service to make a series of phone calls to synagogues and Jewish-owned businesses in the Eastern District of Pennsylvania. In these calls, Parish allegedly spoke to individuals answering the telephone calls on behalf of their respective institutions, at which time he repeatedly referenced the genocide of approximately six million Jewish people during the Holocaust, stating, among other things, “Heil Hitler,” “all Jews must die,” “we will put you in work camps,” “gas the Jews,” and “Hitler should have finished the job.”
If convicted, Parish faces a statutory maximum sentence of 50 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania and Assistant Director Robert Wells of the FBI’s Counterterrorism Division made the announcement.
The FBI is investigating the case.
The Eastern District of Pennsylvania and National Security Division’s Counterterrorism Section are prosecuting the case, with assistance from the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Southern District of Mississippi.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Philadelphia Business Owner Charged with Fraud and Tax EvasionRead the Press Release
A federal grand jury in Philadelphia returned a superseding indictment today charging a Pennsylvania man with seven counts of wire fraud, two counts of mail fraud, and three counts of tax evasion. He was previously charged with the wire and mail fraud counts in an indictment unsealed on Jan. 3, 2023.
According to the superseding indictment, John Griffin of Philadelphia was the principal and founder of Second Story Farming, Inc., doing business as Metropolis Farms, a business purportedly involved with developing and manufacturing sustainable vertical farming technologies. Between approximately 2016 to 2018, Griffin allegedly made misrepresentations, promising to provide two entities with the equipment necessary to create indoor vertical farms. In total, both entities allegedly paid Griffin $760,000 to purchase the equipment, yet Griffin allegedly used only a fraction of that money to purchase equipment. The remainder was allegedly used to operate Griffin’s own business and pay his personal expenses.
The superseding indictment further alleges that from 2016 through 2018, Griffin received at least $420,000 in gross income from his work for Second Story Farming and did not report it on his federal tax returns, and allegedly did not to file a personal tax return since at least 2014. Griffin allegedly attempted to evade his income taxes by making personal withdrawals from business bank accounts and transferring funds from business bank accounts to his wife and entities he controlled.
If convicted, Griffin faces a maximum penalty of 20 years in prison for each wire and mail fraud count and 5 years in prison for each of tax evasion count. 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 Jacqueline C. Romero of the Eastern District of Pennsylvania made the announcement.
IRS-Criminal Investigation, the United States Postal Inspection Service, and the FBI are investigating the case.
Trial Attorney Catriona Coppler of the Tax Division and Assistant U.S. Attorney David Ignall of the Eastern District of Pennsylvania are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Florida Man Sentenced for Securities Fraud Scheme Worth over $9 MillionRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Jeffrey D. Martin, 64, of Orlando, FL, was sentenced to 78 months’ imprisonment and five years’ supervised release and fined $50,000 by United States District Court Judge Gerald Pappert for his participation in a conspiracy to artificially inflate the price of penny stock shares and sell them fraudulently to the public. Martin was also ordered to forfeit $3.5 million in ill-gotten gains.
In November 2020, Martin was charged for manipulating the stock of Mainstream Entertainment, Inc., now known as Volt Solar Systems, Inc., Resort Savers, Inc., Axiom Corp., Virtual Medical International, Inc., and Union Bridge Holdings, Ltd. In a “pump and dump” scheme, Martin and his co-conspirators published fraudulent press releases, filed fraudulent securities disclosures with the U.S. Securities and Exchange Commission, and conducted manipulative stock trading to artificially inflate the price of the stock. They then sold their shares at inflated prices, leading Martin to earn more than $989,000 in illicit proceeds from just one of the companies.
The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Paul G. Shapiro. The U.S. Attorney’s Office appreciates the assistance of the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority.
Broomall Businessman Sentenced to 40 Months in Prison for Stealing PPP Funds and Tax EvasionRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Christopher Davis, 32, of Haddon Heights, NJ, was sentenced to 40 months in prison and five years of supervised release and ordered to pay $267,859 in restitution by United States District Court Judge Harvey Bartle III, for unlawfully obtaining and misusing loan proceeds offered through the federal Paycheck Protection Program (“PPP”) and committing tax evasion.
While operating a property management business out of Broomall, Pennsylvania in 2016, 2017, and 2018, Davis earned hundreds of thousands of dollars. Nonetheless, he willfully failed to file a tax return for each of these years and took actions to evade paying his personal income taxes, such as using approximately $230,000 from his business bank accounts to purchase four automobiles (including a Ferrari, a Range Rover, and a Mercedes Benz) for his personal use and utilizing corporate credit cards to charge over $326,000 in personal expenses, including trips to Italy, Monaco, Great Britain, Spain, France, and Greece.
After this business failed, in May 2020 Davis filed a fraudulent PPP application in the name of one of his companies, seeking a $209,510 loan. In support of this application, Davis falsely claimed that he had 20 employees and paid a monthly salary of approximately $83,000 to these employees. He also submitted false documentation to support these fraudulent claims. As a result, Republic Bank approved Davis’ fraudulent application and issued him the PPP loan. Davis immediately began to spend the proceeds on personal expenses, including a new Tesla.
“PPP funds were meant to help small businesses stay afloat during unprecedented adverse circumstances,” said U.S. Attorney Romero. “In fraudulently obtaining these funds and evading taxes, Davis took advantage of taxpayers and took valuable resources away from businesses and individuals who needed them.”
“Anyone contemplating cheating on their taxes should know that IRS Criminal Investigation Special Agents work tirelessly, year-round, to investigate tax and financial crimes,” said IRS Criminal Investigation Special Agent in Charge Yury Kruty. "The outcome today is due to the dedicated efforts of IRS Criminal Investigation special agents and our law enforcement partners."
“Christopher Davis blatantly defrauded a government program meant to keep businesses and workers afloat during the pandemic, using the money for his own personal expenses,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “The FBI and our partners will continue to crack down on Covid con artists like Davis and hold them accountable for their actions.”
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service and is being prosecuted by Assistant United States Attorney Patrick J. Murray.
Chester County Man Charged with Sexually Assaulting a Minor on Cross Country FlightRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Edward Decker, 45, of West Chester, Pennsylvania, was charged by indictment with two counts of abusive sexual contact on an aircraft.
In July 2022, Decker allegedly engaged in sexual contact with a minor on an American Airlines flight, departing San Diego, California, arriving in Philadelphia, Pennsylvania. If convicted, the defendant faces a maximum possible sentence of 5 years in prison, one year of supervised release, a $500,000 fine, and a $200 special assessment.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Josh A. Davison.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Man Sentenced for Sex Trafficking of MinorsRead the Press Release
A Pennsylvania man was sentenced today to 25 years in prison for trafficking four minors in Philadelphia.
According to court documents, from at least February 2016 to 2017, Andre Felts, 35, of Philadelphia, led a prostitution ring and trafficked at least four minors ranging in age from 15 to 17 years old. Felts kept a significant portion of the money paid to the minor victims and he and others, at his direction, posted advertisements on the internet for commercial sex with the minors, provided transportation to and from sexual encounters, and identified locations for commercial sex acts to occur. His co-defendants, Ryan Keel and Kevin Francis, allowed Felts to use their homes for commercial sex encounters with the minors in exchange for a portion of the proceeds. On one occasion, Felts assaulted a minor victim.
Felts was also sentenced to a lifetime of supervised release.
On May 31, Keel was sentenced to 11 years and three months in prison, followed by 10 years of supervised release. On July 27, 2022, Kevin Francis was sentenced to 10 years in prison, followed by 10 years of supervised release. All three defendants were ordered to jointly pay $235,000 in restitution to the victims as part of their sentences.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania, and Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division made the announcement.
The FBI investigated the case.
Trial Attorneys Gwendelynn Bills and Jessica Urban of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorneys Alexandra Lastowski and Priya De Souza for the Eastern District of Pennsylvania prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Retired New Jersey Doctor Sentenced for Selling Toxic DNP Online and Faking Cancer Diagnosis to Avoid TrialRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that William Merlino, 85, of Mays Landing, NJ, was sentenced to thirty-three months in prison and one year of supervised release by United States District Court Judge Gerald A. McHugh for selling misbranded drugs online and obstruction of justice.
The chemical 2,4-Dinitrophenol (“DNP”) has a variety of industrial and commercial uses, such as herbicides, dyes, and wood preservatives. In the 1930s, before federal law required drugs to be proven safe before they were marketed, DNP was used as a weight-loss drug despite significant adverse side effects, including dehydration, cataracts, liver damage, and death. Owing to DNP’s toxicity, the U.S. Food and Drug Administration (“FDA”) has never approved DNP for human consumption.
A year-long investigation by the FDA revealed that Merlino, a retired physician, packaged and sold DNP for human consumption as a weight-loss drug, and that he used Twitter to advertise, eBay to sell, and email to communicate with customers in the U.S., Canada, and the U.K. Merlino operated his online business out of his home from at least November 2017 until March 2019, and earned approximately $54,000 from his sales of DNP to hundreds of customers. A search warrant executed at the defendant's residence recovered bulk DNP, packaging and encapsulating materials, and a pill press.
In December 2019, Merlino was charged with one count of introduction of misbranded drugs into interstate commerce in connection with operating his illegal business, and in August of 2021, while under indictment and awaiting trial on the misbranding charge, he faked a diagnosis of pancreatic cancer in order to avoid trial. Based on forged medical records and doctor’s letters submitted to the court, Merlino’s trial was delayed several months. When the obstruction was discovered in January 2022, he was charged with obstructing justice and detained.
In August 2022, Merlino was convicted at trial of the misbranding charge, and subsequently pleaded guilty to the obstruction charge in January 2023. During the trial, a witness from the shipping service the defendant used to ship the drug to customers testified that they referred to Merlino among their colleagues as “the yellow man,” owing to the fact that every time he would bring in a package to ship, they would see yellow dust from the chemical on his skin, nails, and clothes. At sentencing, the government presented evidence that a customer in the U.K. died of DNP toxicity after ingesting pills he purchased from Merlino, who knew that DNP was toxic to humans and illegal to market as a drug.
“Misbranding and selling a toxic chemical not fit for human consumption as a diet drug places the public at grave and obvious risk,” said U.S. Attorney Romero. “The defendant’s deliberate, dangerous, and deceptive conduct in this case was egregious, and resulted in the tragic loss of a life. His faking having cancer to avoid accountability in our justice system only underscores his shocking contempt for the law.”
“Distributing unapproved and potentially toxic drugs under false labeling and in a deliberate attempt to avoid regulatory scrutiny endangers consumers who are in many cases desperate for treatment,” said Special Agent in Charge George A. Scavdis, FDA Office of Criminal Investigations Metro Washington Field Office. “The fact a medical professional was involved makes the situation ever more troubling. We will continue to pursue and bring to justice those who jeopardize the public health.”
The cases were investigated by the U.S. Food & Drug Administration Office of Criminal Investigations, U. S. Postal Inspection Service, and Homeland Security Investigations (“HSI”) Atlantic City under the HSI Newark office and are being prosecuted by Assistant United States Attorney Joan Burnes.
Justice Department Reaches Agreement with ESSA Bank & Trust to Resolve Philadelphia-Area Lending Discrimination AllegationsRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that the U.S. Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania filed a proposed consent order today to resolve allegations that Stroudsburg, Pennsylvania-based ESSA Bank & Trust (ESSA) engaged in a pattern or practice of lending discrimination by “redlining” majority-Black and Hispanic neighborhoods around Philadelphia.
“Redlining” is an illegal practice in which lenders avoid providing credit services to individuals living in communities of color because of the race, color, or national origin of residents there. The Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA) prohibit financial institutions from discriminating on such bases when providing mortgage lending services.
The Department began investigating ESSA’s lending practices after receiving a Federal Deposit Insurance Corporation (FDIC) referral. ESSA fully cooperated with the investigation.
The consent order is subject to court approval and was filed, together with the United States’ complaint, in the U.S. District Court for the Eastern District of Pennsylvania. The complaint alleges that:
- From at least 2017 to 2021, and in violation of the FHA and ECOA, ESSA failed to provide mortgage lending services to (and did not serve the credit needs of) majority-Black and Hispanic neighborhoods in and around Philadelphia;
- ESSA inadequately staffed loan officers to cover the Bank’s branches in such neighborhoods; and
- ESSA’s residential lending advertising targeted majority-white areas while avoiding Philadelphia County.
ESSA worked expeditiously with the Department to resolve these allegations. Under the consent order, ESSA agrees to invest over $3 million to increase credit opportunities in majority-Black and Hispanic neighborhoods in the Bank’s lending area—including within a five-mile radius around ESSA’s Upper Darby and Lansdowne branches, which encompasses West Philadelphia and the City’s Grays Ferry section. Specifically, ESSA will invest in and for residents of those neighborhoods at least:
- $2.92 million in a loan subsidy fund to increase access to home mortgage, home improvement, home refinance, and home equity loans and lines of credit;
- $125,000 on community partnerships to provide services that increase residential mortgage credit access within a five-mile radius of the Upper Darby and Lansdowne branches; and
- $250,000 on advertising, outreach, consumer financial education, and credit counseling to expand the Bank’s services within that radius.
ESSA also agrees: to assess and report on its fair lending program; to train staff on the Bank’s obligations under the consent order; to complete a community credit needs assessment and remedial plan; to maintain a Fair Lending Committee and a Community Development Officer; and to hire two new mortgage loan officers to serve its Upper Darby and Lansdowne branches.
Announced in October 2021, the Department of Justice’s Combatting Redlining Initiative coordinates the efforts of the FDIC and other enforcement agencies to address this persistent form of discrimination. To date, under the Initiative, the Department has announced seven redlining cases and settlements, and secured $87 million in relief for communities of color that have been victims of lending discrimination. This includes last year’s $20 million settlement with Trident Mortgage Company of its alleged redlining in the Philadelphia metropolitan area.
"Accessing the American dream of owning your own home is possible only when there is equality for all in their opportunities to access lending in the residential mortgage markets," said U.S. Attorney Romero. “Redlining in Greater Philadelphia has deep roots; it's led to decades of disinvestment in communities of color. We appreciate ESSA's prompt cooperation with the Department's investigation and their efforts that will aim to infuse lending resources and help build wealth in neighborhoods of color."
“For too long, residents of communities of color have been unlawfully denied equal access to credit and shut out of economic opportunities,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “When banks engage in redlining, they perpetuate existing patterns of segregation and widen the racial wealth gap in our country. This resolution makes clear our commitment to holding banks and financial institutions accountable for modern-day redlining while ensuring access to fair lending in communities of color.”
The matter is being handled in the Department’s Civil Rights Division by Special Counsel for Fair Lending Varda Hussain and Trial Attorney Audrey Yap, both of the Housing and Civil Enforcement Section, and in the United States Attorney’s Office by Assistant United States Attorney Gerald B. Sullivan.
A copy of the complaint and information about the Department’s fair lending enforcement can be found at www.justice.gov/fairhousing. Individuals may report lending discrimination by calling the Department’s Housing Discrimination Tip Line at 1-833-591-0291, or submitting a report online.
Citizens in the Eastern District of Pennsylvania who believe that they may have been victims of lending discrimination may also contact the U.S. Attorney’s Office for the Eastern District of Pennsylvania at 215-861-8200 or via email at [email protected].
Two Allentown Residents Charged in Stolen Identity Refund Fraud (SIRF) Scheme, Pandemic Unemployment Assistance (PUA) Fraud, and Aggravated Identity Theft ConspiracyRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Jose Baez and Jessenia Cordero, a married couple, both of Allentown, PA, were charged by way of complaint with one count of conspiracy to defraud the United States with respect to certain claims, conspiracy to commit aggravated identity theft, and conspiracy to commit mail fraud, all stemming from Baez and Cordero filing fraudulent tax returns and PUA applications with stolen identities.
The complaint alleges that Baez and Cordero used stolen identities to file at least 316 fraudulent federal tax returns and 168 fraudulent PUA applications. Baez and Cordero filed the false returns with designated tax preparer identification numbers registered under their name. According to the complaint, Baez and Cordero used the corporate alter ego, JB Multiservices, a company owned by Baez, and of which Cordero was an employee, to file the fraudulent returns. The false returns were filed using an IP address registered to Baez at the business's location. Additionally, according to the complaint, at least 674 false returns were filed by the IP address registered to that location by Baez, Cordero, Person 1, and Person 2. As outlined in the complaint, per Internal Revenue Service (IRS) records, the 316 false returns filed by Baez and Cordero requested at least $1.8 million dollars in fraudulent tax refunds.
As also alleged in the complaint, the IP address registered to Baez at his and Cordero's home was used to file 168 fraudulent PUA applications. After the fraudulent applications were filed, the respective state workforce agency responsible for administering the PUA benefits dispersed funds on the fraudulent PUA applications by mailing PUA debit cards to addresses in Allentown and elsewhere. Over $1.4 million dollars in PUA benefits were withdrawn at ATMs on the cards. PUA debit cards were also issued under Baez and Cordero's names and mailed to an Allentown address. The PUA debit cards issued under the names of Baez and Cordero were often used at ATMs immediately before or after PUA debit cards were issued on other applications filed with stolen identities.
As alleged in the complaint, during a July 6, 2022 search warrant, that was executed pursuant to a federal search warrant issued in the Eastern District of Pennsylvania of Baez and Cordero's home, federal agents recovered lists of identities and documents that were used to file the fraudulent tax returns and PUA applications.
The case was investigated by the Federal Bureau of Investigation's Allentown Resident Agency, the Internal Revenue Service – Criminal Investigation, and the Department of Labor's Office of the Inspector General, and is being prosecuted by Assistant United States Attorneys Timothy M. Lanni and Mary A. Futcher.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
United States Attorney for the Eastern District of Pennsylvania Announces Participation in National Money Mule Initiative; Obtains Three Civil Injunctions Against Alleged Money Mules Involved in Lottery ScamsRead the Press Release
PHILADELPHIA, PA - United States Attorney Jacqueline C. Romero announced her office’s participation in the Department of Justice’s Annual Money Mule Initiative, a national effort to combat money mule fraud schemes.
Money mules are individuals who are recruited by national and international fraud schemes to help with the laundering of fraud proceeds, or to transport goods purchased with fraud proceeds. These individuals are usually recruited online, through dating websites, job recruiting advertisements, or other types of internet solicitations. The money mules are then asked to help move money and goods from the victims to the fraudsters, who are oftentimes located overseas.
Sometimes the money mules are themselves innocent victims who do not realize that they are assisting with criminal activity. Other times, however, the money mules come to realize that what they are doing is wrong and/or illegal. When this happens, the money mules become knowing participants in the fraud schemes they are assisting and are subject to prosecution.
“Identifying and disrupting the work of money mules is critically important, as money mules are integral components of many organized criminal groups, including international fraud rings,” said U.S. Attorney Romero. “We are committed to working with our local, state, and federal law enforcement partners to disrupt money mule networks in an effort to cut off the flow of funds from victims of fraud schemes – often elderly and vulnerable Americans – to transnational criminal organizations.”
“I am pleased to announce today that the United States Postal Inspection Service and the United States Attorney’s Office are taking steps to stem the flow of victim money leaving the United States through the hands of money mules,” said Christopher Nielsen, Inspector in Charge of the Philadelphia Division of the Postal Inspection Service. “For many years, we as Postal Inspectors have developed various initiatives to combat the flow of illegal proceeds being sent through the mail to foreign countries. Taking steps to not only educate our customers, but to bring law enforcement action against perpetrators, will stem the flow of financial loss. These efforts aside, the most effective way to reduce fraud victimization of American citizens is for friends and family to simply look out for one another. If you become aware that someone close to you sends Postal Money Orders, cash, or gift cards through the mail, or through other shipping services, to foreign countries, take a moment to talk to that person about these activities and notify the Postal Inspection Service if you suspect fraud. You might help save them from significant financial loss.”
In the last week, the U.S. Attorney’s Office for the Eastern District of Pennsylvania filed three separate civil complaints and civil injunctions against alleged money mules accused of participating in lottery fraud schemes based in Jamaica and Nigeria. Architects of lottery schemes contact potential victims, falsely claim that those victims have won the lottery, and thereby induce the victims to send money to account for taxes and fees purportedly associated with victims’ falsely promised lottery winnings.
In these schemes, money mules play a critical role by receiving victim payments by mail and wire transfer, depositing the payments into their bank accounts, and allowing access to those accounts by individuals in Jamaica engaged in the scheme. The defendants are alleged to have received victim payments by mail or common carrier, deposited the payments into their bank accounts, and then transferred the funds by wire transfer to individuals engaged in the schemes in Jamaica and Nigeria.
Each defendant has agreed to a stipulated consent decree and order of permanent injunction. The stipulated order bans the alleged money mules from directly or indirectly, assisting, facilitating, or participating in any lottery scheme, prize promotion fraud, or any money transmitting business.
The complaints and civil injunction actions (civil action numbers 23-cv-1844, 23-cv-1885, and 23‑cv-1886) were filed in the United States District Court for the Eastern District of Pennsylvania. These cases are being handled by Assistant United States Attorney David A. Degnan. The investigations were conducted by the United States Postal Inspection Service.
Members of the public are reminded to be careful of individuals they meet online. If those individuals ask you to receive or transfer funds or goods, purchase gift cards, or engage in any type of suspicious activity, please report this activity to law enforcement.
To find public education materials, as well as information about how fraudsters use and recruit money mules, please visit www.justice.gov/civil/consumer-protection-branch/money-mule-initiative.
Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice. If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).