Eastern District of Pennsylvania

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Anton Perevoznikov, 34, of Brooklyn, NY, was sentenced to 4 years in prison, and 3 years of supervised release. by United States District Court Judge Joel H. Slomsky for his participation in a conspiracy to unlawfully export night-vision goggles and thermal-imaging devices to buyers in Russia.

In October 2018, the defendant pleaded guilty to one count of a federal Indictment charging him with conspiracy to unlawfully export defense articles. Between February 2011 and November 2013, the defendant conspired with three Russian co-conspirators to export technologically sensitive imaging devices from the United States without first obtaining from the Department of State the required license or written authorization for such exports. Perevoznikov also purchased night vision equipment from a United States vendor while acknowledging formally, in writing, that he understood that the items he was purchasing were legally precluded from export and by falsely affirming that he did not intend to export those items. The defendant’s Russian co-conspirators sent him wire transfers so that he could, in turn, purchase more than 30 pieces of night-vision and thermal-imaging devices worth over $100,000. On shipping documents, the defendant provided false descriptions of these regulated articles, including “case box,” “case for camera,” “camera and soft case,” “photo camera,” “camcorder,” and “jacket”.

“Individuals who seek to profit by unlawfully obtaining and exporting items designated by the United States as articles important to our national defense will be prosecuted with the full weight of the federal justice system,” said Acting U.S. Attorney Williams. “It is important that we take all necessary steps to prevent our military technology from being exported and possibly used against our service members and our allies overseas.”

"Perevoznikov admitted to a conspiracy to export night-vision goggles and thermal imaging devices to buyers in Russia, all of which can pose a threat to national security," said Brian Michael, Special Agent in Charge of HSI Philadelphia. "HSI Philadelphia's resolve to keep Americans safe is present in each arrest of those criminals seeking to make a profit while threatening the safety of our country."

The case was investigated by Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Thomas R. Perricone.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Sharon Jones, 44, of Philadelphia, PA, was arrested and charged by Indictment with one count of dealing in firearms without a license and six counts of making false statements to a Federal Firearms Licensee (FFL) during the purchase of firearms.

The Indictment alleges that between July and September 2020, during six separate transactions, the defendant purchased a total of 19 firearms from a FFL on York Road in Warminster, PA, and that she made false statements during each of the purchases. Specifically, she allegedly certified on an official Firearm Transaction Record that she was the actual buyer, and that she lived at an address on Hartville Street in Philadelphia. According to the Indictment, Jones purchased firearms from manufacturers including Smith & Wesson, Ruger, Sig Sauer, and two .40 caliber Glocks, all for the purpose of reselling them for profit. The defendant was taken into custody and made her initial appearance in federal magistrate court on Friday, August 27.

“The purpose of our ‘All Hands On Deck’ initiative is, first and foremost, to prevent violent crime, which includes targeting for prosecution prolific straw firearms purchasers,” said Acting U.S. Attorney Williams. “This defendant’s alleged actions certainly fit that description. By charging crimes like straw purchasing of firearms, where firearms are purchased in order to turn them over to people who are prohibited from legally buying or possessing them, we can cut off the supply of illegal weapons at the source.”

“ATF remains dedicated to investigating violent crime and disrupting straw purchasing schemes as this indictment alleges,” said Matthew Varisco, Special Agent in Charge of ATF’s Philadelphia Field Division. “Together, with our law enforcement partners, we will continue to take measures to ensure the safety of our communities and stop the flow of guns to individuals who cannot legally purchase them.”

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.

If convicted, the defendant faces a maximum possible sentence of 35 years in prison.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and is being prosecuted by Assistant United States Attorney Justin Oshana.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Jesse Golden, 30, of Philadelphia, PA, was sentenced to fifteen years in prison and three years of supervised release by United States District Court Judge Gerald J. Pappert. The defendant was convicted of illegally possessing a firearm and ammunition as a convicted felon after a three-day trial in May 2021.

In May 2019, a Philadelphia Police officer saw a video on the social media platform Instagram in which the defendant was sitting in a car with another individual and brandishing a distinctive painted-black revolver. Investigators determined that Golden had multiple prior felony convictions, so they obtained a search warrant for the defendant’s residence. During the execution of that warrant, investigators found an unloaded revolver and 100 rounds of ammunition the same caliber as the firearm. The revolver they found matched the look (including the paint job) of the firearm in the Instagram video. Evidence presented at trial showed that testing performed on the gun found DNA that matched the defendant’s DNA.

“The crime of being a felon in possession of a firearm is a serious offense, particularly in a city like Philadelphia, where gun violence is prevalent,” said Acting U.S. Attorney Williams. “The sentence handed down by the Court today reflects the seriousness of Golden’s crimes, and should serve as a deterrent to others engaged in the same conduct. Our Office is determined to continue doing everything we can to reduce gun violence in Philadelphia by being ‘All Hands On Deck’ to get criminals like Golden off the streets for a long, long time.”

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 Attorney David Ignall.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Ronald DeWitt Vines, 47, of Philadelphia, PA, pleaded guilty before United States District Court Judge Paul S. Diamond to attempted armed bank robbery and using, carrying, and brandishing a firearm during a crime of violence, in connection with an armed robbery he and his accomplices, who were two of his sons, attempted to carry out in Bucks County in late 2017.

In January 2018, the defendant was charged by Indictment for attempting to commit the armed robbery of the PNC Bank branch on Buck Road in Holland, PA, in November 2017. To execute the robbery, Vine placed a handgun against the side of a bank employee’s head, forcing her to open the bank door as she arrived for work that morning, and then forcing her inside the bank. A second bank employee screamed when she realized the bank was being robbed. Vines and his accomplices, sons Elijah and Solomon Vines, quickly fled the bank in a getaway vehicle before being stopped by Northampton Township Police Officers responding to a 911 call. A search by patrol officers of the getaway vehicle produced one loaded semi-automatic handgun, one loaded rifle, and two body armor vests.

“This defendant terrified and threatened the lives of bank employees who were just attempting to do their jobs, and he convinced his sons – young men with their whole lives ahead of them – to help him pull it off,” said Acting U.S. Attorney Williams. “The simple fact is that this family is a danger to the community. This case demonstrates why our All Hands On Deck initiative is so important: we are investigating and prosecuting the most violent criminals to get them off the streets and behind bars.”

“The terror of being forced into her bank at gunpoint is something that employee will likely never forget,” said Bradley S. Benavides, Acting Special Agent in Charge of the FBI’s Philadelphia Division. “Ronald Vines and his accomplice planned to rob a bank. It’s incredibly fortunate no one was hurt before the robbers opted to flee, and that police officers quickly spotted and stopped their getaway vehicle. Bank robbery isn’t an easy payday, it’s a federal crime, and the FBI and our partners will ensure perpetrators like Vines are held fully accountable.”     

The case was investigated by Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Northampton Township Police Department, and is being prosecuted by Assistant United States Attorney José R. Arteaga.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Delgardo Frazer, 52, of Phoenix, AZ, was sentenced to eleven years and three months prison, and four years of supervised release by United States District Judge Chad F. Kenney for organizing and leading an international cocaine trafficking operation which was discovered and dismantled in 2018.

In April 2021, the defendant pleaded guilty to all counts in a Superseding Indictment charging him with intent to distribute fentanyl, conspiracy to distribute cocaine, possession of a firearm in furtherance of drug trafficking, and possession of a firearm by a convicted felon. The charges stemmed from an incident during which Frazer was arrested near Philadelphia International Airport (PHL) in connection with drug smuggling.

For his illicit trafficking organization, the defendant recruited and paid several young women from Arizona to serve as “drug mules,” who would travel at his behest to various Caribbean locations and then deliver suitcases containing kilos of cocaine to him in Philadelphia, PA, and to his conspirators in Orlando, FL. As part of the trafficking conspiracy, Frazer also distributed fake oxycodone pills which, in fact, contained fentanyl. The operation came to an end in July 2018, when one of the “drug mules,” after traveling a circuitous route through the Caribbean, was stopped by federal agents at PHL with two suitcases containing over 4 kilograms of cocaine. Frazer was waiting at a nearby hotel in Essington, PA, to pick her up at the airport. When he learned that she was stopped by law enforcement, he told her on a phone call to take a cab to the nearest cheap hotel, and at the same time he packed up and abandoned the hotel room five days ahead of schedule. The defendant was unaware that the woman was with federal agents who overheard that call.

The defendant drove out of the hotel parking lot quickly, and a Tinicum Township police officer on routine patrol observe him commit multiple traffic violations. The officer stopped Frazer and searched his vehicle at an on-ramp to Interstate-95, at which point approximately 485 fake oxycodone pills containing fentanyl were found in the gas cap, and a semi-automatic 9 mm Luger handgun loaded with 12 live rounds was found in the trunk. Frazer had a prior felony drug conviction in Arizona and was therefore not permitted to possess a firearm.

“Drug distribution and gun violence are an epidemic in Philadelphia, and the federal government is aggressively prosecuting both in order to be ‘All Hands On Deck’ to get dangerous criminals like this defendant off the streets,” said Acting U.S. Attorney Williams. “Delgado Frazer was a large-scale drug trafficker who exploited women to do the ‘heavy lifting’ of bringing illegal narcotics into our country through Philadelphia and other airports, which puts those communities in grave danger. We want to thank our law enforcement partners in this case, HSI and DEA, for their hard work and dedication.”

“Frazer admitted to organizing an international drug trafficking ring, putting deadly drugs in the hands of those struggling with addictions.  HSI is committed to working with its law enforcement partners to ensure that those seeking to make a profit off the vulnerable are arrested to face the consequences of their criminal acts,” said HSI Philadelphia Special Agent in Charge, Brian Michael.

The case was investigated by the Homeland Security Investigations and the Drug Enforcement Administration, and is being prosecuted by Assistant United States Attorney Andrea G. Foulkes.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Robert Fryer, 39, of Perkasie, PA, was charged by Information with one count of conspiracy to commit mail and wire fraud, four counts of mail fraud, and 10 counts of wire fraud related to a scheme to embezzle and pocket fraudulent proceeds from the unauthorized sale of United States Open Championship (“U.S. Open”) tickets, one of four major championships for golf.

The filed Information alleges that the defendant was employed by the United States Golf Association (“USGA”) in its Admissions Office. Beginning in advance of the 2013 U.S. Open held at the Merion Golf Club in Ardmore, PA, and continuing through the 2019 U.S. Open held at the Pebble Beach Golf Links in Pebble Beach, CA, Fryer abused his position in the USGA Admissions Office in order to steal more than 23,000 U.S. Open admission tickets, all without the knowledge and consent of the USGA. The defendant then sold those stolen tickets to third-party ticket brokers in return for payments totaling more than $1 million, which was paid to Fryer mostly in the form of cash and PayPal transfers. According to the Information, the face value of the tickets that the defendant stole was more the $3 million.

The Information further alleges that the ticket brokers to whom Fryer sold the tickets bought them in bulk to then turn around and resell them to their customers. In fact, the Information alleges that the USGA had a strict 20-ticket cap on the number of tickets that it would sell to any one person, but these ticket brokers were able to acquire thousands of tickets to each U.S. Open by buying stolen tickets from Fryer.

According to the Information, Fryer delivered the stolen U.S. Open tickets to the ticket brokers in a variety of ways: sometimes in person, and sometimes by sending them via Federal Express or UPS, either to the ticket brokers themselves or directly to the customers of the ticket brokers. The Information alleges that one of the ticket brokers regularly emailed the defendant prepaid UPS shipping labels that he then used to send the tickets to that broker and that broker’s customers.

“The defendant allegedly stole revenue from a legitimate business that pays taxes, employs many, supports a non-profit organization, and brings excitement and income to our district with U.S. Open events at courses like the Merion Golf Club,” said Acting U. S. Attorney Williams. “Criminals that conduct ticket schemes like this prey on the excitement surrounding big events; fans should remember that any item with a low price that seems ‘too good to be true’ should be cause for caution and concern.”

“Robert Fryer allegedly engaged in a years-long scheme to steal and sell thousands of U.S. Open tickets,” said Bradley S. Benavides, Acting Special Agent in Charge of the FBI’s Philadelphia Division. “Fraud is simply not the answer, if you feel your paycheck isn’t up to par. The FBI takes seriously allegations of embezzlement and fraud and will investigate anyone engaged in this sort of criminal behavior.”

Fryer faces a maximum sentence 300 years in prison, three years of supervised release, a $3,750,000 fine, and a $1,500 special assessment. In addition, Fryer will be required to pay restitution to the USGA and forfeit the proceeds he obtained as a result of his fraud.

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Michael S. Lowe. Investigators appreciate the cooperation of the USGA in connection with this investigation.

An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Daniel King, 25, of Philadelphia, PA, was charged by Superseding Indictment with three counts of bank robbery; four counts of armed robbery of commercial businesses; one count of using and carrying a firearm during and in relation to a crime of violence; and one count of possessing a firearm after having been convicted of a felony. 

The Indictment alleges that the defendant robbed the following banks and commercial businesses: the Rite Aid on Windrim Avenue in Philadelphia on June 10, 2018; the PNC Bank on North Broad Street in Philadelphia on June 18, 2018; the Santander Bank on Easton Road in Wyncote on June 20, 2018; the Citizens Bank on South Easton Road in Glenside on June 16, 2018; the Family Financial Check Cashing on West Girard Avenue in Philadelphia on August  28, 2018; the Rite Aid on Rising Sun Avenue in Philadelphia on September 10, 2018; and the Walgreens in Yorktown Plaza in Elkins Park on September 17, 2018.

King allegedly robbed the pharmacies and the check cashing business while armed with a handgun. The Superseding Indictment further charges the defendant with knowingly possessing a firearm loaded with 18 live rounds of ammunition, while also knowing he had previously been convicted of a felony offense which precluded him from possessing firearms.

“As alleged, this defendant went on a prolific armed robbery spree in the summer of 2018, wreaking havoc on businesses and their employees,” said Acting U.S. Attorney Williams. “Law enforcement experts have said that the majority of violent crimes committed in and around Philadelphia are perpetrated by a small number of brazen criminals.  The charges in this Indictment are a perfect case-in-point and exactly why our All Hands On Deck initiative is committed to investigating and prosecuting the most violent criminals; by focusing on the most violent among us, we will have a big impact.”

“The FBI is committed to keeping the Philadelphia area and its citizens safe from predators like Daniel King. Today’s indictment sends a message to violent criminals that if you terrorize our community, we will find you and bring you to justice,” said Acting Special Agent in Charge Brian T. Herrick.

If convicted, the defendant faces a maximum possible sentence of life in prison, with a mandatory seven-year sentence, five years supervised release, and a $2,250,000 fine.

The case was investigated by the Federal Bureau of Investigation, the Philadelphia Police Department, and the Cheltenham Township Police Department, and is being prosecuted by Assistant United States Attorney Thomas M. Zaleski.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Dominic Luis Escalera, 37, of Allentown, PA, was charged by Indictment on charges of murder-for-hire and being a felon in possession of a firearm related to a plot to kill two individuals in the Allentown area earlier this year.

The Indictment alleges that from about January 28, 2021 to about February 17, 2021, the defendant used a cell phone and traveled from Newark, NJ to Allentown to arrange for the murders of two individuals, M.R. and A.R., and made an agreement to pay someone to commit the murders using controlled substances and cash. The Indictment further alleges that the defendant, knowing he had previously been convicted of a felony offense, illegally possessed a firearm loaded with four live rounds of ammunition. The previous felony conviction precludes the defendant from possessing a firearm.

“This is the second murder-for-hire case our office has announced in the last three weeks,” said Acting U.S. Attorney Williams. “These charges are a warning to anyone thinking that solicitation of homicide is a solution to your problems: This is not a game. If you try to hire someone to commit murder, you will face an aggressive federal investigation and very serious charges. Our office is committed to working with our law enforcement partners across the District to do all we can do prevent senseless violence.”

“This indictment illustrates the power of the combined efforts of ATF and our law enforcement partners,” said Matthew Varisco, Special Agent in charge of ATF’s Philadelphia Field Division. “The vigilant work of our law enforcement partners enabled them to prevent a murder and hold the defendant responsible for his alleged crimes. I want to thank the Allentown Police Department, the Pennsylvania State Police, and the U.S. Attorney’s Office for their continued effort in combatting violent crime.”

“The Pennsylvania State Police worked in collaboration with local, state, and federal law enforcement partners to ensure a thorough and prompt investigation,” said Major Jeremy Richard, director of the Pennsylvania State Police Bureau of Criminal Investigation. “I would like to extend my gratitude to these joint forces whose teamwork spoiled Mr. Escalera’s efforts. Plots to potentially harm or kill another person are serious crimes that carry severe consequences. The Pennsylvania State Police is committed to ensuring the safety of Commonwealth residents.”

If convicted, the defendant faces a maximum possible sentence of 30 years in prison, three years of supervised release, and a $750,000 fine.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Pennsylvania State Police, and the Allentown Police Department, and is being prosecuted by Assistant United States Attorney Thomas M. Zaleski.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Tri-County Hospitalists, LLC (“TCH”) has agreed to pay a total of $200,000 plus interest to resolve alleged violations of the False Claims Act by overbilling Medicare for advanced care planning (“ACP”) and tobacco cessation counseling (“TCC”) services. In many instances, TCH sought Medicare reimbursement for ACP and TCC services regardless of whether the counseling was necessary, voluntary, or performed with patient consent.

The settlement resolves allegations that, between January and September 2019, TCH engaged in a coordinated effort to defraud the United States by pressuring TCH personnel to seek Medicare reimbursement for ACP and TCC services for patients TCH treated, regardless of medical need. In most cases, the prerequisites for ACP and TCC services were not met and not every patient required the services that were billed. In some instances, TCH allegedly billed Medicare four or more times where ACP services were provided to a single patient over a short time frame with no evidence of any documented changes in patient condition to justify its billing activities. TCH also allegedly unnecessarily sought and received Medicare reimbursement for tobacco cessation counseling where patients did not use tobacco.

TCH is a physician-owned medical group that employs over 75 health care providers, also referred to as hospitalists, who specialize in internal medicine, family practice, pulmonary medicine, hospital medicine, emergency medicine and cardiology. TCH has offices in Philadelphia, Montgomery, and Chester Counties and provides its services in hospitals, skilled rehabilitation facilities, outpatient practices, and urgent care centers.

“Receiving payments from Medicare while providing medically unnecessary services to patients who rely on their doctors for their professional judgment cheats patients and defrauds the federal government,” said Acting United States Attorney Williams.  “This resolution represents our commitment to holding accountable those who engage in fraud that affects the residents of this city and this district.”

The allegations were brought by a former TCH hospitalist under the qui tam (or whistleblower) provisions of the False Claims Act. The qui tam provisions permit private parties to sue for false claims on behalf of the government and to receive a share of any recovery. The relator was represented by Christopher J. DelGaizo, Esquire of the Derek Smith Law Group, PLLC.

The government’s pursuit of these matters illustrates its 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 1-800‑HHS‑TIPS (1-800-447-8477). 

This case was investigated by the U.S. Attorney’s Office for the Eastern District of Pennsylvania with assistance by Auditor Dawn Wiggins. The lawsuit is captioned United States ex rel. Zeth Holbert v. Tri-County Hospitalists, LLC (“TCH”) et al., Civil Action No. 19-4099.

The claims resolved by this settlement are allegations only and there has been no determination of liability.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Mark Irvello, 56, of Broomall, PA; Stanley Woloff, 58, of Philadelphia, PA; David Abell, 72, of Chincoteague Island, VA; Stephen Kish, 65, of Philadelphia, PA; Rodney Martinez, 50, of Blackwood, NJ; Jesse Fleck, 43, of Philadelphia, PA; Peter Brauner, 58, of Kintersville, PA; James Turner, 59, of Horsham, PA; and John Brady, 60, of Blue Bell, PA; were charged in separate Criminal Informations with bribery and fraud offenses.

The Informations allege that at various times from 2013 through 2019, management-level employees working in SEPTA’s Bridges and Buildings Department (“BBD”) engaged in bribery and theft schemes with two SEPTA vendors, defendants Mark Irvello of MSI Tool Repair and Supply (“MSI”), located in Upper Darby, PA; and Stanley Woloff of Advantage Industrial Supply (“AIS”), located in Philadelphia, PA. The SEPTA managers alleged to have engaged in the scheme are David Abell, Stephen Kish, Rodney Martinez, Jesse Fleck, Peter Brauner, James Turner, and John Brady.

According to the Informations, the BBD is responsible for maintaining, repairing, and renovating SEPTA facilities throughout the southeastern Pennsylvania region. To facilitate this work, SEPTA issues “procurement cards” (also known as P-Cards) to management-level employees working in the BBD. The P-Cards, which operate as SEPTA credit cards, are to be used for purchasing items needed for the legitimate work of the BBD.

In about 2013, defendant Abell, who was a Senior Director of Maintenance at SEPTA, agreed with defendant Irvello of MSI, and separately, with defendant Woloff of AIS (collectively “the vendors”), to exploit the P-Card system for their mutual benefit. Abell solicited the vendors to provide him with regular cash payments of approximately $1,000 to $2,000 per month. In exchange for those payments, the vendors falsely billed SEPTA through the P-Card system for items that the vendor was not providing to SEPTA. The false charges to SEPTA covered the cash payments to Abell, plus a substantial additional amount to generate fraud proceeds for the vendor. As part of the corrupt deals with the vendors, Abell encouraged other BBD managers to use and continue to use MSI and AIS for SEPTA purchases, growing the vendors’ business with SEPTA. To conceal the scheme, Irvello and Woloff billed SEPTA for items that SEPTA might use, but in fact, did not need at that time, or billed SEPTA for substantially more of certain products than they were actually providing to the agency. The vendors thus combined legitimate with fraudulent billing, making the scheme difficult to detect.

At various times, beginning around 2014, several other SEPTA BBD managers began engaging in similar fraud activity with defendants Irvello and Woloff. Those managers included defendant Martinez, who in 2016 replaced Abell as Senior Director of Maintenance and took over Abell’s legitimate role in SEPTA’s BBD, as well as his role in the fraud and bribery scheme. Martinez regularly solicited cash payments from the vendors under the same arrangement that the vendors had with Abell. The cash payments to Martinez totaled over $144,000.

Other BBD managers, including defendants Kish, Fleck, Brauner, Turner, and Brady, individually solicited the vendors for cash and personal items. The vendors agreed to provide the cash and personal items to the managers, and then fraudulently billed SEPTA to cover the cost of those payments and products and to generate additional fraud proceeds for themselves.

The most prolific participant in this fraud scheme was defendant Kish. Kish had Irvello make over $225,000 in purchases to benefit Kish. In most of these cases, Kish directed Irvello to purchase specific precious metals, particularly gold coins, each worth thousands of dollars. The purchases included several American Gold Eagle Coins, Gold American Buffalo Coins, South African Gold Krugerrand Coins, Canadian Gold Maple Leaf Coins, Royal Canadian Mint Gold Bars, and PAMP Suisse Gold Bars. Defendant Kish is also alleged to have engaged in money laundering for using the proceeds of the scheme to purchase real estate. The other participants in the scheme also obtained numerous personal items, including a $5,000 backhoe attachment for defendant Brauner, ATV equipment for defendant Fleck, and numerous electronics, tools, articles of clothing, and automobile repairs for defendants Turner and Brady.

In connection with this scheme, the vendor companies owned by defendants Irvello and Woloff each became one of SEPTA’s largest billers through the P-Card system. In doing so, Irvello defrauded SEPTA of more than $540,000, and Woloff defrauded SEPTA of more than $330,000.

“Philadelphians deserve public employees who do their jobs honestly, without gaming the system to line their own pockets,” said Acting U.S. Attorney Williams. “At a time when SEPTA is facing significant challenges to continue faithfully serving its riders, many of whom have no other reliable, cost-effective transportation options, the defendants’ alleged actions perpetrating this fraud scheme are the definition of selfish greed.”

“The FBI is committed to tracking down public officials and servants who abuse their positions of trust for personal gain,” said Brian T. Herrick, Acting Special Agent in Charge of the FBI’s Philadelphia Division. “Public corruption erodes citizens' faith in their community servants, and it will continue to be the FBI’s top criminal investigative priority. Today’s indictment sends the message that the FBI will work tirelessly to protect government entities and services from fraud, waste and abuse.”

“SEPTA is a public trust. Employees who engage in fraud violate that trust and will face serious consequences,” said D. James Bannan, the Authority’s Inspector General. “The vast majority of SEPTA’s workforce are honest, hard-working individuals who are dedicated to providing critical public transportation service to our region. We will continue to do right by them, the taxpayers, and the riding public by holding those who engage in illegal activity accountable for their actions.”

If convicted, each defendant faces maximum sentences of at least 20 and as much as 40 years in prison.

The case was investigated by the Federal Bureau of Investigation with the assistance of SEPTA Office of Inspector General, and is being prosecuted by Deputy United States Attorney Louis D. Lappen. SEPTA’s Internal Audit Division launched an investigation after receiving tips from employees, and the Authority’s Inspector General shared the findings with the FBI.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

In our constitutional democracy, the court is the focal point of the entire criminal justice system; its mission is to serve the public by administering justice in a fair and impartial manner, by preserving each citizen’s constitutional rights, and by faithfully applying the rule of law in each individual case. The court’s ability to fulfill this mission – one that the Department of Justice shares with the court – depends on the public’s confidence in our judiciary as an institution. 

A recent paper by an organization called the Institute for the Quantitative Study of Inclusion, Diversity, and Equity claims that two judges in our District – Judges C. Darnell Jones II and Timothy J. Savage – have engaged in discriminatory sentencing practices. Our Office is the most frequent litigant before the U.S. District Court for the Eastern District of Pennsylvania. We can report that Judges Jones and Savage treat defendants fairly and even handedly, balancing the complexities presented in each case without regard to race or ethnicity. 

Putting aside questions about the paper’s methodology and underlying data set, what we have seen over many years is wholly inconsistent with the paper’s assertions. Simply put, it’s conclusion is belied by our experience appearing before these judges.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Wayde McKelvy, 59, of Aurora, Colorado, was sentenced to 18 years in prison, five years of supervised release, and ordered to pay $37 million restitution today by United States District Judge Joel Slomsky for operating a $54 million Ponzi scheme in one of the largest green energy frauds in U.S. history.

In October 2018, the defendant was convicted after trial of seven counts of wire fraud, conspiracy to commit wire fraud, securities fraud, and conspiracy to engage in securities fraud. The government established at trial that McKelvy and his co-conspirators ran an elaborate Ponzi scheme operating as Mantria Corporation, which received more than $54 million in fraudulently obtained new investor funds. The group promised investors huge returns, as high as 484%, for securities investments in supposedly profitable business ventures in real estate and green energy.  In reality, Mantria, based in Bala Cynwyd, PA, was a classic Ponzi scheme in which new investor money was used to pay “returns” to early investors, and the business generated meager revenues and no actual profits.

To induce investors to invest money, the defendant and his co-conspirators repeatedly made fraudulent representations and material omissions about the economic state of Mantria.   McKelvy also promoted himself as a financial wizard through aggressive marketing tactics, even though he had little financial acumen and was an unlicensed securities salesman. McKelvy operated what he called “Speed of Wealth” clubs, which advertised on television, radio and the Internet, held seminars for prospective investors, and promised to make them rich. During those seminars and other programs, McKelvy lied to prospective investors to dupe them into investing in Mantria. When the SEC shut down Mantria in November 2009, the pyramid scheme collapsed and was exposed. 

McKelvy’s co-conspirators, Troy Wragg and Amanda Knorr, who met as Temple University students, were previously sentenced for their involvement in this scheme to 22 years and two and a half years in prison, respectively.

“This case is a classic example of the warning: if it seems too good to be true, it probably is,” said Acting U.S. Attorney Williams. “McKelvy is nothing more than a twenty-first century snake oil salesman, with all of the trappings to make him appear to be a legitimate businessman. The defendant is clearly a danger to the investing public and deserves to be in prison for a very long time, as the government demonstrated at trial.”

“Wayde McKelvy didn’t care about green energy. The only ‘green’ on his mind was money,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “At his bogus financial seminars, he actively and enthusiastically duped people into investing in Mantria, even urging them to liquidate retirement funds and other assets to do so. When the teetering Ponzi scheme finally collapsed, many victims were left financially devastated. It’s the FBI’s duty to hold scammers like McKelvy and his co-conspirators accountable for the serious damage they’ve done.”

This case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Robert Livermore and Sarah Wolfe. Additionally, the U.S. Attorney’s Office appreciates the assistance of Securities and Exchange Commission.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Edward C. Kipp, 74, of Philadelphia, PA, was convicted today at trial of failing to register as a sex offender, as required by the Sex Offender Registration and Notification Act (SORNA), also known as “Megan’s Law.” Under Megan’s Law, sex offenders are required to register their home, work, and school addresses with state law enforcement, so that individuals can search a database and be aware of convicted sex offenders living, working, or attending school in their neighborhood.

In 2013, the defendant was convicted of possessing child pornography. Because of that conviction, he is required to register as a sex offender with the Pennsylvania State Police, and to verify that registration on an annual basis for 10 years. The defendant must also notify the State Police within three business days if there is any change in his residence. In 2020, Kipp absconded from federal supervised release and moved to a new residence without updating his registration. In September 2020, the defendant was charged by Indictment with one count of failing to register as a convicted sex offender.

“The purpose of Megan’s Law is to provide the public with current information about the whereabouts of sex offenders in order to ensure public awareness and safety,” said Acting U.S. Attorney Williams. “Failure to comply with the Megan’s Law registration requirement is not simply an administrative hiccup; it is a new federal crime. And if these offenders do not comply, we will aggressively prosecute.”

“The U.S. Marshals Service is pleased to lead Sex Offender Registration and Notification Act (SORNA) enforcement as part of Project Safe Childhood initiatives to diminish the risk posed by those that have the potential to dangerously endanger children,” said Eric Gartner, U.S. Marshal for the Eastern District of Pennsylvania.

“Parents and caregivers deserve to know if a sex offender lives next door,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “That's precisely why the registration and notification law was passed, to provide that critical information to the public and better protect children. Convicted offenders are required to advise the state police if their address of record changes. Edward Kipp was well aware of that, failed to do so, and is now being held appropriately accountable.”

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 Attorney’s 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 United States Marshals Service and the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorneys Jessica Rice and Nancy Rue.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Charles Salley, a/k/a “Dark Lo,” a/k/a “Ron Harvey,” 39, of Philadelphia, PA, was sentenced to seven and a half years in prison, one years of supervised release, and was ordered to pay a $10,000 fine by United States District Court Judge Mark A. Kearney for threatening a cooperating witness during a federal trial in November 2019.

Salley, a well-known Philadelphia-based rapper and member of the violent street gang “O.B.H.” (or “Original Block Hustlaz”), mailed a menacing letter to a witness on the eve of the witness’ testimony during a federal trial in which Salley’s O.B.H. associates were charged with drug trafficking and weapons possession. The letter threatened violence against the witness and the witness’ girlfriend if the witness told the truth during his testimony. Salley was then present in the courtroom during the course of the 2019 trial, including on the day of the witness’ scheduled testimony. Later that day, following the witness’ testimony, Salley was arrested at his home in Delaware and charged with witness tampering for sending the letter. Ultimately, the O.B.H. defendants were all convicted after trial and sentenced to lengthy prison terms. Salley will now join them.   

“Witness intimidation has no place in the criminal justice system and will be dealt with immediately so as to deter anyone else who might consider acting so reprehensibly,” said Acting U.S. Attorney Williams. “If you attempt to intimidate a federal witness, you will face federal charges of your own.”

“Imagine agreeing to be a federal witness against members of a violent drug gang and the day before you take the stand, one of their buddies threatens you and yours,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “This is exactly the type of thing our witness tampering laws are designed to prevent, as our justice system depends on witnesses being willing to share what they know. The FBI simply will not permit them to be targeted like this, in an attempt to subvert the rule of law. Charles Salley was hoping to keep his OBH associates out of prison. Instead, he finds himself behind bars as well, for quite some time.”

The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Justin Ashenfelter.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Mark Zulewski, Kaushal Patel, Patel’s company Kass Management & Consulting, LLC, and Patel-owned pharmacies Belmont Pharmacy, LLC; Bensalem Pharmacy; Big Oak Pharmacy, Inc.; Doylestown Drugs, LLC; Family One Pharmacy; Penndel Drugs, Inc.; Penlar Pharmacy; and Medical Plaza Pharmacy have agreed to pay $250,000 to resolve potential liability under the False Claims Act.

Zulewski was a pharmacist licensed in Pennsylvania when, in 2010, he was convicted by the Commonwealth of Pennsylvania of a felony controlled substance offense. As a result of the conviction, Zulewski’s pharmacy license was suspended and in 2011 he was excluded from participation in federal health care programs by the U.S. Department of Health and Human Services. 

The United States contends that Patel hired Zulewski to work in Patel’s pharmacies even though Patel knew that Zulewski had been convicted of a controlled substance offense, and that Patel allowed Zulewski to continue working in his pharmacies even after learning Zulewski was excluded from participating in federal health care programs as a result of his conviction. The United States further contends that, from August 2010 until March 2017, Patel gave Zulewski broad administrative authority as well as his pharmacist log-in credential so that Zulewski could manage Patel’s pharmacies and, on occasion, fill prescriptions as needed when pharmacists-in-charge at certain of the Kass pharmacies were unavailable.

The United States further contends that Zulewski, Patel, Kass Management, and the Patel-owned pharmacies knowingly and willfully disregarded Zulewski’s exclusion, resulting in the presentation of false or fraudulent claims for payment to the federal programs, including Medicare, Medicaid, and the Federal Employee Health Benefits Program. 

The Office of the Inspector General of the U.S. Department of Health and Human Services excludes people from participating in federal health care programs upon their conviction of certain crimes, including a controlled substance offense. A federal health care exclusion is intended to keep individuals who have violated the law out of Medicare, Medicaid, and Federal Employee Health Benefits programs to protect program beneficiaries and the integrity of 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 statute. Under these provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The suit was filed in the Eastern District of Pennsylvania and is captioned United States of America, ex rel. LaGrossa v. Kass Management & Consulting, LLC, et al., Civil Action No. 15-6844. The whistleblower’s attorneys are Gavin Lentz and Peter Bryant of Bochetto & Lentz, PC.   

“The United States will pursue those who violate a federal health care exclusion and those who knowingly allow excluded individuals to provide goods or services to federal program beneficiaries.” said Acting U.S. Attorney Williams. “An individual convicted of a controlled substances offense, as Zulewski was, must not be allowed behind the pharmacy counter during his exclusion to handle prescription drugs, including narcotics, and dispense them to federal program beneficiaries.”  

“Civil enforcement is an important tool in our ongoing battle against health care fraud,” said Maureen R. Dixon, Special Agent in Charge of the Office of the Inspector General for the U.S. Department of Health and Human Services. “We will continue to work closely with the United States Attorney’s Office to ensure the integrity of taxpayer funds and protect beneficiaries of federal healthcare programs.”

“Exclusions protect Medicare and Medicaid patients and safeguard the integrity of these vital programs,” stated Gregory Demske, Chief Counsel to the Inspector General for the U.S. Department of Health and Human Services. “Anyone who circumvents an exclusion undermines the goal of ensuring Medicare and Medicaid patients receive safe, appropriate, and high-quality, services.”

The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

This matter was investigated by the U.S. Department of Health and Human Services’ Office of Inspector General, the U.S. Office of Personnel Management’s Office of Inspector General, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania. This matter was handled by Assistant U.S. Attorney Judith A.K. Amorosa and Fraud Investigator Jeffrey Braun.

The claims resolved by this settlement are allegations only and there has been no determination of liability.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced today that Ivan Durasevic, 31, and Nenad Ilic, 41, both of Montenegro, were sentenced by United States District Court Judge Harvey Bartle III, on charges of conspiracy to possess with intent to distribute cocaine on a vessel subject to the jurisdiction of the United States. Durasevic was sentenced to six and a half years in prison and two years of supervised release. Ilic was sentenced to seven years in prison followed by two years of supervised release.

Durasevic and Ilic worked on board the MSC Gayane, a commercial shipping vessel, as crew members; Durasevic was the second officer and Ilic was the engineer cadet. For months in early 2019, Durasevic, and Ilic conspired with others to engage in a bulk cocaine smuggling scheme. On multiple occasions during the MSC Gayane’s voyage and while at sea, crew members including the defendants helped load bulk packages of cocaine onto the vessel from speedboats that approached the vessel in the middle of the night under cover of darkness. Crew members used the vessel’s crane to hoist cargo nets full of cocaine onto the vessel and then stashed the cocaine in the vessel’s shipping containers; they bent railings on the ship and pulled back doors on the shipping containers so they could fit the huge quantities of cocaine into the containers. After hiding the drugs among legitimate cargo, crew members used fake seals to reseal the shipping containers in which they had stashed the cocaine in order to disguise their clandestine activities and contraband. Durasevic and Ilic operated mobile “narco” phones to coordinate the bulk cocaine smuggling with others on land and recruited other crew members while at sea to assist in the scheme.

On June 17, 2019, federal, state, and local law enforcement agents boarded the MSC Gayane when it arrived at Packer Marine Terminal in Philadelphia and seized about 20 tons of cocaine worth over $1 billion U.S. dollars from its shipping containers in one of the largest drug seizures in U.S. history.

Five other crew members from the MSC Gayane involved in this smuggling scheme were arrested, pleaded guilty to conspiracy to possess with intent to distribute cocaine, and have previously been sentenced based on their participation in the scheme. These crew members include Bosko Markovic, 39, of Montenegro, the ship’s chief officer; Vladimir Penda, 27, of Montenegro, the fourth engineer; Stefan Bojevic, 29, of Serbia, the assistant reeferman; Fonofaavae Tiasaga, 29, of Samoa, an able seaman; and Laauli Pulu, 34, of Samoa, an ordinary seaman. A sixth crew member, Aleksandar Kavaja, 27, of Montenegro, the electrician, pleaded guilty and is awaiting sentencing.

“As the sentences for the illegal conduct in this case continue to happen, they serve as a reminder that drug smuggling operations will be uncovered one way or another,” said Acting U.S. Attorney Williams. “Prosecutors in our Office have been working non-stop to pursue justice since the MSC Gayane docked in the port of Philadelphia over two years ago, and we will not stop until the case is closed.”

The case is being investigated by Homeland Security Investigations and the United States Customs and Border Protection, together with a multi-agency team of federal, state, and local partners.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Kevin Smith, 27, of Philadelphia, PA, was charged by Indictment with sex trafficking by force and sex trafficking a minor. The charges against the defendant stem from his operation of a sex trafficking ring in Philadelphia and the surrounding region—including Bucks and Delaware counties.

The Indictment alleges that for about seven days at the end of September 2019, Smith knowingly recruited, enticed, harbored, transported, maintained a minor for the purposes of forcing that minor to engage in commercial sex acts in Philadelphia.  It also alleges that Smith operated a sex trafficking enterprise at various times over a period of two years from July 2015 to July 2017, during which he used physical threats to force three different young adult victims to have sex for money.

“The crimes Smith is accused of committing are some of the most devastating to victims that our office prosecutes,” said Acting U.S. Attorney Williams. “Allegedly, this defendant forced four young people, one a minor child, to sell their bodies for his financial gain. We will continue to work collectively to investigate these destructive crimes against the most vulnerable victims.”

“Using physical threats to control another human being, to force them into sexual exploitation, is unconscionable,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Kevin Smith allegedly did just that to three young women — and a child. The FBI will never stop working to find and help trafficked victims, to protect them from further abuse and keep their traffickers from hurting anyone else.”

If convicted, the defendant faces a maximum possible sentence of life in prison.

The case was investigated by the Federal Bureau of Investigation, with assistance from the Delaware County District Attorney’s Office, the Bensalem Police Department, the Media Borough Police Department, the Tinicum Township Police Department and the Philadelphia Police Department. The case is being prosecuted by Assistant United States Attorneys David Metcalf and Brittany Jones. 

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that David Carbonaro, 28, of Upper Darby, PA, was sentenced to twenty-two years and one month in prison, lifetime supervised release, and was ordered to pay $38,000 in restitution by United States District Court Judge Chad F. Kenney for numerous child exploitation offenses including abusing a three-year-old in order to produce pornography.

The defendant pleaded guilty in November 2019 to charges of production, distribution, and possession of child pornography, stemming from his horrendous sexual abuse of minor child in his care when she was just a toddler. Carbonaro conducted “photo shoots” of Minor #1, as she is referred to in court documents, in sexualized poses and directed his co-defendant Kayla Parker, to sexually abuse Minor #1 for his viewing pleasure. Law enforcement came upon the evidence of these deplorable crimes while investigating the defendant for distributing child pornography over the internet. The search warrant executed at Carbonaro’s residence in Delaware County yielded thousands of images of child pornography in his collection, including nine images depicting the sexual abuse of Minor #1. 

“This is a truly horrifying case. Sexually exploiting and abusing a three-year-old child is simply too awful for most people to even think about,” said Acting U.S. Attorney Williams. “Strong law enforcement collaboration between our Office, Homeland Security Investigations and the Pennsylvania Office of Attorney General resulted in justice for this defendant and his victims. Anyone we find abusing children in this District we will held accountable for their crimes.”

“Children are among the most vulnerable members of our Commonwealth, and thanks to the strong communication and collaboration with our federal and state law enforcement partners, we were able to hold the defendant accountable for his abhorrent crimes,” said Attorney General Josh Shapiro. “My Office will always stand up for survivors of sexual abuse.”

“Rescuing children from these predatory violators is a top priority for Homeland Security Investigations,” said Brian A. Michael, Special Agent in Charge for Homeland Security Investigations Philadelphia. “HSI Special Agents and our state and local partners will spare no resource and will exhaust every effort to hunt them down and bring them to justice.  Working closely together with the Pennsylvania Attorney General’s Office as HSI did in this case, we will continue to investigate and prosecute those who commit the particularly heinous crimes of producing, distributing, and possessing child pornography.”

The case was investigated by Homeland Security Investigations and the Pennsylvania Office of the Attorney General, and is being prosecuted by Assistant United States Attorney Josh A. Davison.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Verzh Movsisyan, 43, of Glendale, CA, was sentenced to six years and three months in prison, five years of supervised release, and was ordered to pay $599,000 in restitution by U.S. District Court Judge Paul S. Diamond for his involvement in a theft scheme using stolen debit card information.

The defendant pleaded guilty in June 2020 to charges of conspiracy, bank fraud, aggravated identity theft and money laundering. Movsisyan and his six co-defendants were charged for their involvement in a scheme to steal money from victims’ bank accounts by making fraudulent ATM withdrawals and money order purchases in multiple states with stolen debit card numbers. The victims’ debit card numbers were obtained by members of the scheme through illegally installed devices on gas station pumps, known as ‘skimmers’, that captured the victims’ debit card numbers and Personal Identification Numbers when they used their debit cards at gas stations to purchase gas. The skimming devices were installed on pumps at gas stations throughout the Mid-Atlantic region.

Movsisyan is the second defendant to be sentenced; one co-defendant was previously sentenced in March 2020 to over three years in prison, two co-defendants are scheduled to be sentenced in August and September 2021, and the three remaining co-defendants are scheduled for trial in September 2021.

“This fraud utilized nearly-undetectable technology to take advantage of victims as they went about the business of their daily lives,” said Acting U.S. Attorney Williams. “Being victimized in this way is an alarming violation because there is nothing a victim can do to prevent or stop it. I want to thank the many agents and investigators who worked tirelessly to uncover this scheme and help our Office seek justice for victims.”

“Skimming is an insidious crime, with perpetrators taking advantage of people just going about their everyday business,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “The victims of this scheme never imagined that filling up their gas tanks could empty out their bank accounts. The FBI will continue to work with our partners to identify, track down, and take down criminal groups siphoning off other people’s money and personal information.”

The case was investigated by the Federal Bureau of Investigation Philadelphia Organized Crime Task Force, the United States Postal Inspection Service, the United States Secret Service, the Newark, Delaware Police Department, the Borough of Wyomissing, Pennsylvania Police Department, and the Bensalem, Pennsylvania Township Police Department, and is being prosecuted by Assistant United States Attorney K.T. Newton.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Kelvin Canales, 21, of Philadelphia, PA, was arrested and charged by Indictment with possession of a firearm by a felon stemming from an incident in which he allegedly violently assaulted a victim before disposing of the weapon. Canales made his initial appearance on these charges in federal court earlier today.

According to the Indictment, Canales allegedly robbed a victim of his cell phone on a sidewalk in North Philadelphia. After the defendant returned to his car, he re-approached the victim and allegedly shot the victim multiple times in the back. Video footage shows Canales then fleeing the area. Court documents further allege that, approximately an hour later, the defendant crashed his car in a single-car accident. When paramedics arrived and attempted to speak with the defendant, he allegedly fled the accident scene, walked behind a row of houses and hid a loaded firearm in a trashcan.

“I have said many times in recent months that our Office is determined to continue doing everything we can to reduce gun violence in Philadelphia by being ‘All Hands On Deck,’” said Acting U.S. Attorney Williams. “When someone illegally possesses a firearm after sustaining a felony conviction, it is a very serious federal crime. In this case, the defendant is facing a maximum possible sentence of life in prison.”

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.

If convicted, the defendant faces a maximum possible sentence of life in prison, a $250,000 fine, a 5-year period of supervised release, and a $100 special assessment.

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.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Darnell Jackson, a/k/a “Major Change,” 47, of Philadelphia, PA, was arrested and charged by Criminal Complaint on federal charges of murder-for-hire and possession of ammunition by a convicted felon. In a news conference outside the federal courthouse in Philadelphia alongside Assistant Special Agent-In-Charge for FBI Philadelphia’s Violent Crime Branch James Christie and Philadelphia Police Chief of Investigations Chief Inspector Frank Vanore, Acting U.S. Attorney Williams discussed the charges and the investigation leading to the defendant’s arrest as part of the federal effort to reduce violent crime in Philadelphia known as ‘All Hands On Deck.’

According to publicly filed court documents unsealed today, the defendant allegedly orchestrated a murder-for-hire plot which stemmed from an ongoing state drug trafficking investigation. One week ago on Monday, July 19, 2021, and in the days immediately following, Jackson allegedly 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. Jackson also allegedly mentioned to the individual that he was interested in locating the close friends of the intended victim so that they could be harmed as well. 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 allegedly replied that he was on his way to meet the individual in order to pay him for his services. 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, and he was allegedly 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 the Criminal Complaint; he made his initial appearance in federal court on Friday, July 23, and will appear before U.S. Magistrate Judge Perkin for a detention hearing on Tuesday, August 3.

“It is no stretch of the imagination to conclude that law enforcement thwarted multiple alleged attempted murders by the defendant last week,” said Acting U.S. Attorney Williams. “But there are hundreds of families in this city for whom this news means very little, because their loved ones were already gunned down this year. I want to thank the dedicated men and women of the FBI and Philadelphia Police Department who were responsible for taking Jackson off the streets, and I want to assure the public that we will continue to do all we can to fight the surge of violence plaguing our city.”

“When our Safe Streets Gang Task Force received information on an alleged murder for hire last week, we immediately determined this was truly a life-threatening situation,” said James E. Christie, Assistant Special Agent in Charge of the FBI’s Philadelphia Division. “Agents and task force officers worked quickly, taking all necessary steps to disrupt this deadly plot. As a result, the intended victim is safe, the alleged orchestrator is behind bars, and a ghost gun is off the street. We refuse to cede this city to criminals who think solving a problem means pulling a trigger, who hold blocks and entire neighborhoods hostage to their violence. The ‘All Hands on Deck’ initiative continues to produce results and you’ll be seeing more of those in the weeks and months to come.”

“Every day, members of law enforcement agencies at all levels work tirelessly to prevent violent events from occurring in our city,” said Philadelphia Police Commissioner Danielle Outlaw. “The PPD and our partner agencies recognize the gravity of Philadelphia’s plight. People who commit serious crimes must face serious consequences, and arrests like the one announced today are the very reason why this joint initiative was created. I want to thank the FBI and the U.S. Attorney’s Office for pledging their support to this effort and ultimately contributing to the safety and well-being of those who live, work, and visit this beautiful city.”

If convicted, the defendant faces a maximum possible sentence of 20 years in prison (10 years for each charge).

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.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – – Acting United States Attorney Jennifer Arbittier Williams announced that Alexander S. Rowland, 30, formerly of Penns Grove, NJ, was sentenced to nine years in prison, three years of supervised release, and was ordered to pay more than $2.1 million restitution to his victims by United States District Court Judge Karen Spencer Marston, for defrauding more than 120 clients who thought they were investing money with Rowland’s company, Roaring Investments, Inc., when in reality, Rowland was operating a Ponzi scheme and spent more than $1 million of their money on himself. The defendant was also ordered to forfeit more than $1.4 million in criminal proceeds that he earned, as well as nine firearms that he purchased with fraud proceeds.

Rowland pleaded guilty in April 2021 to four counts of mail fraud, 16 counts of wire fraud, one count of bank fraud, one count of securities fraud, and one count of investment adviser fraud. As part of his guilty plea, the defendant admitted that he started Roaring Investments in July 2016 and falsely held himself out to potential investors as a licensed investment adviser who would invest their money in stocks and cryptocurrency, and he promised his clients a minimum return of 25% with potential returns of 50% or higher. None of these statements were true. Through these and other misrepresentations, Rowland was able to convince investors to invest almost $3 million in Roaring Investments. Rowland admitted that he actually only invested a little over $500,000 of the funds he obtained from his clients, and that his investments were a flop, losing more than $100,000. Rowland admitted that he spent more than $1 million of his client’s funds on himself, including payments for vacations and luxury vehicles, jewelry, and more than $47,000 worth of firearms. The defendant further admitted that he used some of the other client funds to pay his office rent, his employee salaries, and to make payments to his earlier clients – in effect, operating a Ponzi scheme.

Rowland also admitted that he lied to his clients by providing them with false account balances that led them to believe that their investments were highly profitable. In fact, Rowland led his clients to believe that the roughly $3 million they had collectively invested had grown to more than $9 million. When the scheme collapsed, Rowland’s clients learned that they had actually collectively lost more than $2 million due to Rowland’s fraud. The defendant further admitted that, after the scheme collapsed, he continued to lie to some of his victims by saying he could not repay them because the FBI was preventing him from accessing his accounts.

“Rowland talked a big game about the returns his company could produce through investments in stock and cryptocurrency, but it was all a lie. Instead, he funded his own lavish lifestyle in a manner no better than a common thief,” said Acting U.S. Attorney Williams. “And when he was caught, he continued to lie. The defendant is clearly a determined fraudster who needed to be taken off the street.”

“Alexander Rowland lured investors in by promising astronomical returns on their money,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “Instead, he took full advantage of their trust and lived high on the hog at their expense. Ponzi schemes can be simply devastating for their victims. That's why the FBI and our law enforcement partners are so determined to bring this kind of financial fraud to light, and perpetrators like Rowland to justice.” 

“Anytime a taxpayer is encouraged to invest in a product that seems too good to be true, they should be wary,” said Joleen D. Simpson, Acting Special Agent in Charge of the Philadelphia Field Office.  “IRS Criminal investigators will continue to use their financial skills to assist their law enforcement partners in stopping harmful investor fraud schemes.”

The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division, and is being prosecuted by Assistant United States Attorney Michael S. Lowe.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Thomas Del Borrello, 42, of Sewell, NJ, was sentenced to one year in prison, two years of supervised release, and was ordered to pay a $5,000 fine by United States District Judge Cynthia M. Rufe for filing false currency reports in connection with a vast, multi-million dollar scheme to defraud the Philadelphia Wholesale Produce Market (Market) in South Philadelphia, perpetrated by the Market’s President and CEO Caesar DiCrecchio.

The defendant pleaded guilty to a Criminal Information in April 2021, charging him with filing false Currency Transaction Reports (CTRs) and failing to file CTRs for cash transactions in excess of $10,000. Del Borrello was a supervisor at United Check Cashing on South Broad Street in Philadelphia and, as such, was responsible for compliance with regulations governing cash transactions, including the preparation and filing of CTRs.

Del Borrello regularly cashed checks for Caesar DiCrecchio, who has pleaded guilty to defrauding the Market while serving as its President and CEO. As part of his guilty plea, DiCrecchio admitted regularly causing groups of checks to be delivered to, and cashed at, United Check Cashing. These checks were each made out for less than $10,000, but when cashed as a group generated in excess of $10,000 in United States currency. For these cash transactions in excess of $10,000, regulations require the currency exchange to file a CTR, recording the identity of the person who presented the transaction. Del Borrello caused the filing of false CTRs which hid DiCrecchio’s identity, or caused United Check Cashing to fail to file a CTR altogether. On some occasions, DiCrecchio directed Del Borrello to convert the proceeds of the checks into separate money orders which were used to pay the $14,167 monthly rent for DiCrecchio’s Stone Harbor house. Del Borrello’s corrupt actions permitted DiCrecchio to remain undetected while he perpetrated the $7 million fraud on the Market.

“Del Borrello, by his corrupt choices, prevented the ordinary operation of the anti-money laundering laws of the United States,” said Acting U.S. Attorney Williams. “In his position as a supervisor at a check cashing business, Del Borrello served at a key gateway in our economy.  But rather than respect the law and his important role in the enforcement process, he helped DiCrecchio cover up a massive fraud. He deserves the sentence of imprisonment he received for his effort to defeat our anti-money laundering laws.”

“In repeatedly evading or falsifying the required CTRs, Thomas Del Borrello facilitated the continuation of a long-running, multimillion-dollar fraud scheme,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “He knew it was wrong and didn’t care, because he was making money off the whole deal. As today’s sentencing shows, such criminal actions have serious consequences.”

“The subject’s actions allowed millions of dollars to be siphoned from the Philadelphia Wholesale Produce Market, harming the local economy,” said Joleen D. Simpson, Acting Special Agent in Charge of IRS Criminal Investigation, Philadelphia Field Office. “The subject had a duty to prepare and file CTRs. As a direct result of Del Borrello’s dereliction of duties, an entity suffered lost revenues and federal tax laws were violated.  IRS Criminal Investigation will always be ready to assist its law enforcement partners in investigating complex financial cases that cause economic damage to individuals and entities.”

The case was investigated by the Federal Bureau of Investigation’s Organized Crime Task Force, the Internal Revenue Service – Criminal Investigation, and the Pennsylvania State Police – Bureau of Criminal Investigation, and is being prosecuted by Assistant United States Attorney Michael T. Donovan.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Behzad Sabagh, a/k/a “Ben Sabagh,” 39, of Philadelphia, PA, was arrested and charged by Indictment with multiple counts of retaliating against a witness and tampering with a witness, stemming from a case in which he was previously convicted of bribing an employee of the City of Philadelphia in April 2019.

As set forth in the Indictment, in May 2018, Sabagh was charged criminally with honest services wire fraud, arising from his payment of bribes to a City of Philadelphia Sheriff’s Office employee. From December 2019 until March 2020, after Sabagh pleaded guilty to the fraud charges and completed his court-ordered sentence, he is alleged to have sent threatening text messages to an individual who was also charged in connection with the prior case and who had agreed to plead guilty and cooperate with law enforcement officials as a witness against Sabagh.  

According to the Indictment, while the witness was awaiting sentencing, the defendant sent text messages in which he violently threatened the witness with sexual assault while in prison, threatened to sexually assault the witness’s wife while the witness was in prison, and threatened their children. The Indictment charges Sabagh with nine counts of retaliating against a witness and one count of tampering with a witness.

“Witness intimidation undermines the entire criminal justice system and will be dealt with swiftly and severely,” said Acting U.S. Attorney Williams. “Here, Sabagh allegedly threatened a witness in a most contemptible way, after his conviction and sentence had been served as though his actions would have no consequences.  These charges demonstrate that he is absolutely wrong.”

“Our justice system depends on witnesses truthfully testifying as to what they know,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “Retaliating against a cooperating witness sends a chilling message both to that person and the community at large. Bottom line: ensuring the safety of federal witnesses both before and after a prosecution is paramount, and the FBI takes Sabagh’s alleged acts extremely seriously.”

If convicted, the defendant faces a maximum possible sentence of up to 200 years in prison, a $2,500,000 fine, a $1,000 special assessment, and restitution.

The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorneys Sarah L. Grieb and Christopher Diviny.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Girls Inc. of Greater Philadelphia & Southern New Jersey, in partnership with the U.S. Attorney’s Office for the Eastern District of Pennsylvania, hosted a virtual panel discussion for Girls Inc. program participants with women leaders in law enforcement in Philadelphia. The women leader panelists were Acting U.S. Attorney Jennifer Arbittier Williams, City of Philadelphia Police Commissioner Danielle Outlaw, City of Philadelphia Controller Rebecca Rhynhart, and City of Philadelphia Solicitor Diana Cortes. Dena Herrin, Executive Director of Girls Inc. of Greater Phila. & Southern New Jersey, provided welcoming remarks, and the discussion was moderated by Girls Inc. Eureka! Coordinator Sarah Kane.

The meeting marks a moment when, for the first time in Philadelphia history, four major law enforcement agencies – the United States Attorney’s Office for the Eastern District of PA, the Philadelphia Police Department, the City Controller’s Office and the City’s Law Department – are being led by women, two by women of color. The goal of the discussion, which was attended by approximately 60 participants ranging in age from 11 to 18, was to engage directly with girls who may be beginning to think about their own education and career paths, and to share the message that they can become leaders in any field, even fields like law enforcement that are traditionally dominated by men. The panelists spoke candidly about a wide variety of topics including their personal and professional backgrounds, typical duties of their current jobs, mentors and inspiration, professional challenges and rewarding moments, and even misconceptions about women in the field.

“Representation matters; seeing and engaging directly with women role models matters,” said Acting U.S. Attorney Williams. “Girls in middle school and high school are laying the groundwork for their futures. I enthusiastically participated in this event because, as a mother of four students, I know how important it is for youth to see diverse examples of people pursuing different careers and interests, especially people serving in leadership roles. As the late Justice Ginsburg said: ‘Women belong in all places where decisions are being made.’ And if we can do it, you can, too.”

“Blazing a new path can be challenging but is not impossible,” said Police Commissioner Outlaw. “It is important that young women know that what traditionally has been seen as weaknesses in us are, in fact, strengths. Women have long deserved many seats at the table due to our skill sets, lived experiences, perspectives and qualifications.  It is crucial we develop our young women early to prepare them to not only take their seats at the table or to recognize when a seat at the table is not enough , but to ensure they are equipped to address any inequities or other challenges they may experience as they blaze trails for others behind them.”

“I’m thrilled to participate in this event with Girls, Inc. to encourage today’s young women – the leaders of tomorrow – to consider fields long-believed to be ‘men’s work,’ like government, law enforcement or STEM,” said Controller Rhynhart. “I am the first woman to be elected City Controller and while women are in positions of power across the city, Philadelphia has never had a woman mayor. Pennsylvania has never had a woman senator or governor. Girls need to know that they can, and should, hold positions of power, no matter the field, whether in the public or private sector. Events like this give girls the opportunity to see women creating change and leading, opening their minds to endless possibilities.”

“This program was a great opportunity to share with tomorrow’s women leaders the importance of public service work and how the City of Philadelphia Law Department plays a role in our community by defending the work of our City Council, our affirmative litigation program, or working to ensure the health and safety of our residents are protected,” said Solicitor Cortes.

Girls Inc. is a nonprofit organization with roots dating to 1864 and national status since 1945. The local affiliate was founded in 1961 as Teen Aid, and became affiliated with the national organization in 2002. Its mission is to inspire all girls to be strong, smart, and bold, through direct service and advocacy. Girls Inc. serves girls in K-12th grades at local schools, community partner sites, Philadelphia Juvenile Justice Service Center, and the Girls Inc. center. Girls Inc. programs focus on leadership and community action, STEM, early grade literacy, financial literacy, healthy decision making, and media literacy. The combination of long-lasting mentoring relationships, a pro-girl environment, and research-based programming equips girls to navigate gender, economic, and social barriers, and grow up healthy, educated, and independent. A Girls Inc. participant learns to value herself, take risks, and discover and develop her inherent strengths. The mission and the proven, holistic approach the organization employs to fulfill its mission is making a meaningful impact on thousands of girls in the region.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Mashaq White, 23, of Philadelphia, PA, was arrested and charged by Indictment on the charge of being a previously convicted felon in possession of a firearm, stemming from an incident which occurred during the civil unrest in Philadelphia last year. At a hearing in U.S. District Court today, the defendant was detained pending trial.

The Indictment alleges that on June 1, 2020, the defendant was in possession of a loaded 9mm Ruger handgun as a convicted felon. According to court documents, Philadelphia Police Officers responded to a burglary in progress at a pharmacy on the 5600 block of Chestnut Street in West Philadelphia. When they entered the store they found it ransacked and the sprinkler system activated. Suddenly, the defendant allegedly came running down an aisle of the store, toward one of the officers, while carrying a handgun. The officer restrained the defendant and he was arrested. The incident was captured on the officer’s body camera.

“Our office is committed to prosecuting anybody who took advantage of the civil unrest and protests of last summer to try to commit violent acts or otherwise violate federal law,” said Acting U.S. Attorney Williams. “In this case, a previously convicted felon is charged with allegedly possessing a loaded firearm, which presents a clear danger to our community that is struggling under a surge of violent gun crime.”

“Getting guns away from people who shouldn’t have them is a crucial part of our concerted effort to check violent crime in this city,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “If you’re in criminal possession of a firearm, the FBI and our partners will be glad to take it off your hands, in exchange for a nice pair of cuffs. We will continue to do all we can to make Philadelphia safer for the good folks who live, work, or visit here.”

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.

If convicted, the defendant faces a maximum possible sentence of 10 years in prison, three years of supervised release, $250,000 fine, and a $100 special assessment. 

The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney James R. Pavlock.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Davit Davitashvili, 43, of Gori, the Republic of Georgia, and a naturalized American citizen, was charged by Indictment today with one count of transmitting in interstate and foreign commerce a threat to injure another person. The defendant was arrested on June 3, 2021 upon arriving at John F. Kennedy Airport in Queens, New York, and taken into custody.

The Indictment alleges that on March 10, 2020, Davitashvili knowingly and willfully transmitted messages using an Internet messaging application to a woman living in Philadelphia known as ‘O.V.,’ which contained threats to sexually assault the mother of O.V., and to injure, maim, and kill O.V. and others.

“The defendant is alleged to have sent incredibly scary, disturbing, and intimidating messages to a woman living and working in our city. No one should have to live in such constant fear,” said Acting U.S. Attorney Williams. “The public can rest assured that our Office, together with our law enforcement partners, is working tirelessly to protect victims from all types of threats both at home and abroad.”

“You can't just threaten people online with violent physical harm. That’s not protected speech — it’s a crime,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “The FBI takes all threats to life seriously and so should anyone thinking about making one. We will investigate, identify you, and ensure you’re held accountable for your actions.”

If convicted, the defendant faces a maximum possible sentence of five years in prison, three years of supervised release, a $250,000 fine, and a $100 special assessment.

The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Thomas M. Zaleski.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that  Mikhail Geneles (“Geneles”), will pay $90,000 to resolve False Claims Act allegations that he illegally claimed subsidies from the Department of Housing and Urban Development (“HUD”) while renting an apartment to his father-in-law in violation of the department’s requirements.   

The settlement resolves allegations that, between May 2010 and May 2020, Geneles rented a subsidized apartment to his relative in violation of the Housing Choice Voucher Program’s (“HCVP”) requirements. The HCVP is commonly known as Section 8 housing. In the agreement, the United States alleges that Geneles participated as a landlord in the HCVP, a program whereby HUD provides rental subsidies for eligible low-income tenants who locate acceptable rental units on the private market. The government alleges that Geneles submitted documents to the Bucks County Housing Authority (which administers the HCVP in Bucks County) falsely certifying that the assisted tenant in Geneles’ rental property was not an immediate relative of the property’s owners. In fact, the sole tenant was Geneles’ father-in-law, which precluded Geneles’ receipt of HCVP rental subsidies.

“HUD instituted the HCVP program to help low-income residents without other options to obtain decent housing,” said Acting U.S. Attorney Williams. “By investigating this case, we put all landlords participating in the Section 8 program on notice that they cannot put relatives in apartments for which they are receiving HCVP funds.”  Williams added, “From the time that this matter was brought to his attention, Mr. Geneles committed himself to setting things right. We appreciate his cooperative approach and efforts toward rectifying the problem.” 

“The U.S. Department of Housing and Urban Development, Office of Inspector General is committed to working with the Department of Justice and community stakeholders to ensure that Federal funds intended to help low-income families are not wasted or misapplied,” said Acting Special Agent in Charge Shawn Rice.  “Today’s settlement underscores the government’s commitment to protecting the integrity of HUD programs against fraud, waste, or abuse.”

This case was investigated by the U.S. Department of Housing and Urban Development, Office of Inspector General, and by the Bucks County Housing Authority.  For the United States Attorney’s Office, Assistant United States Attorney Colin Cherico handled the investigation and settlement.

The claims resolved by the settlement are allegations only; there has been no determination of liability.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Daniel Duran, 33, of Jamaica, NY, and Jacqueline Velazquez, 37, of Reading, PA, entered guilty pleas before United States District Court Judge Mark A. Kearney on multiple counts of mail fraud in connection with a phone and mail-based scheme to defraud elderly victims across the country out of hundreds of thousands of dollars.

The defendants were charged by criminal Information with seven counts of mail fraud in June 2021. According to the Information, from December 2018 through March 2020, the defendants played an integral role in what is commonly known as a “Grandparents Scheme,” which worked as follows: co-schemers based in the Dominican Republic telephoned elderly victims throughout the United States and, while posing as a grandchild or grandchild’s lawyer, falsely told each victim that their grandchild had been involved in a vehicular accident and needed money to pay for medical, legal, or court expenses. These co-schemers would also instruct the elderly victims to send large amounts of cash to certain addresses allegedly identified by the defendants, including addresses in Reading, PA. The defendants are charged with picking up the packages and sharing the money with their co-schemers. All told, this scheme defrauded at least fifty elderly victims across the United States of more than $300,000.

“Schemes like this ‘Grandparents Scheme’ are particularly heinous because they prey on a senior’s love for their family,” said Acting U.S. Attorney Williams.“The Department of Justice is committed to protecting our seniors from fraud, and our Office will continue to prioritize prosecuting criminals who prey on our elderly residents.”

The case was investigated by the United States Postal Inspection Service, in connection with the Reading Police Department, and is being prosecuted by Assistant United States Attorney Matthew T. Newcomer.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Herbert Smith, 33, of Philadelphia, PA, pleaded guilty in federal court to seven counts of manufacturing child pornography. Smith was indicted as a result of his extended sexual abuse for more than two years of a child who was just eight years old when Smith began molesting her.  

The defendant’s sexual abuse of this child victim came to light when Philadelphia Police served an arrest warrant for Smith for his sexual assault of a different nine-year-old victim. When Police arrested the defendant, officers discovered him lying in bed with that victim. Police seized Smith’s electronic equipment, and the subsequent forensic analysis by the Federal Bureau of Investigation revealed hundreds of images of Smith’s horrific sexual assaults against an eight-year-old child, including rape and other sexual abuse of the child after she was given medication to make her sleep. Smith recorded his abuse of the child victim, saved the images and videos on his electronic equipment, and in some cases, uploaded the images to his online storage account.

Smith was taken into custody by Philadelphia Police in August 2019. He has been detained in federal custody since he was indicted federally in September 2019. As a result of his conviction on seven counts of manufacturing child pornography, he faces up to 210 years in prison, which includes a mandatory minimum 15 years, five years up to a lifetime of supervised release, a fine of up to $1,750,000, and special assessments of up to $35,700. Smith must also register as a convicted child sex offender under state law.

“Smith is a predator of young children and has been for years,” said Acting Assistant U.S. Attorney Williams. “With this conviction, and Smith now facing up to 210 years in prison, his victimization of our most vulnerable citizens has finally come to an end. Thank you to all of our agency partners who remain determined to identify, prosecute and convict child predators like this defendant.”

“Herbert Smith admits inflicting repeated horrific sexual assaults on a little girl, and recording the abuse so he could savor it whenever he wanted,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “His actions are unconscionable and the harm he’s done, immeasurable. It’s cases like this that drive the FBI and our partners, as we work to protect our community’s children from depraved predators like Smith.”   

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 Federal Bureau of Investigation and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Michelle Rotella.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Gloria Byars, 60, of Aldan, PA; Carlton Rembert, 66, of Hampton, VA; and Alesha Mitchell, 40, of Suffolk, VA, were all indicted for their roles in scheme to defraud elderly, incapacitated people out of hundreds of thousands of dollars. All three defendants were charged with one count of conspiracy and one count of bank fraud. Additionally, Rembert and Byars were charged with five counts of wire fraud, and Byars faces an additional charge of money laundering.

The Indictment alleges that between 2012 and 2018, Byars stole from dozens of incapacitated wards while serving as their court-appointed guardian. Prior to operating her own guardianship company, Byars was an office manager for a different company that was appointed to care for wards in Pennsylvania. As office manager and then as guardian herself through her own firm, Byars had unfettered access to wards’ property including bank accounts, pensions, real estate, annuities, and other assets. Byars allegedly stole money from the wards’ bank accounts by writing unauthorized checks to companies she controlled, or to shell companies controlled by Rembert and Mitchell. The Indictment further alleges that Rembert and Mitchell assisted Byars in the theft by opening bank accounts in the names of shell companies purporting to be medical billing companies and depositing the stolen checks they received from Byars into those accounts. After the stolen checks cleared, Byars, Rembert, and Mitchell are alleged to have shared the fraud proceeds.

Byars is alleged to have also stolen gold Krugerrand coins, valuable gold coins first minted in South Africa in the 1960’s to introduce the country’s gold supply onto the world market, from one elderly victim’s safe deposit box. Byars is also alleged to have stolen $131,000 from the same ward’s bank account and over $756,000 from a retired federal employee’s Thrift Savings Plan. Finally, according to court documents, Byars managed assets for an individual identified as C.G., whose heir asked for the assets’ return from Byers after C.G.’s death.  But Byars had already stolen C.G.’s money. In an attempt to conceal her theft from C.G., Byars is alleged to have stolen $122,000 from yet another ward and used it to repay C.G.’s heir.

Mitchell was arrested in Virginia yesterday, has been released on bail pending trial, and will appear in U.S. District Court in the Eastern District of Pennsylvania on Friday, July 2.  Byars was previously arrested in both Philadelphia and Delaware County for theft from her wards. Byars and Rembert are scheduled to appear for the federal charges in U.S. District Court in the Eastern District of Pennsylvania on Tuesday, July 6.

“As a court-appointed fiduciary, Byars had a moral and legal obligation to act in her clients’ best interest,” said Acting U.S. Attorney Williams. “Instead, she and her co-conspirators allegedly used her position to help themselves to the very property they should have been protecting – no better than wolves in sheep’s clothing.”

“Elder fraud cases are probably the most heartbreaking of the financial violations we work,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Here we have someone entrusted to oversee their incapacitated wards’ affairs, allegedly siphoning off money and property for herself and her co-conspirators. Anyone who targets vulnerable older folks for their assets has neither a conscience nor a moral compass. The FBI is committed to holding such crooks accountable, on behalf of those they’ve so cruelly victimized.”

If convicted, the defendants face the following maximum possible sentences. For each count of conspiracy to commit bank fraud and bank fraud, the maximum sentence is 30 years’ imprisonment and a $1,000,000 fine. For each count of wire fraud, the maximum sentence is 20 years’ imprisonment and a $250,000 fine and for money laundering the maximum sentence is 20 years’ imprisonment and a $500,000 fine.

The case was investigated by the Federal Bureau of Investigations and Delaware County District Attorney’s Office, Criminal Investigation Division, and is being prosecuted by Assistant United States Attorney Tiwana Wright.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Defendant Lorenzo Hodges, 62, of Albany, NY, was sentenced today to one and a half years in prison, three years of supervised release, and was ordered to pay $537,769 restitution and to forfeit $40,000 by United States District Court Judge Wendy Beetlestone for his involvement in a scheme to fraudulently obtain donated medications and return them to the pharmaceutical companies for profit.

The defendant pleaded guilty in May 2019 to conspiracy to commit mail fraud. According to court documents, Hodges and others duped humanitarian organizations into believing that he had selflessly organized international relief missions to deliver medicines to the sick and injured in war-torn areas, but the missions were phony. At the time he was conducting this scheme, Hodges was the General Manager of a legitimate relief agency which provided donated clothing, personal care items, and durable medical equipment to approximately 17 conflict-affected nations worldwide. As such, Hodges was in a unique position to obtain donated pharmaceuticals.

Over a two-year period from 2012 to 2014, the defendant submitted applications under the auspices of his employer asking for donations of antibacterial agents and other medications for serious conditions such as diabetes. Hodges conjured up relief missions that would seem believable, identified fake destinations, and requested medications consistent with the purpose of the bogus trips so as not to raise any red flags. He arranged for the donated drugs to be transported from the donation site to his employer; concealed the drugs in the employer’s warehouse; and then hired a trucking company that transported the drugs to a returns processor using the pharmacy license of a co-conspirator. The returns processor issued refunds to the pharmacist on behalf of the drug manufacturers, believing that the drugs had been legitimately purchased. As a result of the scheme, Hodges and his co-conspirators fraudulently obtained refunds totaling approximately $540,000 for medications that had been donated to help suffering people around the world.

“It is difficult to imagine a fraud scheme more callous than scamming a charity on behalf of people suffering in the midst of war,” said Acting U.S. Attorney Williams. “But that is exactly what this defendant did to satisfy his own callous greed. Thanks to the investigative work of our law enforcement partners, Hodges will now spend time behind bars for his crime.”    

“Under the guise of charity, Lorenzo Hodges amassed donated medications meant for vulnerable people in conflict zones, returned them, and banked the proceeds,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Imagine profiting by purposely exploiting the mass suffering of others. The selfishness on display here is breathtaking. The FBI is gratified to help bring Mr. Hodges to justice.”

The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney M. Beth Leahy.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Nafez Hutchings, 22, of Upper Darby, PA, entered a plea of guilty before United States District Court Judge Anita Brody to an Indictment charging 12 counts of providing false information to a federal firearms licensee.

Between June and August 2020, the defendant fraudulently purchased 23 handguns over 12 separate transactions with several different Federal Firearms Licensees (licensed gun stores) in Philadelphia, Montgomery, and Delaware Counties. During each purchase, Hutchings falsely reported his address and declared on Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Form 4473 that he was the actual purchaser of the firearms, when in reality it was not his intention to keep possession of the weapon. Before his arrest, the defendant admitted to ATF agents that he provided a false address and falsely certified on the ATF forms that he was buying the firearms, when in fact he was buying them on behalf of other individuals.

“Our Office is doing all we can to stem the tide of violent crime in Philadelphia, including indicting and prosecuting criminals who possess firearms when they’re prohibited by law from doing so. But the efforts of law enforcement to keep guns out of the wrong hands are thwarted every time someone straw purchases a weapon like this defendant did, 23 times over,” said Acting U.S. Attorney Williams. “Make no mistake -- If you knowingly buy a handgun for someone else who cannot legally purchase one, and they use it to commit a crime, it is no better than if you had fired that gun yourself. And that is exactly how you will be treated by the federal authorities.”

“Knowingly buying and selling firearms without a license is a violation of federal law, and by doing so, Hutchings circumvented the laws which are designed to protect communities,” said Matthew Varisco, Special Agent in charge of ATF’s Philadelphia Field Division. “The investigation of firearms diversion from the legal to the illegal market place is ATF’s top priority, and we are committed to working alongside our law enforcement partners to seek justice above anything.”

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Thomas M. Zaleski.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Sumo Dukulah, 47, of Philadelphia, PA, was charged by Indictment on the charge of procurement of citizenship by false statement.

According to the Indictment, approximately fourteen months after he took the oath and was sworn in as a United States citizen, the defendant was arrested in Philadelphia in April 2013 on charges of raping a minor child, beginning when the victim was eight years-old in 2004 and continuing until March 2013 when she was 16 years-old. Dukulah was ultimately convicted of those charges and is currently serving a state sentence of 31-63 years in prison. The Indictment alleges that when the defendant applied to become a naturalized U.S. citizen in 2011, he falsely claimed that he had never committed a crime, when during the same time period, he was actively committing a crime by raping a child. As a result of his fraudulent claims in his application to U.S. Citizenship and Immigration Services, Dukulah’s citizenship was granted in January 2012.

“Applying to become a citizen of the United States necessitates your willingness to adhere to the laws of our Nation,” said Acting U.S. Attorney Williams. “What this defendant did, and the crime for which he was convicted, is not just illegal but is also morally repugnant and shocking. The defendant then allegedly lied about it in order to obtain U.S. citizenship, and he will have to answer to this charge in federal court.”

If convicted, the defendant faces a maximum possible sentence of 20 years’ imprisonment, a $500,000 fine, three years’ supervised release, a $200 special assessment, and revocation of his U.S. citizenship.

The case was investigated by Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Josh A. Davison.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Jamir Foushee, a/k/a “Jamir Young,” 31, of Philadelphia, PA, was convicted after trial of possession of a firearm by a convicted felon, possession with intent to distribute “crack” cocaine, and possession of a firearm in furtherance of a drug trafficking crime. The charges against the defendant stemmed from his unlawful possession of these items while riding in his car, which was stopped by Philadelphia police in the Kensington section of the city.

The evidence presented at trial proved that, in April 2019, Foushee was riding as a passenger in his own car when it was stopped for a traffic violation by Philadelphia Police officers. After observing the defendant reach under his seat, officers discovered a handgun under that seat. The defendant then stated to officers that the other guns and drugs in the car were his. Police detained Foushee and the driver of the vehicle, searched the car, and found crack cocaine packaged for sale, as well as two additional firearms. At the time of the incident, the defendant was a convicted felon and was not allowed by law to possess a firearm.

“Less than three months ago, I vowed that our Office would continue doing everything possible to reduce gun violence in Philadelphia through our ‘All Hands On Deck’ initiative,” said Acting U.S. Attorney Williams. “And in just the last three weeks, we have delivered on that promise by securing guilty verdicts from three federal juries against defendants who illegally possessed firearms after sustaining felony convictions. Now, our efforts are multiplying; just this week the Justice Department announced a nationwide initiative to target illegal firearms and support community violence intervention programs in cities experiencing a spike in gun violence like Philadelphia.”

“Drugs and firearms are a very dangerous combination, especially while in the hands of a felon,” said Matthew Varisco, Special Agent in charge of ATF’s Philadelphia Field Division.  “We will continue our great partnership with the Philadelphia Police Department and the U.S. Attorney’s Office to make the community safer by removing criminals like this from our streets.”

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 & Explosives, and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney David E. Troyer, and Department of Justice Trial Attorney Randall Warden.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Imad Dawara, 40, of Swathmore, PA, and Bahaa Dawara, 32, of Woodlyn, PA, were both sentenced this week by United States District Court Chief Judge Juan R. Sanchez to nine years in prison and ordered to pay more than $22 million in restitution for conspiracy to commit arson and conspiracy to defraud the United States. 

The defendants previously pleaded guilty and admitted to planning and causing the arson of their business, RCL Management LLC, at 239-241 Chestnut Street in Philadelphia on February 18, 2018, and to evading the assessment of their income tax liabilities from 2015-2017. Imad Dawara also admitted to fraud in connection with his receipt of health care and other government benefits.

From around December 2012 until February 18, 2018, the defendants owned and operated various restaurants and entertainment establishments in Philadelphia, including a restaurant and hookah lounge in the 200 block of Chestnut Street. As detailed in the Indictment, the Dawara brothers were struggling in their Chestnut Street business and had a years-long history of fighting with their landlord. By October 2017, the Dawara brothers had ceased all business operations at the Chestnut Street location and attempted to sell the business, but as they had failed to renew their lease or pay rent, no one would buy it.

On January 31, 2018, their landlord directed the defendants to vacate the premises by February 2, and advised them that they owed over $64,000 in overdue payments.  Nonetheless, the Dawaras failed to vacate the premises, and on the same day they were to leave, RCL Management purchased a $750,000 insurance policy providing coverage in the event of an accidental fire at the Chestnut Street property. On February 18, a fire was intentionally started with gasoline in the basement of 239 Chestnut Street, which destroyed the entire building, displaced approximately 160 people, closed the 200 block of Chestnut Street for months, and closed numerous businesses.

“The Dawara brothers selfishly and criminally thought only of themselves and their finances that fateful February night,” said Acting U.S. Attorney Williams. “But their horrific conduct left so many victims in its wake – including individuals, businesses and the City of Philadelphia at large.  I hope these sentences provide a measure of closure to the victims, and I want to thank all of our partner agencies for coming together to investigate and hold the Dawaras responsible.”

“This sentencing is the result of the exhaustive effort by ATF’s Arson and Explosives Task Force working in harmony with the U.S. Attorney’s Office,” said Matthew Varisco, Special Agent in charge of ATF’s Philadelphia Field Division. “The Dawara brothers will now serve nine years in federal prison, as a result of his actions. Criminals who commit arson for any reason jeopardize the safety of the community and first responders and will be held accountable.”

“These sentencings demonstrate that individuals who are willing to destroy property for financial gain and commit income tax violations will be held accountable,” said IRS Criminal Investigation Acting Special Agent in Charge Joleen Simpson. “The Dawara brothers had no regard for the well-being of others and were focused on their own greed. This collaborative effort with our law enforcement partners highlights the excellent investigative work done in ensuring such deplorable crimes are brought to justice.”

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Philadelphia, the Philadelphia Fire Marshal, the Philadelphia Police Department, the Internal Revenue Service – Criminal Investigation, the U.S. Department of Health & Human Services - Office of the Inspector General, with assistance from the Philadelphia Parking Authority Taxi and Limousine Division, and is being prosecuted by Assistant United States Attorneys Jeanine Linehan and Katherine E. Driscoll.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Thomas Staszak, 46, of Philadelphia, PA, a former employee of the City of Philadelphia Water Department (“PWD”), was Indicted by a federal grand jury on multiple charges of theft from a federally funded program and computer fraud.

The Indictment charges that, on multiple occasions from approximately April 2017 through at least November 2018, the defendant accessed PWD’s computerized inventory control system without authorization, using log-in credentials associated with PWD employees under his supervision at a PWD storeroom. Staszak is then charged with creating false entries in PWD’s electronic records to provide justifications for removing maintenance materials, for example bulk wire, from the storeroom. The Indictment further alleges that the defendant physically took the materials from PWD’s inventory, transported them to local scrap yards, sold the materials, and kept the proceeds. In this fashion, Staszak is alleged to have stolen items valued in excess of approximately $164,000 before he was caught. And according to the Indictment, PWD receives federal funds and assistance in excess of $10,000 annually.   

“As alleged, Thomas Staszak used his public position to enrich himself to the detriment of all Philadelphians who expect and deserve honest services from City employees,” said Acting U.S. Attorney Williams. “The Philadelphia Water Department is charged with providing clean, safe water for millions of residents and businesses, and protecting the region’s water resources, all on a limited budget. The defendant’s alleged actions took money and resources directly out of the hands of taxpayers and into his own pocket.”

If convicted, the defendant faces a maximum possible sentence of 65 years imprisonment and $2,750,000 in fines.

The case was investigated by the Federal Bureau of Investigation and the City of Philadelphia’s Office of Inspector General, and is being prosecuted by Assistant United States Attorney Eric L. Gibson.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Christopher O’Sullivan, 32, of Philadelphia, PA, was sentenced to 15 years in prison, 10 years of supervised release, and ordered to pay $5,200 restitution by United States District Judge Nitza I. Quinones-Alejandro for crimes stemming from his sexual exploitation of a student via text message.

In October 2020, the defendant pleaded guilty to one count of enticement of a minor, and one count of production of child pornography. According to court documents, over the course of several weeks in June and July 2019, O’Sullivan, a middle school teacher at a Philadelphia charter school at the time, sent a series of sexually suggestive text messages to Minor 1, a student of his who was twelve years old, in an effort to coerce the boy to engage in sexual activity and to send O’Sullivan sexually explicit photographs. Eventually, the child acquiesced to the pressure and sent O’Sullivan a photograph of his genitalia. The child’s parents saw the sexually explicit text messages on the child’s phone and contacted authorities, and law enforcement later found the same photograph on the defendant’s phone.

“O’Sullivan held one of the most sacred positions of trust in our society, a molder of young minds – a teacher,” said Acting U.S. Attorney Williams. “Schools must be safe havens for children.  For this defendant to abuse his position by targeting and manipulating a student for his own perverse gratification is almost unimaginable. As always, we stand ready with our federal partners to identify and prosecute individuals that perpetuate this type of child abuse.”

“What a betrayal by Christopher O’Sullivan,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “He went from teaching a classroom full of kids to eagerly manipulating and sexually exploiting a vulnerable young boy. O’Sullivan is now being held responsible for his predatory behavior, locked behind bars so he can’t target anyone else’s child.”

This case is part of Project Safe Childhood, a Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Department’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 www.projectsafechildhood.gov.

The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Michelle L. Morgan.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Stacy Gallman, 31, of Philadelphia, PA, was convicted today at trial for being a felon in possession of a firearm.

In December 2019, Philadelphia Police Officers pulled Gallman over for a traffic violation when the vehicle he was driving failed to stop at a stop sign. When they approached the vehicle, officers noticed that the passenger had a firearm in his pocket. Moments later, when the officers asked Gallman to step out of the car, they discovered a second firearm next to the driver’s seat. At the time of the incident, the defendant was a convicted felon and was not allowed by law to possess a firearm.

In an unrelated case, on June 11, 2021, Kenneth Blakeney, 29, of Philadelphia, PA, was convicted after trial, also for being a felon in possession of a firearm. The firearm in Blakeney’s possession was also discovered during a traffic stop by Philadelphia police.

“I have said many times in recent months that our Office is determined to continue doing everything we can to reduce gun violence in Philadelphia by being ‘All Hands On Deck,’” said Acting U.S. Attorney Williams. “Today’s conviction is the second in as many weeks against someone who sustained a felony conviction and then illegally possessed a firearm.  Both men will now face lengthy prison sentences.”

“The possession of a firearm by a convicted felon threatens the safety of our entire community,” said Matthew Varisco, Special Agent in charge of ATF’s Philadelphia Field Division. “Thanks to our partners at the Philadelphia Police Department and the U.S. Attorney’s office, this defendant is no longer in a position to harm the citizens of Philadelphia.”

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 is being prosecuted by Special Assistant United States Attorney Ashley Martin.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Devron Brown, 50, formerly of Philadelphia, PA, was arrested and charged by Indictment with two counts of bank fraud and nine counts of money laundering in connection with an alleged scheme to unlawfully obtain and misuse loan proceeds offered through the federal Paycheck Protection Program (“PPP”). 

The Indictment alleges that, in June 2020, the defendant fraudulently obtained approximately $937,500 in PPP loan proceeds, pursuant to a PPP loan application that contained false representations regarding his alleged construction business, Just Us Construction Inc. According to the Indictment, Brown allegedly made multiple false characterizations about Just Us Construction, including the number of employees, the wages paid to them, the payroll taxes paid on those wages, and the intended use of the PPP loan proceeds. It is also alleged that Brown used those PPP loan proceeds for personal and unauthorized purchases, including a new residential property in Florida, a motorcycle, an all-terrain vehicle, a luxury automobile, and diamond jewelry. The defendant also allegedly caused a second fraudulent PPP loan application to be submitted for approximately the same amount in early 2021, but that application was denied.

“Paycheck Protection Program funds are intended to help American small-businesses continue paying their employees, even if revenues have dropped dramatically due to the pandemic,” said Acting U.S. Attorney Williams. “Thieves who attempt to take these funds are taking advantage of others’ misfortune – ripping them off while also ripping off all taxpayers who fund the program. As alleged, Brown fraudulently obtained nearly $1 million in funds that could have helped struggling businesses and individuals.”

“The Paycheck Protection Program was created to provide emergency financial assistance to businesses and employees battered by the pandemic,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Unfortunately, criminal opportunists with dollar signs in their eyes promptly got to work trying to defraud the federal government by seeking a cut of the funds. The FBI will continue to aggressively pursue those using the money from the PPP to bankroll their own lavish lifestyles at taxpayers’ expense.”

If convicted of all charges, the defendant faces a maximum possible sentence of 150 years of imprisonment, three years of supervised release, a $4,250,000 fine, restitution, and an $1100 special assessment. 

The case was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency, Office of Inspector General, and is being prosecuted by Assistant United States Attorney Kathryn Deal.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Jacob Dean Robotin, 25, of Willow Grove, PA, was arrested and charged by Criminal Complaint on charges of possessing an unregistered destructive device, specifically, a homemade firebomb, also known as a “Molotov cocktail.” 

The Complaint alleges that, on the evening of December 31, 2020, members of a large group of individuals wearing dark clothing vandalized the Federal Detention Center, the Robert C. Nix Federal Building, and other property in Center City Philadelphia by spray painting, setting off fireworks, and breaking windows. Shortly thereafter, at 600 Sansom Street, Philadelphia Police officers stopped three individuals, including the defendant. Robotin had a green, military-style backpack and was wearing dark clothing with spray paint on Robotin’s pants. After other police officers identified the three individuals as being among the larger group which had members participating in the vandalism of the Nix Building that evening, officers placed Robotin and the other two individuals under arrest.

According to the Complaint, officers found a glass bottle containing liquid and fuses, along with some tape inside Robotin’s backpack. Officers noticed that the glass bottle had a heavy odor of flammable liquid. In addition, the backpack contained additional fuses, lighters, camping heat sources, and fireworks, among other items. The Philadelphia Police Bomb Disposal Unit took custody of these items and later transferred custody of the items to the FBI. The Explosives Unit of FBI’s Laboratory later determined that the glass bottle contained gasoline, and together with the fuses, comprised a homemade firebomb, or Molotov cocktail.

Earlier today, Robotin was arrested by the FBI and had an initial appearance in federal court. The defendant has been released on conditions.

“Homemade Molotov cocktails can be incredibly dangerous,” Acting U.S. Attorney Williams said. “Here, the defendant is alleged to have carried all of the materials needed to endanger the lives of many people. Luckily, Philadelphia Police arrested Robotin before anyone was hurt. Let this case serve as a warning to others who might consider acting in a similar way – possession of a Molotov cocktail is not protected speech nor harmless hijinks; it is a serious federal crime.”

“Molotov Cocktails are incendiary weapons which pose a significant danger to the entire community,” said Matthew Varisco, Special Agent in Charge of ATF’s Philadelphia Field Division. “There is no telling what future acts of violence were prevented because of the swift action of law enforcement. ATF will continue to work alongside our local, state and federal partners to protect our communities against violent crime.”

“Robotin allegedly took to the streets of Center City on New Year’s Eve, armed with a dangerous incendiary device and components for more,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “People don’t casually stroll around with a Molotov cocktail in their bag, just for fun. It’s fortunate that Philadelphia police officers stopped and this defendant and found the firebomb before it did any damage or hurt someone.”

If convicted, the defendant faces a maximum possible sentence of 10 years in prison, followed by three years of supervised release, and a fine of up to $250,000.

The case was investigated by the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Philadelphia Police Department, and is being prosecuted by the United States Attorney’s Office for the Eastern District of Pennsylvania.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that two related, integrative chiropractic practices and their chiropractor owners have agreed to make payments totaling $805,978 to resolve liability under the False Claims Act for the alleged improper billing of P-Stim electro-acupuncture devices, in these cases branded ‘ANSiStim.’ 

The settling parties are: (1) Discover Optimal Healthcare of Brookhaven, PA, with its owner, Jason Weigner, and his affiliate Weigner Healthcare Management Group, LLC (collectively, “Weigner”); and (2) Yucha Medical Pain Management & Chiropractic Rehabilitation, LLC of Pottstown, PA, and its owners, Randolph E. Yucha and Rodney Gabel (collectively, “Yucha”).

Chiropractors are generally limited in what services they can bill to federal healthcare programs (more information here). However, integrative chiropractic practices such as Weigner and Yucha may in certain circumstances bill additional services to federal healthcare programs through affiliated medical providers, in this case a medical doctor contractor. From approximately September 2016 to February 2017, Weigner and Yucha separately billed Medicare, and Weigner also billed the Federal Employees Health Benefit Program, for the implantation of neuro-stimulators – a surgical procedure which usually requires an operating room and which is reimbursed by federal healthcare programs – when in fact the only procedures performed had been the non-surgical application of ANSiStim by a non-surgeon contractor physician. ANSiStim is another brand name for the P-Stim device, which is also branded as NeuroStim, Stivax, E-Pulse, and NSS-2 Bridge. ANSiStim devices are applied with an adhesive and insertion of a limited number of needles; their application does not involve surgery or anesthesia, nor does it take place in an operating room. Federal healthcare programs do not reimburse for devices such as ANSiStim, whether they are characterized as an electro-acupuncture device or as an implantable neuro-stimulator. Weigner promoted this scheme to Yucha and received a portion of Yucha’s profits.  

For the fraudulently billed P-Stim services here, Weigner previously repaid $306,342 to Medicare and will pay an additional $356,150. Likewise, Yucha had repaid $94,089 to Medicare and will pay an additional $49,397.       

“As we have said before, the application of P-Stim devices is not surgery and should not be billed using the surgical codes improperly pushed by marketers,” said Acting U.S. Attorney Williams. “If a marketer pushes a healthcare scheme like P-Stim that sounds too good to be true, it likely is – and you shouldn’t agree to it.”

These are the fourth and fifth P-Stim provider settlements announced in this District as part of an ongoing investigation. Other jurisdictions including the Southern District of Texas, the Southern District of Georgia, and the Middle District of Tennessee have also taken action to hold providers accountable.

Acting U.S. Attorney Williams continued: “Our continued enforcement through this series of cases has already recovered millions and is a lesson to anyone who might consider a similar fraudulent billing scheme – especially those that prey on vulnerable Medicare beneficiaries looking for legitimate pain management solutions. You will be held accountable by our Office and our partners at the Centers for Medicare & Medicaid Services’ Center for Program Integrity, the Department of Health and Human Services Office of Inspector General, other federal healthcare programs, state partners, and sister U.S. Attorney’s Offices around the country. And if you have already been involved in such a scheme, it is better to come forward and self-disclose than have us find you, as we will.” 

“Every time DOJ stops a provider who is committing fraud, it protects patients and improves the sustainability of the Medicare program,” said Chiquita Brooks-LaSure, Administrator for the Centers for Medicare and Medicaid Services (CMS). “Actions like this to combat fraud, waste and abuse in our federal programs would not be possible without the successful partnership of CMS, the Department of Justice and Department of Health and Human Services Office of Inspector General.” 

“Accurately billing for services provided to Medicare beneficiaries is required of all health care providers,” said Maureen R. Dixon, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of the Inspector General. “HHS-OIG, CMS’s Center for Program Integrity, and the U.S. Attorney’s Office will continue to evaluate and pursue inaccurate billings of P-Stim and similar devices.”

The settled civil claims are allegations only. There has been no determination of civil liability. This case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General. It was handled by Assistant U.S. Attorney Matthew E. K. Howatt, Civil Chief Gregory B. David, and Auditor Dawn Wiggins.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Kenneth Blakeney, 29, of Philadelphia, PA, was convicted today at trial for being a felon in possession of a firearm.

In March 2019, Philadelphia Police Officers pulled Blakeney over for a traffic violation in North Philadelphia, and they observed a gun in his car.  The defendant was a convicted felon at the time and was not allowed by law to possess a firearm.  The defendant fled from the police, leading officers on a car chase for multiple blocks until the defendant eventually jumped out of his car and ran. He was arrested several months later and was charged by federal indictment in October, 2019.

“The crime of being a felon in possession of a firearm is a serious offense, particularly in Philadelphia where gun violence is rampant,” said Acting U.S. Attorney Williams. “As the evidence presented at trial showed, Kenneth Blakeney illegally possessed a gun and then fled from police. Our Office is determined to continue doing everything we can to reduce gun violence in Philadelphia by being ‘All Hands On Deck’ to get criminals like this defendant off the streets for a long, long time.”

“ATF is determined to make our streets safer by working with our local, state and federal partners,” said Matthew Varisco, Special Agent in Charge of ATF’s Philadelphia Field Division.  “We will always be committed to identifying and removing armed criminals from our communities.  The conviction of Kenneth Blakeney is an example of the strong partnership between ATF and the Philadelphia Police Department and a credit to the excellent work of the U.S Attorney’s Office.”

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 is being prosecuted by Assistant United States Attorney J. Jeanette Kang and Anthony Wzorek.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Michael Goldner, 51, of Paoli, PA, was charged by Indictment on a charge of tax evasion. The defendant made his initial appearance in federal court this afternoon.

The Indictment alleges that Mr. Goldner accrued a tax liability of approximately $1,858,740 for the years 2013 through 2017, and that beginning in 2016 he engaged in a scheme to evade the payment of those taxes. Goldner’s tax evasion scheme involved having his employer make payments to Goldner’s wife for payment of personal expenses, including the mortgage on the house where his family resided, rent for an apartment where he resided, service for his pool, dance classes for his daughter, and a vacation for his family. The defendant also had his employer make some payments toward a nearly $5 million restitution judgment that Goldner owed from a 2016 wire fraud and tax evasion conviction in the Eastern District of Pennsylvania. The Indictment further alleges that Goldner failed to report this additional income on his 2016 and 2017 tax returns.

“Goldner’s alleged scheme to hide his true income victimized honest taxpayers in two ways: first, by evading more than $1.8 million in tax liability to the IRS, and second, by avoiding having to make additional payments towards the large balance (more than $4 million) he still owed in court-ordered restitution from his previous conviction on similar charges,” said Acting U.S. Attorney Williams. “Clearly this defendant has not learned that you cannot outrun the IRS. Anyone who is contemplating similar fraud should view this case as a warning that it will not succeed.”

“If you keep breaking the law, the FBI and our partners will keep coming after you,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Willfully defrauding the government and cheating honest taxpayers isn’t ‘creative accounting.’ It’s a federal crime.”

“The American tax system provides government services critical to our people,” said Joleen Simpson, Acting Special Agent in Charge of IRS Criminal Investigation. “Every time someone cheats the tax system, the burden of providing vital services increases on taxpayers who pay their fair share.”

If convicted, the defendant faces a maximum possible sentence of five years in prison, a $250,000 fine, a three years period of supervised release, and a $100 special assessment.

The case was investigated by the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney David J. Ignall.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that generic drug manufacturer KVK-TECH, Inc., headquartered in Newtown, PA, Murty Vepuri (69), and Ashvin Panchal, (50), also of Newtown, were charged by Indictment with conspiracy to defraud the United States Food & Drug Administration (“FDA”) arising from the alleged distribution of unapproved drugs as well as alleged efforts to mislead the FDA and conceal information which could impact drug safety and effectiveness. KVK-TECH was also charged with one count of mail fraud arising from the alleged sale of unapproved drugs to customers who believed the drugs were made with the approval of the FDA.

According to the Indictment, from approximately October 2010 through at least March 2015, Vepuri, the de facto owner of KVK-TECH, and Panchal, the company’s head of Quality Assurance, conspired to defraud the United States and its agencies by impeding, impairing, and defeating FDA’s mission to protect the health and safety of the public by ensuring that drugs marketed and distributed in the United States are safe and effective for their intended uses.

As alleged in the Indictment, Vepuri directed KVK-TECH’s day-to-day operations and made all key business decisions for the company, including decisions related to drug regulatory requirements, drug composition, drug manufacturing quality, purity, and potency. However, Vepuri – who previously owned a generic drug manufacturer in New Jersey that was subject to a restraining order due to ongoing FDA violations – is charged with hiding his involvement in KVK-TECH by placing its ownership in private trusts for the benefit of his children. Vepuri then allegedly represented to the FDA that he was merely an advisor or consultant to KVK-TECH, when in reality he exercised unchecked authority over the company.

As alleged, under Vepuri’s control, KVK-TECH ignored regulatory requirements that had the potential to slow the manufacture, distribution, and sales of its drugs. Vepuri and Panchal are also charged with having provided false explanations to the FDA when inspectors identified violations. Often, Vepuri and Panchal attributed regulatory failures to a mistake or misunderstanding, and KVK-TECH would falsely assure the FDA that violations had been addressed when they knew no corrective and preventative actions had been taken.

The Indictment highlights KVK-TECH’s conduct with regard to Hydroxyzine, a KVK-TECH prescription drug for the treatment of anxiety, for which Vepuri purchased an active pharmaceutical ingredient (“API”) made in Mexico by Dr. Reddy’s Laboratories (“DRL Mexico”). DRL Mexico was not an FDA-approved source. To the contrary, as alleged, the defendants knew that DRL Mexico’s API was considered adulterated by the FDA due to significant violations of good manufacturing practices (cGMP) at DRL Mexico’s manufacturing plant. The cGMP violations were so severe that the FDA issued an import alert for all DRL Mexico API from July 2011 through July 2012. Nonetheless, from 2011 through 2013, KVK-TECH is charged with having knowingly distributed more than 383,000 bottles of the unapproved Hydroxyzine without the FDA’s knowledge or approval.

“FDA laws and regulations regarding drug composition, manufacturing, quality, and related controls are designed to protect Americans’ health and safety – so we can all be confident that our prescription medications will be safe and effective,” said Acting U.S. Attorney Williams. “When companies attempt to game the system to avoid these regulations and increase their profits, the ramifications are potentially catastrophic.  As this Indictment makes clear, any individuals or companies that try to evade the law in this manner will be brought to justice.”

“The FDA’s requirements for drug approval are designed to ensure that patients receive safe and effective medical treatments. Evading the FDA process and distributing unapproved drugs to U.S. consumers will not be tolerated,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations, Metro Washington Field Office.  “We will continue to investigate and protect the public health of the nation.”

“An important mission of the Office of Inspector General is to investigate allegations of fraud against the Department of Labor’s programs. We will continue to work with our law enforcement partners to investigate these types of allegations,” stated Syreeta Scott, Acting Special Agent-in-Charge, Philadelphia Region, U.S. Department of Labor Office of Inspector General. 

If convicted, Vepuri and Panchal each face a maximum possible sentence of five years in prison, three years of supervised release, a $250,000 fine and other financial penalties including forfeiture. KVK-TECH faces fines up to $4 million and other financial penalties such as forfeiture and probation. The parties also face mandatory exclusion from participating in federal programs.

The case was investigated by the FDA-Office of Criminal Investigations, Homeland Security Investigations, and the Department of Labor Office of Inspector General, and is being prosecuted by Assistant United States Attorneys M. Beth Leahy and Patrick J. Murray, and Ross Goldstein, Senior Litigation Counsel for the Department of Justice Consumer Protection Branch.      

An indictment, information, or criminal complaint is an accusation.  A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Donald Thompson, 43, of Scottdale, Georgia, was arrested and charged by Complaint and Warrant on charges of maliciously conveying false information about an explosive, and false information and hoaxes. If convicted, the defendant faces a maximum possible sentence of fifteen years in prison. 

The Complaint alleges that on May 27, 2021, defendant Donald Thompson called into the Lehigh Valley International Airport, Operations Division, located in Allentown, PA, stated that he had a disagreement with his daughter S.T., and claimed she was taking marijuana to an individual in St. Croix aboard a Delta flight. After a short discussion, the Operations Division transferred him to the Delta counter. 

The Complaint further alleges that the defendant proceeded to ask a Delta supervisory representative for information about S.T. and her travel. When the Delta representative declined to share the requested information, the defendant allegedly explained that his daughter was trying to smuggle drugs to St. Croix, asked about Delta’s procedures, and asked if they could get his daughter off the airplane. The Delta representative responded that Delta did have a protocol but that it could not be shared with the caller. As alleged, the caller became irate, identified himself as S.T.’s father Donald Thompson, asked what the Delta representative would do if  “I told you there was a bomb on the plane,” and hung up the phone. 

The Delta representative immediately called law enforcement and corporate security. The airplane was on the tarmac at the time, and the passengers and crew were swiftly deplaned. A search team and bomb dog were deployed to the airplane, and S.T. was screened and questioned by a Lehigh Northampton Airport Authority detective. No drugs or bombs were located on the airplane or on S.T.’s person or luggage.

Donald Thompson was arrested on June 9, 2021 in Georgia and had his initial appearance that same day.  A detention hearing has been scheduled for June 14, 2021 in the Northern District of Georgia, after which the defendant will come to the Eastern District of Pennsylvania to face the charges.

“As a result of this defendant's alleged conduct, law enforcement resources were diverted to respond to what they believed was an imminent, terrifying threat to everyone on the plane and in the airport,” said Acting U.S. Attorney Williams. “As this case exemplifies, bomb threats – even hoax bomb threats such as the one alleged to have been made by this defendant – are no laughing matter; they are federal crimes with serious consequences.”

“The FBI and our partners take all threats of violence seriously. With lives potentially at risk, we have to,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “Hoax threats consume law enforcement resources needed for actual emergencies and cause serious disruptions for the locations and people targeted. Anyone who pulls something like this should expect the FBI to come knocking. It’s a crime and you will be held accountable.”

The case was investigated by Allentown Resident Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Mary A. Futcher.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Danielle Sebenick, 29, of Glenside, PA, was sentenced to seven years in prison, and ten years of supervised release by United States District Court Judge Petrese B. Tucker for her distribution and possession of child pornography.

In May 2019, the defendant pleaded guilty to charges stemming from an investigation into her trafficking in videos of child pornography on the internet during November 2018, while she was employed at Kids First Swim School in Jenkintown, PA.

Authorities identified Sebenick as the administrator of an online site that was dedicated to the sexual abuse and exploitation of children. She used the online site to communicate with other child sex offenders and to traffic in child pornography. At the time that she committed these crimes, Sebenick was six months’ pregnant with her first child; during her online communications with other child sex offenders, Sebenick discussed her plans to sexually abuse her baby as soon as she gave birth. Fortunately, Sebenick was identified by law enforcement, arrested, and incarcerated.  She gave birth in prison and the child was placed in the custody of family members.

“Not only did this defendant commit the heinous crime of possessing and distributing child pornography, but she did so while employed at a business that caters to children and while threatening to sexually abuse her own baby,” said Acting U.S. Attorney Williams. “The thought of a mother bringing a child into the world with the plan to abuse him or her, a helpless infant, is almost unfathomable. She will now spend years behind bars where she no longer poses a threat to our community.”

“Today’s sentence reflects the seriousness of the defendant’s crimes and the irrevocable damage she caused,” said Brian A. Michael, Special Agent in Charge for Homeland Security Investigations Philadelphia. “Homeland Security Investigations will continue to work collectively with our law enforcement partners to investigate and prosecute those who commit the heinous crime of possessing and distributing child pornography.”

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 Homeland Security Investigations, the Abington Police Department, and the Montgomery County Criminal Investigation Division, and is being prosecuted by Assistant United States Attorneys Kelly Harrell and Michelle Rotella.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Lawrence Laws, 28, of Philadelphia, PA, was convicted today at trial of Hobbs Act robbery (robbery which interferes with interstate commerce) and using, carrying and brandishing a firearm during and in relation to a crime of violence arising from his participation in a robbery of a business in the Mount Airy section of Philadelphia.

In February 2017 at approximately 1:00 a.m., the defendant and two co-defendants laid in wait for the owner of the Mermaid Bar, located on Germantown Avenue, as he was closing the bar for the night along with his bartender. The owner of the bar approached his vehicle and, after realizing that one of the defendants was inside waiting for him, both he and the bartender took off running. The defendants caught up to the owner and bartender and ordered them onto the ground and then back to the bar at gunpoint, where they stole a firearm, cash from the register and from a safe in the basement, cartons of cigarettes and a cell phone. The defendants also took the owner’s debit card and PIN number, which they used to make multiple cash withdrawals from the bank ATM across the street before fleeing the scene together. Laws co-defendants both previously pleaded guilty to charges related to this incident.

“Lawrence Laws and his co-defendants committed a brazen armed robbery that endangered innocent lives and left a long-time business owner and one of his employees traumatized,” said Acting U.S. Attorney Williams. “These three defendants should serve as an example to others -- if you rob any kind of business in Philadelphia with a firearm, you are going to face serious federal charges. Our Office is committed to being ‘All Hands On Deck’ working with our law enforcement partners to bring violent criminals to justice.”

“The FBI’s Violent Crime Task Force works closely with our local law enforcement partners to combine our resources as an effective strategy in reducing violent crime in Philadelphia,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “Today's guilty verdict is a direct result of this unique collaboration and is another step towards making our communities safer.”

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 is being prosecuted by Assistant United States Attorneys Alison Kehner and Anthony Wzorek.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams  announced that Justin David May, 31, of Wilmington, DE was sentenced today to seven years and eight months in prison, five years of supervised release, ordered to pay more than $4 Million in restitution and over $300,000 forfeiture by United States District Judge Joel H. Slomsky, following his guilty pleas in two separate cases to 42 counts of mail fraud, 10 counts of money laundering, three counts of interstate transportation of goods obtained by fraud, and two counts of tax evasion.

The defendant’s convictions stem from from separate schemes he perpetrated in order to defraud Cisco Systems Inc. (“Cisco”), Microsoft Corporation (“Microsoft”), Lenovo Group Ltd. (“Lenovo”), and APC by Schneider Electric (“APC”) out of computer hardware, by submitting to these manufacturers hundreds of false warranty claims seeking the advance replacement of more than $5 million worth of computer hardware. While not every false claim was successful, most of the claims did deceive the manufacturers, and May successfully defrauded them into shipping more than $3.5 million worth of computer hardware to him and several co-schemers.

May’s fraud schemes involved the registration of false domain names and the creation of false e-mail addresses, which were used to submit the false warranty claims. After first obtaining legitimate serial numbers for Cisco computer hardware, Microsoft Surface tablets, Lenovo Thinkpads, and APC Smart-UPS that he did not own, the defendant contacted the companies, using false identities and the false email addresses he had created, and claimed to be the owner of a piece of computer hardware that was supposedly broken. May knew how to explain the supposed problem in such a way that the item in question could not be fixed through trouble shooting and would instead require a replacement. May promised to return the supposedly broken item as soon as he received the advance replacement, and he gave false addresses to which the replacement items could be shipped, including many addresses in Philadelphia, South Jersey, and Delaware. After picking up the hardware, May sold most of it through eBay or to various computer equipment resellers, and he never returned any of the supposedly broken items, because he never owned them in the first place.

The primary victim of the defendant’s fraud schemes was Cisco. With respect to Cisco, May personally submitted 267 false warranty claims, while co-schemers based in Texas submitted another 101 false warranty claims. Out of these 368 total false warranty claims, May and his co-schemers were successful on at least 252 occasions, and between April 12, 2016 and April 3, 2017, May and his co-schemers deceived Cisco into shipping Cisco hardware worth almost $3.5 million. May laundered the proceeds he obtained from the Cisco scheme by cashing checks he received from the computer equipment resellers at a check cashing business rather than depositing them in his bank account, and he used some of the proceeds to buy a new BMW.

With respect to Microsoft, May and a Singapore-based co-schemer were responsible for the submission of 227 false warranty claims to Microsoft, and they were successful on 139 of these false claims, which induced Microsoft into shipping to May a total of 139 Microsoft Surface tablets with a retail value of $364,761.

With respect to Lenovo, May personally submitted at least 216 separate false warranty claims, and as to each he claimed that his Lenovo ThinkPad hard drive had failed. These false warranty claims were successful on 193 occasions, and May caused Lenovo to ship to him 193 separate “replacement” hard drives, with a retail value of $143,000. May sold all of these hard drives through an eBay store he operated.

With respect to APC, May induced APC to ship at least three of its uninterruptable power supply products, with a retail value of at least $11,400 through the submission of false warranty claims.

While May earned hundreds of thousands of dollars through his illegal fraud scheme, he failed to pay any income tax on that money, and instead he evaded the payment of at least $52,000 in federal income taxes.

“Warranties are designed to make consumers whole by replacing faulty products, not to be exploited by scammers looking to turn an illegal profit,” said Acting U.S. Attorney Williams. “Warranty fraud is not a victimless crime, rather, companies which support employment for thousands of workers stand to lose millions of dollars, which was the case here. The defendant’s scheme caused real harm, which is why he will now spend many years behind bars as punishment for his actions. I would like to thank the FBI and IRS for their dedication and partnership in this matter.”

“May and his co-conspirators undermined the warranty process which exists to support honest consumers. They profited from this complex scheme while defrauding these companies and the federal government,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “Through the hard work and collaborative efforts of the FBI and IRS, this sentencing sends the message to those who seek to make a profit through fraud and deception, that this conduct bears significant consequences.”

“IRS Criminal Investigation will painstakingly investigate cases when individuals have taken property that belongs to others,” Thomas Fattorusso, Special Agent in Charge of IRS Criminal Investigation. “We will continue to be persistent in our mission to take apart these illicit schemes and bring the criminals who run them to justice.”

The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation Division, and is being prosecuted by Assistant United States Attorney Michael S. Lowe.

PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Kristian Jones, 27, of Wilmington, DE, was sentenced to twenty years in prison, ten years of supervised release, and was ordered to pay over $15,000 in restitution to his victims by United States District Judge Nitza I. Quiñones Alejandro for his participation in a conspiracy to sex traffic minor and young adult victims.

In April 2019, following a 14-day jury trial, the defendant was found guilty of one count of conspiracy to engage in sex trafficking by force, fraud, and coercion and three counts of sex trafficking of minors by force, fraud, and coercion.

The evidence at trial showed that Kristian Jones helped manage the sex trafficking enterprise led by co-defendant Dkyle Bridges. The multi-year sex trafficking conspiracy preyed on teenage girls and young women looking for a home and support. Once lured into the trafficking circle, the victims were compelled to engage in commercial sex acts in southeastern Pennsylvania, Delaware, and elsewhere, for the co-defendants’ financial benefit. Co-defendant Bridges used violence and coercive tactics to force the victims to remain in his sex trafficking operation – including pouring water on them to keep them awake, choking them, and assaulting them. Bridges, the leader of this operation, was sentenced to 35 years in prison earlier this year.

Defendant Kristian Jones’ role in the sex trafficking operation included overseeing the trafficking of three minor girls brought to hotel rooms to engage in commercial sex acts. The defendant collected the money paid by the sex buyers, provided the condoms, controlled the victims’ access to food, and stayed on-site to ensure the victims engaged in the commercial sex acts. In doing so, the defendant fulfilled his role as the day-to-day manager of the sex trafficking of children.  

The defendant’s brother, Anthony Jones, was also convicted for his role in this sex trafficking conspiracy. Anthony Jones is scheduled to be sentenced later this summer.  

“Kristian Jones used the bodies of children for his own financial benefit,” said Acting U.S. Attorney Williams. “His crimes are appalling, and today’s sentence of twenty years reflects the seriousness with which the federal justice system will treat defendants convicted of sex trafficking offenses. We will continue to work collectively to investigate and prosecute these destructive crimes committed against some of the most vulnerable members of our community.”

“Jones exploited and abused his victims. His willingness to prey on vulnerable women and coerce them to engage in sex trafficking is a danger to public safety,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “Today’s sentencing further affirms the FBI’s commitment to combating sex trafficking and protecting the survivors of these crimes. Together with our law enforcement partners across the region, we are dedicated to investigating and bringing federal charges against those like Jones who commit these reprehensible acts.”

The case was investigated by Federal Bureau of Investigation – Philadelphia with assistance from the Tinicum Township Police Department; Newark, Delaware Police Department; Delaware State Police; Delaware River Bay Authority; and Philadelphia Police Department; and was prosecuted by Assistant United States Attorney Priya  T. De Souza and Department of Justice Trial Attorney Jessica L. Urban.