Eastern District of Pennsylvania
Press releases recorded for this federal judicial district.
Primary Care Physicians to Pay $1.5 Million to Resolve False Claims Act Liability for Submitting Unsupported Diagnoses to the Medicare Advantage ProgramRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Complete Physician Services, Kenneth Wiseman, DO, and Steven Schmidt, DO (collectively, “CPS”), have agreed to pay a total of $1,500,000 plus interest to resolve False Claims Act allegations that they caused the submission of false claims by misrepresenting the severity of illness and services rendered to increase reimbursement from the Medicare Part C (Medicare Advantage) and Part B programs.
CPS, a primary care physician practice located in Philadelphia, treated patients under the Medicare Advantage program and the Medicare Part B (Medical Insurance) program. The government alleges that CPS caused the submission of false claims for payment to Part C from January 1, 2015, to December 31, 2018, arising from CPS submitting unsupported diagnosis codes, resulting in increased reimbursement to Part C health insurance companies. Specifically, CPS submitted morbid obesity diagnosis codes to Part C where the diagnoses lacked medical support in that patients had a body mass index under 35. The government contends that the diagnosis of morbid obesity in this situation is inappropriate. Further, the government alleges that CPS’s submission of chronic obstructive pulmonary disease (“COPD”) diagnoses were not medically supported or supported by appropriate medical documentation in many instances. As a result of these unsupported diagnoses, CPS substantially increased Part C reimbursement from the Centers for Medicare & Medicaid Services (“CMS”).
The government also alleges that CPS caused the submission of inappropriate claims to the Medicare Part B program that were not supported by medical documentation from January 1, 2015, to December 31, 2018, in order to maximize its reimbursement. Specifically, the government contends that CPS improperly billed Evaluation and Management visits using Current Procedural Terminology Code 99214 without the requisite level and complex medical decision making that this code requires. Further, CPS inappropriately billed physician assistant services “incident to” the professional services of a physician including occasions when the physician was out of the country. Finally, CPS also submitted unsupported billing to CMS for smoking cessation counseling, pulmonary function tests, and unsupported claims for vaccine administration.
“Almost half of Medicare beneficiaries are now enrolled in Medicare Advantage plans. Investigation of credible allegations of fraud impacting it is more important than ever,” said U.S. Attorney Romero. “The Medicare Advantage Program relies on accurate information about its enrollees’ health status, such as whether they really have morbid obesity or COPD. It is imperative that enrollees receive appropriate treatment and that participating providers and health plans receive proper compensation for the services they actually provide. We will hold accountable those who report unsupported diagnoses to inflate Medicare Advantage payment.”
“Today’s settlement shows our attention to and commitment in investigating all potential allegations of fraud against the Medicare Part C Programs, no matter the size of the physician practice, or the complexity of the scheme,” said Maureen R. Dixon, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of the Inspector General. “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 Medicare programs.”
This settlement resolved a lawsuit filed under the False Claims Act in the U.S. District Court for the Eastern District of Pennsylvania by former CPS employees captioned United States ex rel. Michael Helzner, D.O., et al. v. Complete Physician Services, LTD, at al., No. 16-cv-5401 (E.D. Pa.). Under the qui tam or whistleblower provisions of the False Claims Act, lawsuits like this one may be brought on behalf of the United States and the relators share in any recovery by the government. The relators were represented in this case by John M. Hanamirian of the Hanamirian Law Firm. “We thank the relators and the relators’ counsel for their contributions. Detecting fraud is much easier when we have the cooperation of whistleblowers like the ones in this case,” said Romero.
This matter was investigated by the U.S. Attorney’s Office for the Eastern District of Pennsylvania, in conjunction with the U.S. Department of Health and Human Services Office of Inspector General. The investigation and settlement were handled by Assistant U.S. Attorney Deborah W. Frey, Civil Division Chief Gregory B. David, and Auditor George Niedzwicki.
The claims resolved by this settlement are allegations only and there has been no determination of liability.
Par Funding Principals Charged with Securities Fraud, Extortion, Tax Crimes, Perjury, and ObstructionRead the Press Release
PHILADELPHIA – An indictment was unsealed today charging Complete Business Solutions Group, Inc., doing business as Par Funding, and four of its principals with various crimes, including securities fraud, extortionate collection of credit, tax crimes, perjury, obstruction of justice, witness retaliation, and witness tampering, announced United States Attorney Jacqueline C. Romero. These principals are Joseph LaForte, 52: Lisa McElhone, 43; Joseph Cole Barleta (“Joe Cole”), 39; and James LaForte, 46.
According to the indictment, from at least 2016 through July 2020, co-conspirators Joseph LaForte, Joe Cole, James LaForte, and others participated in a conspiracy to commit wire fraud and securities fraud in connection with funds that were raised from investors in Par Funding and its affiliates. Par Funding and these affiliates provided funding to businesses through short-term financing transactions, referred to as merchant cash advances (“MCAs”). To fund these MCAs, the defendants raised over $500 million from investors.
It is alleged that as part of their fundraising efforts, these defendants and their conspirators caused false and misleading information to be conveyed to investors regarding various issues, including:
- Joseph LaForte’s true name, his role at Par Funding, and his criminal history;
- Par Funding’s underwriting process;
- the diversity of the company’s MCA portfolio;
- Par Funding’s default rate;
- Par Funding’s financial success and profitability;
- the company’s insurance; and
- the defendants’ self-dealing.
For instance, the indictment alleges that although Joseph LaForte operated Par Funding and referred to it as his business, he concealed this ownership and control by using his wife, Lisa McElhone, as his nominee. Joseph LaForte also used several aliases, such as “Joe Mack,” while working at the company. It is alleged that Joseph LaForte, Joe Cole, James LaForte, and their conspirators engaged in this deception to conceal Joseph LaForte’s true role as the person operating the company and his significant criminal history from investors.
The indictment also alleges that Joseph LaForte and James LaForte conspired with an individual named Renato “Gino” Gioe to participate in the extortionate collection of credit. It is alleged that during the course of Par Funding’s operations, these individuals made hostile, threatening, and intimidating communications to Par Funding’s customers in person and over the telephone in order to collect on delinquent MCAs. For example, the indictment alleges that Joseph LaForte threatened to “blow up” a delinquent customer’s home in May 2019 and asked another delinquent customer in August 2019 whether the customer had heard of “cement shoes.” In addition, the indictment alleges that in May 2018, James LaForte told one customer that he was a “soldier for the family” who had torched people’s cars and kicked people’s teeth in.
Furthermore, the indictment alleges that Joseph LaForte and Lisa McElhone committed a variety of tax crimes. For instance, it is alleged that the married couple defrauded the Commonwealth of Pennsylvania out of approximately $1.2 million of state taxes by falsely claiming to be residents of Florida, even though they worked, lived, and spent more than 300 days per year in Pennsylvania. Furthermore, the indictment alleges that Joseph LaForte and Lisa McElhone worked together to evade the payment of half a million dollars of employment taxes that had been imposed on Joseph LaForte in connection with companies that he had operated in the mid-2000s. In addition, it is alleged that Joseph LaForte committed tax crimes by failing to report millions of dollars in cash kickbacks that he personally received from a Par Funding customer, and by regularly paying cash wages to Par Funding employees but not withholding taxes from these wages or reporting them to the IRS.
It is further alleged that Joseph LaForte and Joe Cole each committed perjury twice during depositions in federal lawsuits against Par Funding, making misrepresentations regarding various matters. For instance, the indictment alleges that Joseph LaForte lied under oath about his knowledge of his wife’s role at Par Funding, Joe Cole’s role at the company, and the company’s default rate. The indictment alleges that Joe Cole lied under oath about who was on Par Funding’s credit committee (which Joseph LaForte ran) and who ran Par Funding.
Finally, the indictment alleges that Joseph LaForte and James LaForte engaged in obstruction of justice, witness tampering, and retaliation. Specifically, it is alleged that in late February 2023, on the streets of Center City Philadelphia, James LaForte, with the assistance of and in coordination with Joseph LaForte, physically assaulted counsel for the Receiver for Par Funding in a lawsuit brought by the U.S. Securities and Exchange Commission in the Southern District of Florida. Moreover, in connection with the same lawsuit, the indictment alleges that Joseph LaForte threatened to cause serious bodily injury to another individual in November 2022. Lastly, it is alleged that James LaForte made threats of violence to multiple parties in early 2023 in an effort to interfere with the SEC lawsuit, a federal grand jury investigation, and an anticipated federal prosecution, as well as to retaliate against these parties.
If convicted of all counts charged against them, the defendants face the following maximum possible sentences of imprisonment: Joseph LaForte – 796 years; McElhone – 70 years; Cole– 415 years; and James LaForte – 615 years. The defendants also face full restitution, a fine, and a period of supervised release and/or probation.
The case was investigated by the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigations, the Federal Deposit Insurance Corporation-Office of Inspector General, and Pennsylvania State Police and is being prosecuted by Assistant United States Attorneys Patrick J. Murray, Matthew Newcomer, and Alexandra Lastowski. The SEC in Florida investigated and litigated the civil securities fraud charges which formed the basis of a portion of the criminal prosecution.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Two Defendants Charged in Nationwide Pandemic Unemployment Assistance (“PUA”) SchemeRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Ardavan Alamoutinia, 33, of Hummelstown, PA, and Aryanah Davison, 23, of Harrisburg, PA, were charged by Indictment with one count of conspiracy to commit wire and mail fraud, ten counts of mail fraud, one count of theft of government money, and eight counts of aggravated identity theft, all stemming from their scheme to fraudulently obtain emergency funds meant for those affected by the COVID-19 pandemic.
The Indictment alleges that Alamoutinia and Davison used stolen identities to file over 500 fraudulent PUA applications. These over 500 fraudulent applications were filed using at least 375 identities of current or former employees of Company 1. A co-conspirator stole these identities from Company 1 and transferred them to Davison. After receiving the identities, Alamoutinia and Davison filed or caused to be filed the fraudulent PUA applications in 27 different states resulting in a loss of at least $2,886,876.
According to the Indictment, after the fraudulent applications were filed, the respective state workforce agencies responsible for administering the PUA benefits dispersed funds based upon the fraudulent PUA applications either by direct deposits or mailing checks and PUA debit cards. Defendants then cashed the checks, deposited the checks, received the direct deposits into bank accounts controlled by them, and collected and possessed the PUA debit card issued on the applications. Defendants also made direct expenditures using the PUA debit cards, withdrew the money from those cards at ATMs, and transferred the money to financial accounts controlled by them.
The Indictment also alleges that Alamoutinia and Davison converted at least $2,500,000 of the fraudulent proceeds in this case. Alamoutinia and Davison spent the fraudulent proceeds, in part, on hundreds of thousands of dollars in cryptocurrency purchases and on a luxury sports vehicle.
The case was investigated by the Department of Labor – Office of Inspector General, Department of Homeland Security – Office of Inspector General, United States Postal Inspection Service, National Aeronautics and Space Administration – Office of Inspector General, and the Social Security Administration – Office of Inspector General, and is being prosecuted by Assistant United States Attorney Timothy Lanni.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pennsylvania Woman Sentenced to Imprisonment for Passport FraudRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Samirah Boksmati, 34, was sentenced to three months’ imprisonment, three years of supervised release, and a $700 assessment by United States District Judge R. Barclay Surrick for four counts of making false statements in a passport application and three counts of using a passport secured by false statements.
Boksmati made multiple false representations to the U.S. State Department to secure United States passports for herself and her children and then used those passports obtained by fraud to travel abroad with two of her minor children. Boksmati acted with the intent to take all three of her children out of the United States, despite a family court order prohibiting her from taking her eldest child out of the country.
“Border and identification security are critically important to national security,” said U.S. Attorney Romero. “Obtaining a United States passport by fraud will not be tolerated, especially when that fraud is perpetrated in order to take a child out of the country in violation of a family court order. This sentence demonstrates that there are consequences to abusing the passport application process.”
“One of the core missions of Diplomatic Security Service (DSS) is to protect the integrity of U.S. travel documents, which includes preventing the fraudulent acquisition and use of U.S. passports to facilitate parental child abductions,” Resident Agent in Charge R. Mike Escott of the U.S. Department of State's Diplomatic Security Service Philadelphia Resident Office. “DSS is grateful for today’s outcome and for the close partnership and support of the FBI and the U.S. Attorney’s Office.”
The case was investigated by the U.S. Department of State - Diplomatic Security Service and is being prosecuted by Assistant United States Attorney Josh A. Davison.
Levittown, Pennsylvania Physician Agrees to Pay $100,000 to Resolve Controlled Substances Act ViolationsRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Douglas Daniel Files, D.O., has agreed to pay $100,000 to resolve allegations that he violated the Controlled Substances Act (CSA) by failing to maintain complete and accurate records of a controlled substance (testosterone), failing to keep required receipt and dispensing records, failing to perform biennial inventories, and writing prescriptions “for stock.”
The United States’ investigation involved Files’ practice located at 2346 Trenton Road, Levittown, Pennsylvania 19056.
As part of the settlement, Files has entered into a three-year Memorandum of Agreement (MOA) with the Drug Enforcement Administration (DEA), which includes additional responsibilities regarding the handling of controlled substances. The MOA imposes compliance obligations significantly more stringent than those in the applicable laws and regulations.
Files prescribes and administers testosterone, a Schedule IIIN controlled substance. In April 2022, DEA investigators discovered that Files allegedly failed to conduct a biennial inventory, failed to maintain records for receipt and dispensing of the controlled substance, and was prescribing controlled substances “for stock” – all in violation of applicable regulations and statutes.
The DEA diversion investigators obtained records of Files’ prescriptions “for stock” from a local retail pharmacy. Physicians are prohibited from obtaining controlled substances for the purpose of general dispensing to patients; they must comply with the requirements for a valid prescription, including the date, patient’s name and address, drug name and strength, dosage form, quantity prescribed, directions for use, and the physician/registrant’s name, address, and registration number. The prescription requirement is one of the ways in which controlled substances are tracked to prevent diversion and abuse.
“Physicians who fail to maintain proper records of controlled substances create conditions ripe for diversion, or, at worst, may be engaging in diversion itself,” said U.S. Attorney Romero. “Physicians and pharmacists have a responsibility to ensure that all controlled substances are tracked through the distribution chain. Our Office is committed to ensuring total compliance with the Controlled Substances Act and we will vigorously enforce violations wherever we find them.”
“Dr. Files’ ordering of prescription medicines for stock is not permissible under the regulations of the Controlled Substances Act,” said Thomas Hodnett, Special Agent in Charge of the Drug Enforcement Administration’s Philadelphia Field Division. “Settlements and Memorandum of Agreements such as these help to ensure that physicians properly safeguard, dispense, and account for the controlled substances in their care.”
Congress enacted the CSA to deter the illegal importation, manufacture, distribution, possession, and improper use of controlled substances, including prescription medications, and requires individuals and entities registered with the DEA to maintain complete and accurate records of all controlled substances and security systems so that controlled substances are not lost, stolen, or inappropriately dispensed.
The government’s pursuit of this matter illustrates its emphasis on combating diversion of controlled substances. The record keeping and other regulations applicable to DEA registrants, including physicians, are the tools by which the DEA deters drug diversion.
The investigation was conducted by the Drug Enforcement Administration’s Philadelphia Field Division, Diversion Regulatory Group 2 (D72), and the investigation and settlement were handled by Assistant U.S. Attorney Viveca D. Parker, with DEA Diversion Investigators.
The claims resolved by this settlement are allegations only and there has been no determination of liability.
Contract Killer Sentenced to Five Consecutive Life Sentences in Prison for Committing Six Murders and One Attempted MurderRead the Press Release
CONTRACT KILLER SENTENCED TO FIVE CONSECUTIVE LIFE SENTENCES IN PRISON FOR COMMITTING SIX MURDERS AND ONE ATTEMPTED MURDER
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Ernest Pressley, 43, of Philadelphia, Pennsylvania, was sentenced to five consecutive life sentences by United States District Judge Eduardo C. Robreno on one count of conspiracy to commit murder-for-hire and four counts of use of interstate commerce facilities in the commission of murder-for-hire, in connection with Pressley's role in murdering four victims in Philadelphia between 2017 and 2018, all in exchange for money. Pressley's conduct also included his role in the killing of two other victims in 2016 and 2017 and the attempted murder of a woman in 2018.
In late 2018, the Philadelphia Police Department joined with the Federal Bureau of Investigation to investigate Pressley in connection with the murder of S.S., who was shot to death in the parking lot of a Philadelphia apartment complex near 7400 Malvern Avenue in the early morning hours of September 1, 2018. Pressley was captured on video surveillance footage near the scene and in footage retrieved from a bar in Philadelphia the evening before when he was with S.S. and several other men. Pressley was arrested in connection with this crime on September 7, 2018.
Law enforcement's investigation revealed that Pressley was responsible for other murders in Philadelphia, including the killings of two tow truck drivers for A. Bob's Towing on January 12 and 13, 2017. Pressley agreed to kill tow truck driver K.F. in exchange for money to prevent K.F. from testifying as a witness at an assault trial in Philadelphia. In an effort to distract law enforcement from the true motivation for K.F.'s murder and to make it appear as though it was connected to a feud between rival tow truck companies, Pressley selected at random one of K.F.'s co-workers, E.R., and shot him to death as he left work on January 12, 2017, near 4500 Melrose Street. The next day, Pressley approached K.F. as he left his home and entered his tow truck, which was being driven by a co-worker, at which time Pressley opened fire, fatally striking K.F. and injuring his co-worker, who was shot several times in his lower body.
As the investigation developed further, Pressley was also identified as the person who shot M.R. to death in Philadelphia on January 11, 2017, near the intersection of East Sharpnack and Baldwin Streets, while M.R. worked on his vehicle at a garage in the area.
In September 2022, during his guilty plea allocution before Judge Robreno, Pressley admitted that he murdered M.R., E.R., K.F., and S.S. in exchange for money and at the direction of a drug trafficker. Around the time of each crime, Pressley used his cellular phone to communicate with his co-conspirator to plan how and when each murder would be carried out.
Pressley also admitted to shooting C.Y. to death on July 19, 2016, as C.Y. sat on the porch of a residence near 1500 West Olney Avenue in Philadelphia. Pressley also admitted to his role in providing the location of a man he knew was wanted dead by a Philadelphia drug trafficker, which later resulted in the death of Y.H., who was killed as the result of mistaken identity near the intersection of 56th Street and Ithan Street on July 24, 2018. Finally, Pressley admitted that he attempted to kill a woman when he shot her in the arm as she arrived at her Philadelphia home on North Woodstock Street on July 9, 2018. While the woman survived a gunshot wound, she later discovered that her home had been ransacked and several items, including money and jewelry, were stolen. Several hours later, Pressley was identified as having sold a Rolex watch belonging to the woman at a Philadelphia pawn shop.
"Taking a cold-blooded killer like Ernest Pressley off the street for five consecutive life sentences is a prime example of why the U.S. Attorney's Office and the Department of Justice make tackling violent crime a priority,” said U.S. Attorney Romero. "Our joint partnerships with the FBI and Philadelphia Police Department make it possible to bring these cases into federal court and secure the severe punishment such a career murderer deserves.”
“Ernest Pressley is a hardened and chronic offender, a true menace to society,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “For all the lives he took and families he affected, this contract killer has duly earned each of his life sentences. The FBI and Philadelphia Police Department will continue to focus our partnership and resources on locking up the worst of the worst, like Pressley, who cause so much of the city’s bloodshed.”
"This defendant ultimately failed to escape accountability for his outrageous violent crimes due to the collaboration of law enforcement at all levels of government, which occurs each and every day," Philadelphia District Attorney Larry Krasner said. "I commend U.S. Attorney Romero and her team, the FBI, Philadelphia Police, along with our own ADA Joanne Pescatore, Supervisor of the Homicide/Non-Fatal Shootings Unit, for helping to secure a sentence of incarceration that ensures Ernest Pressley will no longer endanger our communities."
"We are grateful for the collaboration between the Philadelphia Police Department, the Federal Bureau of Investigation, and the U.S. Attorney’s Office, which led to the apprehension and conviction of Ernest Pressley,” said Philadelphia Police Commissioner Danielle Outlaw. “His heinous crimes demonstrate the utmost disregard for human life. This sentence sends a strong message that we will relentlessly pursue justice and protect our communities from those who commit acts of violence."
The case was investigated by the Federal Bureau of Investigation, the Philadelphia Police Department, and the Philadelphia District Attorney’s Office, and is being prosecuted by Assistant United States Attorney Justin Ashenfelter.
Retired Special Education Teacher Sentenced for Traveling Overseas to Sexually Abuse ChildrenRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Craig Alex Levin, 67, of King of Prussia was sentenced to 35 years in prison and a lifetime of supervised release by United States District Court Judge Harvey Bartle, III for for traveling to the Philippines to engage in sex with children as young as 12 years old.
According to court documents, between 2016 and 2019, Levin was a retired special education teacher who traveled to the Philippines nine times, each time for the purpose of engaging in sex with disadvantaged minors who, by Levin’s own words, were hungry or needed money for medicine for family members. In May 2019, the Philippines National Police arrested Levin as he was about to enter the elevator at his hotel with a 15-year-old girl. Upon search of his hotel room, police located several notebooks containing the names and ages of hundreds of girls, scored on a rating system of 1 to 10 in five categories: Face, Body, Sex, Personality, Age. Only girls under the age of 18 received a top score of 10. There were multiple children as young as 12 listed in the notebooks.
"At the time of Levin's arrest in the Philippines, he was escorting a 15-year-old girl to his hotel room. Levin's sentencing effectively takes a dangerous predator who targeted vulnerable children in a foreign country off the streets indefinitely," said U.S. Attorney Romero. "No matter their role in society or where they prey on children, child sex offenders must be held accountable."
“This predator with a passport traveled halfway around the world, multiple times a year, solely to sexually abuse children,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “He took eager advantage of situations of extreme poverty to gain access to the young girls he victimized, apparently thinking he’d just continue to fly under the radar. This lengthy sentence proves him wrong, and should send a message to anyone else sexually exploiting children: whether you commit your crimes here at home or travel to do so abroad, the FBI will investigate, hold you accountable, and ensure your destination is federal prison.”
This case is brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and Criminal Division’s 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 http://www.justice.gov/psc.
The case was investigated by the FBI and Philippine National Police and Women and Children Protection Center - Visayas Field Unit. It is being prosecuted by Assistant United States Attorney Michelle Rotella and Trial Attorney Austin M. Berry of the Criminal Division’s Child Exploitation and Obscenity Section.
Owner of Closed Substance Use Treatment Facility in Florida Pleads Guilty to Conspiracy to Defraud Health InsurersRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Terrence Livorsi, 68, of Glenside, Pennsylvania, pleaded guilty to charges of conspiracy to commit health care fraud arising from his operation of his company’s Employee Assistance Program (“EAP”) . Livorsi used the EAP to funnel patients to addiction treatment at facilities and programs that he owned in Florida in order to fraudulently bill patients’ medical insurance for treatment that was not medically necessary.
Livorsi offered his company’s EAP services free of charge and marketed its services mainly to public sector labor unions in New Jersey. Livorsi and his EAP encouraged union officials and representatives to call when a union member was in distress or facing workplace discipline. Upon referral of a union member for EAP services, Livorsi and/or an employee of the EAP collected information from the person, including asking the prospective patient about his or her use of alcohol or drugs. Many prospective patients did not have substance use disorders but were nevertheless fraudulently referred to Recovery Institute of South Florida (“RISF”), a substance use treatment facility that Livorsi also owned and operated. Patients were pressured to fly to Florida immediately for treatment at RISF, allegedly to save their jobs. The people that Livorsi and his staff members referred to RISF were not told that Livorsi owned RISF or that he would benefit financially by billing their health insurance.
From at least January 2014 until RISF closed in April 2018, it was the business of Livorsi’s EAP to send patients to treatment RISF. RISF depended on the EAP to refer patients for treatment, and made money by billing insurers for those referred patients. The EAP, which did not charge anyone for its services, depended on RISF to finance its operations. As the sole owner of both RISF and the EAP, Livorsi controlled every aspect of their operations, including the finances and bank accounts of both organizations. Livorsi directly profited when RISF profited. Livorsi directed RISF to pay bonuses to his staff, including himself, for admissions to RISF that the employee had procured. Although he was not a licensed caregiver and was infrequently present at RISF, Livorsi exercised control over when patients could be discharged from RISF, and would keep patients as long as possible to maximize the opportunities to bill insurance.
"Livorsi's guilty plea should send a clear message to those seeking to build their financial empire off the despair of individuals battling addiction by committing health care fraud," said U.S. Attorney Jacqueline C. Romero. “The defendant's actions were illegal and unconscionable. Moreover, healthcare fraud impacts all of us by raising costs and compromising quality.”
“Over the course of years, Terrence Livorsi defrauded insurers of big money by using patients as pawns,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “He had no compunction about referring all of these people to his own faraway treatment facility, some of whom didn’t even have substance abuse issues. Health care fraud is a costly, consequential federal crime and the FBI will continue to make these investigations a priority as we work to deter such criminal behavior.”
Livorsi was charged by Information filed April 11, 2023, and entered a plea of guilty on May 8, 2023. A sentencing hearing is scheduled for September 6, 2023 at 10:00 a.m.
The cases were investigated by the Philadelphia FBI Healthcare Fraud Task Force, which includes agents from the Pennsylvania Attorney General's Office and the Philadelphia Police Department, and the Employee Benefit Security Administration of the United States Department of Labor, and is being prosecuted by Assistant United States Attorney Elizabeth Abrams.
Three Brothers Convicted of Multi-District Scheme to Defraud the United States Postal Service, UPS and Citizens BankRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that brothers Zumar Dubose, age 34, of Atlantic City, NJ; Abdush Dubose, age 36, of Boynton Beach, FL; and Kariem Dubose, age 42, of Philadelphia, PA, were convicted today at trial of mail fraud, wire fraud, bank fraud, and money laundering conspiracy charges arising from their scheme to defraud and obtain money from the United States Postal Service, UPS and Citizens Bank.
Starting as early as October 2018, in less than one year, the defendants submitted over 1,200 fraudulent insured-parcel claims with the United States Postal Service and UPS, and received almost $300,000 in ill-gotten gains. As part of the scheme, the Dubose brothers sent parcels themselves containing items of no value using insured United States Postal Service postage and UPS tracking labels. They then filed fraudulent claims with United States Postal Service and UPS, claiming that these parcels which had contained nothing of value were lost or damaged in transit, and attached sham proofs of value. The defendants used numerous e-mails, addresses and postboxes, bank accounts and bank cards, fake individual names, and fictitious corporations, including “Urmajesty Banktruckfit Solutions,” “Miworld Three Incorporated,” and “4 Entertainment Corporation,” which were incorporated in the State of New Jersey, and “Seeds of Beauty Incorporated,” which was incorporated in the State of Florida. The claim checks that the brothers received as part of this fraud scheme were deposited into Citizens Bank accounts opened in the names of these fake companies through ATMs in Philadelphia, Pennsylvania, and elsewhere.
When USPS and UPS refused to issue or deliver some of the fraudulently-obtained claim checks, and when Citizens Bank placed a hold on a bank account that was used to deposit the fraud proceeds, the Dubose brothers were undeterred. The brothers repeatedly contacted the United States Postal Service and UPS using fake names; defendant Zumar Dubose even filed lawsuits against UPS in various counties in New Jersey, using fake plaintiff names and falsely claiming that UPS did not pay him funds that he was owed. The defendants also filed lawsuits against Citizens Bank, again pretending to be a different individual, in an effort to obtain the funds from their fraud scheme.
"Lying about insured parcels and then turning around and filing lawsuits against the victim companies, when those companies suspected something was awry is brazen, to say the least," said U.S. Attorney Romero. "Today's guilty verdicts against the Dubose brothers show the commitment of our office and law enforcement partners to investigate and prosecute this type of flagrant fraud."
One of the investigative missions of the U.S. Postal Service Office of Inspector General (OIG) is to help safeguard the Postal Service and U.S. Mail from being utilized for illegal activity. OIG Special Agents vigorously investigate these cases in partnership with our law enforcement partners,” said Special Agent-in-Charge Jeffery Krafels. “These guilty verdicts should serve as a reminder and deterrent to anyone thinking this type of behavior is acceptable.”
The case was investigated by the United States Postal Service Office of the Inspector General and the United States Postal Inspection Service, and is being prosecuted by Assistant United States Attorneys Louis D. Lappen and J. Jeanette Kang. UPS and Citizens Bank provided crucial cooperation in this investigation.
Retired Special Education Teacher Sentenced for Traveling Overseas to Sexually Abuse ChildrenRead the Press Release
A Pennsylvania man was sentenced today to 35 years in prison for traveling to the Philippines to engage in sex with children as young as 12 years old.
According to court documents, between 2016 and 2019, Craig Alex Levin, 67, of King of Prussia, was a retired special education teacher who traveled to the Philippines nine times, each time for the purpose of engaging in sex with disadvantaged minors who, by Levin’s own words, were hungry or needed money for medicine for family members. In May 2019, the Philippine National Police arrested Levin as he was about to enter the elevator at his hotel with a 15-year-old girl. Upon search of his hotel room, police located several notebooks containing the names and ages of hundreds of girls, whom he rated based on several categories, including age. Only girls under the age of 18 received a top score of 10. There were multiple children as young as 12 listed in the notebooks.
In June 2022, Levin pleaded guilty to six counts charging him with foreign travel to engage in sex with a minor, attempted sex trafficking of a minor, and distribution and transportation of child pornography.
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 and Philippine National Police investigated the case.
Trial Attorney Austin M. Berry of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Michelle Rotella for the Eastern District of Pennsylvania prosecuted the case. The Justice Department’s Office of International Affairs assisted with securing evidence from the Philippines, including through mutual legal assistance requests.
This case is brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and 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.
United States Files Lawsuit Against Radnor, PA Radiologist Alleging Unnecessary Peripheral Artery ProceduresRead the Press Release
United States Attorney for the Eastern District of Pennsylvania, Jacqueline C. Romero, announced today that the United States has filed a complaint in U.S. District Court under the False Claims Act against Dr. James McGuckin of Radnor, PA, an interventional radiologist, and his affiliated practices and management entities. In its complaint, the United States alleges that McGuckin and his entities billed Medicare and the Federal Employees Health Benefits Program for medically unnecessary invasive peripheral artery procedures in patients’ legs between at least January 1, 2016 and December 31, 2019, and for which McGuckin and his entities were reimbursed at least $6.5 million for over 500 claims. The practice-entity defendants are: (1) Peripheral Vascular Institute of Philadelphia, LLC; (2) Main Line Vascular Institute LLC, of King of Prussia, PA; (3) Lehigh Valley Vascular Institute, LLC, of Bethlehem, PA; and (4) PA Vascular Institute, LLC, of East Stroudsburg, PA. The management-company defendants are Philadelphia Vascular Institute, LLC, and Pennsylvania Vascular Institute, P.C.
“Performing medically unnecessary procedures puts patients at risk and contributes to the soaring costs of health care, especially the invasive vascular procedures alleged in this case,” said U.S. Attorney Romero. “As this litigation demonstrates, we are committed to safeguarding federal health care program beneficiaries and protecting public funds.”
“Medicare rules are designed to protect beneficiaries and taxpayer dollars,” said Maureen R. Dixon, Special Agent in Charge of the Philadelphia Regional Office of the Inspector General, Department of Health and Human Services. “HHS-OIG and the U.S. Attorney's Office will continue to work together to fight health care fraud and investigate allegations of co-pay and kickback violations.” SAC Dixon added: “Anyone with information about health care fraud in this or other cases should contact the HHS-OIG hotline at 1-800-HHS-TIPS (1-800-447-8477) or online at https://oig.hhs.gov/fraud/report-fraud.”
The allegations regarding unnecessary vascular procedures are described in detail in the complaint and include unnecessary angioplasty, atherectomy, and the placement of stents, as well as the indiscriminate use of intravenous ultrasound. Each procedure requires puncturing the skin and inserting devices into and through the arteries in patients’ legs. As the relevant standards of care indicate, unnecessary invasive vascular procedures may cause harm to patients’ health, including increasing their likelihood of needing future procedures, and putting them at greater risk of leg amputations.
As alleged, Dr. McGuckin and Defendants knew from prior administrative sanctioning that unnecessary procedures are contrary to standards of care and federal law. First, in 2015, pursuant to a Consent Decree, McGuckin was sanctioned by the Washington [State] Medical Quality Insurance Commission—and subsequently several other states’ medical boards and Medicaid programs, including Pennsylvania—for improperly performing unnecessary, experimental vascular procedures, including angioplasty and stenting, on hundreds of patients for the purported treatment of Multiple Sclerosis—a non-vascular disease.
Second, in 2018, McGuckin signed a False Claims Act settlement as manager/owner of Vascular Access Centers, L.P. (“VAC”) and related entities, which resolved multi-million dollar qui tam lawsuits in the Southern District of New York and Eastern District of Louisiana. In the settlement, McGuckin, on behalf of his entities, admitted that his entities regularly scheduled, performed, and billed for vascular procedures “even though the patients presented without any documented evidence that they exhibited a need for therapies.” More information on those prior settlements is available here: https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-settlement-fraudulent-billing-claims-against-vascular; https://www.justice.gov/usao-edla/pr/vascular-access-centers-pay-least-3825-million-resolve-false-claims-act-allegations.
Additionally, in 2019, McGuckin caused VAC to file for bankruptcy in this District—a filing that Bankruptcy Judge Ashely M. Chan found was orchestrated in bad faith. Judge Chan found that McGuckin’s misconduct in connection with the VAC bankruptcy, including making false statements to the Court on behalf of Philadelphia Vascular Institute, LLC, subjected him to sanctions by the Court. See, e.g., In re Vascular Access Centers, L.P., 611 B.R. 742 (Bankr. E.D. Pa 2000), appeal pending.
The current False Claims Act case is captioned United States of America ex rel. Aaron Shiloh, M.D., FSIR v. Philadelphia Vascular Institute and James McGuckin, M.D., Case No. 18-5458 (E.D. Pa.). This lawsuit was originally filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties (called relators) to sue on behalf of the government when they discover evidence that defendants have submitted false claims for government funds and to receive a share of any recovery. If the United States proves that a defendant has knowingly submitted false claims, it is entitled to recover three times the damage that resulted plus a penalty of $13,508 to $27,018 per claim. The False Claims Act also permits the government to intervene in such lawsuits, as it did when it filed a notice of intervention in this case on February 28, 2023.
The relator, Dr. Aaron Shiloh, is an interventional radiologist who worked for and with Defendants. “We sincerely thank the relator in this case. Without people like Dr. Shiloh being willing to shed light on allegations of fraud, preserving government program funds would be far more challenging,” said U.S. Attorney Romero.
The case has been investigated by the U.S. Department of Health and Human Services Office of the Inspector General. The case is being handled by Assistant U.S. Attorneys Lauren DeBruicker and Matthew E. K. Howatt, as well as Auditor Dawn Wiggins and Investigator Frank O’Connor.
All civil claims are allegations only. There has been no determination of civil liability.
NYC Mother and Son Charged with Interstate Shipment of Misbranded Animal DrugsRead the Press Release
PHILADELPHIA – United States Jacqueline C. Romero announced that Bien King, 70, of Congers, NY and Khalil King, 36, of New York, NY were charged by indictment with conspiracy, distribution of unregistered and misbranded pesticides, and interstate shipment of misbranded animal drugs.
The indictment alleges that Bien King and her son, Khalil King, jointly operated a business called “Little City Dogs,” based in New York City. The defendants purchased unapproved animal drugs and pesticides, including ivermectin, nitenpyram, praziquantel, and fipronil, from various Chinese suppliers. The defendants’ Chinese suppliers routinely mislabeled the shipments to avoid inspection by United States Customs and Border Protection inspectors. According to the indictment, once the defendants received the shipments from China, they used various locations, including a Manhattan office, to mix and repackage these drugs and pesticides for resale to customers throughout the United States. According to the indictment, the defendants’ company received over $4,000,000 from the sale of these misbranded, unregistered, and unapproved pesticides and animal drugs.
If convicted, the defendants face a maximum possible sentence of 19 years in prison, up to 3 years of supervised release, a $1,450,000 fine, and a $550 special assessment.
The case was investigated by the Food and Drug Administration’s Office of Criminal Investigations, the Environmental Protection Agency’s Office of Criminal Investigations, and is being prosecuted by Assistant United States Attorney Christopher E. Parisi.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Chester County Former CFO Indicted on Charges of Tax FraudRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that David L. Shull, 68, of Largo, FL (formerly of West Chester, PA) was charged by Indictment with six counts of failure to pay over employment taxes for a Chester County adult day care facility from 2013 through 2017, and failing to account for employment taxes owed in the same years.
The Indictment alleges that, as the Controller/Chief Financial Officer of the care facility, Shull was legally obligated to withhold payroll taxes from wages paid to the company’s employees and was responsible to pay over these taxes to the IRS. The Indictment also alleges that Shull was required to pay over the care facility’s contributions for Social Security and Medicare in amounts matching the amounts withheld from its employees’ pay for those purposes. Shull was also required to file, following the end of each calendar quarter, an Employer’s Quarterly Federal Income Tax Return (Form 941), setting forth the total amount of wages and other compensation subject to withholding, the total amount of income tax withheld, and the total amount of Social Security and Medicare taxes due to the IRS. The Indictment alleges that from 2005 through 2017, Shull caused the care facility to pay wages to its employees. The Indictment further alleges that during this same period, Shull also caused the care facility to withhold trust fund taxes from those wages and to issue Wage and Tax Statements (Form W-2) to the employees indicating that trust fund taxes had been withheld from those wages and implying that those trust fund taxes had been paid over to the IRS. The Indictment alleges that beginning in or about 2013 through in or about 2017, this was a false representation, as the withheld tax amounts were not paid over to the IRS, neither were the care facility’s employer contributions paid over during this time period. According to the Indictment, Shull caused some amounts to be paid to the IRS in 2013 and 2014, but this was insufficient to cover tax debts and penalties.
The Indictment further alleges that from 2013 through 2017, Shull caused the care facility to file only one Form 941, for the second quarter of 2013, despite the fact that during this period, the care facility had approximately 53-67 employees.
If convicted, the defendant faces a maximum possible sentence of 30 years in prison and a $1,500,000 fine. The defendant may also be responsible for the taxes due, in addition to the payment of penalties to the Internal Revenue Service.
The case was investigated by the Internal Revenue Service, and is being prosecuted by Assistant United States Attorney Angella Middleton.
Plymouth Meeting, Pa Company to Pay $5.3 Million to Resolve False Claims Act Allegations Related to False Billing for Respiratory DevicesRead the Press Release
PHILADELPHIA – AdaptHealth LLC, formerly known as QMES, LLC, a provider of durable medical equipment based in Plymouth Meeting, Pennsylvania, will pay $5.3 million to resolve alleged False Claims Act violations for submitting allegedly false claims to federal healthcare programs for respiratory devices that patients did not need or use, in violation of federal healthcare program requirements. The settlement was announced today by United States Attorney Jacqueline C. Romero.
The settlement resolves allegations that between 2013 and 2017, AdaptHealth (known during the period as QMES and Tri-County Medical Equipment and Supply LLC), itself and through certain of its related entities, knowingly and willfully billed federal payors for non-invasive ventilators (“NIVs”) when a patient was instead prescribed and used a BiPAP machine—for which federal payors reimburse suppliers thousands of dollars less per year. The settlement also resolves allegations that AdaptHealth continued billing federal payors for ventilators after patients no longer needed or were using them, and double-billed federal payors for some ventilator rentals in violation of program requirements.
“The integrity of our health care system depends on the government being able to rely on durable medical equipment providers to seek reimbursement for only those devices a doctor has prescribed for their patient and that the patient actually needs and uses,” said U.S. Attorney Romero. “Providers like AdaptHealth have an obligation to ensure that the equipment and devices they rent to patients are medically necessary and properly billed. When companies disregard that obligation to maximize their profits, this Office will hold them accountable.”
“When submitting false claims to federal healthcare programs, providers exploit the trust that they will bill in accordance with the law and instead use the reimbursement process to steal taxpayer dollars,” stated Maureen Dixon, Special Agent in Charge with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG, along with our law enforcement partners, will work to investigate and cease wrongful activity to protect federal healthcare resources.”
“The integrity of the Federal health care programs depends on the honest and accurate submission of claims,” said Conrad J. Quarles, Deputy Assistant Inspector General for Investigations, Office of Personnel Management Office of the Inspector General. “We applaud the efforts of our law enforcement partners and colleagues at the Department of Justice on today’s settlement.”
The settlement resolves a lawsuit originally brought by Michael J. Kelly, a former QMES employee, 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. Kelly will receive approximately $950,000 of the settlement.
The government’s pursuit of these matters 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 case is being handled by Assistant United States Attorneys Lauren DeBruicker and Veronica J. Finkelstein and Auditor Dawn Wiggins. This settlement was the result of a coordinated effort by the U.S. Attorney’s Office for the Eastern District of Pennsylvania; the Department of Health and Human Services, Office of Counsel to the Inspector General and Office of Investigations; and the Office of Personnel Management, Office of the Inspector General.
The lawsuit is captioned United States ex rel. Kelly v. QMES LLC, d/b/a Tricounty Medical Equipment and Supply, LLC, No. 17-cv-0199 (E.D. Pa.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
U.S. Attorney Announces Arson Charges Against Two Philadelphia Men for Pizza Shop Fire That Resulted in the Death of Firefighter Lt. Sean WilliamsonRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Al-Ashraf Khalil, 29, and Isaam Jaghama, 29, both of Philadelphia, PA, were charged by indictment with one count of conspiracy to commit malicious damage by means of fire of a building used in interstate commerce, and one count of malicious damage by means of fire of a building used in interstate commerce. Khalil was also charged with one count of wire fraud, and one count of using fire in furtherance of the commission of that wire fraud.
Khalil and Jaghama are charged with the arson at 300 West Indiana Avenue in Philadelphia on June 18, 2022, which resulted in the death of Philadelphia Firefighter Lieutenant Sean Williamson, and injuries to five other first responders, who were inside the building when it collapsed following fire suppression activities. Defendant Khalil was the owner of the property at 300 West Indiana Avenue, which contained both apartments and a business. According to the allegations in the indictment, Khalil and Jaghama set a fire inside 300 West Indiana Avenue so that Khalil could profit by filing an insurance claim related to the fire. According to the indictment, after the fire occurred, Khalil signed paperwork authorizing an insurance adjuster to file an insurance claim on his behalf. As alleged in the indictment, this claim was then filed on June 20, 2022.
If convicted, defendant Khalil faces a mandatory-minimum sentence of 17 years in prison, and up to a maximum of life in prison. If convicted, defendant Jaghama faces a mandatory minimum sentence of 7 years in prison and up to a maximum of life in prison.
The case was investigated by ATF Philadelphia and the ATF’s National Response Team, the Philadelphia Fire Department Fire Marshal’s Office, and the Philadelphia Police Department, with significant assistance provided by the Philadelphia Department of Licenses & Inspections. The case is being prosecuted by Assistant United States Attorney Amanda R. Reinitz.
An Indictment, Information, or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
United States Attorney's Office Launches Reentry Simulation Initiative to Commemorate National Second Chance MonthRead the Press Release
Philadelphia, PA - On Monday, April 17, 2023, in partnership with the National Constitution Center, United States Attorney Jacqueline C. Romero hosted a Reentry Simulation to raise awareness about the challenges that formerly incarcerated individuals face when they reenter society. The event marked the launch of the United State Attorney's Office’s "Reentry Simulation Kits," distributed to community organizations and other stakeholders to encourage greater understanding and support efforts to promote successful reintegration.
Reentry Simulations are designed to help people understand the significant challenges faced by citizens returning home from prison. Versions of this exercise have been facilitated by U.S. Attorney's Offices and community and criminal justice organizations nationwide.
The U.S. Attorney’s Office for the Eastern District of Pennsylvania redesigned the kits to facilitate conducting Simulations with easy-to-use, high-quality and reusable materials designed to replicate the challenges encountered such as obtaining identification, finding employment, and accessing essential services.
What is a Reentry Simulation?
The Simulation is a two-hour activity that prompts participants to walk in the shoes of someone who has just returned home from prison by providing them with tasks to complete within a certain amount of time.
The exercise is divided into four 15-minute segments, representing four weeks (the first month) of someone returning home. The participants receive a "wallet" with an "Identity Sheet," which lists information about their criminal offense and life circumstances. They also receive a "Life Card," which details the tasks they must complete, including complying with the terms of probation, finding a job, attending treatment, managing family responsibilities, paying bills, and purchasing food and transportation. The participants must move among several corresponding “stations” to complete the tasks at each station within the allotted time.
The Simulation is followed by a debrief and discussion about the criminal justice system and the complexities of Reentry. This exercise can create awareness about the barriers to Reentry, change perceptions about returning citizens and the criminal justice system, deepen empathy, and inspire people to think more about the workings of our criminal justice system.
“Promoting successful reintegration of formerly incarcerated individuals is why we are here today to commemorate National Second Chance Month with the launch of the Reentry Simulation Initiative," said U.S. Attorney Romero. "In my previous role as an Assistant United States Attorney, I participated in the office's Reentry Court for years and I saw the struggles. I hope that our Reentry Simulation Kits and numerous simulations hosted after today will open up many more eyes and inspire understanding."
The United States Attorney's Office is committed to raising awareness about the importance of Reentry and to supporting initiatives that promote successful reintegration into society. Over the next several months, the Office will facilitate Simulations across the District with law enforcement, community members, non-profits, and people from all walks of life. By working together, we can ensure that our returning citizens have the tools and resources they need to succeed in their journey home.
Third Defendant in Pleads Guilty in Double Armed Carjacking CaseRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Dayon Hackett, 20, of Philadelphia, PA, pleaded guilty today to one count of carjacking and one count of attempted carjacking. Hackett and his co-defendants, Jaheym Newsome, 20, of Philadelphia, and Taquan Mershon, 19, of Philadelphia, were charged by Superseding Indictment with these offenses in connection with an armed carjacking they committed on December 22, 2021, in the Bridesburg section of Philadelphia, and an attempted armed carjacking in South Philadelphia later that same day. Newsome and Mershon pleaded guilty to these same charges on March 20, 2023.
As detailed in the Criminal Complaints previously filed in this case, in the first incident, Hackett, Newsome, and Mershon carjacked a man at gunpoint as he prepared to head to work in early morning hours of December 22, 2021. The three men then took the car they stole in Bridesburg and drove it South Philadelphia, where they attempted to carjack a man who was coming home from work and looking for a parking spot. Hackett and Newsome opened the door to that vehicle and attempted to pull the victim out of the car. Upon observing a firearm on the victim’s lap, Hackett and Newsome opened fire on the victim, striking him multiple times. The victim returned fire and Hackett was struck multiple times. Hackett and Newsome then returned to the waiting vehicle that Mershon was driving, and Mershon and Newsome dropped Hackett on the floor of a nearby emergency room, fleeing in the vehicle they had carjacked earlier that morning. All three individuals were subsequently identified, charged by federal Criminal Complaint, and taken into custody. A grand jury returned the Superseding Indictment on September 13, 2022.
“Today’s guilty plea is another fine example of the successful partnership that is the Philadelphia Carjacking Task Force,” said U.S. Attorney Romero. “If you commit a violent offense like a gunpoint carjacking, you can expect the federal authorities to come knocking at your door.”
“ATF is on the frontline in the fight against violent crime, particularly armed carjackings,” said Eric DeGree, Special Agent in charge of ATF’s Philadelphia Field Division. “While we hope this case deters those willing to use gun violence against American citizens, ATF investigators stand ready to work with our local, state and federal partners whenever gun crime occurs in our community.”
The swift and relentless action to investigate and federally charge these defendants is the result of the Philadelphia Carjacking Task Force, which is comprised of members of the U.S. Attorney’s Office’s Violent Crime Unit; the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Philadelphia Police Department. The goal of the Taskforce is to stem the wave of armed carjackings and violent crimes through investigative and enforcement techniques meant to identify and refer for federal prosecution all who terrorize innocent victims through commission of these offenses within Philadelphia and surrounding areas.
After pleading guilty, Newsome is set to be sentenced on July 12, 2023, Mershon is set to be sentenced on July 24, 2023, and Hackett is set to be sentenced on August 14, 2023, before the Honorable Nitza I. Quinones-Alejandro.
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 Attorney Robert E. Eckert.
Former Philadelphia City Treasurer Sentenced to Prison for Immigration Fraud and Failure to File TaxesRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Christian Dunbar, 42, of Philadelphia, PA, the former Philadelphia City Treasurer, was sentenced to six months in prison, 3 years of supervised release, a $10,000 fine, and $33,202.00 in restitution to the IRS by United States District Court Judge Cynthia M. Rufe. His U.S. citizenship will also be revoked. As part of his application to become a U.S. citizen, Dunbar made multiple false statements, submitted altered citizenship papers, and failed to file federal tax returns in three separate tax years.
In May 2021, the defendant was charged by Superseding Indictment with multiple counts of filing a false income tax return and failure to file tax returns. Earlier, in September 2020, Dunbar was charged in a 14-count Indictment, charging embezzlement by a bank employee, procurement of naturalization through a false statement, procurement of naturalization unlawfully, obtaining false citizenship papers, and making false statements in support of naturalization.
The defendant previously admitted to procuring U.S. citizenship fraudulently by providing false information about where and with whom he was living, where his child was residing, and submitting a false lease and a false W-2 tax form to U.S. Citizenship and Immigration Services. Further, Dunbar admitted to not filing his personal income tax returns for tax years 2015, 2016, and 2019 (during the last of which he was serving as the Philadelphia City Treasurer).
“Christian Dunbar’s actions in seeking United States citizenship and serving as the City of Philadelphia’s Treasurer betrayed the ideals inherent in the precious privilege of U.S. citizenship, and the duty he owed to Philadelphians to oversee the City’s finances,” said U.S. Attorney Romero. “Our Office will continue to work with our law enforcement partners to hold public officials accountable.”
“As city treasurer, Christian Dunbar held a key position of public trust,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “Little did the people of Philadelphia realize that his U.S. citizenship was fraudulently obtained and he'd been dodging doing his taxes. Philly deserves better and the FBI will continue to work on behalf of the public to hold corrupt officials like Dunbar accountable.”
“Mr. Dunbar’s conscious decision to violate federal tax laws has cost him his freedom,” said IRS Criminal Investigation Special Agent in Charge Yury Kruty. “With the end of the tax filing season fast approaching, this should serve as another reminder of the importance for filing an accurate tax return. Failure to do so could lead to similar consequences.”
“Today’s sentencing of Mr. Dunbar illustrates HSI’s commitment to ensuring that our immigration system is void of fraud and deception, particularly from those entrusted with public office,” said Special Agent in Charge of HSI Philadelphia William S. Walker. “HSI will continue to tirelessly work with our partners in the U.S. Attorney’s Office, FBI, and IRS-CI to prosecute and to revoke any fraudulently obtained citizenship from those committing federal crimes and violating the trust of the people of Philadelphia.”
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigations, and Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Josh A. Davison.
York County Man Charged with Assaulting Federal Air MarshalRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Zachary William Easterly, 38, of Etters, Pennsylvania, was charged by Information with misdemeanor assault of a federal officer. Specifically, the Information alleges that on August 30, 2022, Easterly assaulted a Special Agent of the Federal Air Marshal Service who was engaged in the performance of his official duties.
If convicted, the defendant faces a maximum possible sentence of one year in prison, one year of supervised release, and a $100,000 fine.
The case was investigated by the Federal Air Marshal Service, an agency of the Department of Homeland Security, Transportation Security Adminstration.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Additional Federal Charges Brought in Superseding Indictment for Murder of Philadelphia Police Sergeant James O’ConnorRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that a Superseding Indictment was unsealed today in relation to the murder of Philadelphia Police Corporal James “Jimmy” O’Connor, posthumously promoted to Sergeant. The 31-count Superseding Indictment includes a RICO conspiracy, three additional counts of murder, nine non-fatal shootings, and related charges for Hassan Elliott, a/k/a “Haz,” age 25; Khalif Sears, a/k/a “Leaf,” a/k/a “Lil Leaf,” age 21; and two previously unnamed defendants, Kelvin Jiminez a/k/a “Nip,” age 32; and Dominique Parker, a/k/a “Dom,” age 31, all of Philadelphia.
The original Indictment charged the murder of Sergeant O’Connor, as well as related drug trafficking and firearms offenses.
The Superseding Indictment charges all four defendants with:
- conspiracy to participate in a racketeering (RICO) enterprise (1 count); and
- conspiracy to distribute a controlled substance (1 count).
Additional charges include:
- murder in aid of racketeering (4 counts);
- assault in aid of racketeering (9 counts);
- attempted assault in aid of racketeering (2 counts);
- possession of a firearm in furtherance of drug trafficking (1 count);
- using, carrying, brandishing, and discharging a firearm during a crime of violence (5 counts);
- murder in the course of using, carrying, and discharging a firearm (4 counts);
- possession with intent to distribute and distribution of a controlled substance (1 count);
- maintaining a drug involved premises (1 count); and
- possession of a firearm by a felon (2 counts).
The Superseding Indictment alleges that the defendants were members of a violent drug trafficking organization known as “1700 Scattergood,” which operated in the Frankford section of Northeast Philadelphia. The defendants allegedly sold large quantities of narcotics over a multi-year period, using violence and threats of violence to protect their reputation and drug territory. The Superseding Indictment alleges that in furtherance of that conspiracy, Elliott and others killed Kaseem Rogers on December 3, 2018; Tyrone Tyree on March 1, 2019; and Dontae Walker on August 22, 2019.
On March 13, 2020, Elliott, Sears, and others previously indicted were inside a stash house on the 1600 block of Bridge Street when Sergeant O’Connor and other members of the Philadelphia Police Department’s SWAT team arrived with a homicide warrant for Elliott related to the March 2019 murder of Tyrone Tyree. As Sergeant O’Connor and his fellow officers ascended the staircase to the second floor of the residence and announced their presence multiple times, Elliott allegedly fired a semi-automatic assault rifle 16 times, striking and killing Sergeant O’Connor.
If convicted, the defendants face a maximum possible penalty of lifetime imprisonment. In addition, contained within the Superseding Indictment is a Notice of Special Findings for defendant Elliott for each of the four charges of murder while using or carrying a firearm. These Notices make Elliott eligible for the death penalty.
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 Christopher Diviny, Ashley Martin, and Lauren Stram.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Diabetes Blood Test Distributor GlycoMark Agrees to Pay $195,000 to Settle False Claims Act AllegationsRead the Press Release
PHILADELPHIA—United States Attorney Jacqueline C. Romero announced that GlycoMark, Inc., a joint-venture subsidiary owned by Toyota Tsusho Corporation, Toyota Tsusho America, Inc., and Nippon Kayaku Co., Ltd., has agreed to pay $195,000 to resolve allegations that it violated the False Claims Act by encouraging its customers to submit claims for the GlycoMark test after the test was no longer approved for reimbursement to Medicare and Medicaid.
Between approximately 2016 and 2018, GlycoMark distributed the GlycoMark test, which was used to detect hyperglycemia and hyperglycemic excursions. According to GlycoMark, the GlycoMark test is used for a “more complete assessment of glycemic control to identify patients that may benefit from closer diabetes management.”
Prior to September 1, 2016, the GlycoMark test was eligible for reimbursement under Medicare’s Current Procedural Terminology (CPT) code 84378, providing coverage for a variety of tests related to blood sugars. In September 2016, a Medicare Administrative Contractor (MAC) issued Local Coverage Determination (LCD) L36761, specifically prohibiting Medicare reimbursement for the GlycoMark test, stating that the GlycoMark test was not reasonable or necessary for the management of diabetes, and is not covered. The non-coverage policy went into effect on October 17, 2016.
Despite knowing of the prohibition of Medicare reimbursement and being aware of the billing oversight for the GlycoMark test, the United States alleges that GlycoMark, from November 1, 2016 to May 30, 2019, knowingly caused to be submitted claims for GlycoMark tests that it knew were not covered by the Federal health care programs. The United States further contends that GlycoMark encouraged its customers to submit GlycoMark tests for Medicare reimbursement in two ways: (1) by encouraging labs to continue billing for the GlycoMark test using CPT code 84378; and (2) by printing and distributing marketing materials that stated “reimbursed by Medicare” and by displaying CPT code 84378 with no disclaimer that Medicare reimbursement is prohibited.
“We are committed to ensuring that testing manufacturing companies appropriately bill Medicare,” said U.S. Attorney Romero. “GlycoMark allegedly encouraged labs to charge the government for quantities of tests after it was aware that federal programs would not reimburse for this testing. Those who engage in these deceptive practices in the name of profits will be held accountable.”
“Testing manufacturing companies have a responsibility to follow Medicare regulations,” stated Maureen R. Dixon, Special Agent in Charge with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG is committed to working with the United States Attorney’s Office to investigate allegations of inappropriate insurance claims and to safeguard the integrity of our federal health care programs.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act. 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 case is captioned U.S. ex rel. Jeffery Johnston v. GlycoMark, Inc., et al., No. 2:18 -cv-5033 (E.D. Pa.) and was filed by Thomas W. Sheridan of Sheridan & Murray LLC in Philadelphia, PA.
The investigation was conducted by the U.S. Department of Health and Human Services Office of Inspector General. The investigation and resolution obtained in this action were handled by United States Attorney Jacqueline C. Romero and Auditor George Niedzwicki.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Philadelphia Man Convicted of Obtaining United States Citizenship by FraudRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Sumo Dukulah, 49, of Philadelphia, Pennsylvania was convicted today at trial of procurement of citizenship by a false statement and unlawfully arising from his failure to honestly answer questions during the naturalization process about his prior criminal activity, including his rape of a child under the age of thirteen.
The defendant was indicted by a grand jury on June 24, 2021 and charged with procuring citizenship through a false statement and with procuring citizenship unlawfully. The defendant, from September 27, 2011 to January 9, 2012, in submitting his application for citizenship and in his sworn affirmations at his interview at U.S. Citizenship and Immigration Services in Philadelphia, falsely declared that he had never committed a crime, when in fact, he had been raping a minor female.
“The guilty verdict for Sumo Dukulah sends a message that you will be held accountable for lying about your criminal background on federal immigration forms,” said U.S. Attorney Romero. “Those who would lie in order to secure the precious privilege of U.S. Citizenship put the integrity of our immigration system at risk.”
“Today’s conviction of Mr. Dukulah illustrates HSI’s commitment to ensuring that our immigration system is void of fraud and deception, particularly from those perpetrating such heinous criminal conduct,” said Special Agent in Charge of HSI Philadelphia William S. Walker. “HSI will continue to tirelessly work with our partners in the U.S. Attorney’s Office to prosecute and to revoke any fraudulently obtained citizenship from anyone that poses a threat to the most vulnerable amongst our communities.”
The case was investigated by Homeland Security Investigations, and is being prosecuted by Assistant United States Attorneys Josh A. Davison and Patrick Brown.
North Philadelphia Man Sentenced to nearly 10 Years as Maker of Illegal M-1000 Style DevicesRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that David Perez 37, of Philadelphia, PA, was sentenced to 110 months’ imprisonment, three years of supervised release, and ordered to pay $75,218.40 in restitution to the Philadelphia School District and $43,500 in restitution to Wells Fargo Bank by United States District Court Judge Michael M. Baylson for engaging in the business of manufacturing explosive devices, possession of explosives by a convicted felon, malicious damage to a building/institution receiving federal financial assistance, possession of firearm by a convicted felon, possession with intent to distribute a mixture and substance containing a detectable amount of phencyclidine (PCP), and conspiracy to commit bank fraud.
Perez previously pled guilty to manufacturing illegal explosive devices for several years prior to his arrest in June 2021. Devices consistent with those made by Perez were found at numerous post-blast scenes, including at multiple scenes where explosive devices were used to attempt to access ATMs in the summer and fall of 2020.
Perez admitted to using some of his homemade illegal explosive devices on July 4, 2020 in the courtyard of the Honorable Luis Munoz-Marin Elementary School in Philadelphia. Use of these devices caused extensive damage to property inside and outside the school, and resulted in damage to numerous windows. Repairs to the school cost more than $75,000.
Upon arrest Perez was found in possession of multiple firearms and distribution-level quantities of PCP in his home. He also participated in a bank fraud conspiracy, which led to a loss of $43,500 to Wells Fargo Bank.
"Perez's Sentencing today should serve as a cautionary tale to others considering producing, possessing, or selling an illegal explosive device," said U.S. Attorney Romero. "Detonating powerful explosive devices on the grounds of an elementary school, and possession of firearms and distribution-quantity PCP, all by a convicted felon, is the very definition of a threat to public safety. The U.S. Attorney's office, with our law enforcement partners, will continue to pursue these cases relentlessly, and David Perez will spend nearly ten years in federal prison."
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Social Security Administration – Office of Inspector General, and the Philadelphia Police Department, with substantial assistance from the Philadelphia Fire Marshal’s Office, and is being prosecuted by Assistant United States Attorney Amanda R. Reinitz.
Exton, Pennsylvania Lab Agrees to Pay $125,000 to Resolve Controlled Substances Act ViolationsRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Frontage Laboratories, Inc. (Frontage) has agreed to pay $125,000.00 to resolve allegations that it violated the Controlled Substances Act (CSA) by failing to maintain complete and accurate records of controlled substances and failing to keep one controlled substance secured. The United States’ investigation involved Frontage’s facility located 75 E. Uwchlan Ave., Exton, PA 19341. As part of the settlement, Frontage has entered into a two-year extension of its Memorandum of Agreement (MOA) with the Drug Enforcement Administration (DEA), which includes additional responsibilities regarding the handling of controlled substances. The MOA imposes compliance obligations significantly more stringent than those in the applicable laws and regulations.
Frontage is registered with the DEA as a Manufacturer of schedule I-V controlled substances. Based on an investigation, Frontage entered into a Memorandum of Agreement with the DEA on July 21, 2021. On May 9, 2022, a reinspection was completed on Frontage’s manufacturer registration. The investigators found record-keeping violations, including failure to separate Schedule I-II biennial inventory from Schedule III-V inventory, failure to document the correct amount of certain controlled substances on-hand, failure to record the date and quantity received on four receiving records, record the address and registration number of their own manufacturer and analytical lab on six transfers of controlled substances, and storing one controlled substance in a cabinet, rather than an approved safe.
Frontage acknowledged the seriousness of the issues, corrected the problems, hired new oversight staff, and accepted the extended MOA and the need to pay a penalty.
“Manufacturers who fail to maintain proper records of controlled substances create conditions ripe for diversion,” said U.S. Attorney Romero. “Companies have a responsibility to ensure that all controlled substances are tracked through the distribution chain. Our Office is committed to ensuring total compliance with the Controlled Substances Act, and we will vigorously enforce violations wherever we find them.”
Congress enacted the CSA to deter the illegal importation, manufacture, distribution, possession, and improper use of controlled substances, including prescription medications, and requires individuals and entities registered with the DEA to maintain complete and accurate records of all controlled substances and security systems so that controlled substances are not lost, stolen, or inappropriately dispensed.
The government’s pursuit of this matter demonstrates its commitment to combating diversion of controlled substances. The recordkeeping and other regulations applicable to DEA registrants, including manufacturers, are the tools by which the DEA deters drug diversion.
The investigation was conducted by the DEA’s Philadelphia Field Division, Diversion Regulatory Group 1 and the investigation and settlement was handled by Assistant U.S. Attorney Viveca D. Parker.
The claims resolved by this settlement are allegations only and there has been no determination of liability.
Justice Department Investigation Leads to Takedown of Darknet Cryptocurrency Mixer that Processed over $3 Billion of Unlawful TransactionsRead the Press Release
The Justice Department announced today a coordinated international takedown of ChipMixer, a darknet cryptocurrency “mixing” service responsible for laundering more than $3 billion worth of cryptocurrency, between 2017 and the present, in furtherance of, among other activities, ransomware, darknet market, fraud, cryptocurrency heists and other hacking schemes. The operation involved U.S. federal law enforcement’s court-authorized seizure of two domains that directed users to the ChipMixer service and one Github account, as well as the German Federal Criminal Police’s (the Bundeskriminalamt) seizure of the ChipMixer back-end servers and more than $46 million in cryptocurrency.
Coinciding with the ChipMixer takedown efforts, Minh Quốc Nguyễn, 49, of Hanoi, Vietnam, was charged today in Philadelphia with money laundering, operating an unlicensed money transmitting business and identity theft, connected to the operation of ChipMixer.
“This morning, working with partners at home and abroad, the Department of Justice disabled a prolific cryptocurrency mixer, which has fueled ransomware attacks, state-sponsored crypto-heists and darknet purchases across the globe,” said Deputy Attorney General Lisa Monaco. “Today’s coordinated operation reinforces our consistent message: we will use all of our authorities to protect victims and take the fight to our adversaries. Cybercrime seeks to exploit boundaries, but the Department of Justice’s network of alliances transcends borders and enables disruption of the criminal activity that jeopardizes our global cybersecurity.”
“Today's announcement demonstrates the FBI's commitment to dismantling technical infrastructure that enables cyber criminals and nation-state actors to illegally launder cryptocurrency funds,” said FBI Deputy Director Paul Abbate. “We will not allow cyber criminals to hide behind keyboards nor evade the consequences of their illegal actions. Countering cybercrime requires the ultimate level of collaboration between and among all law enforcement partners. The FBI will continue to elevate those partnerships and leverage all available tools to identify, apprehend and hold accountable these bad actors and put an end to their illicit activity.”
According to court documents, ChipMixer – one of the most widely used mixers to launder criminally-derived funds – allowed customers to deposit bitcoin, which ChipMixer then mixed with other ChipMixer users’ bitcoin, commingling the funds in a way that made it difficult for law enforcement or regulators to trace the transactions. As detailed in the complaint, ChipMixer offered numerous features to enhance its criminal customers’ anonymity. ChipMixer had a clearnet web domain but operated primarily as a Tor hidden service, concealing the operating location of its servers to prevent seizure by law enforcement. ChipMixer serviced many customers in the United States, but did not register with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and did not collect identifying information about its customers.
As alleged in the complaint, ChipMixer attracted a significant criminal clientele and became indispensable in obfuscating and laundering funds from multiple criminal schemes. Between August 2017 and March 2023, ChipMixer processed:
- $17 million in bitcoin for criminals connected to approximately 37 ransomware strains, including Sodinokibi, Mamba and Suncrypt;
- Over $700 million in bitcoin associated with wallets designated as stolen funds, including those related to heists by North Korean cyber actors from Axie Infinity’s Ronin Bridge and Harmony’s Horizon Bridge in 2022 and 2020, respectively;
- More than $200 million in bitcoin associated either directly or through intermediaries with darknet markets, including more than $60 million in bitcoin processed on behalf of customers of Hydra Market, the largest and longest running darknet market in the world until its April 2022 shutdown by U.S. and German law enforcement;
- More than $35 million in bitcoin associated either directly or through intermediaries with “fraud shops,” which are used by criminals to buy and sell stolen credit cards, hacked account credentials and data stolen through network intrusions; and
- Bitcoin used by the Russian General Staff Main Intelligence Directorate (GRU), 85th Main Special Service Center, military unit 26165 (aka APT 28) to purchase infrastructure for the Drovorub malware, which was first disclosed in a joint cybersecurity advisory released by the FBI and National Security Agency in August 2020.
Beginning in and around August 2017, as alleged in the complaint, Nguyễn created and operated the online infrastructure used by ChipMixer and promoted ChipMixer’s services online. Nguyễn registered domain names, procured hosting services and paid for the services used to run ChipMixer through the use of identity theft, pseudonyms, and anonymous email providers. In online posts, Nguyễn publicly derided efforts to curtail money laundering, posting in reference to anti-money laundering (AML) and know-your-customer (KYC) legal requirements that “AML/KYC is a sellout to the banks and governments,” advising customers “please do not use AML/KYC exchanges” and instructing them how to use ChipMixer to evade reporting requirements.
“ChipMixer facilitated the laundering of cryptocurrency, specifically Bitcoin, on a vast international scale, abetting nefarious actors and criminals of all kinds in evading detection,” said U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania. “Platforms like ChipMixer, which are designed to conceal the sources and destinations of staggering amounts of criminal proceeds, undermine the public’s confidence in cryptocurrencies and blockchain technology. We thank all our partners at home and abroad for their hard work in this case. Together, we cannot and will not allow criminals’ exploitation of technology to threaten our national and economic security.”
“Criminals have long sought to launder the proceeds of their illegal activity through various means,” said Special Agent in Charge Jacqueline Maguire of the FBI Philadelphia Field Office. “Technology has changed the game, though, with a site like ChipMixer and facilitator like Nguyen enabling bad actors to do so on a grand scale with ease. In response, the FBI continues to evolve in the ways we ‘follow the money’ of illegal enterprise, employing all the tools and techniques at our disposal and drawing on our strong partnerships at home and around the globe. As a result, there’s now one less option for criminals worldwide to launder their dirty money.”
“Together, with our international partners at HSI The Hague, we are firmly committed to identifying and investigating cyber criminals who pose a serious threat to our economic security by laundering billions of dollars’ worth of cryptocurrency under the misguided anonymity of the darknet,” said Special Agent in Charge Scott Brown of Homeland Securities Investigations (HSI) Arizona. “HSI Arizona could not be more proud to work alongside every agent involved in this complex international case. We thank all our domestic and international partners for their support.”
Nguyễn is charged with operating an unlicensed money transmitting business, money laundering and identity theft. If convicted, he faces a maximum penalty of 40 years in prison.
The FBI, HSI Phoenix and HSI The Hague investigated the case.
The U.S. Attorney’s Office for the Eastern District of Pennsylvania is prosecuting the case.
German law enforcement authorities took separate actions today under its authorities. The FBI’s Legal Attaché in Germany, the HSI office in The Hague, the HSI Cyber Crimes Center, the Justice Department’s Office of International Affairs and National Cryptocurrency Enforcement Team, EUROPOL, the Polish Cyber Police (Centralnego Biura Zwalczania Cyberprzestępczości) and Zurich State Police (Kantonspolizei Zürich) provided assistance in this case.
To report information about ChipMixer and its operators visit rfj.tips/Duhsup.
A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Justice Department Investigation Leads to Takedown of Darknet Cryptocurrency Mixer that Processed over $3 Billion of Unlawful TransactionsRead the Press Release
Philadelphia – The Justice Department announced today a coordinated international takedown of ChipMixer, a darknet cryptocurrency “mixing” service responsible for laundering more than $3 billion worth of cryptocurrency, between 2017 and the present, in furtherance of among other activities, ransomware, darknet market, fraud, cryptocurrency heists and other hacking schemes. The operation involved U.S. federal law enforcement’s court-authorized seizure of two domains that directed users to the ChipMixer service and one Github account, as well as the German Federal Criminal Police’s (the Bundeskriminalamt) seizure of the ChipMixer back-end servers and more than $46 million in cryptocurrency
Coinciding with the ChipMixer takedown efforts, Minh Quốc Nguyễn, 49, of Hanoi, Vietnam, was charged today in Philadelphia with money laundering, operating an unlicensed money transmitting business and identity theft, connected to the operation of ChipMixer.
“This morning, working with partners at home and abroad, the Department of Justice disabled a prolific cryptocurrency mixers, which has fueled ransomware attacks, state-sponsored crypto-heists and darknet purchases across the globe,” said Deputy Attorney General Lisa O. Monaco. “Today’s coordinated operation reinforces our consistent message: we will use all of our authorities to protect victims and take the fight to our adversaries. Cybercrime seeks to exploit boundaries, but the Department of Justice’s network of alliances transcends borders and enables disruption of the criminal activity that jeopardizes our global cybersecurity.”
“Today's announcement demonstrates the FBI's commitment to dismantling technical infrastructure that enables cyber criminals and nation-state actors to illegally launder cryptocurrency funds,” said FBI Deputy Director Paul Abbate. “We will not allow cyber criminals to hide behind keyboards nor evade the consequences of their illegal actions. Countering cyber crime requires the ultimate level of collaboration between and among all law enforcement partners. The FBI will continue to elevate those partnerships and leverage all available tools to identify, apprehend, and hold accountable these bad actors and put an end to their illicit activity.”
According to court documents, ChipMixer – one of the most widely used mixers to launder criminally derived funds – allowed customers to deposit bitcoin, which ChipMixer then mixed with other ChipMixer users’ bitcoin, commingling the funds in a way that made it difficult for law enforcement or regulators to trace the transactions. As detailed in the complaint, ChipMixer offered numerous features to enhance its criminal customers’ anonymity. ChipMixer had a clearnet web domain but operated primarily as a Tor hidden service, concealing the operating location of its servers to prevent seizure by law enforcement. ChipMixer serviced many customers in the United States, but did not register with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and did not collect identifying information about its customers.
As alleged in the complaint, ChipMixer attracted a significant criminal clientele and became indispensable in obfuscating and laundering funds from multiple criminal schemes. Between August 2017 and March 2023, ChipMixer processed:
- $17 million in bitcoin for criminals connected to approximately 37 ransomware strains, including Sodinokibi, Mamba and Suncrypt;
- Over $700 million in bitcoin associated with wallets designated as stolen funds, including those related to heists by North Korean cyber actors from Axie Infinity’s Ronin Bridge and Harmony’s Horizon Bridge in 2022 and 2020, respectively;
- More than $200 million in bitcoin associated either directly or through intermediaries with darknet markets, including more than $60 million in bitcoin processed on behalf of customers of Hydra Market, the largest and longest running darknet market in the world until its April 2022 shutdown by U.S. and German law enforcement;
- More than $35 million in bitcoin associated either directly or through intermediaries with “fraud shops,” which are used by criminals to buy and sell stolen credit cards, hacked account credentials and data stolen through network intrusions; and
- Bitcoin used by the Russian General Staff Main Intelligence Directorate (GRU), 85th Main Special Service Center, military unit 26165 (aka APT 28) to purchase infrastructure for the Drovorub malware, which was first disclosed in a joint cybersecurity advisory released by the FBI and National Security Agency in August 2020.
Beginning in and around August 2017, as alleged in the complaint, Nguyễn created and operated the online infrastructure used by ChipMixer and promoted ChipMixer’s services online. Nguyễn registered domain names, procured hosting services and paid for the services used to run ChipMixer through the use of identity theft, pseudonyms, and anonymous email providers. In online posts, Nguyễn publicly derided efforts to curtail money laundering, posting in reference to anti-money laundering (AML) and know-your-customer (KYC) legal requirements that “AML/KYC is a sellout to the banks and governments,” advising customers “please do not use AML/KYC exchanges” and instructing them how to use ChipMixer to evade reporting requirements.
“ChipMixer facilitated the laundering of cryptocurrency, specifically Bitcoin, on a vast international scale, abetting nefarious actors and criminals of all kinds in evading detection,” said U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania. “Platforms like ChipMixer, which are designed to conceal the sources and destinations of staggering amounts of criminal proceeds, undermine the public’s confidence in cryptocurrencies and blockchain technology. We thank all our partners at home and abroad for their hard work in this case. Together, we cannot and will not allow criminals’ exploitation of technology to threaten our national and economic security.”
“Criminals have long sought to launder the proceeds of their illegal activity through various means,” said Special Agent in Charge Jacqueline Maguire of the FBI’s Philadelphia Field Office. “Technology has changed the game, though, with a site like ChipMixer and facilitator like Nguyen enabling bad actors to do so on a grand scale with ease. In response, the FBI continues to evolve in the ways we ‘follow the money’ of illegal enterprise, employing all the tools and techniques at our disposal and drawing on our strong partnerships at home and around the globe. As a result, there’s now one less option for criminals worldwide to launder their dirty money.”
“Together, with our international partners at HSI The Hague, we are firmly committed to identifying and investigating cyber criminals who pose a serious threat to our economic security by laundering billions of dollars’ worth of cryptocurrency under the misguided anonymity of the darknet,” said Special Agent in Charge Scott Brown of Homeland Securities Investigations (HSI) Arizona. “HSI Arizona could not be more proud to work alongside every agent involved in this complex international case. We thank all our domestic and international partners for their support.”
Nguyễn is charged with operating an unlicensed money transmitting business, money laundering and identity theft. If convicted, he faces a maximum penalty of 40 years in prison.
FBI, HSI Phoenix and HSI The Hague investigated the case.
The U.S. Attorney’s Office for the Eastern District of Pennsylvania is prosecuting the case.
German law enforcement authorities took separate actions today under its authorities. The FBI’s Legal Attaché in Germany, the HSI office in The Hague, the HSI Cyber Crimes Center, the Justice Department’s Office of International Affairs, National Cryptocurrency Enforcement Team, EUROPOL, the Polish Cyber Police (Centralnego Biura Zwalczania Cyberprzestępczości) and Zurich State Police (Kantonspolizei Zürich) provided assistance in this case.
To report information about ChipMixer and its operators visit rfj.tips/Duhsup.
A criminal complaint is merely an allegation. All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Leader of Illegal Copyright Infringement Scheme Sentenced to 5 ½ Years’ ImprisonmentRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Bill Omar Carrasquillo, 36 years old, of Swedesboro, NJ, was sentenced to 66 months’ imprisonment, five years of supervised release, more than $30 million in forfeiture, and more than $15 million in restitution by United States District Court Judge Harvey Bartle III, for crimes arising from a wide-ranging copyright infringement scheme that involved piracy of cable TV, access device fraud, wire fraud, money laundering, and hundreds of thousands of dollars of copyright infringement.
As the Indictment set forth, from about March 2016 until at least November 2019, Carrasquillo along with his co-defendants operated a large-scale internet protocol television (IPTV) piracy scheme in which they fraudulently obtained cable television accounts and then resold copyrighted content to thousands of their own subscribers, who could then stream or playback content. The defendants also made fraudulent misrepresentations to banks and merchant processors in an effort to obtain merchant processing accounts. During the period of their scheme, the defendants earned more than $30 million. Carrasquillo, in particular, converted a large portion of his profits into homes and dozens of vehicles, including high-end sports cars. When agents attempted to seize those items pursuant to judicially-authorized warrants, Carrasquillo made false statements about and attempted to hide some of those vehicles, including a Freightliner recreational vehicle and a McLaren sports vehicle.
Carrasquillo was convicted of one count of conspiracy; one count of violating the Digital Millennium Copyright Act; 1 count of reproduction of a protected work; 3 counts of public performance of a protected work; 1 count of access device fraud; 1 count of wire fraud; 1 count of making false statements to a bank; 1 count of money laundering; 1 count of making false statements to law enforcement officers; and 1 count of tax evasion.
In addition to a sentence of 66 months’ imprisonment, the court ordered Carrasquillo to pay $10.7 million in restitution to the victim cable companies, more than $5 million in restitution to the IRS, and to forfeit over $30 million in illegal proceeds that he reaped from the scheme.
"Income gained from the infringement of copyrights is taken seriously, and the federal government will continue its commitment to protecting copyright holders, creators, and the millions of customers who enjoy the fruits of a strong intellectual property rights system," said U.S. Attorney Romero. "Carrasquillo and his co-defendants operated a large-scale cable piracy scheme. They fraudulently obtained cable television accounts and then resold copyrighted content to tens of thousands of subscribers across the country and abroad, earning over 30 million dollars in illicit revenue in about three years, none of which was reported on state or federal income tax return. Accordingly, today's sentencing of Omar Carrasquillo includes prison time and substantial forfeiture and restitution reflecting the severity of his actions."
“Making money off of someone else’s copyrighted work is theft, plain and simple,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “Mr. Carrasquillo hijacked all of this content, sold it to his subscribers, and lived large off the illegal proceeds. Today’s sentence should send a message that willfully stealing another party’s intellectual property is a serious crime and the FBI is committed to holding violators accountable.”
“Whether obtained legally or illegally, all income must be reported,” said IRS Criminal Investigation Special Agent in Charge Yury Kruty. Carrasquillo took multiple steps to evade his tax liability, including attempting to hide the source of his ill-gotten gains by depositing them into bank accounts held in names other than his own. Thanks to the hard work of IRS-CI and its law enforcement partners, Carrasquillo has been held accountable for his criminal conduct.”
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 Matthew T. Newcomer and Sara A. Solow, and DOJ Computer Crime and Intellectual Property Section Trial Attorneys Adrienne Rose and Jason Gull. Special Assistant United States Attorney David Weisberg and Assistant United States Attorney Lauren Baer also assisted with the prosecution, forfeiture, and restitution.
Co-Founder and Leader of a Violent Drug and Sex Trafficking Gang called the “Sevens,” Sentenced to Life Plus a Consecutive Ten YearsRead the Press Release
PHILADELPHIA, PA – United States Attorney Jacqueline C. Romero and announced today that Alexander Malave, 31, of Reading, Pennsylvania, co-founder and Top General of a gang he named the Sevens, was sentenced to lifetime imprisonment followed by a consecutive mandatory 10 years’ imprisonment.
Malave was one of 14 defendants charged with various offenses involving the violent acts of the Sevens gang, whose members represented other gangs such as the Gangster Disciples, Bloods, and Crips. Ten offenders pled guilty. Malave was convicted, along with Karvarise Person, 33; James Goode, 47 and Shaquile Newson, 29, by a jury on June 2, 2022, of offenses including conspiracy to participate in a racketeering enterprise; conspiracy to commit sex trafficking by force, fraud, and coercion, and of a minor; violent crime in aid of racketeering, including kidnapping and assault with a dangerous weapon; sex trafficking by force, fraud, or coercion; and discharging a firearm in the course of committing a violent offense - all arising from his leadership in in the “Sevens” gang, which took control over and operated out of a 50-room boarding house on South 4th Street in the City of Reading.
One trial witness testified that when the Sevens gang took over the boarding house, it was “like Russia invading Ukraine.” Malave was one of the gang’s most violence members. In the course of committing his violent offenses, he kidnapped, maimed, assaulted, imprisoned, and otherwise wreaked havoc and harm to those he encountered. For example, during one vicious attack, Malave grabbed a man from behind and savagely used a knife to slice him from ear to ear, causing him excruciating pain and permanent disfigurement. After he was sliced and maimed, the man was kept locked naked in a closet for three days, provided no food or water, during which time the Sevens gang members kept watch and discussed who would kill him. During the course of the three days, the man was also subject to additional beatings. On another occasion, Malave shot another individual in an attempt to demonstrate the Sevens gang’s power and control over the boarding.
“Today’s sentencing ensures the permanent end of Malave’s reign of terror over the City of Reading and the demise of the Sevens gang,” said U.S. Attorney Romero. “We will continue to partner with our local counterparts to bring the resources necessary to investigate, prosecute and dismantle violent gangs.
The sentencing of the “Seven’s” leader, Alexander Malave, to a lifetime in federal prison should serve as a warning to criminal organizations that perpetuate violence and terrorize our communities,” said HSI Philadelphia Special Agent in Charge William S. Walker. “HSI’s resolve to disrupt the abhorrent acts and to dismantle the criminal enterprises of gangs in order to restore safety to our community’s streets is and always will be absolute.”
"This Gang and its members were responsible for despicable criminal acts in our community," said John T. Adams, Berks County District Attorney. "Again, I would like to thank our Federal Partners for the collaborative effort with local authorities to dismantle this Criminal enterprise and for seeking Justice for the victims in this case. Hopefully, today's sentencing sends a message that this type of criminal conduct will not be tolerated in our community, and those that violate our Laws will receive significant penalties for their actions. "
“The sentencing of Alexander Malave to life in prison for his role as a leader in the Sevens gang will ensure that he will never again terrorize and prey on innocent victims like he did in the City of Reading,” said Reading Police Chief Richard A. Tornielli. “The Reading Police Department, with our partner law enforcement agencies, will continue to prioritize the investigation and dismantling of criminal organizations that conduct acts of violence in our city. I want to thank Homeland Security Investigations and the US Attorney’s Office for their hard work and collaboration on this and other cases that will continue to make the City of Reading a safer place.”
The case was investigated by Homeland Security Investigations and the Reading Police Department and is being prosecuted by Assistant United States Attorneys Sherri A. Stephan and Justin Ashenfelter.
Sherwin-Williams to Pay $1 Million to Resolve Alleged False Claims Act Violations Arising from Bridge Painting ProjectRead the Press Release
PHILADELPHIA, PA – United States Attorney Jacqueline C. Romero announced that The Sherwin-Williams Company has agreed to pay $1 million to resolve False Claims Act allegations that it participated in a scheme to defraud the federal Disadvantaged Business Enterprise (DBE) program in connection with a contract to paint the George C. Platt Memorial Bridge in Philadelphia.
Governed by statutes and regulations, the DBE program provides opportunities for small businesses owned by socially and economically disadvantaged individuals to work on federally funded projects by requiring that government contracts set goals for DBE participation. A government contractor may claim credit toward a DBE goal only if a DBE serves a “commercially useful function” on the project. A DBE does not serve a commercially useful function, however, if it acts as a mere pass-through, or extra participant, through which funds are passed to create the appearance that historically disadvantaged businesses did the work.
According to the government’s investigation, this was precisely the case with the Platt Bridge project. In 2011, Hercules-Vimas Joint Venture, LLC was awarded a $42.7 million contract by the Pennsylvania Department of Transportation (PENNDOT) to paint the bridge. The contract, funded largely by the federal government, required that a percentage of work be performed by a DBE. To meet this requirement, Hercules-Vimas subcontracted with Vertech International, Inc., a DBE certified in Pennsylvania, to supply materials.
The government contends that this arrangement was a sham. While Hercules-Vimas represented to PENNDOT that Vertech was the paint supplier, the government alleges that it worked directly with Sherwin-Williams, a non-disadvantaged business, to deliver paint and materials to the project site. Vertech merely created invoices designed to conceal the fraud in exchange for a nominal fee.
In 2016, the owner of Vertech pleaded guilty to criminal charges associated with his role in the fraudulent scheme, as did a Hercules-Vimas principal in 2017. In addition, the government reached a $310,000 civil settlement of False Claims Act allegations against Hercules-Vimas in 2020.
According to the government, Sherwin-Williams’ liability as a third-party supplier arises from its knowing complicity with the fraudulent scheme. The government contends that Sherwin-Williams maintained the ordered supplies in storage and delivered them directly to Hercules-Vimas’s job site, then submitted invoices for payment of paint and supplies to Vertech, with knowledge and intent that Vertech would, in turn, create invoices on Vertech’s letterhead, adding a 1.75% mark-up (representing Vertech’s profit) and submit those invoices to Hercules-Vimas for payment. This scheme, the government believes, enabled Hercules-Vimas to submit a substantially lower bid than competing bidders on the Platt Bridge Project because, unlike Hercules-Vimas’s bid, competing bids included the reasonable market value for commercially useful functions performed by Disadvantaged Business Enterprises.
“Because of this scheme, legitimate disadvantaged business owners were deprived of the very opportunities the DBE program was designed to create,” said U.S. Attorney Romero. “Sherwin-Williams must be held accountable because, without its agreement, the scheme would not have worked.”
“Preserving the integrity of DBE programs by unraveling the layers of fraudulent activities in federally funded highway projects remains an important point of focus for our Office of Investigations,” said Christopher A. Scharf, Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General Northeastern Region. “The significant financial settlement and compliance program reached today demonstrates our commitment to working with our law enforcement and prosecutorial partners on DBE schemes that adversely impact transportation programs in the Commonwealth of Pennsylvania and throughout the United States.”
The settled civil claims are allegations only. There has been no determination of civil liability. The investigation was conducted by the United States Department of Transportation Office of Inspector General and the United States Department of Labor Office of Inspector General. For the United States Attorney’s Office, Assistant United States Attorneys David Degnan, Eric Gill, and Bryan Hughes handled the investigation.
Philadelphia Man Found Guilty by Jury on Murder-For-Hire Charges; Attempted Homicide in Southwest Philadelphia ThwartedRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Darnell Jackson, a/k/a “Major Change,” 51, of Philadelphia, PA was convicted at trial of federal charges of murder-for-hire and possession of ammunition by a convicted felon.
The defendant orchestrated a murder-for-hire plot which stemmed from an ongoing state drug trafficking investigation. On Monday, July 19, 2021, and in the days immediately following, Jackson communicated with an individual via cell phone calls and text messages in an effort to arrange the killing of a different individual (the intended victim), sending a photo of the intended victim and indicating that he was willing to pay $5,000 to someone to commit the murder. Once the individual reported to the defendant that he had located the intended victim, they allegedly agreed that the killing would occur on the evening of Wednesday, July 21st.
That same evening, the individual called Jackson to report that the intended victim had been killed, but this was actually false. In response, the defendant replied that he was on his way to meet the individual in order to pay him for carrying out the murder. A few minutes later, Jackson was stopped by law enforcement while driving a vehicle in the vicinity of 65th Street & Guyer Avenue in Southwest Philadelphia. He was found in possession of a Glock-style Personally Manufactured Firearm (PMF or “ghost gun”) loaded with 16 live rounds of ammunition, and nowhere near the amount of $5,000. The defendant was immediately arrested and taken into custody pursuant to a Criminal Complaint.
“Every day, members of law enforcement agencies at all levels work tirelessly to prevent violent events from occurring in our city,” said U.S. Attorney Romero. “In this case, the work of the FBI and the Philadelphia Department of Police ensured the swift arrest and filing of a Criminal Complaint that stopped Darnell Jackson en route to an attempted murder plot.
“Darnell Jackson not only wanted his intended target dead, he was open to killing others in the process,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “Given his lack of respect for human life, he belongs behind bars and that’s exactly where the jury’s verdict today will keep him. The FBI and Philadelphia Police Department are committed to working together and bringing all our resources to bear, to take violent criminals like Jackson off the street for the safety of all Philadelphians.”
The case was investigated by the Federal Bureau of Investigation – Philadelphia Field Office and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Justin Ashenfelter.
Former Springside Chestnut Hill Academy Teacher Sentenced to over 38 Years on Child Pornography OffensesRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Andrew Wolf, age 42, of Philadelphia, PA, was sentenced today before United States District Court Judge Mark A. Kearney to 38 years and 10 months in prison, 5 years supervised release, $800 special assessment, $40,000 special assessment under the Justice for Victims of Trafficking Act, $150,000 in assessments under the Amy, Vicky, and Andy Child Pornography Victim Assistance Act, and a $50,000 in fines for multiple child exploitation offenses in connection with his scheme to manipulate and catfish children online, including his own middle school students.
In February 2022, the defendant and an accomplice were indicted on charges of conspiracy to manufacture child pornography, along with several counts of manufacturing and attempted manufacturing of child pornography. These charges, to which Wolf pleaded guilty in June 2022, stem from conduct which occurred over a period of one year. Between May 2020 and October 2021, Wolf and his accomplice developed and carried out an elaborate online child exploitation catfishing scheme, in which they impersonated minor girls to entice their child victims to self-produce and send them sexually explicit images. As part of their scheme, Wolf provided identifying information for his own middle school students to his accomplice so that the accomplice could target them online.
“Our Office and our law enforcement partners are committed to holding child sexual predators accountable,” said U.S. Attorney Romero. “Today’s sentencing will never make the victims whole; however, it should serve as a reminder to all of us that an open line of communication and discussion with our youth about the ever-evolving dangers on the internet are another key component to keeping our youth safe”.
“Over several years, Timothy Gritman collected hundreds of thousands of dollars to which he knew he wasn’t entitled,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “Needless to say, defrauding the government is a criminally bad idea and the FBI and our partners will continue to pursue anyone bold enough, and foolish enough, to do so.”
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Kelly Harrell.
Federal Jury Convicts Felon of Unlawful Possession of a Firearm in West PhiladelphiaRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Ramoine White, 39, of Upper Darby, PA, was convicted at trial of a single count of possession of a firearm by a felon.
On February 11, 2021, officers stopped White during a narcotics surveillance operation in the area of 5100 Arch Street in Philadelphia. Philadelphia Police Officers retrieved a Smith and Wesson, M&P, .40 caliber handgun loaded with 14 live rounds from White’s waistband. The defendant, who did not have a permit to carry that firearm, was also prohibited from possessing it due to his prior felony convictions which include possession with intent to distribute narcotics, aggravated assault, and firearms violations.
“This trial conviction exemplifies the ongoing commitment of the U.S. Attorney’s office to keep weapons out of the hands of people who are not permitted to possess them,” said U.S. Attorney Romero. “It is the partnerships and the hard work of our law enforcement partners that are critical in keeping our communities safe.”
“I want to congratulate our ICE ERO officers for their skill and dedication in tracking down this dangerous criminal,” said Enforcement and Removal Operations Philadelphia Field Office Director Cammilla Wamsley. “The interagency cooperation and professionalism of the officers and prosecutors led to the arrest of another person who threatens the safety of the American public.”
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 Department of Homeland Security - Enforcement and Removal Operations and is being prosecuted by Assistant United States Attorney MaryTeresa Soltis.
Local Man Posed as Dead Father to Steal Social Security and Pension BenefitsRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Timothy Gritman, 55, of Brodheadsville, PA pled guilty in U.S. District Court today to wire fraud and Social Security fraud for concealing the death of his father to steal his Social Security Administration Retirement Benefits ("SSA") and New York State pension benefits ("pension”) totaling approximately $204,985.
The defendant's father, Ralph Gritman, was 79 years old and in poor health in 2016 when he was last seen alive by relatives at defendant Gritman's Pennsylvania residence. In the summer of 2017, defendant Gritman relocated to Wyoming with his father. After that, the defendant posed as his dead father numerous times to continue receiving the SSA retirement benefits and the New York State pension.
Gritman obtained a Pennsylvania State identification card from the Department of Transportation Driver License Center in his father's name. Defendant Gritman was then photographed trying to disguise himself as an older man, holding the Pennsylvania State identification card he obtained of his father and appearing to use make-up to whiten his hair and eyebrows.
According to Medicare records, Ralph Gritman's health insurance was last used in September 2017 for an emergency visit to a Wyoming hospital. After that, his Medicare health benefits were never used again, but he was not reported deceased. Thus, his SSA and pension benefits continued to be paid to a joint account with the defendant. From approximately October 2017 to October 2022, defendant Gritman took Social Security and pension benefits intended for his father for his own personal use. While law enforcement has determined that Ralph Gritman is now deceased, his remains have not been found.
"Representing the United States in court means protecting taxpayer funds, including pursuing cases where there is an attempt to obtain money from the SSA fraudulently," said U.S. Attorney Romero. "Defendant Gritman physically represented himself as his elderly father to steal funds from the SSA. His guilty plea should serve as a warning that defrauding the SSA or any other government agency will never be worth money fraudulently obtained."
“Over several years, Timothy Gritman collected hundreds of thousands of dollars to which he knew he wasn’t entitled,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “Needless to say, defrauding the government is a criminally bad idea and the FBI and our partners will continue to pursue anyone bold enough, and foolish enough, to do so.”
“Mr. Gritman’s admission holds him accountable for the intentional concealment of his father’s death to steal government funds for his personal gain,” said Gail S. Ennis, Inspector General for the Social Security Administration. “I thank each agency for their investigative efforts, as well as the NYS Comptroller’s office for their work in this investigation, and the U.S. Attorney’s Office for prosecuting this case.”
“Timothy Gritman hid his father’s death to collect his pension and social security payments for more than four years, going so far as posing as his deceased father to keep his fraud going,” Thomas P. DiNapoli said. “Thanks to the work of my investigative team and our partners in law enforcement, he has been brought to justice. My office will continue to hold anyone who seeks to defraud the pension system accountable no matter who or where they are.”
“Timothy Gritman hid his father’s death to collect his pension and social security payments for more than four years, going so far as posing as his deceased father to keep his fraud going,” DiNapoli said. “Thanks to the work of my investigative team and our partners in law enforcement, he has been brought to justice. My office will continue to hold anyone who seeks to defraud the pension system accountable no matter who or where they are.”
The defendant faces a maximum possible sentence of 285 years' imprisonment, a three-year period of supervised release, a $3,750,000 fine, and a $1,500 special assessment.
The case was investigated by the FBI, Social Security Administration-Office of the Inspector General, U.S. Postal Inspection Service, and the New York State Office of the Comptroller and is being prosecuted by Special Assistant United States Attorney Megan Curran.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Man Pleads Guilty His Role in a Robbery Spree Targeting Latino Businesses in North Philadelphia One Year AgoRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Acia Moore, 20, of Philadelphia, PA, pleaded guilty today to two counts of attempted Hobbs Act robbery, one count of Hobbs Act robbery, and one count of carrying and using a firearm during the commission of a crime of violence. Moore and co-defendant, Omar White-Davis, 29, of Philadelphia, were charged by Indictment with these offenses in connection with multiple armed robberies of businesses in the Feltonville and Juniata sections of North Philadelphia, including Café Tinto restaurant on Wyoming Avenue, which was targeted twice in two days.
According to the Indictment, the defendants attempted to rob and did rob a variety of small businesses, both together and separately, stealing approximately $3,100 dollars total between November 21 and December 6, 2021. The incidents detailed are as follows:
- On November 21, 2021, White-Davis attempted to rob the Ariel Grocery, 2000 block of E. Pacific Street;
- On December 1, 2021, Moore robbed the Al-Molhem Store, 400 block of E. Wyoming Avenue;
- On December 2, 2021, White-Davis and Moore robbed Café Tinto, 100 block of E. Wyoming Avenue;
- On December 4, 2021, Moore returned to Café Tinto approximately 48 hours later and robbed it again;
- On December 6, 2021, Moore robbed the Leslie Mini Market, 4200 block of Bodine Street; and,
- Also on December 6, 2021, approximately an hour later, Moore and White-Davis attempted to rob the Hernandez Food and Deli Market, 4500 block of D Street.
“These defendants robbed small local businesses in the Feltonville and Juniata neighborhoods," said U.S. Attorney Romero. "They were so brazen that they targeted the same business twice in two days. We will remain dedicated to making our neighborhoods safer, and to working with our local, state and federal partners to identify, investigate, apprehend, and prosecute violent individuals like these defendants."
“Moore and his co-defendant went on a crime spree, targeting neighborhood businesses six times in just over two weeks and threatening their victims at gunpoint to terrify them into compliance,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “Now that they’ve admitted to their crimes, they'll be off the street and not able to menace innocent people who are just trying to make a living.”
After pleading guilty, Moore is set to be sentenced in April 10, 2023 before the Honorable Gerald A. McHugh.
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 Federal Bureau of Investigation and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Robert E. Eckert.
Philadelphia Auto-Mechanic Pleads Guilty to Trafficking Hazardous Automobile Airbags from ChinaRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline Romero announced that Emiliano Rodriguez, 45, a citizen of the Dominican Republic residing in Philadelphia, PA pleaded guilty to one count of trafficking in counterfeit goods, and two counts of causing the delivery of hazardous materials by air carrier in connection with a scheme to utilize counterfeit goods in used vehicles, which he then resold to unsuspecting customers.
From at least in or about January 2017 through on or about October 30, 2019, defendant Rodriguez, an auto mechanic, fraudulently imported airbags from China and installed these defective parts in salvaged autos which were then reintroduced to the consumer market. China has been identified as the largest exporter of counterfeit commodities, including counterfeit airbags. Persons involved in the trade of counterfeit airbags engage in this practice in an effort to increase profits from their sales by decreasing the costs of the parts used to replace the original items. Unsuspecting motorists purchase remanufactured vehicles unaware of the history or the substandard/defective part(s) used in the vehicle reconstruction. Once purchased and driven on public roads, the vehicles expose the driver, passengers and general public to the hazards associated with vehicle malfunctions due to the use of substandard parts. Some of these malfunctions may include tires prone to blow-outs, brakes unable to withstand the high temperatures associated with highway driving speeds, and airbags incapable of timely inflation or over-inflation that result in the death or serious injury of the driver or others exposed to the defective airbag. In this case, federal agents recovered more than 450 counterfeit airbags and parts from Rodriguez’s residence and business.
"Counterfeit airbags are playing Russian roulette with the lives of unsuspecting consumers," said U.S. Attorney Romero. "The National Highway Traffic Safety Administration notes that counterfeits have consistently been shown to malfunction. Emiliano Rodriguez peddled these airbags for profit, knowing lives would be at risk. Consumers must also be aware of the threat. Our office will continue to work with federal, state, and local law enforcement partners to keep these dangerous counterfeit products from being imported."
“Emiliano Rodriguez’s plea should serve as a potent warning that disreputable actors could circumvent our laws and safety protocols by using international commerce to obtain and install faulty, unsafe, and counterfeit equipment in order to make a profit,” said Special Agent in Charge of Homeland Security Investigations Philadelphia William S. Walker. “In all commercial transactions, we urge consumers to conduct their own research and only purchase from reputable dealers who have a verifiable track record of legal performance. The consequences of not doing so can be dire, including monetary losses or even the loss of life or limb.”
“Today’s announcement is a sober reminder that the safety of the public is put at grave risk when counterfeit airbags are illegally transported by air and later introduced into the market and cars traveling on our roads,” said Christopher A. Scharf, Special Agent in Charge, Department of Transportation Office of Inspector General, Northeastern Region. “As we continue working with our law enforcement and prosecutorial partners, we also encourage the public to review resources available at https://www.nhtsa.gov/equipment/air-bags#the-topic-fake-air-bags.”
The defendant faces a maximum possible sentence of 10 years’ imprisonment, three years of supervised release, fines of $50,000, and a $200 special assessment. As a non-U.S. citizen, he also faces deportation.
The case was investigated by the Department of Homeland Security, Homeland Security Investigations and the Department of Transportation, and is being prosecuted by Assistant United States Attorney M. Beth Leahy.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Eastern District of Pennsylvania’s U.S. Attorney’s Office Hosts Presentation on Autism-Based Discrimination in Schools, Camps, and Childcare FacilitiesRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that her Office, along with the United States Department of Education, Office for Civil Rights (“OCR”), in Philadelphia, hosted a panel presentation yesterday for disability rights organizations to discuss the problem of discrimination against children in public and private schools, camps, and childcare facilities, based on an autism spectrum diagnosis. The virtual event was attended by organizations that routinely work with families of children with disabilities.
The focus of the presentation was to inform the public of the efforts and enforcement tools of the United States Attorney’s Office and OCR to combat disability discrimination, with an emphasis on less-recognized and under-reported discrimination against children who have been diagnosed with autism.
The United States Attorney’s Office’s segment of the presentation focused on its primary tool to combat autism-based discrimination, the Americans with Disabilities Act (“ADA”). The Department of Justice enforces the ADA, which prohibits discrimination in a variety of settings because of disability. The presentation discussed the provisions of the ADA that apply to public and private schools, camps, and childcare facilities, and informed the public that these entities are required to comply with the ADA by providing disabled children with an equal opportunity to participate in programs, activities, and services.
To assist the public with identifying potential autism-based discrimination, and increase reporting, several examples of allegations investigated or resolved by the Department of Justice were discussed, including situations where children with autism were denied enrollment, disenrolled, or treated differently than other children in schools, camps, and childcare facilities.
“Autism is a spectrum condition, meaning that each child has different needs and abilities. The ADA prohibits schools, camps, and childcare facilities, whether public or private, from making blanket denials of enrollment, services, or activities without conducting an individualized assessment of the needs of children with autism. Our Office is committed to combating autism-based discrimination by helping the public identify and understand the options for reporting such potential violations of the ADA,” said U.S. Attorney Romero.
U.S. Attorney Jacqueline C. Romero; Assistant United States Attorney Stacey L. B. Smith, from the Civil Division of the United States Attorney’s Office in Philadelphia; and Andrea DelMonte, an attorney with the United States Department of Education, Office for Civil Rights in Philadelphia, presented to the attendees.
The United States Attorney’s Office encourages anyone who believes their child is being discriminated against by public or private schools, camps, or childcare facilities based on autism to review Department of Justice guidance and resources provided at www.ADA.gov, where complaints may also be filed. Individuals in Philadelphia and the surrounding counties of Berks, Bucks, Chester, Delaware, Lancaster, Lehigh, Montgomery, and Northampton may also file a complaint with the United States Attorney’s Office directly at 615 Chestnut Street, Suite 1250, Philadelphia, PA 19106, ATTN: Lauren DeBruicker, Civil Rights Deputy Chief. She may also be emailed at [email protected] or [email protected]
Individuals may also contact OCR at [email protected] to discuss the Department of Education’s enforcement options detailed during the presentation.
One Leader of a Violent Sex Trafficking Gang Sentenced to Life and a Consecutive Ten Years Imprisonment, and a Gang Associate Sentenced to 37 years ImprisonmentRead the Press Release
PHILADELPHIA, PA – United States Attorney Jacqueline C. Romero and announced that Karvarise Person, 33, of Reading, Pennsylvania, a member of the Gangster Disciples who “tied flags” with a gang called the “Sevens” in Reading and became one of its leaders, was sentenced to life imprisonment plus ten consecutive years’ imprisonment and ten years of supervised release. James Goode, 47, also of Reading, a drug supplier and associate the “Sevens” in Reading, was sentenced to 37 years’ imprisonment and 10 years of supervised release.
If either is ever released from prison, they will also be required to register pursuant to the Sexual Offender Registration and Notification Act.
Both Person and Goode were convicted along with Shaquile Newson, 29 and Alexander Malave, 31, by a jury on June 2, 2022, of offenses including conspiracy to participate in a racketeering enterprise; conspiracy to commit sex trafficking by force, fraud, and coercion, and of a minor; various violent crimes in aid of racketeering offenses including kidnapping and assaults with dangerous weapons; sex trafficking including of minors; and firearms offenses; all arising from their membership and association in a violent gang called “The Sevens,” which took control and operated out of a 50-room boarding house on South 4th Street in the City of Reading.
Person was a “general” in the Sevens gang, and trial evidence established that he was one of its most ruthless leaders. The Sevens operated primarily out of the boarding house. Person was one of 14 defendants charged with various offenses involving the violent acts of the gang, whose members represented other gangs such as the Gangster Disciples, Bloods, and Crips. One trial witness testified that when the Sevens gang took over the boarding house, it was “like Russia invading Ukraine.”
Person is the first of the gang members to be sentenced. In the course of his racketeering enterprise, he raped, robbed, caged, shot, violently beat, and caused others to do the same, under his command and leadership. Trial testimony described a shocking series of dehumanizing and violent acts. For example, victims were shot, assaulted with a baton, stabbed with a knife, and beaten with a hammer. A minor was forced to engage in a commercial sexual encounter while Person held a gun to her head; at other times, he also assaulted her with a baton and hammer and locked her naked in a dog kennel while he poked her with a knife through its bars.
Goode is the second member of the conspiracy to be sentenced. In the course of his racketeering enterprise, he distributed drugs, possessed multiple firearms, menaced a man and a woman with firearms, and raped a minor female and a woman at the boarding house. Trial testimony described Goode’s attempts to recruit women for commercial sexual encounters by raping and then paying them, and then withholding drugs from them, all in an attempt to groom and coerce the victims into sex trafficking. In addition, Goode held a close relationship with Sevens members by working alongside them to sell drugs, participating in meetings led by the Sevens leadership, and recruiting women for commercial sex at the boarding house.
“The demise of the Sevens gang was the result of the successful collaboration among local and federal authorities to dismantle a violent gang that terrorized the City of Reading,” said U.S. Attorney Romero. “We will continue to partner with our local counterparts to bring the resources necessary to dismantle violent gangs and restore peace and safety to the communities upon which they prey.”
“The Sevens gang inflicted depraved and unprecedented violence on its victims and on the communities of Reading. I hope today’s sentencing provides some solace and justice to those brutally victimized and exploited by the Sevens gang,” said HSI Philadelphia Special Agent in Charge William S. Walker. “It has been HSI Philadelphia’s privilege to partner with the Reading Police Department and the United States Attorney’s Office to rid the community of this predatory gang and to make our communities safer in the process.”
“The acts of this gang were despicable,” said John T. Adams, Berks County District Attorney. “Thanks to the collaborative efforts of local and federal law enforcement authorities, this gang and its leader will most likely never be released from prison, nor should they be. Hopefully this investigation and the penalties imposed will serve as a deterrent to rid our community of this type of criminal activity from occurring again. For those who continue to engage in this insidious behavior we will continue to investigate and prosecute them to the fullest extent of the law. I want to thank our federal partners for a job well done and we look forward to our continuing partnership to make our community a safe place to live.”
“The sentencing of Karvarise Person and James Goode was the result of a collaborative effort between the Reading Police Department and our partners in federal law enforcement,” said Reading Police Chief Torineilli. “The crimes committed by the Sevens gang, both directed and perpetrated by Karvarise Person, are some of the most violent, horrific, and inhumane acts we have ever witnessed in our community. While any sentence cannot undue the horrors the victims of this gang were forced to endure, they and our community can be assured that Person and his gang will no longer be able to terrorize our community.”
Sevens associates Shaquile Newson and Alexander Malave are scheduled for sentencing in Spring 2023.
The case was investigated by Homeland Security Investigations and the Reading Police Department and is being prosecuted by Assistant United States Attorneys Sherri A. Stephan and Justin Ashenfelter.
Speakeasy Operator Convicted for Possession of a Firearm by a FelonRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Edward Burgess, 45, of Philadelphia, PA, was convicted at trial of a single count of possession of a firearm by a felon, arising from an investigation of an illegal speakeasy by the Pennsylvania State Police, Bureau of Liquor Control Enforcement (BLCE).
In June 2019, BLCE officers conducted undercover surveillance of a local lounge selling alcohol and tobacco products without a license. They witnessed defendant Edward Burgess acting as a manager of the lounge and entering areas designated as "employees only." Philadelphia Police officers then conducted a raid of the lounge premises. When the officers were escorting the defendant away from the crowd, he pulled a loaded firearm from his waistband and threw it behind him, where it struck one of the undercover BLCE officers in the leg. The officer alerted a Philadelphia Police officer, who was able to retrieve the firearm. Defendant Burgess was previously convicted of a felony offense and is prohibited from possessing a firearm.
"Today's conviction at trial is a step forward to a safer Philadelphia," said U.S. Attorney Romero. "This case is an example of our close working relationship with our local and state partners to use federal criminal charges to make the community safer.”
“The outcome of this prosecution sends a positive message to the community on ATF’s commitment to keeping the public safe from firearms violence,” said Eric DeGree, Special Agent in charge of ATF’s Philadelphia Field Division. “Keeping our communities safe from violent felons like this will always be our top priority. This outcome highlights the value of the collaborative effort with our local, state, and federal partners to reduce violent crime.”
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 and the Philadelphia Police Department and is being prosecuted by Assistant United States Attorneys Anthony Carissimi and Bea Witzleben.
Retired New Jersey Doctor Admits to Fabricating Documents and Faking Diagnosis to Avoid TrialRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that William Merlino, 85, of Mays Landing, NJ, entered a plea of guilty before United States District Court Judge Gerald A. McHugh on one count of obstruction of justice, arising from his creation and submission of false and fictitious medical records and doctor’s letters, and causing them to be submitted to the District Court, in an effort to keep him from having to stand trial on separate felony charges.
In August 2021, Merlino was under indictment and awaiting trial on a felony misbranding charge for selling a toxic chemical as a weight-loss drug online. Merlino faked a diagnosis of pancreatic cancer and caused fraudulent submissions to the trial court, by altering a doctor’s letters and altering legitimate medical records. The misbranding trial was postponed for months until the documents were discovered to be falsified. In August, 2022, Merlino was convicted at trial of selling misbranded drugs online, arising from his scheme to sell the toxic industrial chemical DNP as a weight-loss drug which he manufactured in a lab in his home.
Merlino is scheduled to be sentenced on both the obstruction charge and the misbranding trial conviction on March 16, 2023.
"Dr. Merlino submitted fraudulent medical records and letters claiming to have pancreatic cancer in an effort to avoid trial for selling misbranded drugs online," said U.S. Attorney Romero. "Obstructing justice to dodge the judicial process with claims of such a deadly cancer is particularly egregious."
“The distribution of unapproved and dangerous drugs puts consumers’ health at risk,” said Special Agent in Charge George A. Scavdis, FDA Office of Criminal Investigations Metro Washington Field Office. “We will continue to pursue and bring to justice those who jeopardize the public health.”
The cases were investigated by 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.
Savani Group Owners and Associates Charged in Racketeering ConspiracyRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced today the unsealing of a sweeping 42-count indictment charging defendants Bhaskar Savani (56), Arun Savani (55), Niranjan Savani (51), Amen Dhyllon (45), Alesksandra Radomiak (44) - all of Montgomery County; and Sunil Phillip (56) of Bucks County, with a conspiracy under the Racketeering Influenced and Corrupt Organizations Act, or RICO as it is commonly called, alleging racketeering activity involving visa fraud, under 18 U.S.C. § 1546, related to a scheme to file false applications and petitions for H-1B visas; wire fraud, under 18 U.S.C. § 1343, related to a health care fraud scheme to fraudulently obtain Medicaid contracts and fraudulently bill Medicaid; money laundering, under 18 U.S.C. §§ 1956 and 1957, related to the laundering of the health care fraud proceeds; wire fraud, under 18 U.S.C. § 1343, related to a scheme to file false tax returns; and mail fraud, under 18 U.S.C. § 1341, related to the distribution and placement in human patients of prototype “Not For Human Use” dental implants that were not cleared by the U.S. Food and Drug Administration.
Bhaskar, Arun and Niranjan Savani, and defendants Vivek Savani (35), Bharatkumar Parasana (55), and Hiteshkumar Goyani (29), also of Montgomery County, PA and Piyusha Patel (41), a resident of Iowa, were charged with conspiracy to commit visa fraud, in violation of 18 U.S.C. § 371. Bhaskar, Arun and Niranjan Savani, and Piyusha Patel were charged with visa fraud.
Bhaskar and Arun Savani, and defendant Susan Malpartida (26) of Passaic County, NJ were charged with conspiring to obstruct a grand jury investigation.
Bhaskar, Arun and Niranjan Savani, Amen Dhyllon and Aleksandra Radomiak were charged with conspiracy to commit health care fraud, in violation of 18 U.S.C. § 1349, and various counts of health care fraud, in violation of 18 U.S.C. § 1347.
Bhaskar and Arun Savani, Sunil Philip and Amen Dhyllon were charged with conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). Bhaskar and Arun Savani were charged with various counts of money laundering, in violation of 18 U.S.C. §§ 1956 and 1957.
Bhaskar, Arun and Niranjan Savani and Sunil Philip were charged with a conspiracy to defraud the United States Treasury, in violation of 18 U.S.C. § 371, and wire fraud, in violation of 18 U.S.C. § 1343, for a scheme to file false tax returns.
Bhaskar and Niranjan Savani and defendant Jon Julian of South Carolina (70) were charged in a conspiracy to distribute adulterated and misbranded dental implants, in violation of 18 U.S.C. § 371.
As alleged in the indictment, the Savani brothers built a complex criminal enterprise (the “Savani Group”) that amassed millions of dollars through multiple fraud schemes. Bhaskar and Niranjan Savani were dentists by training. Defendant Arun Savani generally controlled the finances of the Savani Group. Through their criminal enterprise, the Savani brothers orchestrated long-running schemes to enrich themselves, including through:
- A visa fraud scheme to file false H-1B visa applications and petitions with the U.S. Department of Labor, U. S. Citizenship and Immigration Services, and the U.S. Department of State to exploit a workforce comprised of foreign nationals, mostly from India, who were dependent on the Savani Group, were forced to kickback wages and fees to the Savani Group.
- A health care fraud scheme to fraudulently obtain Medicaid contracts and fraudulently bill Medicaid using myriad of business entities and nominee business owners after Savani Group dental practices were terminated from Medicaid insurance contracts. The Savani Group defrauded Medicaid of more than $80 million through the scheme.
- A money laundering scheme to launder health care fraud proceeds through a complex web of financial transactions using numerous bank accounts at various banks.
- A wire fraud scheme involving false business expenses and the failure to report some taxable payroll to fraudulently decrease the amount of personal and payroll taxes due and owing. Through the scheme the Savani brothers and their companies failed to pay approximately $2 million in personal and payroll taxes, and fraudulently expensed through their businesses, among other personal expenses, improvements on a vacation property; payments to an elite private college preparatory school; college tuition payments; and car payments for personal cars of family members.
- A mail fraud scheme involving Osseolink USA LLC to place prototype “Not For Human Use” dental implants, not cleared by the U.S. Food and Drug Administration, in human patients without their knowledge or consent. Dental practices alleged to be involved in this scheme include AAA Signature Smile PC in Fort Washington, PA, and The Dental Retreat in Travelers Rest, SC.
If convicted, Bhaskar, Arun and Niranjan Savani, respectively, face a statutory maximum sentence of 430 years’ imprisonment, 425 years’ imprisonment, and 115 years’ imprisonment. Bhaskar and Arun Savani face fines of $10,750,000, and Niranjan Savani faces fines of $2,750,000. Other members of the RICO conspiracy face substantial sentences. Defendant Sunil Philip faces up to 105 years’ imprisonment and fines of $1,750,000; defendant Amen Dhyllon faces 110 years’ imprisonment and fines of approximately $2,500,000; and defendant Aleksandra Radomiak faces 50 years’ imprisonment and fines of approximately $1,000,000. The other defendants also face imprisonment and fines, as follows: defendants Vivek Savani, Bharatkumar Parasana, and Hiteshkumar Goyani each face 5 years’ imprisonment and fines of approximately $250,000 for their roles in the visa fraud conspiracy; Piyusha Patel faces 15 years’ imprisonment and a $500,000 fine for her visa fraud crimes; and defendants Jon Julian and Susan Malpartida each face 5 years’ imprisonment and fines of approximately $250,000 for conspiring to distribute adulterated and misbranded dental implants and obstruction of justice, respectively.
“This complex, multi-year investigation is an example of federal law enforcement at its best,” said U.S. Attorney Jacqueline Romero. “Through the coordinated efforts of almost a dozen state and federal law enforcement agencies, the United States Attorney’s Office for the Eastern District of Pennsylvania, the Money Laundering and Asset Recovery Section and Organized Crime and Gang Section of the Department of Justice, this group of dedicated public servants unraveled a tangled and complex web of alleged criminal activity designed to thwart justice. Through the unyielding work of all our law enforcement partners we were able to bring these charges and now will seek to hold persons accountable for these crimes.”
“Fraud and abuse take critical resources out of our healthcare system and cost taxpayers tens of billions of dollars each year,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “The FBI has been working alongside our state and federal partners on this investigation, we’re proud of the collaboration that’s led to these charges, and we’ll continue our joint efforts to hold anyone fleecing the U.S. government accountable.”
“Health care providers, who have a duty to practice in their patients’ best interests, are especially deceitful when they commit Medicaid fraud,” stated Special Agent in Charge Maureen R. Dixon with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “To assist in investigating the alleged illicit activity announced in today’s takedown, agents at HHS-OIG employed our suite of data analytics tools to identify and examine concerning trends. We will continue to work tirelessly with our partners to detect, investigate, and deter deception that jeopardizes the integrity of federal health care programs and services.”
“Criminal charges like the ones outlined in this indictment underscore the financial expertise and diligence of the IRS-CI special agents, who worked side-by-side with other federal law enforcement officers and the United States Attorney’s Office, to uncover these schemes and bring these charges against these defendants,” said IRS Criminal Investigation Special Agent in Charge Yury Kruty.
“The synchronized efforts of the diligent investigators and prosecutors who teamed together on this years-long investigation have been extraordinary,” said William S. Walker, Special Agent in Charge of HSI’s Philadelphia office. “One of HSI’s primary missions is to detect and dismantle criminal organizations who exploit financial systems to fuel their greedy endeavors. Results like those obtained through these indictments are only realized through teamwork and information sharing. Without the dedication and tireless work of the multiple agencies involved in this investigation, this fraudulent conspiracy might still be active today.”
“This is a perfect illustration of DSS’ global reach with our network of DSS agents and investigative teams at U.S. embassies and consulates worldwide, and our skill in uncovering larger criminal enterprises while investigating visa fraud allegations,” said Mike Escott, Resident Agent in Charge at the DSS Philadelphia Resident Office. “When a United States-based business engages in a conspiracy to commit visa fraud to illegally bring workers to the United States to exploit that labor, DSS partners with our allies to bring them to justice, protecting American
“FDA takes seriously the requirement that devices have the proper approval or clearance before being introduced into interstate commerce,” said Special Agent in Charge George A. Scavdis, FDA Office of Criminal Investigations Metro Washington Field Office. “We will continue to pursue those who skirt these requirements and jeopardize the public health.”
“An important part of the mission of the Office of Inspector General is to investigate allegations of fraud related to the foreign labor certification programs administered by the U.S. Department of Labor,” stated Syreeta Scott, Special Agent in Charge, Mid-Atlantic Region, U.S. Department of Labor, Office of Inspector General. “We will continue to work with our law enforcement partners to investigate these types of allegations.”
The case was investigated by the following agencies: the Federal Bureau of Investigation; Health and Human Services-Office of Inspector General; Internal Revenue Service-Criminal Investigations Division; Homeland Security Investigations; the U.S. Department of State’s Diplomatic Security Service; U.S. Food and Drug Administration-Office of Criminal Investigations; Department of Labor-Office of Inspector General; Pennsylvania Office of Attorney General; and State of Iowa Medicaid Fraud Control Unit.
The case is being prosecuted by Assistant United States Attorneys Lesley Bonney, Kevin Jayne, and Meaghan Flannery, and Department of Justice Money Laundering Section Attorneys Darrin McCollough, Senior Policy Advisor, and Colin Trundle, Trial Attorney. The asset seizure and forfeiture is being prosecuted by Assistant United States Attorney Sarah Grieb.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Dental Practice Owners Charged with Fraud and RICO ConspiracyRead the Press Release
Multiple dental practice owners and co-conspirators were charged in the Eastern District of Pennsylvania for allegedly engaging in a multifaceted racketeering conspiracy through a multi-state network of dental practices and related dental businesses.
On Jan. 18, a federal grand jury returned an indictment charging 12 individuals with operating and participating in a series of dental practices and related companies (the Savani Group) that engaged in visa fraud, health care fraud, wire fraud involving federal tax evasion, and money laundering. Six of the defendants were charged with being part of a racketeer influenced corrupt organization (RICO) conspiracy based on their roles in the Savani Group, and three defendants were also charged with obstruction of justice.
According to court documents, the defendants were allegedly part of a wide-ranging scheme to defraud Medicaid, U.S. Immigration authorities, the IRS, and the Food and Drug Administration (FDA), and to launder the fraud proceeds. Bhaskar Savani, 57, and Niranjan Savani, 51, both of Maple Glenn, Pennsylvania and both licensed dentists, owned and controlled the Savani Group dental practices. Arun Savani, 55, of Blue Bell, Pennsylvania, owned and managed the Savani Group companies and was responsible for the Savani Group’s financial affairs. The three brothers – Bhaskar, Niranjan, and Arun – allegedly conspired to recruit foreign workers for U.S. work visas while concealing the workers’ true job titles and responsibilities.
Sunil Philip, 57, of Newton, Pennsylvania, was an outside accountant for the Savani Group and personal accountant of Bhaskar, Arun, and Niranjan Savani. Philip, along with Bhaskar, Arun, and Niranjan Savani, allegedly engaged in a wire fraud scheme to evade federal taxes.
Amen Dhyllon, 44, of Wynnewood, Pennsylvania, was a licensed dentist for the Savani Group. Aleksandra Radomiak, 45, of Lansdale, Pennsylvania, was an employee and dental practice manager of the Savani Group. Dhyllon and Radomiak, along with Bhaskar, Arun, and Niranjan Savani, allegedly executed a scheme to use nominee owners of “on paper” dental practices to obtain and continue to profit from Medicaid contracts after managed care companies terminated the Savani Group dental practices’ Pennsylvania Medicaid contracts.
Jon Julian, 70, of South Carolina, was a licensed dentist for the Savani Group. Along with Bhaskar and Niranjan Savani, Julian allegedly conspired to place adulterated and misbranded dental devices in U.S. commerce.
Vivek Savani, 35, Bharatkumar Parasana, 55, and Hiteshkumar Goyani, 39, all of North Wales, Pennsylvania; and Piyusha Patel, 41, of Ankenny, Iowa, were employed under the H1B visa program under the pretense of serving in specialty occupations for the Savani Group but actually performed office support roles for the Savani Group’s dental practices.
Susan Malpartida, 27, of Passaic, New Jersey, served in an office support function and allegedly obstructed the investigation when she made false statements about a Savani Group employee’s job function.
The defendants and their charges:
Name
Charges
If convicted, each defendant faces maximum imprisonment of:
Bhaskar Savani
Conspiracy to commit racketeering, conspiracy to commit visa fraud, visa fraud, conspiracy to obstruct justice, conspiracy to commit health care fraud, health care fraud, money laundering conspiracy, money laundering, conspiracy to defraud the United States Treasury, wire fraud, and conspiracy to distribute an adulterated and misbranded medical device in interstate commerce.
Racketeering Conspiracy: (20 years)
Conspiracy to Commit Visa Fraud: (5 years)
Visa Fraud: (10 years)
Conspiracy to Obstruct Justice: (5 years)
Conspiracy to Commit Health Care Fraud: (10 years)
Health Care Fraud: (120 years)
Money Laundering Conspiracy: (20 years)
Money Laundering: (210 years)
Conspiracy to Defraud the United States Treasury: (5 years)
Wire Fraud: (20 years)
Conspiracy To Distribute an Adulterated and Misbranded Medical Device in Interstate Commerce: (5 years)
Arun Savani
Conspiracy to commit racketeering, conspiracy to commit visa fraud, visa fraud, conspiracy to obstruct justice, conspiracy to commit health care fraud, health care fraud, money laundering conspiracy, money laundering, conspiracy to defraud the United States Treasury, and wire fraud.
Racketeering Conspiracy: (20 years)
Conspiracy to Commit Visa Fraud: (5 years)
Visa Fraud: (20 years)
Conspiracy to Obstruct Justice: (5 years)
Conspiracy to Commit Health Care Fraud: (10 years)
Health Care Fraud: (120 years)
Money Laundering Conspiracy: (20 years)
Money Laundering: (210 years)
Conspiracy to Defraud the United States Treasury: (5 years)
Wire Fraud: (20 years)
Niranjan Savani
Conspiracy to commit racketeering, conspiracy to commit visa fraud, visa fraud, conspiracy to commit health care fraud, health care fraud, conspiracy to defraud the United States Treasury, wire fraud, and conspiracy to distribute an adulterated and misbranded medical device in interstate commerce.
Racketeering Conspiracy: (20 years)
Conspiracy to Commit Visa Fraud: (5 years)
Visa Fraud: (20 years)
Conspiracy to Commit Health Care Fraud: (10 years)
Health Care Fraud: (30 years)
Conspiracy to Defraud the United States Treasury: (5 years)
Wire Fraud: (20 years)
Conspiracy To Distribute an Adulterated and Misbranded Medical Device in Interstate Commerce: (5 years)
Sunil Philip
Conspiracy to commit racketeering, money laundering conspiracy, conspiracy to defraud the United States Treasury, and wire fraud.
Racketeering Conspiracy: (20 years)
Money Laundering Conspiracy: (20 years)
Conspiracy to Defraud the United States Treasury: (5 years)
Wire Fraud: (60 years)
Amen Dhyllon
Conspiracy to commit racketeering, conspiracy to commit health care fraud, health care fraud, and money laundering conspiracy.
Racketeering Conspiracy: (20 years)
Conspiracy to Commit Health Care Fraud: (10 years)
Health Care Fraud: (80 years)
Money Laundering Conspiracy: (20 years)
Aleksandra Radomiak
Conspiracy to commit racketeering, conspiracy to commit health care fraud, and health care fraud.
Racketeering Conspiracy: (20 years)
Conspiracy to Commit Health Care Fraud: (10 years)
Health Care Fraud: (20 years)
Jon Julian
Conspiracy to place adulterated and misbranded dental devices in commerce.
Conspiracy To Distribute an Adulterated and Misbranded Medical Device in Interstate Commerce: (5 years)
Vivek Savani
Conspiracy to commit visa fraud.
Conspiracy to Commit Visa Fraud: (5 years)
Bharatkumar Parasana
Conspiracy to commit visa fraud.
Conspiracy to Commit Visa Fraud: (5 years)
Hiteshkumar Goyani
Conspiracy to commit visa fraud.
Conspiracy to Commit Visa Fraud: (5 years)
Piyusha Patel
Conspiracy to commit visa fraud and visa fraud.
Conspiracy to Commit Visa Fraud: (5 years)
Visa Fraud: (10 years)
Susan Malpartida
Conspiracy to obstruct justice.
Conspiracy to Obstruct Justice: (5 years)
Bhaskar, Arun, and Niranjan Savani, Sunil Phillip, and Aleksandra Radiomak made their initial court appearances on Jan. 20 in the Eastern District of Pennsylvania.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division and U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania made the announcement.
The FBI, Homeland Security Investigations, IRS Criminal Investigation, U.S. Department of State Diplomatic Security Service, Department of Health and Human Services Office of the Inspector General, FDA, Department of Labor Office of the Inspector General, Pennsylvania Office of the Attorney General, Iowa Medicaid Fraud Control Unit, and Federal Aviation Administration are investigating the case.
Senior Policy Advisor Darrin L. McCullough and Trial Attorney Colin W. Trundle of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorneys Leslie S. Bonney, Meaghan A. Flannery, Sarah L. Grieb, and Kevin L. Jayne for the Eastern District of Pennsylvania are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former DeSales University Priest SentencedRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced today that William McCandless, age 59, of Elkton, Maryland, a former DeSales University priest, was sentenced to 37 months’ imprisonment followed by 15 years of supervised release. He is also required to register pursuant to the Sexual Offender Registration and Notification Act.
On May 27, 2022, McCandless pleaded guilty to access and attempted access with intent to view child pornography. In 2017, McCandless searched for images of young boys and accessed over 3000 web pages depicting and offering child sex abuse images. He also accessed dozens of stories which graphically detailed and described the sexual torture of young boys.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
“Those in positions of power and trust should never put the safety of our children in peril,” said U.S. Attorney Romero. “The actions taken by the defendants in Project Safe Childhood cases cause trauma and heartache for the victims and their families. Our office will continue pursuing these cases to help ensure our communities are safe.”
“For a priest and university faculty member to violate his position of trust by engaging in the depraved activity for which he previously pled guilty is reprehensible,” said William S. Walker, Special Agent in Charge for HSI Philadelphia. “Homeland Security Investigations and our law enforcement partners around the world will continue to coordinate closely to ensure our communities are protected from child predators who exploit vulnerable victims.”
The case was investigated by Homeland Security Investigations and the High Technology Investigative Unit of the Department of Justice’s Child Exploitation and Obscenity Section and is being prosecuted by Assistant United States Attorney Sherri A. Stephan.
Chester County Doctor Sentenced to Two Years in Prison for Operating Pill Mill Out of Main Line Pain ClinicRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Yutong Zhang, 64, of Berwyn, PA, a physician, was sentenced to two years in prison, and three years of supervised release by United States District Court Judge Michael M. Baylson for operating a pain management medical practice in St. Davids, PA, as a “pill mill.”
In February 2022, the defendant pleaded guilty to an Information charging four counts of distributing oxycodone-containing medications outside of the usual course of professional practice and for no legitimate medical purpose. From approximately 2016 through 2020, Zhang sold medically unnecessary prescriptions for oxycodone and other controlled substances to about 120 so-called patients, who were actually cash-paying customers. The defendant frequently supplied these prescriptions after conducting only a cursory physical examination or without any examination at all, and did not take steps, such as ordering diagnostic testing, designed to discern the root cause of the pain reportedly suffered by patients.
In a separate but related civil settlement, the U.S. Attorney’s Office and Zhang agreed to resolve his civil penalty liability under the Controlled Substances Act. Zhang agreed to pay $715,000 in civil penalties for his controlled substance prescribing. The civil settlement also permanently prevents Zhang from ever prescribing controlled substances.
“The U.S. Attorney’s Office is committed to fighting the opioid epidemic on all fronts, including prosecuting drug dealers who happen to have a medical degree,” said U.S. Attorney Romero. “As a physician, Yutong Zang was certainly aware of the inherently dangerous nature of the drugs he was selling, but he chose to profit from sales of prescriptions, instead of providing genuine medical treatment. His actions kept addicted customers returning to his office, contributing to the opioid crisis on the streets of Philadelphia.”
“Today we see yet another local physician going to prison for pushing powerful pills to addicts,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “We see a waste of all that education and experience, and we see a monstrous ethical lapse. Zhang and other doctors who deal oxycodone to anyone who can pay for it are directly fueling the opioid crisis and its mounting human toll here. The FBI is committed to holding accountable medical professionals who choose to throw away their oath and get involved in this dangerous drug diversion.”
“Dr. Zhang demonstrated a complete and utter disregard of his medical oath as a doctor by prescribing powerful prescription painkillers for no legitimate purpose and for profit only,” said Thomas Hodnett, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “In addition to his federal prison sentence, Dr. Zhang will have to pay a $715,000 civil penalty fine and is prohibited from ever prescribing controlled substances again.”
“As a physician, Dr. Zhang was trusted to care for his community,” said Acting Attorney General Michelle Henry. “He violated that trust by prescribing highly addictive drugs that fuel the opioid crisis throughout Pennsylvania. We will hold any individual, including health care professionals, accountable when they recklessly put the lives of others at risk."
“We are pleased to shut down this illegal operation within our community,” said Radnor Township Police Superintendent Chris Flanagan. “These ‘pill mills’ effect everyone involved; the user, their friends and their families. Over time they truly ruin lives. The teamwork from the F.B.I., U.S. Attorney’s Office, P.A. Attorney General Task Force Members, and Delaware County D.A., was instrumental to bring this case to prosecution. We encourage those struggling with drug addiction to seek support from the many free resources where they live. Please report “pill mills” or other drug activities to your local authorities so action can be taken."
The case was investigated by the Radnor Police Department, the Pennsylvania Office of the Attorney General, the Federal Bureau of Investigation, and the the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. The criminal case is being prosecuted by Assistant United States Attorney Elizabeth Abrams, and the civil settlement was handled by Assistant United States Attorney Anthony D. Scicchitano.
Bristol Man Facing Federal Charges After Threatening Incident at Federal CourthouseRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Anthony Lombardo, 44 of Bristol, PA has been charged by criminal complaint and warrant with attempting to murder and forcibly assault, intimidate, and interfere with, a federal law enforcement officer. Lombardo remains hospitalized and in federal custody.
This case is being investigated by the FBI’s Philadelphia Division and the United States Marshals Service. It is being prosecuted by Assistant U.S. Attorney Justin Ashenfelter.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former Philadelphia Restaurant Owner Sentenced to 15 Months for Tax FraudRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced today that Matthew Swartz, 50, of Fairmount, West Virginia, was sentenced to 15 month’s imprisonment, three years of supervised release, and ordered to pay $486,000 in restitution to the U.S. Department of Treasury.
In November 2020, the defendant pleaded guilty before United States District Court Judge Timothy J. Savage to failing to pay employee withholding taxes to the IRS from his employees’ taxes in 2014. Swartz, the owner of a group of Philadelphia area restaurants operating as the Grainery Group, was personally responsible for preparing the payroll for the company. As part of that responsibility, he prepared payroll stubs for employees that represented that taxes had been withheld from their pay and paid over to the IRS. In fact, Swartz did not pay to the IRS the taxes he withheld from the employee’s pay. As part of a plea agreement, Swartz acknowledged that he had failed to pay over withholding for the years 2011, 2012 and 2013, in addition to the charged conduct in the 2014 tax year.
The case was investigated by the Internal Revenue Service – Criminal Investigations and is being prosecuted by Assistant United States Attorney Richard Barrett.
Philadelphia, Lehigh Valley Postal Workers Agree to Repay Fraudulently Obtained Unemployment Assistance BenefitsRead the Press Release
PHILADELPHIA, PA – United States Attorney Jacqueline C. Romero announced that Jaire Chance, 27, of Philadelphia, has agreed to a consent judgment of $100,399, and Robert Day, 42, of Center Valley, Lehigh County, has agreed to a consent judgment of $110,610 to resolve allegations that they violated the False Claims Act by improperly seeking Pandemic Unemployment Assistance (PUA) benefits when they were employed by the United States Postal Service.
The United States alleges that Chance and Day made materially false and fraudulent statements to the Pennsylvania Department of Labor and Industry to obtain PUA benefits, meant for individuals not eligible for regular unemployment compensation or extended unemployment benefits. In fact, both were working full-time for the United States Postal Service for most or all of the time they were receiving PUA benefits. During that time, Day was also earning income as a driver using the Uber mobile application to arrange work. Further details regarding the United States’ allegations regarding conduct by Chance and Day can be found in the complaints filed in federal court, United States v. Jaire Chance, U.S.D.C. E.D. Pa. No. 2:22-cv-4626, and United States v. Robert Dean Day, U.S.D.C. E.D. Pa. No. 5:22-cv-4736.
“There is no excuse for any individual who fraudulently obtains money set aside to help victims of the COVID-19 pandemic,” said U.S. Attorney Romero. “The fraud alleged in this case is particularly egregious as it was perpetrated by a federal employee. The United States Attorney’s Office is ready to investigate and bring to justice any individual who abuses emergency assistance in this way.”
“It is alleged in the settlement agreements filed in court that Jaire Chance and Robert Day submitted weekly certifications, which falsely represented they were unemployed due to the COVID-19 pandemic, to the Pennsylvania Department of Labor and Industry’s Pandemic Unemployment Assistance (PUA) program. In actuality, they were employed full-time by the U.S. Postal Service for all or a majority of the period that they submitted the certifications. The submission of those certifications resulted in Chance and Day receiving PUA benefit payments that they were not eligible to receive. We will continue to work with the Pennsylvania Department of Labor and Industry and our law enforcement partners to safeguard unemployment compensation benefit programs,” said Syreeta Scott, Special Agent-in-Charge, Philadelphia Region, U.S. Department of Labor Office of Inspector General.
“The majority of postal employees are hard-working public servants dedicated to moving the mail to its proper destination. Unfortunately, Day and Chance betrayed this public trust when applying for unemployment benefits. The USPS-OIG, along with our law enforcement partners, will continue to aggressively investigate those who engage in fraudulent activities intended to defraud federal benefit programs and the United States Postal Service,” stated Jeffrey E. Krafels, Special Agent-in-Charge of the Mid Atlantic Area Field Office, United States Postal Service Office of Inspector General.
This investigation was conducted by United States Attorney’s Office for the Eastern District with investigators from the United States Postal Service Office of Inspector General and United States Department of Labor Office of Inspector General. Assistant United States Attorneys Paul W. Kaufman and Isaac J. Jean-Pierre handled the investigation and consent resolution.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Department of Justice Files Nationwide Lawsuit Against AmerisourceBergen Corp. and Subsidiaries for Controlled Substances Act ViolationsRead the Press Release
PHILADELPHIA – U.S. Attorney Jacqueline C. Romero, together with Associate Attorney General for the Department of Justice Vanita Gupta, U.S. Attorneys for the Districts of New Jersey, Colorado and Eastern New York, and representatives from the DEA and Justice Department’s Civil Division’s Consumer Protection Branch, announced that the Department of Justice filed a civil complaint today alleging that AmerisourceBergen Corporation and two of its subsidiaries, AmerisourceBergen Drug Corporation and Integrated Commercialization Solutions, LLC (together “AmerisourceBergen”), collectively one of the country’s largest wholesale pharmaceutical distributors and one of the largest companies in America by revenue, violated federal law in connection with the distribution of controlled substances to pharmacies and other customers across the country, thereby contributing to the prescription opioid epidemic.
The complaint alleges that this unlawful conduct resulted in at least hundreds of thousands of violations of the Controlled Substances Act (CSA). The Justice Department seeks civil penalties and injunctive relief.
“Companies like AmerisourceBergen that sell controlled substances across the country have a significant responsibility to ensure that their product is handled appropriately and that they comply with their federal legal obligations,” said U.S. Attorney Romero. “The allegations against AmerisourceBergen are disturbing, especially for a company that is headquartered only a few miles from neighborhoods in Philadelphia devastated by the opioid epidemic. This lawsuit sends a strong message to the community that companies who fail to comply with their controlled substance legal obligations will be held accountable.”
“The Department of Justice is committed to holding accountable those who fueled the opioid crisis by flouting the law,” said Associate Attorney General Vanita Gupta. “Companies distributing opioids are required to report suspicious orders to federal law enforcement. Our complaint alleges that AmerisourceBergen—which sold billions of units of prescription opioids over the past decade—repeatedly failed to comply with that requirement.”
“AmerisourceBergen, one of the largest wholesale distributors of opioids in the world, had a legal obligation to report suspicious orders to the Drug Enforcement Administration, and our complaint alleges that the company’s repeated and systemic failure to fulfill this simple obligation helped ignite an opioid epidemic that has resulted in hundreds of thousands of deaths over the past decade,” said DEA Administrator Anne Milgram. “The men and women of the DEA will stop at nothing to hold accountable registrants that fail to uphold their responsibility of saving American lives by filing suspicious order reports.”
Pharmaceutical distributors that sell controlled substances, including AmerisourceBergen, have a longstanding legal obligation to monitor the orders that they receive from pharmacies and other customers and must inform the Drug Enforcement Administration (DEA) each and every time they receive a suspicious order.
The complaint filed in the U.S. District Court for the Eastern District of Pennsylvania alleges that over the course of nearly a decade, from 2014 through the present, AmerisourceBergen violated the CSA by failing to report at least hundreds of thousands of suspicious orders of controlled substances to the DEA as required by law. The alleged unlawful conduct includes filling and failing to report numerous orders from pharmacies that AmerisourceBergen knew were likely facilitating diversion of prescription opioids. Today’s filing is the result of a multi-year investigation by the DEA, the Civil Division’s Consumer Protection Branch and several U.S. Attorneys’ Offices.
“For years, AmerisourceBergen put its profits from opioid sales over the safety of Americans” U.S. Attorney for the District of New Jersey Philip R. Sellinger said. “According to the Complaint, this was part of a brazen, blatant, and systemic failure by one of the largest companies in America to comply with its obligations to report suspicious opioid orders, contributing to the epidemic of opioid abuse throughout this country.”
“AmerisourceBergen, a wholesale drug distributor, flagrantly and repeatedly violated its obligation to notify DEA of suspicious orders for controlled substances, which directly contributed to the epidemic of prescription opioid abuse across the United States,” stated U.S. Attorney for the Eastern District of New York Breon Peace.
“When drug distributors like AmerisourceBergen fail to alert the DEA of suspicious orders of prescription drugs by pharmacies, they shirk a key obligation in dealing with addictive drugs that can end lives. This complaint makes clear that the Department of Justice will continue to hold accountable corporations that disregard the public’s safety for their own profit,” said U.S. Attorney for the District of Colorado Cole Finegan.
The government’s complaint specifies several pharmacies for which AmerisourceBergen allegedly was aware of significant “red flags” suggesting the existence of diversion of prescription drugs to illicit markets. The complaint asserts that AmerisourceBergen nevertheless continued to distribute drugs to the pharmacies for years and reported few suspicious orders to the DEA. The five examples include: two pharmacies, one in Florida and one in West Virginia, for which AmerisourceBergen knew the drugs it distributed were likely being sold in parking lots for cash; a New Jersey pharmacy that has pleaded guilty to unlawfully selling controlled substances; another New Jersey pharmacy whose pharmacist-in-charge has been indicted for drug diversion; and a Colorado pharmacy that AmerisourceBergen knew was its largest purchaser of oxycodone 30mg tablets in all of Colorado. The government further alleges that for this Colorado pharmacy, AmerisourceBergen specifically identified eleven patients as potential “drug addicts” whose prescriptions likely were illegitimate. Two of those patients subsequently died of overdoses.
The complaint further alleges that AmerisourceBergen not only ignored red flags of diversion, but also relied on internal systems to monitor and identify suspicious orders that were deeply inadequate, both in design and implementation. These systems allegedly flagged only a tiny fraction of suspicious orders, thereby enabling diversion and AmerisourceBergen’s failure to report orders it was legally obligated to identify to the DEA. In fact, the complaint asserts that in the midst of the opioid epidemic, AmerisourceBergen intentionally altered its internal systems in a way that reduced the number of controlled substances reported as suspicious. Even for the small percentage of orders that AmerisourceBergen did identify as suspicious, the company routinely failed to report them to the DEA.
The government’s complaint alleges that for years AmerisourceBergen flouted its legal obligations and prioritized profits over the well-being of Americans.
If AmerisourceBergen is found liable, it could face escalating civil penalties depending on when each violation occurred and the type of controlled substance at issue. Specifically: up to $10,000 for each reporting violation before November 2015, up to $16,864 for each violation between November 2015 and October 2018 and for each violation relating to a suspicious order for a non-opioid controlled substance not reported after October 2018, and up to $109,374 for each violation relating to a suspicious opioid order not reported after October 2018, potentially totaling billions of dollars in penalties. The court also may award injunctive relief to prevent AmerisourceBergen from committing future CSA violations.
The United States is represented in the filed action by Assistant U.S. Attorneys Anthony D. Scicchitano and Landon Jones for the Eastern District of Pennsylvania, in conjunction with Trial Attorneys Michael Wadden, Amy DeLine, and Deborah Sohn of the Department of Justice Civil Division’s Consumer Protection Branch, Assistant U.S. Attorneys Hayden Brockett and Jordann Conaboy for the District of New Jersey, Assistant U.S. Attorneys Amanda Rocque and David Moskowitz for the District of Colorado, and Assistant U.S. Attorneys Elliot M. Schachner and Diane Leonardo for the Eastern District of New York. The DEA collaborated with the Department to investigate the case.
The claims made in the complaint are allegations that, if the case were to proceed to trial, the government must prove by a preponderance of the evidence.
Collegeville Man Found Guilty for Scheme to Sell Fraudulent Canine Cancer-Curing Drugs to Pet OwnersRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Jonathan Nyce, 73, of Collegeville, PA, was convicted by a federal jury of wire fraud and the interstate shipment of misbranded animal drugs. The charges arise from a years-long scheme to defraud pet owners of money by falsely claiming to sell canine cancer-curing drugs.
In February 2020, the defendant was charged by Indictment for this scheme, which he operated by creating several companies, including “Canine Care,” “ACGT,” and “CAGT,” through which he purported to develop drugs intended to treat cancer in dogs. Using various websites for these companies beginning in 2012, the defendant marketed these “cancer-curing” medications to desperate pet owners, using the drug names “Tumexal” and “Naturasone.” The websites made numerous false and fraudulent claims regarding the safety and efficacy of these supposed drugs, including that “Tumexal is effective against a wide variety of cancers,” and, “[i]n fact, Tumexal will almost always restore a cancer-stricken dog’s appetite, spirit and energy!” As alleged, these drugs were nothing more than a collection of bulk ingredients from various sources, which the defendant blended together himself at a facility on Arcola Road in Collegeville.
Further, through email and telephone conversations, Nyce induced the owners of terminally ill dogs to pay him hundreds or thousands of dollars for these drugs by touting the effectiveness of his products in treating a host of canine cancers. He also told prospective customers that their pets could become part of clinical trials, but in order to do so, they had to pay him large sums of money. Evidence presented at trial showed the defendant sold nearly $1,000,000 worth of drugs to approximately 900 different victims. The defendant’s marketing, sale, and shipment of these drugs violated the Food and Drug Administration’s Food, Drug, and Cosmetic Act because the drugs were not approved by the FDA. The defendant even falsely claimed in promotional materials that his company’s research was “funded in part by the U.S. Food and Drug Administration.”
“When beloved pets become sick, caring owners look for treatments that can offer hope to keep their pet alive and comfortable,” said U.S. Attorney Romero. “Jonathan Nyce took advantage of that bond between pet and owner by defrauding customers and giving them false hope that they might be able to save their dying pet. That is both cruel and illegal, and we hope this verdict brings his victims a small measure of justice for their suffering.”
“The FDA’s animal drug approval process ensures that our pets receive safe and effective products. Ignoring the FDA’s requirements and selling unapproved drugs to vulnerable U.S. consumers will not be tolerated,” said Special Agent in Charge George A. Scavdis, FDA Office of Criminal Investigations Metro Washington Field Office. “We will aggressively pursue and bring to justice those criminals who place profits above the health and safety of animal patients."
The case was investigated by the Food and Drug Administration’s Office of Criminal Investigation with assistance from the Consumer Protection Branch of the Department of Justice, and is being prosecuted by Assistant United States Attorney Christopher E. Parisi.
Philadelphia Man Sentenced to 11 Years for Three Commercial RobberiesRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Nasir Wright, 25, of Philadelphia, PA, was sentenced to 11 years in prison and five years of supervised release by United States District Court Judge John Padova for three gunpoint robberies which occurred in January 2020.
In June 2022, the defendant pleaded guilty to three counts of Hobbs Act robbery; one count of the carrying, using, and brandishing a firearm in during a crime of violence; and possession with the intent to distribute heroin. The charges stem from a series of incidents which occurred almost two years ago in Philadelphia and Delaware County. First, on January 10, 2020, the defendant entered a Little Caesar’s restaurant on the 5900 block of Lancaster Avenue and placed an order. Once the cashier opened the register, the defendant jumped over the counter, grabbed $200 from the register and fled the area. Then, on January 20, 2020, the defendant entered the Family Dollar on the 6400 block of Rising Sun Avenue and went to the checkout line to pay for a bag of chips. When he reached the front of the line, Wright jumped over the top of the counter, pointed a silver firearm at two employees, took $300 from the cash register and fled the store. A few hours later, on the same date, the defendant travelled to the Family Dollar located on the 1400 block of Chester Pike in Sharon Hill, PA. Wright entered the store and browsed the aisles inside. After about 15 minutes in the store, he approached the counter with an item from the store. Wright gave the cashier a $5 bill and when the cashier opened the register, Wright jumped over the counter, pulled out a silver handgun, and pointed it at the cashier. The cashier then gave Wright $350 from the register and he fled the store.
Early the next morning, Upper Darby police officers located a vehicle that matched the description from the Sharon Hill robbery and observed that Wright was inside. When officers searched Wright’s vehicle, they recovered the silver handgun that he used to commit the robberies and six grams of heroin.
“Violent takeover robberies with firearms are terrifying for victims who are going about their daily duties to make a living,” said U.S. Attorney Romero. “Nasir Wright was determined to steal money from these businesses, growing bolder and more aggressive with each incident. This sentence of more than a decade in prison will keep him off the street, and we hope is a measure of justice for the victims.”
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, the Philadelphia Police Department, the Sharon Hill Police Department and the Upper Darby Police Department, and is being prosecuted by Assistant United States Attorney Robert E. Eckert.
Four Local 98 Employees Plead Guilty to Illegal Use of Union AssetsRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Michael Neill, 56, Marita Crawford, 53, Niko Rodriguez, 31, and Brian Fiocca, 31, all of Philadelphia, Pennsylvania, and all employees of Local 98 of the International Brotherhood of Electrical Workers (“Local 98”), entered pleas of guilty this week before United States District Court Judge Jeffrey Schmehl to federal charges arising from their personal use of the assets of Local 98 in ways that did not benefit the membership of Local 98 as a whole, including embezzlement of labor union assets, wire fraud, and theft from a union employee benefit plan.
All four were charged with former Local 98 Business Manager John Dougherty, who is set to stand trial with codefendant Brian Burrows, President of Local 98, on similar charges, in January 2023.
Michael Neill served as the Training Director of Local 98’s Apprentice Training Fund. He pleaded guilty to four counts of embezzlement of labor union assets, one count of theft from a union employee benefit plan, and one count of making and subscribing to a false federal income tax return. He is scheduled to be sentenced on April 7, 2023.
Marita Crawford served as Local 98’s Political Director. She pleaded guilty to four counts of wire fraud, the object of which was to obtain money and property from Local 98 by means of false and fraudulent pretenses, representations, and promises. She is scheduled to be sentenced on April 4, 2023.
Niko Rodriguez was employed by Local 98’s Apprentice Training Fund and by Local 98. He pleaded guilty to six counts of embezzlement of labor union assets. He is scheduled to be sentenced on April 4, 2023.
Brian Fiocca was employed by Local 98 as an office employee. He pleaded guilty to six counts of embezzlement of labor union assets. He is scheduled to be sentenced on April 6, 2023.
The Indictment returned in January 2019 alleges that from April 2010 through August 2016, defendants John Dougherty, Brian Burrows, Michael Neill, Marita Crawford, Niko Rodriguez, Brian Fiocca and others conspired and agreed to embezzle, steal, and convert to their use and the use of others, the funds, property, and other assets of Local 98 and of the Apprentice Training Fund, in violation of the IBEW constitution, the by-laws of Local 98, the interests of the members of Local 98, and federal law.
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, and 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; Anthony Carissimi; and Richard Barrett, Chief of the Office’s Criminal Division.