Eastern District of Pennsylvania
Press releases recorded for this federal judicial district.
Final Defendant in Skipworth Drug Trafficking Gang in Philadelphia and its Surrounding Suburbs Sentenced to 15 YearsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Rahim Amin, 36, of Philadelphia, PA was sentenced to 15 years in prison, and five years of supervised release by United States District Judge Mark A. Kearney for his role in a large scale drug trafficking ring.
The defendant pleaded guilty in November 2019 to conspiracy to distribute controlled substances, possession with intent to deliver methamphetamine, cocaine, heroin, and fentanyl, possession of a firearm in furtherance of a drug trafficking crime, and possession of a firearm by a convicted felon. Amin was a member of the “Skipworth” drug trafficking organization, which sold bulk quantities of methamphetamine, fentanyl, and other deadly drugs in Philadelphia and its surrounding suburbs. Following a lengthy investigation, including a series of court-ordered wiretaps, the defendant and his co-conspirators were indicted by a federal grand jury.
Amin’s co-conspirators, Damir Skipworth (the gang’s namesake), Jarrett Cobb, and Tyrone Smith all previously pleaded guilty to drug trafficking charges in this case and received significant prison sentences: Skipworth more than eight years, Cobb more than five years, and Smith more than three years. A fourth co-defendant, Vontez Scales, was convicted at trial of possession with intent to distribute and conspiracy to distribute narcotics and was sentenced to over 26 years.
“By pumping millions of dollars worth of meth, heroin, cocaine and fentanyl into our region, the Skipworth drug trafficking organization was a menace to Philadelphia and its suburbs,” said U.S. Attorney McSwain. “With Amin’s sentence, all of the defendants in this case have now received substantial periods of incarceration. Nobody should have to endure living in a neighborhood where drug dealers and thugs act like they’re in charge. My Office, together with our law enforcement partners, must be relentless in attacking and destroying these drug gangs, along with the violence that often comes with them.”
“The dismantling of the Skipworth DTO by federal law enforcement officers and the Bucks County Drug Strike Force is a great testament to the force multiplier effect that we achieve when we all work together to make our community safer. No egos; just a great collaborative effort by all involved for justice and public safety,” said Bucks County District Attorney Matthew Weintraub.
The case was investigated by the Bucks County Detective Bureau and the Drug Enforcement Administration, and is being prosecuted by Assistant United States Attorneys Christopher Parisi and Andrea Foulkes.
Two Members of “Original Block Hustlaz” Gang in North Philadelphia Sentenced for Drug Trafficking OffensesRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Richard Chase Hoover, 34, of Las Vegas, NV and Amir Boyer, 29, of Philadelphia, PA were sentenced by United States District Judge Michael M. Baylson to 15 years and 10 years in prison, respectively, to be followed by five years of supervised release, for their participation in a long-term drug trafficking conspiracy in Philadelphia from at least March 2017 through June 2018.
In November 2019, both defendants pleaded guilty to multiple counts in a Second Superseding Indictment, which charged nine defendants with various drug trafficking crimes. These nine defendants are members of a violent drug trafficking organization (also purporting to be rap artists) known as the Original Block Hustlaz or “OBH”. The 16-count Second Superseding Indictment alleged that the defendants conspired to distribute and did distribute cocaine, crack, methamphetamine, and heroin from various locations that they controlled, particularly in and around North Philadelphia.
In September 2017, officers and detectives from the Philadelphia Police Department executed a search warrant at 3234 North Sydenham Street, which was a property used by members of OBH to store and sell drugs. During the execution of the search warrant, numerous drugs were seized, including approximately 62 grams of cocaine base (“crack”), 229 grams of heroin, and 48 grams of a methamphetamine mixture. The officers also seized $8,101 from the residence.
In May 2018, FBI agents observed Hoover enter an apartment on Columbus Boulevard in Philadelphia, soon after he returned from a trip to Los Angeles. Pursuant to a federal search warrant, the FBI followed Hoover into the apartment and found 10 kilograms of cocaine, nearly 6 pounds of pure methamphetamine, and $20,000 in cash. Then, in October 2018, Amir Boyer was arrested at the property on North Sydenham Street, where he had been living with his girlfriend and two children. During the execution of the arrest, officers seized approximately 20 pounds of marijuana and a firearm loaded with eight live rounds.
“Hoover and Boyer were members of a crew that trafficked in poison that it transported across the country and pushed here on our streets in Philadelphia,” said U.S. Attorney McSwain. “They also used violence to maintain their hold on their drug territory, in order to keep the cash rolling in, while pretending to do legitimate business as musicians as part of their cover. Now OBH has been decimated, hopefully never to return.”
“The O.B.H. gang steadily poisoned the parts of Philadelphia they controlled, dealing drugs and dishing out violence,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “The money they made from dealing cocaine, crack, meth, and heroin fueled this violence. The FBI will continue putting drug traffickers firmly out of business and behind bars, as we fight violent crime and work to make this city safer.”
“Hoover and Boyer headed a poly-drug distribution organization that distributed significant amounts of illicit drugs such as cocaine, crack, methamphetamine, heroin, and marijuana,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration's (DEA) Philadelphia Field Division. “Their drug-trafficking activities negatively impacted countless lives in and around North Philadelphia.”
This case is part of the FBI’s Violent Gang Safe Streets Task Force, a program through which federal, state, and local law enforcement agencies collaboratively address the violent crime plaguing communities. It was investigated by the Federal Bureau of Investigation, the Drug Enforcement Administration, and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorneys Everett Witherell and Timothy M. Stengel.
Montgomery County Man Sentenced to Three Years for Nearly $3 Million Embezzlement Scheme Against Lancaster CompanyRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Steven J. Russo, 43, of Pennsburg, PA, was sentenced by U.S. District Court Judge Jeffery L. Schmehl to three years in prison, three years of supervised release, and ordered to pay $2,798,000 in restitution to the victim and $980,000 in restitution to the IRS, for embezzling nearly $3 million from his former employer and making false statements on his federal income tax returns.
The defendant pleaded guilty in June 2020 to wire fraud related to the embezzlement scheme, and to filing false tax returns. Russo had served as the Director of Information Technology for a design and manufacturing company headquartered in Lancaster, PA, and over a period of almost six years embezzled money from the company in a variety of ways. His schemes included the use of sham corporations with virtual addresses, fake invoices, and access to the company’s credit cards and on-line accounts. Russo would use those company owned accounts to make unearned payments to the sham companies owned and controlled by him, and to purchase items that he kept for his personal use or sold for personal gain. Russo also filed false tax returns, failing to report his income accurately and claiming false expenses and deductions, resulting in a tax debt to the IRS of nearly $1 million.
“Embezzlement and tax fraud are forms of stealing, pure and simple,” said U.S. Attorney McSwain. “Russo held a senior position of trust with his former employer, and shamefully used that access to steal millions of dollars, while also ripping off the government (and honest tax payers) in the process. My Office will continue to work with our law enforcement partners to protect innocent businesses and taxpayers from being victimized by this type of fraud.”
“Mr. Russo’s decision to use deceit and fraud to line his pockets with his employer’s money and shirk his tax obligations has cost him his freedom,” said IRS Criminal Investigation Special Agent in Charge Thomas Fattorusso. “This sentence should serve as a deterrent to those who might contemplate similar actions.”
The case was investigated by the Internal Revenue Service – Criminal Investigations, and is being prosecuted by Assistant United States Attorney Bea L. Witzleben.
Delaware County Man Sentenced to 35 Years for Sexually Abusing and Recording the Abuse of a Young Boy, and for Collection of More than 114,000 Images of Child PornographyRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Archie Kissling, 25, of Aston, PA, was sentenced to 35 years in prison, 10 years of supervised release, and $39,000 in restitution by United States District Court Judge Jan E. DuBois for multiple child exploitation offenses, stemming from his sexual abuse of a young child for months, and his extensive collection of horrific child pornography. Kissling’s sentence also requires him to register as a sex offender under Megan’s Law.
In July 2019, the defendant pleaded guilty to six counts of manufacturing child pornography, and one count each of transportation and possession of child pornography. The investigation uncovered videos that Kissling had taken of himself sexually assaulting a 7-year-old boy in his care numerous times over at least a four-month period. Among other abuse, Kissling filmed himself masturbating the child, orally raping him, and attempting to sodomize the victim on multiple occasions. When investigators seized the defendant’s phones and online accounts, they uncovered a massive collection of child pornography that showed not only Kissling’s 7-year-old victim, but also more than 114,000 images and videos of some of the most sadistic pornography imaginable. The bulk of his collection featured infants, toddlers, and prepubescent children, primarily boys, who were being sexually abused by adults through digital penetration, and oral and anal rape.
“As federal prosecutors, we see horrific examples of child exploitation and sexual depravity on a routine basis, but this case is in a special category,” said U.S. Attorney McSwain. “Kissling belongs in only one place – prison – and will now spend the next thirty-five years there, where he will be unable to harm any more innocents.”
“Archie Kissling repeatedly sexually abused a little boy and documented it for his own twisted gratification,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “His trove of horrific images of that child and others represents an unimaginable level of pain and trauma inflicted on those young victims. Locking Kissling up doesn’t undo that damage, not by a long shot. But it does keep him from hurting anyone else and for that we’re thankful.”
This case is part of Project Safe Childhood (PSC), a program bringing together all levels of law enforcement and the communities they serve to reduce the sexual exploitation and abuse of children. The case was investigated by the Federal Bureau of Investigation, the Delaware County District Attorney’s Office, the Darby Township Police Department and the Pinellas County, Florida Sheriff's Department, and is being prosecuted by Assistant United States Attorney Michelle Rotella.
18 Pennsylvania Prison Inmates and Accomplices Charged with Fraudulently Obtaining Pandemic Unemployment Assistance FundsRead the Press Release
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that twelve Chester County Prison inmates and their accomplices were charged federally with fraudulently applying for and obtaining emergency unemployment benefits related to COVID-19. The defendants are charged with submitting false applications claiming that the prison inmates lost jobs as a result of the pandemic and are available to work full-time. All the defendants were arrested and taken into custody this morning or were already in custody.
In addition, Pennsylvania Attorney General Josh Shapiro announced last week that his office brought state charges against six state prison inmates in the Eastern District of Pennsylvania, who fraudulently applied for and obtained the same type of emergency unemployment benefits.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The CARES Act created the Pandemic Unemployment Assistance (PUA) program, which provides unemployment benefits to individuals not eligible for regular unemployment compensation or extended unemployment benefits, including individuals, families, and businesses affected by the COVID-19 pandemic. Eligibility to receive weekly PUA benefits is predicated on an applicant’s unemployment for reasons related to the pandemic, and it requires that the applicant was able to work each day and, if offered a job, would have been able to accept it. Once an applicant is approved to receive benefits, the applicant is required to submit weekly certifications indicating that he or she: was ready, willing and able to work each day; was seeking full time employment; did not refuse any job offers or referrals; and had reported any employment during the week and the gross pay or other payments received. In all of the cases, the inmates falsely reported themselves eligible to receive PUA benefits when in fact they did not meet the eligibility requirements -- namely, they were not able to report to a job each day because of their incarceration.
These cases are being prosecuted and investigated by the United States Attorney’s Office and the Pennsylvania Office of Attorney General with assistance from the Chester County District Attorney’s Office and agencies of the Coronavirus Working Group led by the United States Attorney’s Office, including the Internal Revenue Service – Criminal Investigations, the Federal Bureau of Investigation, the United States Postal Inspection Service, and the United States Department of Labor – Office of Inspector General.
“These fraudsters – many of whom were already incarcerated for breaking the law - treated a national public health crisis as an opportunity to cash in,” said First Assistant U.S. Attorney Williams. “This callous attitude rips off honest taxpayers who fund relief programs and also makes it much more difficult to provide funds to those who deserve and need them. My Office will do everything in its power to ensure that coronavirus fraud scams are stopped and punished.”
“After announcing our first round of arrests in these COVID unemployment scams, I promised that there were more to come,” said Attorney General Josh Shapiro. “Last week, my office charged 20 more individuals with illegally taking benefits away from hard-working Pennsylvanians who are struggling during this crisis, including six inmates from SCI Phoenix in Montgomery County. These arrests are not the end of our investigation, and I’ll continue working with my colleagues at the federal level to track down those heading these schemes, along with those who are willfully participating and breaking the law.”
“It is despicable that incarcerated people lined their pockets by taking advantage of the COVID-19 financial lifeline given to millions of honest, hardworking Pennsylvanians. Thank you to the U.S. Attorney’s Office of the Eastern District of Pennsylvania for your continuing efforts in fighting for justice,” said Chester County District Attorney Deb Ryan.
“Millions of Americans struggling financially due to job loss from COVID-19 depend on every single dollar of assistance available to them,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “When fraudulent applications wrongly drain those funds, it’s a blow to the folks who truly need help and a blatant theft of taxpayer dollars. Meantime, a word of advice to anyone thinking that scamming the government means easy money — the federal charges announced today can mean hard time, if convicted.”
“During tough economic times like this, it is despicable that people would seek to fraudulently obtain emergency unemployment benefits that were specifically meant for those who lost their jobs and are unable be gainfully employed amid this pandemic,” said IRS Criminal Investigation Special Agent in Charge Thomas Fattorusso. “We will continue to be relentless in our mission to dismantle these types of illicit scams and bring the criminals who run them to justice.”
“Today’s charges demonstrate the Office of Inspector General’s commitment to combating fraud against the Unemployment Insurance program, which has become increasingly prevalent amid the pandemic. We will continue to work with our law enforcement and state workforce agency partners to pursue individuals who seek to undermine the integrity of the Unemployment Insurance program,” said Derek Pickle, Acting Special Agent-in-Charge, Philadelphia Region, U.S. Department of Labor Office of Inspector General.
Descriptions of the cases are below:
Vincent Hazzard, 49, of Coatesville, PA, was charged by Indictment with mail fraud, fraud in connection with emergency benefits, theft of money of the United States, and aiding and abetting. According to the Indictment, in July 2020, the defendant caused multiple individuals to assist him in filing a fraudulent application for PUA funds. The application falsely stated that Hazzard was available for immediate employment, and that he was currently unemployed due to the pandemic, when in fact he was not available for employment due to the fact that he was incarcerated at the Chester County Prison, was not scheduled for release until late September 2020, and was not unemployed due to the pandemic. Hazzard had $1,590 credited to him by means of a prepaid bank card in late July 2020, and he caused others to spend or withdraw almost all of the funds by the end of August in order to avoid having funds left in his account in the event his fraud was discovered. If convicted of all charges, the defendant faces a maximum sentence of 60 years in prison, three years of supervised release, and a $750,000 fine.
Jacob Fulton, 32, and Emily Baier, 26, both of Coatesville, PA, were charged by Indictment with conspiracy to commit mail fraud, mail fraud and fraud in connection with major disaster or emergency benefits, and aiding and abetting. According to the Indictment, between July 12 and August 26, 2020, Fulton and Baier conspired to file claims for PUA benefits on behalf of inmates of Chester County Prison and agreed to keep a portion of the PUA benefits for themselves. Fulton allegedly told Baier that with this scheme, they “can be f******* rich.” The Indictment also alleges that on or about May 11, 2020, Fulton and Baier filed PUA claims for themselves, fraudulently claiming that they are entitled to PUA benefits. If convicted of all charges, Fulton faces a maximum sentence of 90 years in prison, five years of supervised release, and a fine of $2,250,000, and Baier faces a maximum sentence of 120 years in prison, five years of supervised release, and a fine of $2,500,000.
Christopher Hersh, 36, of Avondale, PA, was charged by Indictment with conspiracy to defraud the United States and fraud in connection with major disaster or emergency benefits. According to the Indictment, in July 2020, the defendant caused one of his close relatives to assist him in filing a fraudulent application for PUA funds. The application falsely stated that Hersh was available for immediate employment, that he was currently unemployed due to the pandemic, and that his last day of work had been in November 2019 because he was laid off due to a business closure caused by the pandemic, when in fact he was not available for employment due to the fact that he was incarcerated at the Chester County Prison, had been incarcerated since December 2016, and was not unemployed due to the pandemic. If convicted of all charges, Hersh faces a maximum sentence of 35 years in prison, three years of supervised release, and a $500,000 fine.
Kenneth Huggins, 24, of Coatesville, PA, and Patrice Hawthorne, 46, of Middletown, DE, were charged by Criminal Complaint with conspiracy to commit mail fraud. According to the Complaint, Huggins, an inmate at Chester County Prison, and his mother, Hawthorne, conspired over a series of recorded prison telephone calls to submit a fraudulent application for PUA benefit payments on Huggins’s behalf. The application falsely stated that Huggins was available for immediate employment and that he was currently unemployed due to the COVID-19 pandemic, when in fact he had been incarcerated since January 2020 at Chester County Prison and was not unemployed due to the pandemic. Huggins ultimately received more than $12,000 in unemployment benefits on a prepaid bank card; Hawthorne took custody of that card and withdrew funds for her own benefit. If convicted of all charges, both Huggins and Hawthorne face a statutory maximum sentence of 20 years in prison, three years of supervised release, and a $250,000 fine.
Biancha Kranzley, 31, of Coatesville, PA was charged by Complaint with fraud in connection with major disaster or emergency benefits. According to the Complaint, in July 2020, the defendant submitted a fraudulent application for benefits on behalf of an individual who, at the time, was incarcerated at the Chester County Prison. The application falsely stated that the applicant was unemployed due to the COVID-19 pandemic but was otherwise available to work, if offered a job. In fact, the applicant had been incarcerated since early 2019. The defendant received a prepaid debit card loaded with more than $13,000 in PUA benefits. She has used or withdrawn more than half of those funds. If convicted of all charges, Kranzley faces a maximum sentence of 30 years in prison, five years of supervised release, and a fine of $250,000.
Jennifer D’Hulster, 37, of Coatesville, Zachary Gathercole, 30, of Sadsburyville, Ashley Harrington, 30, of West Chester, and Anthony Schweitzer, 20, of Coatesville, were charged by Indictment with conspiracy, fraud in connection with emergency benefits and aiding and abetting, and mail fraud. According to the Indictment, in June 2020, D’Hulster fraudulently applied for benefits for Schweitzer, who has been an inmate at Chester County Prison since June 2020, and, in July 2020 applied for benefits for a different inmate who has been incarcerated at State Correctional Institute Phoenixville (SCIP) since March 2020, neither of whom lost a job because of COVID-19. D’Hulster successfully enabled the SCIP inmate to receive unemployment benefits totaling approximately $11,410 credited to the inmate by means of a prepaid bank card. In May 2020, Harrington fraudulently applied for benefits for Gathercole, who has been an inmate at Chester County Prison since August 2019, did not lose a job because of COVID-19, and has not been able to work. Harrington successfully enabled Gathercole to receive unemployment benefits totaling approximately $14,140. Additionally, D’Hulster and Gathercole collected personal identification information for other individuals, including inmates at Chester County Prison, to use to submit additional fraudulent applications for PUA benefits. If convicted of all charges, the defendants face the following maximum sentences: D’Hulster faces 90 years in prison, three years of supervised release, and a $1 million fine; Gathercole faces 140 years in prison, three years of supervised release, and a $1.5 million fine; Harrington faces 70 years in prison, three years of supervised release, and a $750,000 fine; and Schweitzer faces 50 years in prison, three years of supervised release, and a $500,000 fine.
Arthur Johnson, 44, of Coatesville, PA was charged by Complaint with fraud in connection with major disaster or emergency benefits. According to the Complaint, in July 2020, the defendant submitted a fraudulent application for benefits on behalf of an individual who, at the time, was incarcerated at the Chester County Prison. The application falsely stated that the applicant was unemployed due to the COVID-19 pandemic, but was otherwise available to work, if offered a job. In fact, the applicant had been incarcerated since October 2019. The defendant received a prepaid debit card loaded with approximately $13,500 in PUA benefits. All of the funds have been withdrawn. If convicted of all charges, Johnson faces a maximum sentence of 30 years in prison, five years of supervised release, and a fine of $250,000.
In addition to the above, six inmates at State Correctional Institution Phoenix (SCIP), located within the Eastern District of Pennsylvania, were arrested on state charges as part of an ongoing investigation by the Pennsylvania Office of Attorney General in partnership with the U.S. Attorney’s Office: Jermaine Plumer received $18,264 worth of PUA paid out after he provided personal identifying information to non-incarcerated individuals; Rafael Rodriguez received $22,109 worth of PUA paid out after he provided personal identifying information to non-incarcerated individuals; Dwayne Washington received $3,510 worth of PUA paid out after he provided personal identifying information to a non-incarcerated individual; Leroy Barnes was never paid, but he did provide his personal identifying information to a non-incarcerated individual to have them complete a PUA application on his behalf; Andrew Simms was never paid, but he did provide his personal identifying information to a non-incarcerated individual to have them complete a PUA application on his behalf; and Dexter Pitts a/k/a Kevin Perry received $3,150 worth of PUA paid out after he provided his personal identifying information to a non-incarcerated individual.
First Assistant U.S. Attorney Williams, Attorney General Shapiro and District Attorney Ryan thanked law enforcement officials at the Chester County Prison and officials at the Pennsylvania Department of Labor and Industry, the Pennsylvania Department of Treasury and the Pennsylvania Department of Corrections for their important assistance in these cases. The federal cases are being prosecuted by Assistant United States Attorneys Judy Smith, Jeanette Kang, Anthony Wzorek, Jessica Rice, Anita Eve, Chris Mannion, and Melanie Wilmoth.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Ten Men Sentenced to Prison for Their Roles in a Child Exploitation Enterprise and ConspiracyRead the Press Release
Ten men from around the country have been sentenced for participating in a child pornography enterprise and conspiracy, Acting Assistant Attorney General Brian Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania announced today.
U.S. District Judge Harvey Bartle III for the Eastern District of Pennsylvania imposed the following sentences:
- Andrew Dowdle, aka “Chigger,” 48, of Oswego, New York, was sentenced on Sept. 23, 2019, to 16 years in prison, followed by 15 years supervised release. He pleaded guilty on April 8, 2019.
- Carl Masters, aka “Harmon,” 45, of Lawrence, Kansas, was sentenced on Sept. 24, 2019, to 27 years in prison, followed by lifetime supervised release. He pleaded guilty on April 25, 2019.
- Ric Crossfield, aka “Officer Branner,” 25, of Jamaica, New York, was sentenced on Sept. 25, 2019, to 14 years in prison, followed by 40 years supervised release. He pleaded guilty on April 18, 2019.
- Christian Brennan, aka “Choad,” 46, of Puyallup, Washington, was sentenced on Nov. 7, 2019, to 20 years in prison, followed by 10 years supervised release. He pleaded guilty on April 23, 2019.
- Sharif El-Battouty, aka “Fritos,” 39, of Woodside, New York, was sentenced on March 16, 2020, to 30 years in prison, followed by lifetime supervised release. He was found guilty at trial on May 2, 2019.
- Jarrett Lea, aka “Toot,” 27, of Charlotte, North Carolina, was sentenced on Oct. 1 2020, to 17 years in prison, followed by 15 years of supervised release. He pleaded guilty on April 15, 2019.
- David Minnichelli, aka “Davis,” 30 of Califon, New Jersey, was sentenced on July 28, 2020, to 15 years in prison, followed by lifetime supervised release. He pleaded guilty on Oct. 22, 2019.
- Marqueal Bonds, aka “The Goat,” 22, of Chicago, Illinois, was sentenced on Aug. 18, 2020, to 22 years in prison, followed by lifetime supervised release. He pleaded guilty on March 5, 2020.
- Timothy Friel, aka “JJChuck,” 40 of Penndel, Pennsylvania, was sentenced on March 19, 2020, to 12 years in prison, followed by 15 years supervised release. He pleaded guilty on Aug. 24, 2018.
U.S. District Judge Benjamin H. Settle for the Western District of Washington imposed the following sentence:
- Cory Crosby, aka “The 191,” 39, of Tacoma, Washington, was sentenced on April 1, 2019, to 25 years in prison, followed by lifetime supervised release. He pleaded guilty on July 18, 2018.
“The defendants collaborated in a sophisticated conspiracy to deceive, manipulate, and extort hundreds of unsuspecting and vulnerable children, tricking them into creating sexually explicit content by posing as their peers on live-streaming video chat applications,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “These significant sentences reflect the Department’s commitment to uncovering such nefarious schemes and protecting our most innocent from exploitation by online predators.”
“Jarret Lea and his co-conspirators caused irreparable harm to over 170 identified child victims,” said U.S. Attorney William McSwain for the Eastern District of Pennsylvania. “These men shrouded their true identities in the anonymity of the internet and presented themselves as their victims’ peers in order to gain these children’s trust and exploit them sexually. The lengthy sentences handed out for this despicable behavior will not restore the innocence lost, but they do send a strong message that my office will find and prosecute child predators, no matter where they lurk.”
“In order to ensure themselves a steady supply of new child pornography, these predators conspired to befriend, manipulate, and sexually exploit scores of minors online,” said Special Agent in Charge Michael J. Driscoll of the FBI’s Philadelphia Division. “The defendants thought they could hide behind fake names and handles and continue their violations with impunity. The FBI is proud to have fully unmasked them, shut them down, and brought them to justice.”
According to court documents, between November 2016 and July 2018, these defendants, and other co-conspirators outside of the United States, utilized chatrooms on the online service “Discord” – an application designed for online gaming communities that allows users to engage in text chat and share images and videos – to produce and exchange child pornography. These chatrooms were accessed by invitation only. Those who gained access to the chatrooms actively worked together to identify social media platforms and profiles of minor females, including girls as young as 10 years old, and strategized regarding how to convince the children to engage in sexually explicit activity via live web camera. The group targeted live-streaming video chat applications such as Live.Me, Periscope, YouNow, Kik, Musically and Snapchat to target and entice the minors to engage in sexually explicit conduct.
While pretending to be minor boys and girls, the defendants streamed pre-recorded videos of other underage minors engaging in similar conduct to the targeted victims in an effort to get the minors to believe they were watching a live video of someone their own age. The victims were unaware that they were communicating with adult men who were recording their sexually explicit activity. After successfully recording a victim, the defendants shared the sexually explicit videos with each other by uploading the files to file-storage sites and placing a link to download the file on a section of their members-only chatroom. To date, 172 minor victims have been positively identified.
Four of the co-conspirators each pleaded guilty to one count of engaging in a child exploitation enterprise and one count of advertising child pornography. Three of the co-conspirators pleaded guilty to one count of advertising child pornography. Two of the co-conspirators pleaded guilty to one count of engaging in a child exploitation enterprise. Additionally, Cory Crosby, who was prosecuted in the Western District of Washington pleaded guilty to one count of engaging in a child exploitation enterprise, one count of producing child pornography and one count of possession of child pornography.
Trial Attorneys Kaylynn Foulon and Lauren Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Assistant U.S. Attorney Kevin Jayne and former Assistant U.S. Attorney Seth Schlessinger of the Eastern District of Pennsylvania, and Assistant U.S. Attorney Matthew Hampton of the Western District of Washington prosecuted the cases. The FBI Philadelphia and Tacoma Field Offices and investigated the case with assistance from Operation Rescue Me, the Digital Analysis and Research Center (DARC) Lab and CEOS’s High Technology Investigative Unit.
This case is brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc.
North Carolina Man Sentenced to 17 Years for Engaging in an Internet-Based Child Pornography ConspiracyRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Jarret Lea, 27, of Charlotte, North Carolina, was sentenced to 17 years in prison and 15 years of supervised release by Senior United States District Court Judge Harvey Bartle, III, for engaging in a conspiracy to advertise child pornography online. Lea was also ordered to pay a total of $33,221.45 in restitution to various victims. In April 2019, Lea pleaded guilty to one count of conspiracy to advertise child pornography.
Using Discord, an online communications application that allows users to share files and communicate via chat messages, Lea and his co-conspirators connected in private chat rooms to share child pornography and discuss how to exploit children to produce more child pornography. Using what they had learned in the chatroom, some of these men then entered legitimate live streaming websites and “groomed” children they found there into producing child pornography by performing sexual acts while being video recorded.
Judge Bartle has already imposed sentences in the following other related cases:
- Andrew Dowdle, 48, of Oswego, New York, was sentenced to 16 years in prison, followed by 15 years of supervised release. He pleaded guilty in April 2019.
- Carl Masters, 45, of Lawrence, Kansas, was sentenced to 27 years in prison, followed by lifetime supervised release. He pleaded guilty in April 2019.
- Ric Crossfield, 25, of Jamaica, New York, was sentenced to 14 years in prison, followed by 40 years of supervised release. He pleaded guilty in April 2019.
- Christian Brennan, 46, of Puyallup, Washington, was sentenced to 20 years in prison, followed by 10 years of supervised release. He pleaded guilty in April 2019.
- Sharif El-Battouty, 39, of Woodside, New York, was sentenced to 30 years in prison, followed by lifetime supervised release. He was found guilty at trial in May 2019.
- Timothy Friel, 40 of Penndel, Pennsylvania, was sentenced to 12 years in prison, followed by 15 years of supervised release. He pleaded guilty in August 2019.
- David Minnichelli, 30 of Califon, New Jersey, was sentenced to 15 years in prison, followed by lifetime supervised release. He pleaded guilty in October 2019.
- Marqueal Bonds, 22, of Chicago, Illinois, was sentenced to 22 years in prison, followed by lifetime supervised release. He pleaded guilty in March 2019.
“Jarret Lea and his co-conspirators caused irreparable harm to over 170 identified child victims,” said U.S. Attorney William McSwain. “These men shrouded their true identities in the anonymity of the internet and presented themselves as their victims’ peers in order to gain these children’s trust and exploit them sexually. The lengthy sentences handed out for this despicable behavior will not restore the innocence lost, but they do send a strong message that my Office will find and prosecute child predators, no matter where they lurk.”
“In order to ensure themselves a steady supply of new child pornography, Jarett Lea and these other predators conspired to befriend, manipulate, and sexually exploit scores of minors online,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “The defendants thought they could hide behind fake names and handles and continue their violations with impunity. The FBI is proud to have fully unmasked them, shut them down, and brought them to justice.”
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 U.S. 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. The case was prosecuted by Assistant U. S. Attorneys Kevin Jayne (EDPA) and Seth Schlessinger (EDVA), and Trial Attorneys Kaylynn Foulon and Lauren Britsch, of the U.S. Department of Justice’s Child Exploitation and Obscenity Section.
U.S. Attorney McSwain Announces Charges Against Delaware County Doctor and Medical Office Manager as Part of Nationwide Health Care Fraud TakedownRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that three individuals have been charged in the Eastern District of Pennsylvania in connection with a nationwide health care fraud takedown that charged 345 defendants across 51 federal districts, including more than 100 doctors, nurses and other licensed medical professionals. These defendants have been charged with submitting more than $6 billion in alleged fraudulent claims to federal health care programs and private insurers, connected to topics such as telemedicine, substance abuse treatment facilities, and illegal opioid distribution schemes. This is the largest health care fraud and opioid enforcement action in U.S. Department of Justice history.
The case charged in the Eastern District of Pennsylvania is summarized below:
Steven J. Valentino, 63, of Haverford, PA, Michele Miller, 51, of Swarthmore, PA, and Leah Afolabi, 46, of Missouri City, TX, a doctor, office manager and pharmacy owner, respectively, were charged with conspiracy to pay and receive health care kickbacks, and paying and receiving kickbacks. The charges stem from a multi-year scheme involving injured federal workers and Medicare beneficiaries wherein kickbacks were paid to induce the prescribing of medications that were filled by a Houston-based pharmacy. Specifically, Afolabi paid kickbacks to Valentino and Miller for the referral of prescriptions for medications written by Valentino to Department of Labor-Office Workers’ Compensation Program (DOL-OWCP) claimants and Medicare beneficiaries. DOL-OWCP and Medicare were billed approximately $2.5 million and paid out approximately $1.1 million during the course of this scheme.
“Doctors and medical professionals are supposed to put their patients’ needs first. When they don’t, and instead try to rip off the system, my Office will take forceful action in order to punish and deter wrongdoers,” said U.S. Attorney McSwain. “Moreover, these prosecutions safeguard federal tax dollars and therefore benefit all American taxpayers. We will continue to do all in our power to stop fraud, waste, and abuse within our federal health care programs.”
“Investigating alleged health care fraud offenses against U.S. Department of Labor programs is an important mission of the Office of Inspector General. We will continue to work diligently with our law enforcement partners to hold accountable those who seek to defraud DOL programs and siphon taxpayer funds for personal gain,” said Derek Pickle, Acting Special Agent-in-Charge, Philadelphia Region, U.S. Department of Labor Office of Inspector General.
“The U.S. Postal Service spends billions of dollars per year in workers compensation-related costs, most of which are legitimate,” stated U.S. Postal Service Office of Inspector General Special Agent in Charge Kenneth Cleevely, Eastern Area Field Office. “However, when medical providers, pharmacies, and other organizations choose to flout the rules and profit illegally, special agents with the USPS OIG will work with our law enforcement partners to hold them responsible. To report fraud or other criminal activity involving the Postal Service, contact our special agents at www.uspsoig.govor 888-USPS-OIG.”
“Today’s arrests demonstrate our commitment to pursuing medical professionals who selfishly place their desire for profits above patients’ health care needs,” said Maureen Dixon, Special Agent in Charge, Office of the Inspector General U.S. Department of Health and Human Services. “We will continue to focus our efforts on fighting fraud, waste and abuse in vital federal health care programs and protecting their beneficiaries. To report Medicare or Medicaid fraud, please contact our hotline at 1-800-HHS-TIPS (1-800-447-8477).”
Today’s enforcement actions were led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section, in conjunction with its Medicare Fraud Strike Force, as well as the U.S. Attorney’s Office for the Eastern District of Pennsylvania and 50 other U.S. Attorney’s Offices across the country.
The EDPA case was investigated by the Department of Labor Office of Inspector General, United States Postal Service Office of Inspector General and Department of Health and Human Services Office of Inspector General. It is being prosecuted by DOJ Trial Attorney Debra Jaroslawicz.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Man Convicted at Trial of Illegal Firearms Possession While on State ParoleRead the Press Release
PHILADELPHIA –United States Attorney William M. McSwain announced that Steven Mack, 31, of Philadelphia, PA was convicted today at trial of possession of a firearm and ammunition by a convicted felon, arising from an incident during which state parole agents caught Mack with the firearm and ammunition shortly after he was released from prison.
Mack was paroled after serving the low end of a state sentence for robbing multiple women at gunpoint and stealing their possessions. On September 9, 2019, while he was under the supervision of the Pennsylvania Parole Board, agents visited Mack at his residence and observed five different types of ammunition and a loaded revolver. The agents arrested Mack on the spot.
“The crime of being a felon in possession of a firearm is a very serious offense – particularly in a city like Philadelphia, where gun violence is running rampant,” said U.S. Attorney McSwain. “Mack has repeatedly demonstrated his disrespect for the law and the conditions for his parole. The answer to Philadelphia’s violent crime crisis is to get recidivists like Mack off of the streets and have them serve an appropriate sentence, which is exactly what will happen now that he has been convicted in the federal system in which there is no opportunity for parole.”
“The outcome of this prosecution is sending a positive message to the community on ATF’s commitment to keeping the public safe from firearms violence,” said John Schmidt, acting Special Agent in Charge of ATF’s Philadelphia Field Division. “ATF is determined to continue our collaborative efforts with our law enforcement partners in our plight to ensure Philadelphia neighborhoods can be free of violence.”
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Philadelphia Police Department, and the Pennsylvania Parole Board, and is being prosecuted by Assistant United States Attorneys Sara A. Solow and Derek E. Hines.
Offshore Internet Sports Betting Company Agrees to Forfeit over $46.8 Million in Proceeds to Resolve Criminal InvestigationRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that the internet sports betting company, 5D Holdings Ltd. (operating under the unincorporated brand name, “5Dimes”) and Laura Varela, have agreed to forfeit more than $46.8 million in gambling proceeds as part of a settlement agreement in a criminal investigation into 5Dimes’ sports betting operation based in Costa Rica that allowed American gamblers to place bets, primarily through its website www.5Dimes.eu, in violation of U.S. law. Beginning in at least 2011, 5Dimes accepted wagers from and made payouts to U.S. bettors, and transferred more than $46.8 million in proceeds earned from its illegal gambling activities in such a manner as to attempt to hide the nature, location, source, and control of the funds.
5Dimes was previously owned and operated by Varela’s husband, William Sean Creighton, a U.S. citizen who moved to Costa Rica, where he created and operated 5Dimes in violation of U.S. law. From at least 2011 until approximately September 24, 2018, Creighton exercised full and exclusive control over 5Dimes, although he hid his control over the company by utilizing an alias and operating the business through several shell companies. In September 2018, Creighton was kidnapped and subsequently murdered. Over a year later, Creighton’s remains were discovered and positively identified in Costa Rica; Creighton’s death has been ruled a homicide by Costa Rican authorities.
Beginning in approximately May 2016, the United States Attorney’s Office for the Eastern District of Pennsylvania, in conjunction with the Department of Homeland Security Investigations (“HSI”), began investigating Creighton and 5Dimes for possible violations of federal criminal laws including, but not limited to, illegal gambling, money laundering, wire fraud, and other related offenses. During Creighton’s lifetime, Varela, a Costa Rican citizen, was never employed as a manager at 5Dimes, nor did she exercise any control over the operations of 5Dimes. Following Creighton’s death, Varela assumed responsibility for 5Dimes assets, but did not exercise day-to-day authority over the operations of 5Dimes. Varela subsequently took control of 5Dimes and sought to resolve the federal investigation and change the operations of the company in a manner that complies with U.S. law. In order to resolve the federal investigation of 5Dimes (which continued after Creighton’s kidnapping), Varela and 5Dimes have entered into a settlement agreement with the EDPA in which they have agreed to forfeit more than $46.8 million and acknowledged that those funds are the proceeds of various unlawful gambling-related offenses.
Creighton’s operation of 5Dimes in violation of U.S. law involved the use of third-party payment processors (or “TPPPs”) to accept payments from the U.S.-based bettors. These TPPPs processed credit card transactions for 5Dimes, and charged the customers’ credit cards on behalf of 5Dimes, thereby concealing the true nature of the charges from the credit card companies that otherwise would not have processed the payments had 5Dimes attempted to process the charges directly. Once the TPPPs received the betting funds from the U.S. customers’ credit cards, the funds were transferred to bank accounts in the names of shell companies controlled and operated by Creighton until his disappearance and death. Creighton also laundered 5Dimes’ unlawful gambling proceeds in various additional ways, including through bulk cash transportation and the purchase of gold bars, gold coins, and expensive collectible sports cards.
During the investigation, HSI seized approximately $3,376,189 in cash and other assets belonging to Creighton, including a 1948 George Mikan rookie basketball card, which Creighton purchased for over $400,000 (which at the time was the most expensive basketball card ever sold, and which now resides at the Smithsonian Institute), and a 1970 Pete Maravich rookie basketball card, as well as over $715,000 worth of rare coins. As part of the settlement agreement, 5Dimes and Varela have agreed to forfeit these seized assets, and have agreed to help in the collection and forfeiture of additional assets totaling more than $26,000,000. Further, 5Dimes and Varela have agreed to forfeit approximately $2,000,000 that was seized in Costa Rica by Costa Rican law enforcement, and to pay and consent to the forfeiture of an additional $15,000,000 of the proceeds of the criminal conduct.
All told, pursuant to the terms of the settlement agreement, 5Dimes and Varela have agreed to forfeit a total of $46,817,880.60, which they agree constitutes proceeds that are traceable to transactions in violation of Title 18, United States Code, Sections 1343 (wire fraud), 1084 (illegal transmission of gambling information), 371 (conspiracy to commit wire fraud), and were involved in transactions in violation of Title 18, United States Code, Section 1956 (money laundering). Varela has fully cooperated with the investigation and has worked with EDPA to identify criminal assets associated with 5Dimes, has overseen the implementation of compliance procedures, and has reorganized the corporate structure of the company into a streamlined, transparent corporate structure, and caused 5Dimes to cease violating U.S. law.
Pursuant to the terms of the settlement agreement, the United States Attorney’s Office for the Eastern District of Pennsylvania has agreed to not criminally prosecute 5Dimes or Varela for any crimes committed prior to September 30, 2020 (except for criminal tax violations, if any, as to which EDPA does not make any agreement), and will not file a civil action relating to the conduct described in the settlement agreement.
“The settlement agreement announced today is a victory for the United States in ceasing the illegal activity of a company that was being investigated for a multitude of crimes, including a sophisticated money laundering operation,” said U.S. Attorney McSwain. “It is also a testament to the dedication of the investigators and prosecutors who doggedly pursued this case even after the primary target was kidnapped and murdered. As the Office has done with a variety of criminal and civil matters, we will use every tool at our disposal to hold individuals and businesses accountable and ensure their compliance with federal law.”
“Through our 5Dimes investigation, Homeland Security Investigations illuminated a massive global network of criminals whose profession was to launder proceeds for drug cartels, kleptocratic regimes, illegal mining operations, and fraudsters,” said Brian A. Michael, Special Agent in Charge, HSI Philadelphia. “Today’s announcement of the global settlement agreement and significant monetary seizures demonstrates HSI’s commitment with our partners to deny criminal organizations the financial proceeds of their illicit activities.”
“Transnational Criminal Organizations are concerned with one priority: making and hiding money. This investigation demonstrates the sophisticated efforts of the actors to secrete their ill-gotten gains, in this case, from gambling. The scheme is just as viable for laundering drug proceeds, those from weapons or human trafficking, or other illegal activities,” said Jeremiah A. Daley, Executive Director of the Liberty Mid-Atlantic High Intensity Drug Trafficking Area (HIDTA). “We are proud to support HSI in pursuing all forms of money laundering from any source.”
The case was investigated by the Department of Homeland Security, Homeland Security Investigations with support from the Liberty Mid-Atlantic HIDTA, the Philadelphia Police Department, and the Pennsylvania State Police. The criminal investigation and settlement was handled for the Eastern District of Pennsylvania by Assistant United States Attorneys Michael S. Lowe and Maria M. Carrillo.
Northampton County Man Charged with Defrauding Family and Friends Out of over $1 Million by Selling Them Worthless StockRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Robert McCabe, 76, of Bangor, PA, was charged by Information with multiple counts of securities fraud, mail fraud, and wire fraud in connection with an extensive fraudulent investment scheme.
According to court documents filed today, between September 2010 and July 2020, the defendant stole more than $1,000,000 from more than 50 family members and friends, including former fraternity brothers, by claiming that his company, McCabe Properties, Inc., owned close to two million shares of something he called “founders shares” of a well-known pharmaceutical company. He offered those “shares” to his victims by selling them a corresponding number of shares of McCabe Properties, Inc.
As alleged, McCabe sold this investment to his victims at a price of between $2.60 and $2.70 per share, which would have represented a significant discount over the actual share price for shares of the pharmaceutical company. In reality, however, McCabe Properties, Inc. had no assets whatsoever. The defendant spent the more than $1 million he took in from his victims, leaving them with nothing but worthless shares of McCabe Properties, Inc.
McCabe was able to deceive his victims over the span of the scheme by allegedly: (a) preparing and shipping to them shares of McCabe Properties, Inc. that purported to correspond to the number of shares of the pharmaceutical company; (b) falsely informing victim investors that their “founders shares” could only be sold once the pharmaceutical company was acquired by another company; (c) forwarding press releases, financial analysis reports, and news stories on the status of the pharmaceutical company to the victim investors; (d) falsely representing to clients that the nonexistent “founders shares” owned by McCabe Properties, Inc. had been purchased from a private venture capital firm that had ties to a known securities fraudster, making selling the “founders shares” problematic; and (e) communicating with clients by email and telephone and providing them with false reasons for an inability to sell the “founders shares.”
“As alleged, McCabe is a fraudster who promised something that he had no intention of delivering,” said U.S. Attorney McSwain. “Here, according to the Information, he exploited personal relationships with trusting members of his own family and circle of friends, repeatedly lying about the investment he sold to them. This type of financial fraud has devastating consequences for the victims and must be aggressively prosecuted and deterred at every turn.”
McCabe faces a maximum sentence of 420 years in prison, a three-year period of supervised release, a $10,000,000 fine, and a $2,100 special assessment.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Michael S. Lowe.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Four Alleged Stock Defrauders from Georgia, New York and Texas Indicted for “Pump and Dump” Scheme Involving Three Public CompaniesRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Ricardo Richardson, 50, of Buford, GA; John Scott Watkins, 54, of Canton, GA; Gary B. Wolff, 78, an attorney from New York, NY; and Edward Heil, 71, an accountant from Pearland, TX; were arrested and charged by Indictment with conspiracy, wire fraud, and securities fraud in connection with what is commonly referred to as a ”pump and dump” scheme.
The Indictment alleges that the defendants and others sought to generate illegal proceeds by manipulating the stock of three public companies: AI Document Services, Inc. (ticker symbol AIDC), Creative Edge Nutrition, Inc. (ticker symbol FITX), and Interactive Health Network (ticker symbol IGRW). This manipulative activity was designed to make it falsely appear that trading in those stocks was the result of free and fair market forces, and to conceal the activity from the U.S. Securities and Exchange Commission (the “SEC”).
The Indictment further alleges that, among other things, the defendants planned and took various fraudulent actions, including disguising their share ownership in these companies, paying large bribes to stockbrokers for prearranged purchases of AIDC, FITX, and IGRW stock on behalf of the brokers’ unknowing customers, hiring promoters to distribute misleading email newsletters regarding these companies to numerous potential investors throughout the United States, and causing the public companies to issue nationwide press releases to conceal the manipulative activity. The schemers intended to generate at least $15 million in proceeds from this scheme, which was implemented from mid-2014 through approximately February 2016, when the SEC suspended trading in these stocks.
Court documents also reveal that the defendants and their co-schemers had worked together on previous stock deals, and each performed different roles in the scheme. Watkins himself explained that he was on the stock side of the deals, and Richardson much of the negotiating. Wolff and Heil, in turn, supplied the public companies that the schemers used in the manipulations and assisted with some of the paperwork. As alleged, all of the defendants owned or controlled a substantial number of shares of AIDC, FITX, and IGRW stock and were prepared to sell them at a large profit into the manipulated markets to unsuspecting investors.
“Pump and dump stock schemes have real victims: those who play by the rules and save and invest in the markets,” said U.S. Attorney McSwain. “Market manipulation also causes generalized harm to the markets and to our economy because it erodes public trust that the markets are free and fair. Thanks to the excellent work of the FBI, SEC, and prosecutors from my Office, these four defendants will now face the consequences of their alleged actions.”
“The defendants allegedly employed fraud and misinformation in an attempt to boost these companies’ stocks,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Their ‘business model’ was nothing but a classic pump and dump scheme from which they sought to handsomely profit. The FBI will continue to investigate and shut down such illegal activity, to protect both the public and the integrity of our financial markets.”
If convicted, the defendants each face a maximum possible sentence of 65 years in prison, 3 years of supervised release, a $10,500,000 fine, and a $400 special assessment.
The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorneys Judy Smith and Patrick J. Murray. The U.S. Attorney’s Office also acknowledges the substantial assistance provided by the U.S. Securities and Exchange Commission, Philadelphia Regional Office in this investigation.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia City Treasurer Arrested and Charged with Multiple FraudsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Christian Dunbar, 40, of Philadelphia, PA, the current Philadelphia City Treasurer, was arrested this morning and charged by Criminal Complaint with embezzlement by a bank employee, conspiracy to commit marriage fraud, and fraudulent procurement of citizenship. U.S. Attorney McSwain detailed the charges at a press conference this afternoon in front of the James A. Byrne U.S. Courthouse in Philadelphia.
As the Philadelphia City Treasurer, Dunbar’s responsibilities include: (1) managing the City’s debt obligations, which includes overseeing the issuance of the City’s municipal bonds; (2) managing the City’s bank accounts, including its operating account, capital account, and petty cash accounts in various departments; (3) paying the City’s bills, including making payments to vendors, cutting payroll checks, and making payments to pension plans; and (4) managing the City’s cash reserves.
According to the Criminal Complaint, Dunbar allegedly participated in two schemes – (1) bank embezzlement and (2) marriage fraud in order to become a U.S. citizen.
The details of the alleged bank embezzlement scheme are as follows: Just weeks before his appointment to serve as the City’s Deputy Treasurer, Dunbar, while employed at Wells Fargo Bank in Newtown Square, stole $15,000 from two different bank customers. The Complaint alleges that on two separate occasions, once in December 2015 and again in January 2016, Victim #1 met with the defendant to transfer $5,000 between Victim #1’s Wells Fargo bank accounts. During both meetings, Dunbar allegedly directed Victim #1 to sign several documents, including a blank withdrawal slip. He later allegedly used the blank slips to withdraw cash from Victim #1’s account and deposit those funds into his own personal bank account.
The defendant allegedly used the same trick with Victim #2. In December 2015, Dunbar assisted Victim #2 in the same Wells Fargo branch and directed Victim #2 to sign several documents, including a blank withdrawal slip. As alleged in the Criminal Complaint, he later used the blank withdrawal slip to withdraw money from Victim #2’s account. Soon thereafter, Dunbar allegedly made significant cash deposits into his personal bank account.
Dunbar also allegedly participated in a conspiracy to enter into a sham marriage in order to secure immigration benefits, and ultimately U.S. citizenship, for himself and his family. The details of that alleged fraud are as follows: The Criminal Complaint alleges that the defendant and his current wife, identified in the Complaint by the initials “F.N.D.,” both entered into fraudulent marriages, Dunbar with Person #1 and his wife with Person #2. Prior to these sham marriages, Persons #1 and #2 were U.S. citizens, but Dunbar and F.N.D. were not – having been born in Liberia and Senegal, respectively. By marrying U.S. citizens, Dunbar and F.N.D. were able to gain their own U.S. citizenship.
These four individuals – Christian Dunbar, F.N.D., and Persons #1 and #2 – attended Temple University together and allegedly coordinated this sham marriage plan. Both of these sham marriages occurred within days of each other in December 2006 and were performed by the same officiant — a former Temple University professor. But since the time they attended Temple University together, Dunbar and F.N.D. were the only legitimate couple, marrying each other in Senegal in June 2013 (while Dunbar was still legally married to Person #1). On their child’s 2014 birth records, Dunbar is listed as the father, F.N.D. is listed as the mother, and they are listed as married to each other.
But in February 2012, relying on his sham marriage to Person #1, the defendant allegedly applied to become a permanent resident of the United States (which he certified as true under the penalty of perjury), was granted that status in October 2012, and then submitted additional paperwork to become a naturalized citizen in late 2015 and early 2016. As detailed in the Complaint, in paperwork he submitted in 2015 and in subsequent interviews, he continued to make fraudulent claims about his marital status, which was the basis for his becoming a naturalized citizen in January 2016. Two months later, he filed paperwork to divorce Person #1.
“The alleged conduct in this case shows a pattern of deception, dishonesty and criminality that no individual should ever engage in – but is especially alarming and intolerable for a high ranking City official,” said U.S. Attorney McSwain. “City officials whose job is to handle money should not be thieves. And they should not have a track record of engaging in elaborate immigration fraud against the public that they are supposed to serve. My Office will continue to hold public officials to the high standard of conduct that residents of this City deserve. And when we find that a public official’s behavior falls short, we will hold them accountable.”
“The accusations against Christian Dunbar run quite the criminal gamut, from stealing his own bank customers’ money to violating the immigration laws that help protect our national security,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “In his role as City Treasurer, Dunbar holds a position of public trust, making these charges lodged against him today extremely disturbing. The FBI is working every day to battle public corruption and the corrosive damage it does to people’s faith in government. We must hold public officials to high ethical standards — and we will hold them to obeying federal law.”
If convicted, Dunbar faces a maximum possible sentence of 45 years’ imprisonment and a fine of $1.5 million.
The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Denise S. Wolf.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Multinational Industrial Engineering Company to Pay $22 Million to Settle False Claims Act Allegations of Evading Customs DutiesRead the Press Release
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams and Acting Assistant Attorney General Jeffrey Bossert Clark announced that Linde GmbH and its U.S. subsidiary Linde Engineering North America LLC (LENA) (together, “Linde”) have agreed to pay the United States more than $22.2 million to resolve allegations that Linde violated the False Claims Act by knowingly making false statements on customs declarations to avoid paying duties owed on the companies’ imports.
Linde GmbH is a multinational corporation headquartered in Germany that, among other things, imports materials into the United States for use in the construction of natural gas and chemical plants. LENA, based in Houston, conducted portions of Linde’s United States business and managed procurement and logistics for Linde. Between 2011 and 2017, Linde imported more than $500 million in goods into the United States.
To enter goods into the United States, an importer must declare, among other things, the country of origin of the goods, the value of the goods, whether the goods are covered by antidumping or countervailing duties, and the amount of duties owed. U.S. Customs and Border Protection (CBP) relies on these representations to determine the correct amount of any duties owed. It is the importer’s affirmative duty to use “reasonable care” to make sure that such information is accurate so that CBP can assess the proper duties.
The United States alleged that, between 2011 and 2017, Linde avoided duties owed to the United States, including in some instances antidumping and countervailing duties, by misrepresenting the nature, classification, and valuation of imported merchandise, as well as the applicability of free trade agreements.
“Trade policy is a critical part of our nation’s foreign policy,” said First Assistant U.S. Attorney Jennifer Arbittier Williams. “Anti-dumping and countervailing duties ensure that American manufacturers are protected from unfair trade practices, and valuation requirements help to ensure that importers do not have an incentive to use foreign engineers to design or inspect the equipment instead of hiring in the United States.”
“This settlement reflects our commitment to hold accountable those who evade duties owed on imported goods, including antidumping and countervailing duties that level the playing field for U.S. manufacturers,” said Acting Assistant Attorney General Jeffrey Bossert Clark for the Department of Justice’s Civil Division. “The Department of Justice will zealously pursue those who seek an unfair advantage in U.S. markets by bringing underpriced goods into this country.”
“CBP is proud to work with the Department of Justice to enforce our trade laws. Collecting revenue on behalf of the American people is something we take very seriously,” said Brenda Smith, Executive Assistant Commissioner, CBP Office of Trade. “We are glad to have come to an equitable and productive solution.”
Prior to the United States’ disclosure to Linde of its investigation, Linde initiated a voluntary disclosure to CBP regarding its importing practices. Since that time, Linde has cooperated with the investigation and worked to overhaul and improve its customs compliance program.
First Assistant U.S. Attorney Williams praised Linde’s work in addressing the issues in these programs: “We commend Linde for coming forward with these issues and working to ensure both that the government is made whole and that these issues will not recur. We hope this settlement will serve as a message to other importers to ensure that they have compliance processes in place that can detect problems before they grow. Importers have an obligation to scrutinize their practices and promptly report issues if they discover that they have not lived up to their obligations.”
The settlement with Linde resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed in the Eastern District of Pennsylvania and is captioned United States ex rel. Johnson v. Linde AG, et al., No. 17-cv-1012. As part of today’s resolution, Ms. Johnson will receive approximately $3.7 million. The qui tam complaint was filed by Stephen Hasegawa of Phillips & Cohen in San Francisco.
“We thank the relator and relator’s counsel for their contributions to this case. Without information from citizens like the relator, detecting fraud and conserving government program funds would be much more difficult,” said First Assistant U.S. Attorney Williams.
The settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Commercial Litigation Branch of the Justice Department’s Civil Division, with assistance from CBP’s Office of Chief Counsel and CBP’s Regulatory Audit and Agency Advisory Services. Assistant United States Attorneys Paul W. Kaufman and Landon Y. Jones III of the Eastern District of Pennsylvania and trial attorney Jennifer Chorpening of the Civil Frauds section of the Department of Justice handled the investigation and settlement.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Mount Laurel, NJ Man Arrested and Charged with Almost 30 Counts of Fraud in Connection with Two Business SchemesRead the Press Release
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Michael Salerno, 51, of Mount Laurel, NJ, was arrested and charged by Indictment with twenty-three counts of wire fraud and six counts of mail fraud in connection with multiple, elaborate fraud schemes.
According to the Indictment, between September 2016 and at least November 2018, the defendant operated a series of businesses, including Black Diamond Forex, L.P., BDF Trading, L.P., Advanta Capital Markets, Inc., and Advanta FX, each of which purported to be in the business of trading foreign currencies. Using a variety of misrepresentations and omissions, Salerno induced victims to pay advance fees—up-front payments of typically more than $1,000—in order to be hired by Salerno’s company. He told the victims that, upon being hired, he would make available to them a pool of $10 million which they could trade on the foreign currency market, and take a generous cut of any profits. Each of these representations was completely false.
To make his fraudulent activities appear legitimate, Salerno held himself out as a sophisticated and successful businessman. According to the Indictment, the defendant claimed to have managed a real estate empire, a portion of which he claimed to have recently sold for $10 million to fund the currency-trading venture. He also claimed that he had been a profitable currency trader. None of this was true, either. In fact, he declared bankruptcy twice, most recently in 2015, and had been evicted multiple times from rental homes for failure to pay rent. In 2005, he pleaded guilty to federal tax charges and was sentenced to 21 months in prison. He failed to disclose any of this to the aforementioned victims before taking their money. Instead, Salerno allegedly collected more than $300,000 in advance fees and used the money for his own benefit.
The defendant’s currency-trading scheme came to a halt when this Office opened a criminal investigation and the Commodity Futures Trading Commission sought and obtained an injunction against Salerno and his businesses in 2018. However, Salerno allegedly turned immediately to a second scheme. Also according to the Indictment, between May 2018 and least December 2019, Salerno operated a company called AccuOne Financial, Inc. AccuOne purported to be in the business of assisting clients in ridding themselves of unwanted automobile leases. It also purported to offer a different set of clients, whose personal credit precluded them from obtaining an automobile lease, access to automobile leases, low interest vehicle loans, and credit repair services. But Salerno failed to do as promised, instead ripping off both sets of clients. According to the Indictment, the defendant took the unwanted vehicles from the first set of clients, made few - if any - of the required lease payments, and then gave the vehicles to the second set of clients who could not obtain their own leases, in exchange for substantial monthly fees. The predictable result of this house of cards-style scheme was that the clients who wanted to get out of their leases either continued to make monthly lease payments for cars they no longer had, or suffered substantial damage to their credit. And the clients who leased cars from AccuOne often had them repossessed without warning. As for Salerno, he netted several hundred thousand dollars from this scheme alone.
“When Salerno’s foreign currency trading scheme came crashing down around him, he very quickly moved on to an alternative way of swindling people out of their money with car leases and loans,” said First Assistant U.S. Attorney Williams. “The damage done by such corrupt financial schemes can be catastrophic to innocent people’s credit and financial security. We will continue to hold those who commit crimes like the ones alleged here accountable for their misdeeds.”
If convicted, the defendant faces a maximum possible sentence of 580 years in prison, three years supervised release, a fine of $7,250,000 and full restitution.
The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Christopher J. Mannion
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Three California Men Sentenced for Scheme to Manipulate Stock Prices of Two Public CompaniesRead the Press Release
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Chip Hackley, 49, of Hermosa Beach, CA, and George Matin, 51, of Los Angeles, CA, were each sentenced to 15 months in prison, to be followed by two years of supervised release, by United States District Court Judge Paul S. Diamond for conspiracy, wire fraud, and securities fraud. Previously, on September 16, 2020, Judge Diamond sentenced their co-conspirator, Harold Minsky, 81, of Northridge, CA, to one year and one day in prison, to be followed by the same term of supervised release.
Minsky, Matin, and Hackley conspired to manipulate the stock price and trading volume of public companies. As part of this conspiracy, Minsky and Matin attempted to manipulate the stock of two public companies: WGE Holdings Corp. (ticker symbol WGE), a gold mining business, and Holy Grail (ticker symbol HGRL), which produced and sold hemp and Cannabidiol (“CBD”) products. Hackley joined the scheme later, participating only in the manipulation of HGRL.
The conspirators planned to manipulate the stock of these companies by establishing control over both their restricted and free trading shares and coordinating the issuance of press releases with the stock promotions in order to give the false impression of market interest in the stock. As part of this conspiracy, they also agreed to engage in prearranged stock trades and to bribe purchasers to buy the stock.
In attempting to manipulate the stock of both WGE and HGRL, Minsky and Matin intended to generate approximately $9 million in illegal proceeds for themselves and their co-conspirators, and to cause corresponding losses to the conspiracy’s victims. With respect to HGRL, Hackley intended to generate approximately $4 million in illegal proceeds.
Minsky, Matin, and Hackley were charged by separate Informations, each charging conspiracy, wire fraud, and securities fraud. Minsky pleaded guilty on May 2, 2019, Hackley on May 15, 2019, and Matin on October 10, 2019.
“Innocent individuals who try to legitimately invest and save money for the future are the ones who lose big when greedy fraudsters like Minsky, Matin and Hackley manipulate the markets with pump and dump stock schemes,” said First Assistant U.S. Attorney Williams. “Market manipulation also causes our economy to take a hit because the public cannot trust that the markets are free and fair. Thanks to the excellent work of the FBI, SEC, and prosecutors from this Office, these defendants’ days of profiting off of others’ misfortune are over.”
The case is being investigated by the Federal Bureau of Investigation, with the assistance of the Securities and Exchange Commission. It is being prosecuted by Assistant United States Attorney Patrick J. Murray.
Northampton County Man Sentenced to Five Years for Using Drone to Harass Ex-Girlfriend, Illegally Possessing Bombs and GunsRead the Press Release
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Jason Muzzicato, 43, of Bangor, PA, was sentenced to five years in prison and three years of supervised release by United States District Court Judge Joseph F. Leeson, Jr., for unlawfully possessing firearms and explosives, and using an unregistered drone aircraft to drop explosive devices in order to terrorize his victim, a former girlfriend, in and around Bangor, Northampton County.
In December 2019, the defendant pleaded guilty to possession of a destructive device, possession of firearms by a person subject to a domestic violence protective order, and knowingly operating an unregistered aircraft. The charges stem from Muzzicato’s possession of homemade bombs and firearms while subject to the terms of a Protection from Abuse (“PFA”) order issued by the Northampton County Court of Common Pleas on behalf of Muzzicato’s former girlfriend, and from his unlawful operation of an unmanned aerial vehicle (drone). Muzzicato was found to be in possession of a DJI, Model Phantom 3, unmanned aerial vehicle, seven improvised explosive devices and ten firearms, including multiple AR-15 rifles and semi-automatic pistols. Under federal law, an individual who is subject to a PFA order is prohibited from possessing these firearms.
“With this combination of homemade bombs, guns and a drone, this defendant terrorized an entire community,” said First Assistant U.S. Attorney Williams. “His blatant disregard for court orders, the law and others’ personal safety made him a true threat, and we are grateful to our law enforcement partners that Muzzicato was identified and arrested before anyone was physically hurt. Our Office will continue to work with our partners to ensure the security of our communities is not threatened by people who hide behind a remote control.”
The case was investigated by the Federal Bureau of Investigation, Allentown Resident Agency; the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Allentown Field Office; the Department of Transportation, Office of Inspector General, Fort Washington Field Office; the Washington Township Police Department; the Pennsylvania State Police; and the City of Bethlehem Fire Department, and is being prosecuted by Assistant United States Attorney Kishan Nair.
Drug Trafficker Sentenced to 10 Years for Moving Kilograms of Drugs Through the Lehigh ValleyRead the Press Release
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Miguel Gonzalez Segovia, 31, of Veracruz, Mexico, was sentenced to ten years in prison, five years of supervised release by United States District Court Judge Joseph F. Leeson Jr. for trafficking drugs in the Lehigh Valley in November 2018.
In September 2019, Gonzalez Segovia pleaded guilty to the charge of possession with intent to distribute 69 kilograms cocaine, 14 kilograms of fentanyl, and 4 kilograms of acetyl fentanyl (a fentanyl analogue). According to court documents, the defendant was stopped by a Pennsylvania State Trooper while driving on Interstate 78 in Northampton County, and was evasive in answering questions and provided conflicting information about his destination and purpose for traveling through Northeastern Pennsylvania. The Trooper also observed nine large suitcases stacked inside the rented vehicle the defendant was driving.
After searching the vehicle and one of the suitcases to reveal approximately 50 pounds of substances including cocaine, fentanyl and acetyl fentanyl, Gonzalez Segovia was placed under arrest and interviewed by Pennsylvania State Police. He admitted that this was the fourth time he had driven the same drug delivery route across Pennsylvania for individuals in California, and explained that they would load drugs between furniture in moving trucks in California and drive it to the East Coast for delivery in different locations in New York, New Jersey, Pennsylvania and Maryland.
“Gonzalez Segovia and other members of this drug organization moved huge quantities of dangerous drugs through and into our community,” said First Assistant U.S. Attorney Williams. “These traffickers essentially delivered destruction to every state, city and town where these deadly drugs ultimately landed. Our office is determined to investigate and convict these criminals, and put them behind bars.”
“Segovia pleaded guilty and was responsible for trafficking 69 kilograms of cocaine and 18 kilograms of illicit fentanyl across the Lehigh Valley area. These are substantial amounts of dangerous and potentially deadly illicit drugs,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “Working with our partners at the Pennsylvania State Police, Segovia will no longer be able to distribute these poisons that ruin our communities and destroy countless lives.”
The case was investigated by the Drug Enforcement Administration, Allentown Resident Office and the Pennyslvania State Police. The case is being prosecuted by Assistant United States Attorney Kelly A. Lewis Fallenstein.
Bucks County Man Indicted for Trafficking Firearms to St. LuciaRead the Press Release
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Thomas Harris Jr., 27, of Croydon, PA was arrested and charged by Indictment with multiple firearms trafficking offenses stemming from his scheme to sell almost 40 guns to a buyer on the island of St. Lucia. Specifically, the defendant was charged with making false statements to a federal firearm licensee, dealing in firearms without a license, delivery of firearms to a common carrier without written notice, and smuggling goods from the United States.
The Indictment alleges that Harris purchased approximately 38 firearms in 12 transactions at two Bucks County, PA, gun shops between April 20, 2019, and February 15, 2020, and provided a false address as his place of residence on the required federal forms that he completed during each transaction. It is further alleged that the defendant then illegally trafficked, and attempted to traffic, the guns to St. Lucia, a sovereign island nation in the West Indies, despite his not having a license to deal in firearms nor a license to export them as required by law. He also allegedly failed to notify the shipping company he used that his shipments contained firearms, as required by law.
One of Harris’s suspected packages to St. Lucia was intercepted by federal agents at the warehouse of a local shipping company. Inside, concealed in household items such as packages of diapers, cat litter and laundry detergent, the agents found seven Glock semiautomatic pistols, one Ruger semiautomatic pistol, two AK-47 pattern pistols, two AK-47 pattern rifles, two AR-15 lower receivers, two AR-15 upper receivers, ten high capacity Glock ammunition magazines, seven additional assorted ammunition magazines, and 815 rounds of ammunition.
Harris allegedly used the alias “Lance Brown” when he presented this package to the shipping company for shipment to St. Lucia, and he allegedly falsely told a shipping company representative that the package contained household items. After the defendant left this package with the shippers, he traveled to St. Lucia himself in March 2020. He remained there until returning to the United States on July 25, 2020, when he was arrested at an airport in New York.
“As alleged in the Indictment charging him with firearms trafficking offenses, Harris has a brazen disrespect for our laws meant to regulate and monitor the sale of weapons,” said First Assistant U.S. Attorney Williams. “After sending his most recent shipment of guns overseas he also left the country for a few months, but all that did was postpone the inevitable. If you are charged in the Eastern District of Pennsylvania with a federal offense, there is no place to hide, here or abroad. We will not rest until we find you and hold you accountable.”
“Illicit international firearms trafficking is a top priority for the Office of Export Enforcement,” said P. Lee Smith, Performing the Non-exclusive Functions and Duties of the Assistant Secretary for Export Enforcement at the Department of Commerce. “We will continue to work with our law enforcement partners to arrest and prosecute individuals who violate United States export control laws that are intended to keep the most dangerous goods out of the most dangerous hands.”
“Preventing the illegal use and trafficking of firearms is a central focus of ATF's strategy to combat violent crime and protect our communities,” said John Schmidt, acting Special Agent in Charge of ATF’s Philadelphia Field Division. “Illegally purchased firearms often end up in the hands of violent offenders and affect communities near and far, in this instance Saint Lucia in the Caribbean. Ensuring firearms traffickers are aggressively investigated and swiftly brought to justice is a top priority for the Philadelphia Field Division -- this collaborative effort between our local, state and federal partners is a prime example of such.”
“If you want to be a firearms dealer and exporter, get the proper licenses and follow the law,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. "Guns illegally exported overseas are quite likely to end up in the wrong hands and be used to commit further criminal acts. The FBI is committed to working with our law enforcement partners to combat weapons trafficking, in the interests of public safety here and abroad.”
If convicted, the defendant faces a maximum possible sentence of 80 years in prison, three years of supervised release, a $3,750,000 fine, and a $1,500 special assessment.
The case was investigated by the U.S. Department of Commerce, Office of Export Enforcement, New York Field Office; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Joseph A. LaBar and U.S. Department of Justice National Security Division Trial Attorney Michael E. Eaton.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Allentown Man and Former Fugitive Sentenced to Three Years for Stealing Stepfather’s Identity, Retirement SavingsRead the Press Release
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Erick Wandique, 26, of Allentown, Pennsylvania was sentenced to three years in prison, three years of supervised release, and was ordered to pay restitution in the amount of $87,657 and forfeiture in the same amount by United States District Court Judge Edward G. Smith for his scheme to impersonate, and steal from, his stepfather.
In March 2020, the defendant pleaded guilty to eight counts of wire fraud and one count of aggravated identity theft, after being charged with a nine-count Indictment in August 2016. The charges arose from Wandique’s electronic communications with Fidelity Investments in which he pretended to be his stepfather, Luis Flores, in order to authorize fraudulent bank transactions and debit purchases, resulting in the depletion of nearly all of Flores’ Fidelity retirement account.
From December 2014 through March 2015, Wandique went on a spending spree utilizing his stepfather’s retirement savings: withdrawing cash, making wire transfers of funds, arranging payments through the BillPay service for the account, making debit purchases at retail stores, and even taking his friends on a trip to California. After a family member confronted him about his inexplicable newfound income and spending, the defendant fled the United States by flying to Honduras, which does not have an extradition agreement with the United States. On August 25, 2019, the defendant was arrested after he attempted to reenter the United States on a flight to New Orleans, LA.
“It’s hard to imagine victimizing your own family, but Wandique took advantage of an opportunity to do just that,” said First Assistant U.S. Attorney Williams. “Here, the defendant drained his stepfather’s lifetime of savings – money earned to support himself in retirement – and when his family and the law caught on to him, Wandique fled the country. If you are charged in the Eastern District of Pennsylvania with a federal offense, we will find you and hold you accountable for your actions.”
“Mr. Wandique’s sentencing underscores the importance of vigilance against financial fraud schemes,” said Brian A. Michael, Special Agent in Charge of Homeland Security Investigations Philadelphia. “Even after Mr. Wandique fled from prosecution, Homeland Security Investigations worked closely with Interpol and international partners to ensure he was apprehended and brought to justice. Mr. Wandique will now be held accountable for swindling his family member.”
“Today’s sentencing is the culmination of years of collaboration between the Pennsylvania State Police and its federal law enforcement partners to seek justice for the victim in this case,” said Major Jeremy Richard, director of the Pennsylvania State Police Bureau of Criminal Investigation. “Despite occurring behind the anonymity of a computer, wire fraud and identity theft are serious crimes that can quickly erase a lifetime of savings from unsuspecting victims and devastated families.”
The case was investigated by the Department of Homeland Security Investigations, Customs and Border Protection, Interpol, and the Pennsylvania State Police. The case is being prosecuted by Assistant United States Attorney Christopher Diviny.
Neurosurgeon Medical Practice Director to Pay over $1 Million to Resolve False Claims Act Liability Arising from Billing of P-Stim DevicesRead the Press Release
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that neurosurgeon Sagi M. Kuznits, practice director Pnina Kuznits, and Neurosurgical Care LLC (collectively, “Kuznits”), have agreed to pay $1,017,375.03 to resolve liability under the False Claims Act for the alleged improper billing of electro-acupuncture devices called Stivax and/or P-Stim and a memory-loss device called eVox.
From February 2017 through July 2018, Kuznits billed Medicare, TRICARE, and 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 P-Stim and Stivax by a physician assistant. P-Stim and Stivax are applied with an adhesive and insertion of a limited number of needles, and they do not involve surgery, anesthesia, or take place in an operating room. Federal healthcare programs do not reimburse for devices such as P-Stim or Stivax, whether they are characterized as an electro-acupuncture device or as an implantable neuro-stimulator. Other brand names for this device include NeuroStim, ANSiStim, E-Pulse, and NSS-2 Bridge.
In addition, Kuznits billed Medicare for a physician assistant’s application of an “eVox” device. Manufactured by Evoke Neuroscience, Inc., eVox consists of a cap with electrodes that are placed on the head and connected to a laptop by wires, purporting to measure certain “biomarkers” to assist in treatment of memory loss. Kuznits submitted claims to Medicare for payment using a combination of six reimbursable codes apparently in an effort to maximize reimbursement. The United States alleges that Medicare does not reimburse for eVox as billed, and especially not when one diagnostic test is mis-billed under multiple codes as if it were multiple different tests.
“Dr. Kuznits, as a surgeon, should have known better. P-Stim is clearly not surgery and should not be billed using the surgical codes improperly pushed by marketers,” said First Assistant U.S. Attorney Williams. “Dr. Kuznits failed to do his own independent due diligence which would have shown that he could not bill federal healthcare programs for P-Stim. Instead, he chose to take the money based on the self-serving representations of those selling the product that Medicare would pay for it.”
Now, in addition to this settlement, Dr. Kuznits is suing those marketers. See Neurosurgical Care, LLC v. Doc Solutions LLC, Civil Case No. 19-5751 (E.D. Pa.). “As this settlement shows,” continued First Assistant 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 do it.”
This is the third electro-acupuncture device settlement announced in this District as part of an ongoing investigation. In recent months, other jurisdictions including the Southern District of Texas and the Middle District of Tennessee have also taken action to hold providers accountable. See https://www.justice.gov/usao-sdtx/pr/pain-doctor-pays-settle-allegations-deceptive-medicare-billing; https://www.justice.gov/usao-sdtx/pr/pain-doctor-pays-settle-allegations-deceptive-medicare-billing);https://www.justice.gov/usao-mdtn/pr/united-states-and-tennessee-file-suit-against-comprehensive-pain-specialists-and); https://www.tn.gov/attorneygeneral/news/2020/6/10/pr20-27.html#:~:text=Nashville%2D%20Tennessee%20Attorney%20General%20Herbert,Tennessee%20Medicaid%20False%20Claims%20Act.
“We continue to work closely with our partners at CMS’s 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 to hold accountable any other providers who inappropriately billed this device and any product distributors or marketers who may have devised or carried out such a billing scheme,” stated First Assistant U.S. Attorney Williams.
“Every dollar saved is critical to the sustainability of our Medicare program and the needs of our beneficiaries,” said Centers for Medicare and Medicaid Services Administrator Seema Verma. “We thank our partners at the Department of Justice and Department of Health and Human Services Office of Inspector General for working hard with us to identify, investigate, and eliminate waste, fraud and abuse in our federal healthcare programs.”
“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 Man Convicted at Trial of Illegal Firearms PossessionRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that William Johnson, 34, of Philadelphia, PA was convicted today at trial of possession of a firearm by a convicted felon, arising from an incident in which Philadelphia police officers recovered a weapon that Johnson had tried to discard while attempting to evade capture.
In September 2019, Philadelphia Police Department Highway Patrol Officers responded to reports of a person with a gun at 15th Street and West Allegheny Avenue in North Philadelphia. Upon arrival, the officers observed the defendant walking with a person that matched the description in the report. When the officers got out of their car to investigate, Johnson took off in a full sprint while holding onto his waistband. He then cut through an empty lot and climbed a fence in an attempt to flee. An officer drove around to where Johnson would be expected to emerge on the other side of the lot. When Johnson climbed the fence that led away from the lot, he spotted yet another police officer. Johnson then jumped down from the fence and the officers observed him toss a firearm a few feet away. The officers then took Johnson into custody and secured the firearm.
“Everybody knows what is happening in Philadelphia today with the staggering violent crime rates, and everybody also knows the reason for it – a lack of enforcement at the local level. One of the ways that my Office is working to combat this chaos is by stepping in to aggressively prosecute cases in which convicted felons illegally possess firearms,” said U.S. Attorney McSwain. “This was not an easy case, and in fact resulted in a hung jury the first time we tried it back in January. But now justice has been done, thanks to the determination of the prosecution team and our law enforcement partners in this case, the FBI, the ATF, and the Philadelphia Police Department. This is the kind of commitment that is needed to keep our community safe.”
“The FBI is committed to working with our law enforcement partners to get guns out of the hands of convicted felons and off the streets,” said, Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “In order to reduce violent crime, we must stay vigilant and keep firearms away from those not permitted to possess them.”
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 Assistant United States Attorney Robert Eckert.
Chester County Doctor Agrees to Pay over $1.2 Million to Settle Allegations of Fraudulent Billing and Unlawful Opioid DistributionRead the Press Release
PHILADELPHIA— United States Attorney William M. McSwain announced that Thomas J. Whalen, D.O., 65, of Berwyn, PA, has agreed to pay the United States $1,257,499.00 to resolve allegations under the False Claims Act that he submitted or caused the submission of false claims to federal health care plans for FDA-approved versions of Remicade, Orencia, Prolia/Xgeva, Synvisc/Synvisc One, and Boniva when he had, in fact, administered non-FDA-approved, foreign versions of these medications.
In addition, the civil settlement resolves admissions that Whalen knowingly and intentionally prescribed controlled substances outside the usual course of professional practice and without a legitimate medical purpose, in violation of the Controlled Substances Act. Whalen permanently surrendered his controlled substance registrations with the DEA, surrendered his medical license, and will be excluded from participation in federal programs.
Whalen owned and operated Rheumatology Consultants, P.C., doing business as Whalen Rheumatology Group, with locations in Havertown, PA, Exton, PA, and Wilmington, DE. As part of his practice, Whalen used medications administrated by injection and infusion to treat his patients. These medications, including Remicade Synvisc, Synvisc-One, Orencia, Prolia/Xgeva, and Boniva, are made of living cells and are expensive. Rather than purchase FDA-approved versions of these medicines from authorized distributors, Whalen devised a scheme to purchase much cheaper foreign, non-FDA-approved versions of these medications. Unbeknownst to his patients, Whalen injected or infused them with the non-FDA-approved medications and then billed health care programs as if he had used the approved medications and pocketed approximately $1.1 million in illicit gains.
Whalen also prescribed oxycodone to patients abusing illicit drugs. Whalen admitted to unlawful distribution of a controlled substance to two of his patients to whom he prescribed oxycodone, despite receiving multiple urine drug screening results for each that revealed the patients simultaneously abused cocaine and heroin.
In December 2019, Whalen also pleaded guilty before United States District Court Judge Timothy J. Savage to related criminal charges of one count of health care fraud, one count of importation contrary to law, and two counts of distributing and dispensing oxycodone outside the course of professional practice and not for a legitimate medical purpose. He was sentenced this week to one day incarceration, followed by 12 months home confinement, three years supervised release and a $25,000 fine.
“Whalen prioritized lining his own pockets over his patient’s safety,” said U.S. Attorney McSwain. “By duping his patients and health care programs alike, he stole more than $1.1 million. On top of that, he also unlawfully distributed oxycodone to patients he knew were using cocaine and heroin. These are egregious, inexcusable violations of the trust that was placed in him as a medical professional.”
Regarding the resolution of the civil suit allegations, U.S. Attorney McSwain also stated: “This settlement illustrates my Office’s dedication to ensuring that physicians who engage in submission of false claims and the illegal distribution of opioids and other controlled substances are held accountable with all of our civil enforcement tools, as well as our criminal tools. My Office’s Health Care Fraud Strike Force, Civil Division, and Forfeiture staff continue to aggressively investigate doctors who violate their duties, so that we can deter and punish illegal opioid prescribing and health care fraud.”
“Dr. Whalen administered non-FDA approved drugs, which placed patients’ health at risk” said Special Agent in Charge Maureen Dixon of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Philadelphia Office. “Such medications are not paid for by Medicare due to the risk they may pose to patient health. HHS-OIG, along with our law enforcement partners, will continue to protect the public and root out dangerous and costly fraud schemes.”
“Dr. Whalen dispensed oxycodone, a highly addictive controlled substance medication, to individuals who he knew were already abusing cocaine and heroin. He did so without first establishing a professional doctor-patient relationship with these individuals and dispensed the oxycodone to them without any legitimate medical purpose. Instead of using his professional standing to help these individuals addicted to illicit street drugs, Dr. Whalen used his medical license to harm them in the name of making money, ” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “Whalen’s crimes enabled his patients’ substance use disorder rather than treating it appropriately.”
“The opioid epidemic that continues to spread across our nation is fueled by the illegal procurement and distribution of drugs such as OxyContin,” said Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General, OPM OIG. “Dr. Whalen’s scheme not only defrauded the federal health insurance carriers, but also put patients at grave risk through his unlawful distribution of controlled substances for no legitimate medical purpose. This guilty plea and settlement sends a clear message to those engaged in fraudulent conduct contributing to the opioid crisis that we will hold providers accountable. I applaud the hard work of our investigative staff and our law enforcement partners.”
“U.S. consumers rely on FDA oversight to ensure that the drugs they receive are safe and effective. Rogue health care professionals who obtain foreign unapproved medicines and then dispense and administer those drugs to their patients, put the health of those patients at significant risk,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations Metro Washington Field Office. “We will continue to pursue and bring to justice those who choose to put the public’s health at such risk.”
The U.S. Department of Health and Human Services, Office of Inspector General; the Drug Enforcement Administration; Homeland Security Investigations; the Food and Drug Administration, Office of Criminal Investigations; the Office of Personnel Management, Office of Inspector General; and the Federal Bureau of Investigation all investigated the case. Trial Attorney Debra Jaroslawicz with the Criminal Division’s Fraud Section and Assistant United States Attorney Paul J. Koob prosecuted the criminal case. Assistant United States Attorney and Deputy Chief Charlene Keller Fullmer handled the civil case.
Former Hatboro Pastor Sentenced to 200 Years for Sexually Abusing and Recording the Abuse of an Infant and Young GirlRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Jerry Zweitzig, 71, of Hatboro, PA, was sentenced to 200 years in prison and lifetime supervised release by United States District Court Judge Wendy Beetlestone for manufacturing and attempted manufacturing of child pornography. The charges stemmed from the defendant’s sexual abuse of an infant and a young girl under ten years of age, both of whom were in the defendant’s care at the time of the abuse. Zweitzig was a pastor at the Horsham Bible Church at the time of the abuse. He was sentenced for the charges in both cases today.
In the case involving the young girl, Zweitzig pleaded guilty to five counts of manufacturing and attempted manufacturing of child pornography and one count of possession of child pornography. The charges arose from the defendant’s sexual exploitation of the girl over a period of years, his photographing and videotaping of this sexual abuse, and his collection of more than 10,000 images of child pornography involving thousands of other children on four different hard drives found in his home. According to court documents, the collection included disturbing images of prepubescent children being raped by adult males, forced oral sex on babies and young girls by adult men and women, and insertion of objects into children – many of which show children crying and clearly in pain.
In the case involving the infant, Zweitzig pleaded guilty to one count of manufacturing and one count of attempted manufacturing of child pornography. The charges were based on a video that the defendant made in 2010 that depicts an infant under six months of age being coaxed to suck on adult male genitalia. In the video, Zweitzig’s voice can be heard repeatedly saying: “that’s a good boy.”
“The level of depravity in these cases leaves me almost speechless,” said U.S. Attorney McSwain. “I will simply say this: today’s sentence ensures that Zweitzig will die in prison, which is probably a better fate than he deserves.”
“Safeguarding children from being victimized by predators is a top priority for Homeland Security Investigations,” said Brian A. Michael, Special Agent in Charge of Homeland Security Investigations Philadelphia. “Mr. Zweitzig’s behavior is deplorable, and the exploitation of children is inexcusable. HSI special agents and our law enforcement partners will relentlessly pursue child predators, in every form, and ensure those who commit these atrocious crimes are brought to justice.”
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 Department of Homeland Security, Homeland Security Investigations, the Horsham Police Department, and the Montgomery County District Attorney’s Office. It is being prosecuted by Assistant United States Attorney Eric L. Gibson.
West Chester Drug Dealer Sentenced to 6 ½ Years for Selling Hundreds of Deadly Fentanyl Pills Disguised as OxycodoneRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Kevin Swing, a/k/a “Tone,” 36, of West Chester, PA, was sentenced to 6 ½ years in prison and three years of supervised release by United States District Judge H. Slomsky, for his role in distributing more than 900 pills containing a dangerous fentanyl analogue, a Schedule I controlled substance.
In January 2020, Swing pleaded guilty to conspiracy to distribute a substance containing a fentanyl analogue, as well as knowingly distributing a substance containing a fentanyl analogue, for his role in a scheme to sell fentanyl disguised as prescription oxycodone. On May 11, 2018, Swing used an intermediary to sell more than 900 pills containing the narcotic cyclopropyl fentanyl, a fentanyl equivalent, to his co-defendant Ryan Menkins, for $5,600. Each pill was imprinted with “ETH 446,” which is typically found on Oxycodone Hydrochloride 30 mg pills. In other words, the fentanyl pills were intentionally mislabeled as legitimate, prescription oxycodone pills. Co-defendant Menkins is currently scheduled for trial on December 14, 2020.
“It’s bad enough when legitimate prescription medication like oxycodone is misused and abused, but when a substance as dangerous as fentanyl is made to appear to be prescription medication, it can have disastrous consequences,” said U.S. Attorney McSwain. “Fentanyl and the misuse of opioids is killing our citizens, and Kevin Swing significantly contributed to our region’s opioid epidemic. Together with our law enforcement partners, my Office will do everything possible to stop the illegal distribution of these deadly drugs.”
“Thank you to the U.S. Attorney’s office for bringing justice to the citizens of Chester County by removing the defendant and his drug peddling from our streets,” said Chester County District Attorney Deb Ryan. “We must work together to keep our residents safe.”
“Kevin Swing was peddling pills that appeared to be standard oxycodone doses, but in fact contained a drug related to fentanyl,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “Anyone buying those pills would've been expecting one thing and getting another, with potentially deadly results. Drug dealers making money off the misery of others is bad enough, let alone this dangerous bait and switch. Taking Swing off the street should send a message that the FBI and our law enforcement partners continue to fight to make our communities safer in the face of the opioid epidemic.”
The case was investigated by the Federal Bureau of Investigation, Newtown Square Resident Agency and the West Whiteland Township Police Department, and is being prosecuted by Assistant United States Attorney Matthew T. Newcomer.
Senior Veterans Affairs Official in Philadelphia Indicted for Soliciting BribesRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Ralph Johnson, 54, of Kinzers, PA, former Chief of Environmental Management Services at the Corporal Michael J. Cresenz Veterans Affairs Medical Center (VAMC) in Philadelphia, PA, was charged by Indictment for soliciting and accepting bribes in connection with contracts and purchase orders at the medical center.
As the Chief of Environmental Management Services, Johnson was responsible for a range of sanitation, waste removal, linen and uniform services for the Philadelphia VAMC, and participated in the solicitation and award of contracts to vendors for those services. According to the Indictment, Johnson is charged with asking for, and receiving, thousands of dollars in cash from two Florida-based companies in return for steering purchase orders and contracts to those companies several times from about July 2018 until August 2019. He is also charged with seeking a $10,000 kickback on an $84,000 contract for tree trimming and removal awarded to one of those vendors, for which Johnson had fraudulently and grossly inflated the estimate of the work to be done and the price for that work under the contract.
“The allegations here are shameful. By giving us their best, we owe our veterans the same in return. As a senior official tasked with maintaining a healthy and safe environment for the care and treatment of our nation’s veterans, Ralph Johnson had a responsibility to do that job with honesty and integrity,” said U.S. Attorney McSwain. “Rather than being concerned about serving our veterans, Johnson was allegedly concerned with serving himself by lining his own pockets at taxpayers’ expense.”
David Spilker, Special Agent in Charge at the Veterans Affairs Office of Inspector General (OIG) stated, “VA OIG will vigorously investigate alleged instances when government employees solicit and accept bribes and kickbacks from vendors and contractors who seek to obtain business with the VA. As alleged in the indictment, Johnson’s actions breached the public’s trust, undermined the integrity of VA’s operations, and besmirched the vital work that honest hardworking VA employees do every day in support of our nation’s veterans.”
If convicted, the defendant faces a possible sentence of 45 years imprisonment, 3 years supervised release, and up to a $750,000 fine.
The case was investigated by the United States Department of Veteran Affairs, Office of Inspector General, and is being prosecuted by Assistant United States Attorney K.T. Newton.
United States Attorney McSwain Delivers Remarks on the Ongoing Public Safety Crisis in PhiladelphiaRead the Press Release
PHILADELPHIA, PA – On September 14, 2020, United States Attorney William M. McSwain convened a press conference to announce charges against Khalif Tuggle and John Allen Kane, both of Philadelphia. The United States Attorney’s Office stepped in to bring federal charges in both cases after the Philadelphia District Attorney’s Office failed to handle the local criminal cases appropriately. U.S. Attorney McSwain also spoke about the ongoing escalation of violent crime in Philadelphia and its causes. He highlighted several local cases in which the defendants received shockingly lenient plea deals from the Philadelphia District Attorney’s Office, returned to the streets and then allegedly committed murder. These cases highlight an undeniable pattern of cause and effect in which the application of the District Attorney’s Office’s misguided policies produce violence and tragedy.
Remarks as Prepared for Delivery
Good morning. I am here today to announce that my Office has unsealed two criminal indictments charging two individuals, Khalif Tuggle and John Allen Kane, with committing serious federal crimes on the streets of Philadelphia. Both cases are part of my Office’s continuing efforts to fight the tidal wave of violent crime in the City that is the unfortunate result of local criminal justice policies that coddle violent criminals. These policies create a culture of lawlessness; they leave criminals emboldened; and they have inevitable consequences – one of which is a murder rate in Philadelphia that is the highest it has been in nearly 15 years.
The two indictments announced today are the latest efforts by my Office to serve as a counterweight to this chaos. First, Khalif Tuggle, age 28, has been charged in a three-count indictment with carjacking, use of a firearm in furtherance of a crime of violence, and murder in the course of using a firearm, all stemming from his alleged robbery, carjacking, and brutal murder of Thomas Petersen on January 24, 2017. Tuggle allegedly fired a shot into Mr. Petersen’s chest, dragged him out of the car, threw him on the road, robbed him, and left him for dead while Mr. Petersen was screaming in pain. Tuggle fled the scene in Mr. Petersen’s car, and Mr. Petersen died at Temple University Hospital after two Philadelphia Police Officers rushed him there from the crime scene. If convicted on each count, Tuggle faces a statutory maximum sentence of life imprisonment.
Second, John Allen Kane, age 53, has been charged in a one-count Indictment with possession of a firearm by a convicted felon on January 17, 2018. Kane allegedly possessed this firearm while on probation for committing his second homicide in Philadelphia. If convicted, Kane faces a statutory maximum term of imprisonment of 10 years.
I would like to thank our law enforcement partners whose investigative work made these indictments possible. From the Bureau of Alcohol, Tobacco, Firearms and Explosives, which investigated both cases, I want to thank John Schmidt, Special Agent in Charge of ATF’s Philadelphia Field Division, and the law enforcement agents who investigated the cases. I also want to thank the Philadelphia Police Department for its assistance in both cases. And thank you to Sal Astolfi, the Chief of the Violent Crime unit in my Office, and Assistant United States Attorneys Joseph Labar, Michael Miller, and Tom Zaleski, who are prosecuting these important cases.
Both the Tuggle and the Kane cases are prime examples of how local criminal justice policies benefit violent criminals and harm crime victims. After Mr. Petersen was murdered in cold blood on January 24, 2017, the Philadelphia Police charged Tuggle with first degree murder, firearms offenses, theft, and receipt of stolen property, and he was held without bail until trial. As Tuggle sat in jail awaiting trial for first degree murder, he caught a big break – in January 2018, there was a change in leadership in the District Attorney’s Office in Philadelphia: the Krasner administration took over. This new administration subsequently agreed not to prosecute Tuggle for either first or second degree murder, thus eliminating the possibility that he would serve a life sentence for killing Mr. Petersen. Instead, the District Attorney’s Office permitted Tuggle to plead guilty to third degree murder, ostensibly because he agreed to cooperate with investigators to identify and prosecute his accomplice.
But the plea negotiations were a farce. For one thing, the District Attorney’s Office agreed to drop the most serious charges without bothering to negotiate a “floor” for the sentence -- a minimum term of years that Tuggle would be required to serve for murdering Mr. Petersen. And incredibly, the District Attorney’s Office agreed to the deal without knowing whether the information Tuggle supposedly would provide would prove helpful, and without ensuring that Tuggle would actually identify his accomplice as promised.
In the end, he didn’t – and his accomplice remains on the loose. In other words, Tuggle got a huge break for nothing. The judge sentenced Tuggle to 13.5-27 years for third degree murder, and he will be eligible for parole in the state system in approximately ten years. That sentence is a miscarriage of justice. It is a cruel slap in the face to Mr. Petersen’s family – including his mother, Linda, and his sister, Heather, who are with us today for this announcement. It is something that I am determined to fix.
If convicted on the federal charges, Tuggle faces the very real possibility of life in prison with no possibility of parole.
As for John Kane, as noted in publicly filed documents, the Philadelphia Police recovered a firearm in his possession after a traffic stop and placed him under arrest. As a convicted felon, Kane was prohibited from possessing any firearms. But he was not just any convicted felon – at the time of the traffic stop, he was on probation for committing his second homicide in Philadelphia. But the District Attorney’s Office saw fit to voluntarily dismiss the charges against Kane on a technicality, and he walked free. That is, until now: Kane has been arrested on the federal charge and is in federal custody.
Armed murderers cannot be permitted to walk the streets of Philadelphia in the name of criminal justice reform. The staggering homicide and shooting rates in Philadelphia are proof that the District Attorney’s radical experiment has failed. Homicides, shootings, and serious violent crime have all skyrocketed in 2020 – from already intolerable levels that existed in 2019 and 2018. There have been 316 homicides since the beginning of the year – a 32% increase as compared to this time last year. The violence has been pervasive and it is destroying the soul of the City. In the last month alone, 48 people have been killed and hundreds have been shot. And the average age of the shooting victims is getting younger. Tragically, the vast majority of the victims are racial minorities. I can’t say it any clearer: the District Attorney’s policies come at the expense of minority communities.
We can draw a straight line from these policies to the carnage on the streets. My Office has examined the circumstances underlying many of the recent murder cases in the City and the inescapable conclusion is that a great number of these murders were made possible by the District Attorney’s Office’s willingness – indeed, its eagerness – to offer sweetheart plea deals to violent defendants. Deals that allowed those defendants to quickly get back out on the street and kill.
On this adjacent chart are 10 examples of this sad state of affairs:
- In October 2018, Michael Banks was arrested and charged with multiple counts, including a felony gun charge for possessing an unlicensed firearm. Banks also had prior convictions, and yet in February 2019, the Philadelphia District Attorney’s Office gave him a plea deal in which the felony gun charge was dismissed, and he received only 3-9 months of incarceration for a misdemeanor gun charge and immediately went back out on the street. Banks now stands accused of murdering a seven year-old boy in West Philadelphia last month, who was playing with a toy on his family’s porch when two groups of men began firing upon one another and shot the boy in the head.
- In November 2017, Francisco Reyes was arrested and charged with multiple drug offenses. Despite his prior convictions – which include aggravated assault, robbery, and multiple other prior drug offenses – Reyes was given a plea deal in July 2018 in which the felony drug charge was dismissed and he received probation. Only two days after he pleaded guilty and received probation, on July 5, 2018, Reyes allegedly murdered a 25 year-old man in Kensington.
- In September 2018, Jerome Martin was arrested and charged with possession of a firearm by a felon, which is a felony. He had previously been convicted of felony drug dealing and possessing drug paraphernalia. Somehow, Martin was given a plea deal in June 2019 in which he was sentenced to house arrest. While on house arrest, in August 2019, he allegedly broke into a house and murdered a 23 year-old man, who is survived by many, including his newborn baby.
- In February 2018, Keith Garner was arrested and charged with simple assault. Despite having multiple prior felony convictions, Garner was given a plea deal in March 2018 to probation. In November 2018, Garner executed four people in a West Philadelphia basement, and has been convicted of all four murders.
- In March 2017, Timothy Sherfield was arrested and charged with numerous violent crimes, including two counts of aggravated assault, two counts of robbery, burglary, possession of an unlicensed firearm, and many additional misdemeanors. In February 2018, he was given a plea deal in which the vast majority of these charges were dropped. Sherfield received a minimum sentence of less than one year. This enabled him to be out on the streets and murder a 23 year-old man in April 2019. The victim was inside a mini market at the time that he was gunned down in cold blood.
- In May 2017, Tariq Gant was arrested and charged with a variety of violent crimes, including aggravated assault and firearm offenses. But in February 2018, he was given a plea deal in which the vast majority of the charges were dropped. Gant pleaded guilty to simple assault and resisting arrest, and received probation. In September 2018, he allegedly murdered a 19 year-old young man in Germantown. The victim is survived by his mother, who in addition to losing this son, also tragically lost another son who was gunned down earlier this year.
- In October 2017, Jose Lugo was arrested and charged with felony drug offenses. Despite having previously been convicted of numerous felony drug crimes and carrying a firearm without a license, he was given a plea deal in September 2018 in which he was immediately released. Just months later, in February 2019, Lugo allegedly murdered a 24 year-old man.
- In March 2018, Byron Taylor was arrested and charged with multiple offenses, including felony possession of an unlicensed firearm. Despite his prior convictions, he was given a plea deal in May 2019 in which the felony gun charge was dismissed and he received probation. Almost immediately, in July 2019, Taylor allegedly shot and killed a 35 year-old man in Germantown.
- In January 2018, Rasheed Malcolm was arrested and charged with multiple offenses, including aggravated assault, simple assault, and recklessly endangering another person. Despite his prior felony drug distribution convictions, he was given a plea deal in which all of these charges were dropped, and he was permitted to plead guilty to the summary offense of disorderly conduct. By the end of the year, in December 2018, Malcolm allegedly murdered a 27 year-old man in the 6200 block of Market Street.
- In June 2018, Maalik Jackson-Wallace was arrested and charged with multiple offenses, including felony possession of a firearm without a license. The District Attorney’s Office then selected him to participate in its Accelerated Rehabilitative Disposition program (ARD) – a diversion program in which defendants can avoid a conviction if they comply with certain conditions. This diversion allowed Jackson-Wallace to walk away free. He was then arrested with a second illegal firearm while in the program, but the District Attorney’s Office did not move for him to be taken out of ARD at that time. In June 2019, Jackson-Wallace allegedly murdered a 26 year-old man in the Frankford section of Philadelphia.
Each of these cases is its own separate tragedy, with terrible ramifications that extend in many directions. And these ten cases only scratch the surface of the devastation that is being wrought by the District Attorney’s policies. The cases are merely examples – there are many others like these, in which violent defendants who should not be on the street are committing murder or other violent crimes. Furthermore, these are cases that have led to murder arrests. Most homicides in the City do not even result in an arrest, so it is chilling to think of the number of unsolved murders that have likely been committed by violent criminals who do not belong on the street – and are only there because the District Attorney put them there.
As I have said before, everybody in Philadelphia deserves to live in a safe neighborhood – regardless of race or income level. We won’t get there by treating violent criminals like they are victims, or by undermining law enforcement. We must have the courage and the will to enforce the law – and to hold criminals accountable. The future of our City depends upon it. We must put the law-abiding residents of this City first. Thank you.
United States Attorney McSwain Announces Violent Crime and Gun Charges in Two Philadelphia Cases Mishandled by the District Attorney’s OfficeRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Khalif Tuggle, 28, and John Allen Kane, 53, both of Philadelphia, PA, were arrested and charged by federal Indictment after their local cases were mishandled by the District Attorney’s Office. In a press conference outside the federal courthouse, U.S. Attorney McSwain discussed the charges against Tuggle and Kane in the context of efforts by his Office to fight the tidal wave of violent crime that has engulfed Philadelphia in 2020.
Tuggle has been charged in a three-count Indictment with carjacking, use of a firearm in furtherance of a crime of violence, and murder in the course of using a firearm, all stemming from his alleged robbery, carjacking, and brutal murder of Thomas Petersen on January 24, 2017. Tuggle allegedly fired a shot into Mr. Petersen’s chest, dragged him out of the car, threw him on the road, robbed him, and left him for dead while Mr. Petersen was screaming in pain. Tuggle fled the scene in Mr. Petersen’s car, and Mr. Petersen died at Temple University Hospital after two Philadelphia Police Officers rushed him there from the crime scene.
Kane has been charged in a one-count Indictment with possession of a firearm by a convicted felon on January 17, 2018. Kane allegedly possessed this firearm while on probation for committing his second homicide in Philadelphia.
U.S. Attorney McSwain explained thatthese cases are prime examples of how local criminal justice policies benefit violent criminals and harm crime victims. In the Tuggle case, the District Attorney’s Office agreed not to prosecute the defendant for either first or second degree murder in exchange for information on Tuggle’s accomplice that never materialized – thus eliminating the possibility that Tuggle would serve a life sentence for killing Petersen. Under his current sentence, Tuggle would be eligible for parole in approximately only ten years. If convicted of the federal charges, he faces the possibility of life imprisonment.
In the Kane case, the Philadelphia Police recovered a firearm in the defendant’s possession after a traffic stop and placed him under arrest. As a convicted felon, Kane was prohibited from possessing any firearms. But he was not just any convicted felon – at the time of the traffic stop, he was on probation for committing his second homicide in Philadelphia. But the District Attorney’s Office saw fit to voluntarily dismiss the charges against Kane on a technicality and he walked free. That is, until now: Kane has been arrested on the federal charge and is in federal custody.
“The federal cases against defendants Tuggle and Kane are the latest efforts by my Office to serve as a counterweight to the chaos in Philadelphia created by local criminal justice policies that coddle violent criminals,” said U.S. Attorney McSwain. “These policies create a culture of lawlessness; they leave criminals emboldened; and they have inevitable consequences – one of which is a murder rate in Philadelphia that is the highest it has been in nearly 15 years.”
U.S. Attorney McSwain went on to detail ten additional cases that are examples of shockingly lenient plea deals given out by the Philadelphia District Attorney’s Office where the defendant was subsequently arrested for murder.
- In October 2018, Michael Banks was arrested and charged with multiple counts, including a felony gun charge for possessing an unlicensed firearm. Banks also had prior convictions, and yet in February 2019, the Philadelphia District Attorney’s Office gave him a plea deal in which the felony gun charge was dismissed, and he received only 3-9 months of incarceration for a misdemeanor gun charge and immediately went back out on the street. Banks now stands accused of murdering a seven year-old boy in West Philadelphia last month, who was playing with a toy on his family’s porch when two groups of men began firing upon one another and shot the boy in the head.
- In November 2017, Francisco Reyes was arrested and charged with multiple drug offenses. Despite his prior convictions – which include aggravated assault, robbery, and multiple other prior drug offenses – Reyes was given a plea deal in July 2018 in which the felony drug charge was dismissed and he received probation. Only two days after he pleaded guilty and received probation, on July 5, 2018, Reyes allegedly murdered a 25 year-old man in Kensington.
- In September 2018, Jerome Martin was arrested and charged with possession of a firearm by a felon, which is a felony. He had previously been convicted of felony drug dealing and possessing drug paraphernalia. Somehow, Martin was given a plea deal in June 2019 in which he was sentenced to house arrest. While on house arrest, in August 2019, he allegedly broke into a house and murdered a 23 year-old man, who is survived by many, including his newborn baby.
- In February 2018, Keith Garner was arrested and charged with simple assault. Despite having multiple prior felony convictions, Garner was given a plea deal in March 2018 to probation. In November 2018, Garner executed four people in a West Philadelphia basement, and has been convicted of all four murders.
- In March 2017, Timothy Sherfield was arrested and charged with numerous violent crimes, including two counts of aggravated assault, two counts of robbery, burglary, possession of an unlicensed firearm, and many additional misdemeanors. In February 2018, he was given a plea deal in which the vast majority of these charges were dropped. Sherfield received a minimum sentence of less than one year. This enabled him to be out on the streets and murder a 23 year-old man in April 2019. The victim was inside a mini market at the time that he was gunned down in cold blood.
- In May 2017, Tariq Gant was arrested and charged with a variety of violent crimes, including aggravated assault and firearm offenses. But in February 2018, he was given a plea deal in which the vast majority of the charges were dropped. Gant pleaded guilty to simple assault and resisting arrest, and received probation. In September 2018, he allegedly murdered a 19 year-old young man in Germantown. The victim is survived by his mother, who in addition to losing this son, also tragically lost another son who was gunned down earlier this year.
- In October 2017, Jose Lugo was arrested and charged with felony drug offenses. Despite having previously been convicted of numerous felony drug crimes and carrying a firearm without a license, he was given a plea deal in September 2018 in which he was immediately released. Just months later, in February 2019, Lugo allegedly murdered a 24 year-old man.
- In March 2018, Byron Taylor was arrested and charged with multiple offenses, including felony possession of an unlicensed firearm. Despite his prior convictions, he was given a plea deal in May 2019 in which the felony gun charge was dismissed and he received probation. Almost immediately, in July 2019, Taylor allegedly shot and killed a 35 year-old man in Germantown.
- In January 2018, Rasheed Malcolm was arrested and charged with multiple offenses, including aggravated assault, simple assault, and recklessly endangering another person. Despite his prior felony drug distribution convictions, he was given a plea deal in which all of these charges were dropped, and he was permitted to plead guilty to the summary offense of disorderly conduct. By the end of the year, in December 2018, Malcolm allegedly murdered a 27 year-old man in the 6200 block of Market Street.
- In June 2018, Maalik Jackson-Wallace was arrested and charged with multiple offenses, including felony possession of a firearm without a license. The District Attorney’s Office then selected him to participate in its Accelerated Rehabilitative Disposition program (ARD) – a diversion program in which defendants can avoid a conviction if they comply with certain conditions. This diversion allowed Jackson-Wallace to walk away free. He was then arrested with a second illegal firearm while in the program, but the District Attorney’s Office did not move for him to be taken out of ARD at that time. In June 2019, Jackson-Wallace allegedly murdered a 26 year-old man in the Frankford section of Philadelphia.
“Convicted felons who carry firearms pose a serious risk to public safety,” said John Schmidt, acting Special Agent in Charge of ATF’s Philadelphia Field Division. “ATF will continue to aggressively pursue these investigations and strive to be ‘no better partner’ to our local, state and federal colleagues. Thanks to the diligent work of the investigators and detectives of the Philadelphia Police Department, these individuals will be brought to justice preventing another potential violent crime or death. I would like to thank the U.S. Attorney's Office for their guidance and work prosecuting these cases.”
If convicted on each count, Tuggle faces a total maximum sentence of life imprisonment, five years of supervised release, a $750,000 fine, and a $300 special assessment; Kane faces a statutory maximum term of imprisonment of 10 years, three years of supervised release, a $250,000 fine, and a $100 special assessment.
Both cases were investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case against Tuggle is being prosecuted by Assistant United States Attorneys Joseph LaBar and Michael Miller, and the case against Kane is being prosecuted by Assistant United States Attorney Thomas Zaleski.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Three Philadelphia Men Detained on Charges of Child Sex TraffickingRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that three men, Andre Michael Felts, 32, Kevin Michael Francis, 60, and Ryan Keel, 39, all of Philadelphia, PA, were charged by Indictment for their roles in a sex trafficking operation that exploited numerous minor children from 2016 through 2017. Felts was detained pending trial this afternoon, joining his co-defendants, who are also in federal custody. All three defendants were charged with one count of conspiracy to sex traffic a minor, while Felts and Francis were also each charged with four counts of sex trafficking a minor.
The Indictment alleges that Felts ran a prostitution ring that recruited and enticed young girls, including one who was only fifteen years old, to engage in commercial sex acts; harbored the victims at various residences for that purpose; transported and provided the victims to males who purchased the commercial sex acts; and collected a portion of the proceeds. Further, Keel and Felts allegedly had explicit discussions via Facebook Messenger about the commercial sex acts occurring at the residences. At least one of the victims was also a victim of physical violence during the operation of the trafficking ring: according to public filings, Felts pulled her from a vehicle and repeatedly stomped on her.
“The allegations against these three men are vile and disturbing. I am gratified that the defendants are all now off the streets and in custody pending trial on these charges,” said U.S. Attorney McSwain. “Working with our federal partners, we will do all that we can to keep criminals who sell the bodies of children for their own profit securely behind bars so they can do no more harm.”
“To advertise underage girls for sex, to willfully pimp them out for profit, is heinous,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “Those who so victimize vulnerable kids do untold physical and emotional harm. Make no mistake, the Philadelphia Child Exploitation Task Force is working each and every day to lock up sex traffickers and other predators preying on innocent children.”
This investigation is a part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc
If convicted, each defendant faces a maximum possible sentence of lifetime imprisonment.
The case was investigated by the Federal Bureau of Investigation with assistance from the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Sara Solow and Trial Attorney Jessica Urban of the Department of Justice Criminal Division’s Child Exploitation and Obscenity Section (CEOS).
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Another Crew Member Pleads Guilty in Historic, 20-Ton Cocaine BustRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Aleksandar Kavaja, 27, of the Balkan country Montenegro, pleaded guilty before United States District Court Judge Harvey Bartle III to charges of conspiracy to possess with intent to distribute 5 kilograms or more of cocaine on a vessel subject to the jurisdiction of the United States.
In 2019, Kavaja, a crew member who worked on board the shipping vessel MSC Gayane as the ship’s electrician, conspired with others to engage in bulk cocaine smuggling. On multiple occasions during the MSC Gayane’s voyage at sea, crew members, including Kavaja, helped load huge quantities of cocaine onto the ship from speedboats that approached under cover of darkness, traveling at high speeds. Crew members used the Gayane’s crane to hoist cargo nets full of packaged cocaine onto the vessel and then stashed the drugs in various shipping containers.
On June 17, 2019, federal, state, and local law enforcement agents boarded the MSC Gayane when it arrived at Packer Marine Terminal in the Port of Philadelphia and seized approximately 20 tons of cocaine on the ship -- with a street value of over $1 billion. This was one of the largest drug seizures in U.S. history.
“This momentous drug bust sent a clear message to criminals around the world that our city is not a safe harbor for their deadly drug trafficking,” said U.S. Attorney McSwain. “Prosecutors in my Office, in conjunction with our partner agencies, have been working non-stop for over a year to pursue justice in this case. And now another member of the conspiracy has been convicted and held accountable.”
“Protecting the Homeland against transnational crime is a top priority of Homeland Security Investigations,” said Brian A. Michael, Special Agent in Charge of Homeland Security Investigations Philadelphia. “Mr. Kavaja’s guilty plea is yet another example of HSI, our law enforcement partners, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania working hand in hand to safeguard our community against transnational drug smuggling.”
“Mr. Kavaja’s guilty plea is the logical result from his participation in what remains a record cocaine seizure for CBP,” said Casey Durst, CBP’s Director of Field Operations in Baltimore. “Successful prosecutions reinforce the notion that suspects caught smuggling illegal drugs through our communities face severe, life-changing consequences.”
The defendant faces a maximum possible sentence of lifetime imprisonment.
The case is being investigated by United States Homeland Security Investigations and the United States Customs and Border Protection, together with a multi-agency team of federal, state, and local partners.
Woman Formerly of Harleysville, PA, Indicted on Fraud Charges for “GoFundMe” Cancer SchemeRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Vanessa O’Rourke, 32, formerly of Harleysville, PA, and last known to be residing in Queensland, Australia, was charged by Indictment with wire fraud in connection with falsely stating that she had cancer in order to solicit donations, including on gofundme.com. The Indictment was previously under seal and was unsealed earlier today.
The Indictment alleges that from approximately October 2015 through July 2016, O’Rourke falsely represented to others that she had a terminal form of brain cancer known as “Glioblastoma.” The defendant also allegedly lied about needing to raise money to travel to Australia to receive experimental cancer treatments. Based on these and other allegedly false representations, more than 140 people donated a total of $11,740 to O’Rourke’s fundraising campaign through gofundme.com, a legitimate online fundraising platform. The Indictment also alleges that while O’Rourke did travel to Australia, she did not receive any cancer treatment while she was there and instead used the donated money for personal expenses, including a variety of leisure activities.
“The allegations in this case are nauseating,” said U.S. Attorney McSwain. “O’Rourke is charged with preying upon the kindness and generosity of good people who wished to help those in need. As alleged, there was no need here – only lies, greed and callous manipulation.”
“Misleading people about a significant medical diagnosis in order to take advantage of their kind hearts and open wallets is reprehensible,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “As alleged, Vanessa O’Rourke scammed friends and family alike, convincing them to donate money toward her supposed medical care. Instead, those funds supported her lifestyle and leisure. When someone commits such financial fraud, the FBI and our law enforcement partners will work to hold them accountable.”
The case was investigated by the Federal Bureau of Investigation and the Towamencin Township Police Department, and is being prosecuted by Assistant United States Attorney Kevin Jayne.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Men Charged with Child Sex TraffickingRead the Press Release
Three Philadelphia men were charged, by a federal grand jury, in an indictment unsealed today in the Eastern District of Pennsylvania for their roles in a sex trafficking operation that exploited numerous minors from 2016 through 2017.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania, and Special Agent in Charge Michel J. Driscoll of the FBI’s Philadelphia Field Division made the announcement.
Andre Michael Felts, aka “Dre” and “Plug,” 32, and Kevin Michael Francis, aka “Kev,” 60, were each charged with one count of conspiracy to sex traffic a minor and four counts of sex trafficking a minor. Ryan Keel, 39, was charged with conspiracy to sex traffic a minor.
The indictment alleges that Felts ran a prostitution ring that recruited and enticed young females, including minors, to engage in commercial sex acts; harbored the victims at various residences for that purpose; transported and provided the victims to males who purchased the commercial sex acts; and collected a portion of the proceeds.
The charges and allegations contained in an indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Trial Attorney Jessica Urban of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Sara Solow of the Eastern District of Pennsylvania are prosecuting the case. The FBI’s Philadelphia Field Division is investigating the case and received significant assistance from the Philadelphia Police Department.
This investigation was a part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Controlled Substance Disposal Company Pays to Resolve Allegations of Civil LiabilityRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Specialty Disposal Services, Inc., a controlled substance disposal company with its principal place of business in New Jersey, will pay $137,500 and enter into an administrative memorandum of agreement with the Drug Enforcement Administration to resolve allegations that the company negligently failed to complete required records regarding the disposal of certain controlled substances.
Specialty Disposal Services (SDS) is registered with the DEA as a reverse distributor. The settlement announced today resolves allegations that SDS negligently failed to make and keep records required by the Controlled Substances Act for reverse distributors arising from SDS’s transportation of controlled substances to a third-party facility in Morrisville, PA. In particular, the settlement resolves allegations that SDS negligently failed to properly complete the DEA form requiring verification that SDS’s employees witnessed the destruction of the controlled substances, which ultimately led to some of those controlled substances being subject to diversion by employees of the third-party facility. There are no allegations, however, that SDS was aware of or involved in the diversion. The settlement resolves liability for SDS’s record-keeping from January 9, 2017 through September 30, 2018.
In addition to the $137,500 civil penalty, SDS entered into an administrative agreement with the DEA, in which it agreed to various compliance and monitoring measures such as ensuring its compliance with these regulatory obligations. SDS and the third-party facility cooperated with the government’s investigation.
“The accountability and record-keeping requirements imposed by the DEA for companies that handle controlled substances are critical in preventing diversion,” said U.S. Attorney McSwain. “This civil settlement acknowledges the important responsibilities that all controlled substance disposal companies have to comply with those requirements and to do their part to prevent controlled substances from falling into the wrong hands.”
“Reverse distributors like Specialty Disposal Services play an important role in the closed distribution system of pharmaceutical controlled substances,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “As such, their observation and documentation of the proper disposal of these same substances are essential to their responsibilities under the Controlled Substances Act.”
The civil investigation was conducted by the Philadelphia Field Division of the Drug Enforcement Administration. For the United States Attorney’s Office, Assistant United States Attorney Anthony D. Scicchitano handled the investigation and settlement.
The claims resolved by the settlement are allegations only; there has been no determination of liability and no admission of any facts.
Reading, PA Woman Pleads Guilty to Sex Trafficking ChildrenRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Melissa Madera, 27, of Reading, PA pleaded guilty before United States District Court Judge Joseph F. Leeson, Jr. to multiple child exploitation and pornography offenses.
In August 2019, the defendant was charged by Indictment with two counts of sex trafficking minors, and one count each of distribution, receipt, and possession of child pornography. The charges stem from Madera’s trafficking of two children, 15-year-old and 17-year-old girls, from about August until October 2017. Madera forced the girls to engage in commercial sex for her own financial gain, and also plied the minors with drugs like Ecstasy and cocaine to ensure their compliance. Sometimes the girls would not make it to school the following day because they had been given so many drugs the previous night.
Madera also obtained a sexually explicit image of one of the girls and used it in a commercial sex trafficking website, advertising the minor for commercial sex acts using locations like the Quality Inn in Wyomissing, PA, and the Days Inn, Kleins’ Motel and Roadway Inn, all in Reading, PA. The defendant would rent two rooms at the hotel: one room was for the commercial sex acts and Madera would stay in the other after meeting the sex buyers and charging a fee of $200 per hour. After the 15-year-old’s mother reported her missing to the Reading Police Department in October 2017, Madera confronted the girl and assaulted her, stating “This is what you get for being a rat.”
“Sex trafficking is a serious problem in the Eastern District of Pennsylvania and we are committed to rooting it out,” said U.S. Attorney McSwain. “Here, Madera advertised children like objects to be sold online and gave them drugs so that they weren’t in their right minds. This is a parent’s worst nightmare.”
“Predators come in many different forms,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Make no mistake, Melissa Madera fits that bill. She has now admitted to selling minors for sex, drugging them to maintain control of their minds and bodies. Such despicable treatment does serious lasting harm. The FBI is committed to finding and freeing trafficking victims and holding their tormentors accountable.”
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Sherri A. Stephan.
Pennsylvania Medicare Advantage Plan Provider Agrees to Pay $2.25M to Resolve Allegations of Inflated Plan BidsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Keystone Health Plan East, Inc. and QCC Insurance Company, Inc. (collectively referred to as “KHPE/QCC”), on behalf of parent company Independence Blue Cross, LLC (“IBC”), operator of Medicare Advantage plans, have agreed to pay a total of $2,250,000 plus interest to resolve False Claims Act allegations of incorrectly calculating anticipated plan costs, resulting in inflated Medicare Advantage plan bids to the Centers for Medicare and Medicaid Services (“CMS”).
IBC operates a number of Medicare Advantage plans for Medicare beneficiaries, and is reimbursed by CMS, which pays IBC’s subsidiaries KHPE/QCC. Medicare Advantage plans are also sometimes called “Part C” or “MA Plans,” and include bundled coverage for Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance), and usually Medicare prescription drugs (Part D). KHPE/QCC submits annual bids that include anticipated costs for each Medicare Advantage plan to be offered the following year. The government alleges that KHPE/QCC incorrectly calculated its actual prior costs in the financial plan bids submitted to CMS for contract years 2009 and 2010. The incorrect and inflated prior cost data resulted in higher base amounts in KHPE/QCC’s Medicare Advantage plan bids, causing CMS to pay inflated reimbursement to KHPE/QCC. The United States contends that these claims were false in light of defendant’s conduct.
This settlement resolved a lawsuit filed under the False Claims Act in the U.S. District Court for the Eastern District of Pennsylvania by an employee of IBC. Under the qui tam (or whistleblower) provisions of the False Claims Act, private citizens are permitted to bring lawsuits on behalf of the United States and obtain a portion of the government’s recovery. The False Claims Act also permits the government to intervene and take over the lawsuit, which occurred in this case. The whistleblower in this case, Mr. Eric Johnson, will receive $499,438.05 as his share of the recovery.
“Investigating credible allegations of fraud against federal healthcare programs saves taxpayer dollars, especially in complex Medicare Advantage Part C cases such as this, when the alleged conduct has potential implications for Medicare beneficiaries and drives up the cost of Medicare Advantage plans,” said U.S. Attorney McSwain. “Medicare Advantage plan operators must know the CMS contracting rules, and the proper presentation of claims costs required by those programs, and abide by them.”
“Today’s settlement represents significant teamwork and shows our commitment to investigating all potential allegations of fraud against the Medicare Part C Programs, no matter how complex,” said Maureen R. Dixon, Special Agent in Charge of the Office of the Inspector General, Department of Health and Human Services. “We will continue to partner with the United States Attorney’s Office to evaluate allegations brought under the False Claims Act to ensure the integrity of Medicare programs.”
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 (“HHS”), at 1-800‑HHS‑TIPS (1-800-447-8477).
This matter was investigated by the U.S. Attorney’s Office for the Eastern District of Pennsylvania, in conjunction with the U.S. Department of Health and Human Services Office of Inspector General. The lawsuit is captioned United States ex rel. Eric Johnson v. Independence Blue Cross, Civ. Action No. 10-CV-1520 (E.D. Pa.). Assistant U.S. Attorneys Viveca D. Parker and Eric D. Gill handled the case in the Eastern District of Pennsylvania, with assistance from auditor Dawn Wiggins.
The claims resolved by this settlement are allegations only and there has been no determination of liability.
Six-Time Bank Robber from Philadelphia Sentenced to over 10 YearsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Justin O’Brien, 33, of Philadelphia, PA, was sentenced to 10 years and 10 months in prison, three years of supervised release, and ordered to pay $7,244 in restitution by United States District Court Judge Nitza I. Alejandro-Quinones for armed bank robbery.
In December 2019, O’Brien pleaded guilty to committing an armed bank robbery on March 12, 2019, taking $1,260 from an employee of Firstrust Bank on Lancaster Avenue in Bryn Mawr, PA. The defendant also admitted to committing an assault by the use of a dangerous weapon – namely, a facsimile firearm (pellet gun).
As part of the plea agreement, O’Brien also acknowledged his guilt for five other bank robberies, and agreed that the Court could sentence him as if he had been convicted of these crimes: 1) the October 29, 2018 bank robbery of the Tompkins VIST Bank on Verree Road in Philadelphia, resulting in a loss of approximately $1,880; 2) the November 9, 2018 bank robbery of the M&T Bank on Frankford Avenue in Philadelphia, resulting in a loss of approximately $451; 3) the March 1, 2019 armed bank robbery of the Firstrust Bank on Krewstown Road in Philadelphia, resulting in a loss of approximately $975; 4) the March 8, 2019 armed bank robbery of the Tompkins VIST Bank on West Lancaster Avenue in Radnor Township, resulting in a loss of approximately $600; and 5) the March 18, 2019 bank robbery of the PNC Bank on Market Street in Philadelphia, resulting in a loss of approximately $2,078.
“O’Brien’s bank robbery spree terrorized innocent employees and showed a contempt for the law,” U.S. Attorney McSwain. “But federal crime means federal time, and now O’Brien has earned a long stint behind bars. My Office’s anti-violence public awareness campaign warns against the serious consequences of committing violent crime in the Eastern District of Pennsylvania. You can learn more about this campaign on our District website.”
“Thanks to the hard work of the Philadelphia FBI and its local partners, Justin O’Brien will no longer be in a position to terrorize the community,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “While today’s sentence cannot undo the harm O’Brien caused his victims, it sends a message that if you commit a violent crime, the FBI and our law enforcement partners will work tirelessly to bring you to justice.”
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, the Lower Merion Township Police Department, the Philadelphia Police Department, and the Radnor Township Police Department. It is being prosecuted by Assistant United States Attorney Thomas M. Zaleski.
South Philadelphia Drug Trafficking Ringleader Sentenced to 25 YearsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Antoine Clark, 31, of Philadelphia, PA, was sentenced to 25 years in prison, 10 years of supervised release, and ordered to pay a $1,700 fine by United States District Court Judge Gerald J. Pappert for multiple narcotics offenses related to his role in leading an almost around-the-clock drug delivery service for several years in South Philadelphia.
Clark and his codefendants, Gerald Spruell, 33, and Daniel Robinson, 37, were convicted after more than two weeks at trial of charges that included conspiracy to distribute controlled substances, and distribution or possession with intent to distribute crack cocaine and heroin.
Between 2014 and 2016, the defendant and his co-conspirators, including Spruell, Robinson, and several others who pleaded guilty to similar charges before trial, were known as the “Friends” and the “7th Street” drug trafficking group. Members of the group delivered crack cocaine and heroin to customers along the 7th Street corridor in South Philadelphia using a shared drug phone to take orders and communicate with customers; they would pass the phone off in shifts to keep their operation going almost 24 hours per day. During the course of the investigation, FBI agents intercepted phone calls and text messages from the phone, which documented the defendants’ illicit activities.
“Drug trafficking is an insidious, dangerous activity that ruins neighborhoods,” said U.S. Attorney McSwain. “Antoine Clark was an expert at it, and now he will pay the price -- to the tune of 25 years. That is the sort of just punishment that awaits drug dealers in federal court. My Office is determined to protect communities ravaged by the drug trade by investigating and destroying drug trafficking organizations like the 7th Street organization.”
“The FBI is committed to keeping communities safe from predators like Antoine Clark,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Today’s sentence sends the message to drug organizations and gang members that if you traffick in illegal drugs, we will hunt you down and bring you to justice.”
The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorneys Matthew Newcomer and Jason Grenell.
Serial Bank Robber from Philadelphia Sentenced to 12 YearsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Lamar Tindall, 45, of Philadelphia, PA, was sentenced to 12 years in prison, three years of supervised release, and was ordered to pay $2,955 in restitution by United States District Court Judge Joshua D. Wolson for robbing three separate BB&T Banks over a period of ten days in May 2019.
In January 2020, Tindall pleaded guilty to three counts of bank robbery, arising from his robberies of BB&T Banks in Philadelphia on May 14, 2019; Feasterville on May 17, 2019; and King of Prussia on May 23, 2019. During each robbery, Tindall handed a threatening note to a teller in order to receive money. For example, during the robbery on May 14, Tindall handed the frightened teller a note that read, “all 50’s and 100’s or ill shoot.” Tindall made off with a total of $3,650 as a result of these robberies. Philadelphia Police Department officers later arrested Tindall, who confessed to his crimes.
Tindall has a long rap sheet, which includes convictions for drug distribution offenses in 1999 and 2010, and a conviction for robbery of property of the United States in 2002. Because of his criminal history, the Court found Tindall to be a “Career Offender” under the U.S. Sentencing Guidelines.
“Robbing any type of business – whether it’s a bank, a corner store, or anything in between – is a serious federal offense that can carry stiff penalties, as Tindall can now attest,” said U.S. Attorney McSwain. “And even the threat of having and using a firearm during a robbery, regardless of whether or not you actually have one, will multiply the penalty. I want people to know that committing a violent crime in the Eastern District of Pennsylvania carries a tremendous risk of a long prison sentence, which is the point of our anti-violence public awareness campaign. You can learn more about this campaign on our District website.”
“Serial bank robbers like Lamar Tindall terrorize our communities,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “I would like to thank our law enforcement partners who assisted in bringing Mr. Tindall to justice and making our community safer.”
The case was investigated by the Federal Bureau of Investigation, with assistance from the Abington Township Police Department, the Conshohocken Police Department, the Lower Southampton Township Police Department, the Philadelphia Police Department, and the Upper Merion Township Police Department. The case is being prosecuted by Assistant United States Attorneys Lauren R. Baer and Kevin Jayne.
Four Chester County Residents Charged with COVID-19 Related Unemployment FraudRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Jennifer D’Hulster, 37, of Coatesville, PA; Zachary Gathercole, 30, of Sadsburyville, PA; Ashley Harrington, 30, of West Chester, PA; and Anthony Schweitzer, 20, also of Coatesville, PA, were charged by Complaint with fraudulently obtaining and attempting to obtain unemployment benefits related to COVID-19 emergency relief funds to which they were not entitled. Defendant D’Hulster was arrested and taken into custody this morning; the other three defendants were already in custody. All four defendants made their initial appearances in federal court today.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The CARES Act created the Pandemic Unemployment Assistance (PUA) program, which provides unemployment benefits to individuals not eligible for regular unemployment compensation or extended unemployment benefits, including individuals, families, and businesses affected by the COVID-19 pandemic. Eligibility to receive weekly PUA benefits was predicated on the applicant’s unemployment for reasons related to the pandemic; however, the applicant must also have been able to work each day and, if offered a job, the applicant must have been able to accept it. Once the applicant was approved to receive benefits, the applicant was required to submit weekly certifications that indicated that he or she: was ready, willing and able to work each day; was seeking full time employment; did not refuse any job offers or referrals; and, had reported any employment during the week and the gross pay or other payments received.
The Complaint alleges that D’Hulster and Harrington assisted individuals incarcerated at Chester County Prison and other correctional institutions in fraudulent efforts to obtain Pandemic Unemployment Assistance (PUA) benefits. Harrington enabled Gathercole, who was incarcerated at Chester County Prison prior to the onset of the pandemic, to receive approximately $12,865. D’Hulster and Gathercole enabled another unidentified inmate to receive approximately $11,410 and attempted to obtain PUA benefits for another inmate. Schweitzer did not actually receive any PUA benefits, but attempted to several times. The inmates were not eligible to receive PUA benefits because they did not meet the eligibility requirements -- namely, they were not able to report to a job each day because of their incarceration.
“Sadly, fraudsters consider a national public health crisis as an opportunity to cash in,” said U.S. Attorney McSwain. “That callous attitude rips off honest taxpayers who fund relief programs and also makes it much more difficult to provide funds to those who deserve and need them. My Office will do everything in its power to ensure that coronavirus fraud scams are stopped and punished.”
“Unemployment insurance fraud has risen sharply during the COVID-19 pandemic, and investigating these types of schemes remains a priority for the Office of Inspector General. We will continue to work with our law enforcement partners to aggressively pursue allegations of criminal conduct against the Unemployment Insurance program,” said Derek Pickle, Acting Special Agent-in-Charge, Philadelphia Region, U.S. Department of Labor Office of Inspector General.
“At the end of March, 2020, the United States Government invested billions of dollars in helping its citizens through the pandemic,” said Postal Inspector in Charge Damon Wood. “From the beginning, Postal Inspectors in Philadelphia, and across the country, have worked to do our part in ensuring that those investments in the American public do not fall into the hands of fraudsters and con artists. I hope that the charges announced today serve as a deterrence to those who think that stealing or obtaining funds fraudulently from the most vulnerable amongst us, pays; it doesn’t. As always, I want to thank the other agencies that assisted in this investigation and the United States Attorney’s Office which supported the investigation and will see the prosecution through.”
If convicted of the conspiracy and fraud in connection with emergency benefits charges, D’Hulster, Gathercole, Harrington, and Schweitzer each face up to 60 years’ imprisonment, a $2,000,000 fine, and five years of supervised release following any imprisonment.
This case was investigated by the United States Department of Labor – Office of Inspector General, the United States Postal Inspection Service, and the Pennsylvania Department of Labor and Industry, assisted by Chester County Prison. The case is being prosecuted by Assistant United States Attorney Anita Eve.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Three Texans, One New Yorker Indicted for Conspiracy to Sell Sanctioned Iranian Petroleum to Refinery in China for Millions in ProfitRead the Press Release
Assistant Attorney General for National Security John C. Demers and U.S. Attorney for the Eastern District of Pennsylvania William M. McSwain announced that the following defendants were indicted on charges of conspiracy, violating the International Emergency Economic Powers Act (IEEPA), and money laundering conspiracy based on their attempt to transact in sanctioned Iranian petroleum:
- Nicholas Hovan, 34, of New York, NY;
- Zhenyu Wang, aka “Bill Wang,” 39, of Dallas, TX;
- Robert Thwaites, 30, of Dallas, TX; and
- Daniel Ray Lane, 39, of McKinney, TX.
“The defendants in this case allegedly conspired to sell Iranian petroleum to a Chinese refinery in order to enrich themselves at the expense of the US Iran sanctions regime,” said Assistant Attorney General Demers. “The defendants devised a scheme to use front companies, bribes, and false contractual documents in order to conceal their brazenly illicit activity. We will continue to leverage all of our tools to detect and prevent individuals such as these from engaging in actions that would have harmed the national security of this nation.”
“It doesn’t get much lower than attempting to get rich by flouting the United States’ national security interests,” said U.S. Attorney McSwain. “The defendants here allegedly jeopardized the safety and security of the United States by scheming to get in bed with Iran and China. This type of conspiracy deserves the full condemnation of my office and it has it.”
The indictment alleges that from May 2019 to February 2020, the defendants conspired in Philadelphia and elsewhere to arrange for the purchase of petroleum from the Islamic Republic of Iran, in violation of United States economic sanctions imposed on Iran, for sale to a refinery in the People’s Republic of China. They also allegedly conspired to launder the proceeds of the sale through shell entities and offshore financial accounts to disguise the nature of the transaction. The defendants are charged with conspiring to purchase sanctioned Iranian petroleum, to sell the petroleum to a Chinese refinery, to conceal the origin of the petroleum (including by bribing a Chinese official), and to obtain Antigua passports to open Swiss bank accounts through which the proceeds would be laundered.
In February 2020, the defendants were arrested pursuant to a criminal complaint. As previously reported, the defendants planned two shipments of oil per month going forward, all for an expected profit of roughly $28 million-per-month.
If convicted, the defendants face a maximum possible sentence of 45 years’ imprisonment, a $1.75 million fine, a three-year term of supervised release, and a $300 special assessment.
The case was investigated by the FBI and is being prosecuted by First Assistant U.S. Attorney Jennifer Arbittier Williams and Assistant U.S. Attorney Michael J. Rinaldi and in partnership with Trial Attorney David Recker of the Department of Justice’s National Security Division, Counterintelligence and Export Control Section.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty
Three Texans, One New Yorker Indicted for Conspiracy to Sell Sanctioned Iranian Petroleum to Refinery in China for Millions in ProfitRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain and Assistant Attorney General for National Security John C. Demers announced that the following defendants were indicted on charges of conspiracy, violating the International Emergency Economic Powers Act (“IEEPA”), and conspiracy to commit money laundering based on their attempt to transact in sanctioned Iranian petroleum:
- Nicholas Hovan, age 34, of New York, NY;
- Zhenyu Wang, a/k/a “Bill Wang,” age 39, of Dallas, TX;
- Robert Thwaites, age 30, of Dallas, TX; and
- Daniel Ray Lane, age 39, of McKinney, TX.
The Indictment alleges that from May 2019 to February 2020, the defendants conspired in Philadelphia and elsewhere to arrange for the purchase of petroleum from the Islamic Republic of Iran, in violation of United States economic sanctions imposed on Iran, for sale to a refinery in the People’s Republic of China. They also allegedly conspired to launder the proceeds of the sale through shell entities and offshore financial accounts to disguise the nature of the transaction. More specifically, the defendants are charged with conspiring to purchase sanctioned Iranian petroleum, to sell the petroleum to a Chinese refinery, to conceal the origin of the petroleum (including by bribing a Chinese official), and to obtain Antigua passports to open Swiss bank accounts through which the proceeds would be laundered.
In February 2020, the defendants were arrested pursuant to a criminal complaint. As previously reported, the defendants planned two shipments of oil per month going forward, all for an expected profit of roughly $28 million-per-month.
“It doesn’t get much lower than attempting to get rich by flouting the United States’ national security interests,” said U.S. Attorney McSwain. “The defendants here allegedly jeopardized the safety and security of the United States by scheming to get in bed with Iran and China. This type of conspiracy deserves the full condemnation of my Office -- and it has it.”
“The defendants in this case allegedly conspired to sell Iranian petroleum to a Chinese refinery in order to enrich themselves at the expense of the US Iran sanctions regime,” said Assistant Attorney General for National Security John C. Demers. “The defendants devised a scheme to use front companies, bribes, and false contractual documents in order to conceal their brazenly illicit activity. We will continue to leverage all of our tools to detect and prevent individuals such as these from engaging in actions that would have harmed the national security of this nation.”
If convicted, each defendant faces a maximum possible sentence of 45 years in prison, a $1.75 million fine, a three year term of supervised release, and a $300 special assessment.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by First Assistant U.S. Attorney Jennifer Arbittier Williams and Assistant U.S. Attorney Michael J. Rinaldi, in partnership with Trial Attorney David Recker of the Department of Justice’s National Security Division, Counterintelligence and Export Control Section.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Business Owner Indicted for Arson of his North Philly Convenience Store to Collect Insurance ProceedsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Leonardo Dan Almonte-Fernandez, 39, of Philadelphia, PA, was charged by Indictment with one count of malicious damage of a building by means of fire affecting interstate commerce, one count of the use of fire to commit another felony, and three counts of wire fraud.
According to court documents, on April 25, 2020, Almonte-Fernandez allegedly set fire to his business, Chevere Mini Market, at 1443 E. Luzerne Street in Philadelphia. The defendant, who rented the basement, first, and second floors of the building, was behind on his lease payments and had recently been cited by the Philadelphia Department of Public Health for underage tobacco sales. Following the fire, he allegedly submitted fraudulent claims to State Farm Fire and Casualty Company seeking $200,000 in insurance proceeds for damages resulting from the fire, for which he claimed no involvement.
“As alleged in the Indictment, Almonte-Fernandez has a brazen disrespect for the law – and for the safety of his neighbors in this densely-populated residential area,” said U.S. Attorney McSwain. “He put other people’s homes and lives at risk, and then attempted to steal insurance money. Arson is a despicable crime. Together with our federal and local partners, we are committed to doing everything possible to punish and prevent it.”
“Arson is a dangerous crime and a very real threat to our community,” said John Schmidt, acting Special Agent in Charge of ATF’s Philadelphia Field Division. “We routinely work with our partners from the Philadelphia Police Department and Fire Marshal’s Office to build these complex and violent arson cases. Rest assured, ATF along with our law enforcement partners who round out our Arson and Explosives Task Force is dedicated to seeking justice against those who use fire as a weapon.”
“The Philadelphia Fire Marshals Office remains committed to investigating acts of arson throughout the City. We are grateful to the US Attorney’s Office and all of our partners for their ongoing help and support,” said Deputy Chief Fire Marshal Dennis J. Merrigan.
If convicted, the defendant faces a maximum possible sentence of 100 years’ imprisonment, a 10-year mandatory minimum term of imprisonment, up to three years’ supervised release, a $1.25 million fine, and a $500 special assessment.
The case was investigated by the Bureau of Alcohol, Tobacco, Fire Arms and Explosives Arson and Explosives Task Force, the Philadelphia Fire Marshal’s Office and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Sarah Damiani.
An indictment, information or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Career Criminal from Philadelphia Sentenced to over Six Years in Prison for Illegally Possessing a FirearmRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Kenneth Saunders, 34, of Philadelphia, PA, was sentenced to over six years in prison (80 months), and three years of supervised release by United States District Court Judge John M. Younge for illegally possessing a firearm as a felon. Saunders was also on Pennsylvania state parole at the time of the offense.
The defendant pleaded guilty in March 2020 to one count of possession of a firearm by a convicted felon. During his plea hearing, Saunders admitted that he carried a firearm with an obliterated serial number and fled from Philadelphia police officers while carrying the gun on July 18, 2019. During that foot chase in the Logan neighborhood, Saunders grabbed the firearm from his waistband and pointed it at the pursuing officers before falling to the ground, after which police recovered the weapon.
According to court documents, Saunders was previously convicted of numerous felony offenses in the Philadelphia County Court of Common Pleas, including violations of the Uniform Firearms Act in 2005 and 2011 and possession with intent to distribute a controlled substance in 2010. Further, in 2004, the defendant was arrested for carrying a firearm without a license and endangering the welfare of a child. In that case, Saunders not only illegally possessed a gun, but also shot his two-year-old daughter with it. After pleading guilty, the defendant was sentenced to two to five years in Pennsylvania state prison.
“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 running rampant,” said U.S. Attorney McSwain. “Saunders has been living a life of crime for the better part of twenty years now, and has repeatedly demonstrated his disrespect for the law. The answer to Philadelphia’s violent crime crisis is to get criminals like Sanders off of the streets, which is exactly what the U.S. Attorney’s Office is focused on.”
“As a convicted felon in possession of a firearm, Kenneth Saunders presented a real danger to the community and to law enforcement officers alike,” said John Schmidt, acting Special Agent in Charge of ATF’s Philadelphia Field Division. “Despite being prohibited from possessing a firearm, he was armed when encountered by law enforcement. The federal prosecution of this crime demonstrates ATF’s dedication to working alongside our local, state and federal partners, in this case the Philadelphia Police Department and the U.S. Attorney’s Office, to ensure violent individuals like Saunders are deprived of the ability to terrorize our community.”
“It is going to take an aligned and sustained collaborative effort with all of our law enforcement partners in order to combat the crisis of violence in our neighborhoods,” said Philadelphia Police Commissioner Danielle Outlaw. “Individuals like Mr. Saunders need to know that illegally carrying weapons on our streets will have serious and consistent consequences. I would like to thank our federal partners for helping us work towards our common goal of making our communities safer places to live and work.”
The case was investigated by the Bureau of Alcohol, Tobacco, Fire Arms and Explosives and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Kelly Harrell.
Lancaster County Business Owner Sentenced to One Year in Prison for Filing False Liens Against IRS AgentRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Dorothy Recarde, 68, of Kirkwood, PA, was sentenced to one year in prison, one year of supervised release and ordered to pay a $25,000 fine by United States District Judge Paul S. Diamond for filing false and fraudulent liens worth $15,000,000 against an employee of the Internal Revenue Service.
In December 2019, the defendant pleaded guilty to corruptly endeavoring to obstruct or impede the due administration of the Internal Revenue Service. After an IRS revenue officer initiated levy actions to satisfy an outstanding federal tax obligation of approximately $24,000 incurred by Recarde’s company, Summerbeam Woodworking, Recarde retaliated by filing two fraudulent liens in Chester County against the officer.
According to court documents, Recarde initially responded to repeated attempts by the revenue officer to collect the outstanding tax obligation by mailing notarized letters to the IRS that espoused sovereign citizen ideology, an anti-government movement that, among other things, denies the government’s authority to impose taxes. She further claimed that correspondence she had mailed to IRS officials and the United States Treasury had gone unanswered, thus nullifying her outstanding debts. Bogus and illegal liens, such as those filed by the defendant, are a common tactic used by supporters of the sovereign citizen movement against perceived opponents or enemies.
“The sovereign citizen movement is nonsense and will be treated as such,” said U.S. Attorney McSwain. “And if you use it as an excuse to harass and retaliate against an IRS agent, you’re going to jail. Then you’ll have plenty of free time to think about the consequences of flouting the law.”
“TIGTA’s statutory mission includes investigating individuals who interfere with Federal tax administration,” said J. Russell George, Treasury Inspector General for Tax Administration. “Attempts to intimidate or retaliate against Internal Revenue Service employees engaged in the performance of their official duties will not be tolerated. We appreciate the efforts of the U.S. Attorney’s Office in this investigation.”
The case was investigated by the Treasury Inspector General for Tax Administration (TIGTA), and is being prosecuted by Assistant United States Attorney Frank R. Costello, Jr.
Former Florida Investment Adviser Sentenced to Ten Years in Prison for Defrauding ClientsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Sean Donald Premock, 47, of Ft. Lauderdale, Florida, was sentenced today to ten years in prison and three years of supervised release by United States District Judge Paul S. Diamond for numerous fraud offenses. The defendant was also ordered to forfeit $797,021 in proceeds and pay $1,061,532 in restitution.
The defendant, a former licensed stockbroker and investment adviser, pleaded guilty in May 2017 to nine counts of mail fraud, nine counts of wire fraud, one count of securities fraud, and one count of investment adviser fraud. As part of his guilty plea, Premock admitted that he had lost all of his professional licenses between March 2012 and August 2013, and had been permanently barred from serving as an investment advisor. The defendant’s fraud that led to his conviction in this case began while he was still licensed and continued even after he lost his licenses.
Premock began defrauding his clients in at least 2009, while still employed at a securities firm in Florida. When it became apparent that he was going to lose his licenses, Premock set up his own investing companies, including the aptly-named Mocktrading Investments, LLC and Mock Trading Group, which the defendant used to defraud his clients -- most of whom were elderly and inexperienced investors and some of whom were his own family members. Premock continued to hold himself out as a licensed stockbroker and investment adviser even after losing his licenses, and convinced many of his clients to trust him with their life savings. The defendant promised to manage his clients’ money and invest it in, among other things, stocks, bonds, “hedge funds,” “tractions,” and annuities. Premock told his clients that their funds would be safe, and promised to place them in low risk investments.
In reality, Premock invested only about half of the funds he received from clients and spent the rest on himself. Furthermore, the investments he did make were failures and he lost virtually all of his clients’ money. To hide his fraud, the defendant lied to his clients about their investments and mailed them false account statements. Later, Premock even began calling himself “Ethan” to make it harder for anyone to discover his true identity. In total, Premock’s clients lost more than $1,000,000 during the course of his fraud.
“Honesty, integrity, and trust all play a critical role in the relationship between a financial advisor and a client. Any advisor who deliberately betrays his clients’ trust for his own financial gain turns the system on its head,” said U.S. Attorney McSwain. “The damage done by such corrupt financial advisors can be catastrophic; here, some of Sean Premock’s victims lost their life savings. Today’s sentence reflects the gravity of that betrayal.”
“Getting fired for bad behavior and losing his professional licenses proved a mere career speedbump for Sean Premock,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “His next venture: flat-out fraud. He set about reeling in unsuspecting investors, lied about his plans for their money, and created a phony paper trail to cover up his crimes. Most of his victims were elderly. Maybe that’s why he thought he could get away with it. The FBI is proud to have proved him wrong.”
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Michael S. Lowe.
Philadelphia Tax Preparer Sentenced to Five Years for FraudRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain and Principal Deputy Assistant Attorney General of the Tax Division Richard E. Zuckerman, announced that Nvahbulai “Kosh” Quisiah, 44, of Philadelphia, PA was sentenced to five years in prison, three years of supervised release and ordered to pay $215,941 in restitution by United States District Court Judge Nitza I. Quiñones Alejandro for multiple fraud and tax offenses.
In February 2020, the defendant was found guilty after a jury trial on charges of preparing false tax returns, aggravated identity theft, wire fraud and engaging in a conspiracy to defraud the United States.
According to evidence presented at trial, Quisiah was the owner and operator of First Premier Tax Service (also d/b/a Kosh & Associates), a Philadelphia-based tax preparation business on Woodland Avenue. From 2010 through 2017, the defendant prepared tax returns for clients that fraudulently inflated itemized deductions, claimed fictitious Schedule C businesses, and claimed false dependents for tax years 2009 through 2016. This resulted in inflated tax refunds for his clients to which the clients were not entitled. Quisiah also bought and sold the personal identifying information of children in order to falsely claim the children as dependents on tax returns.
“Today’s sentence is an appropriate reminder to tax preparers that attempting to defraud the federal government will result in serious consequences,” said U.S. Attorney McSwain. “And here, the defendant’s actions will have ramifications for years to come because he stole the identities of children as part of his fraud. My Office will continue to work with our federal partners here and in Washington D.C. to prioritize the investigation and prosecution of tax crimes.”
“As today’s sentencing makes clear, corrupt tax preparers who falsify tax returns, and particularly those who exploit stolen minors’ identities to do so, will not go unpunished,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman.
“When return preparers put honest taxpayers and unsuspecting individuals at risk for a quick dollar, they can count on IRS-CI being on their tail,” said Don Fort, Chief, IRS Criminal Investigation. “Our special agents use their investigative and financial expertise to detect and hold accountable abusive tax return preparers like Quisiah, who falsely told taxpayers they were eligible for inflated tax refunds that they were not entitled to receive.”
The case was investigated by the Internal Revenue Service’s Criminal Investigation Division and is being prosecuted by Assistant United States Attorney Anthony Wzorek and Department of Justice Tax Division Attorney Ann M. Cherry.
Philadelphia Return Preparer Sentenced to Five Years in Prison for Tax FraudRead the Press Release
A Philadelphia, Pa, tax return preparer was sentenced to 60 months in prison today for conspiring to defraud the United States, preparing false client tax returns, wire fraud, and identity theft, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney William M. McSwain for the Eastern District of Pennsylvania.
“As today’s sentencing makes clear, corrupt tax preparers who falsify tax returns, and particularly those who exploit stolen minors’ identities to do so, will not go unpunished,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman.
“Today’s sentence is an appropriate reminder to tax preparers that attempting to defraud the federal government will result in serious consequences,” said U.S. Attorney McSwain. “And here, the defendant’s actions will have ramifications for years to come because he stole the identities of children as part of his fraud. My office will continue to work with our federal partners here and in Washington D.C. to prioritize the investigation and prosecution of tax crimes.”
According to the evidence presented at trial, Nvahbulai Quisiah owned and operated First Premier Tax Service, a tax return preparation business in Philadelphia. From 2010 through 2017, Quisiah falsified clients’ tax returns by claiming false dependents based on stolen minors’ identities, as well as false itemized deductions and business losses in order to increase the refunds paid by the IRS.
In February 2020, a federal jury found Quisiah guilty on all counts.
In addition to the term of imprisonment, U.S. District Judge Nitza I. Quiñones Alejandro ordered Quisiah to serve three years of supervised release and to pay $215,941 in restitution to the United States.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney McSwain thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Ann M. Cherry of the Tax Division and Assistant U.S. Attorney Anthony Wzorek, who prosecuted the case.
Serial Child Predator in Philadelphia Sentenced to 25 Years for Producing Child PornographyRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Maurice Neal, 31, of Philadelphia, PA was sentenced to 25 years in prison and lifetime supervised release by United States District Court Judge Timothy J. Savage for producing child pornography.
In November 2019, the defendant pleaded guilty to one count of manufacturing child pornography, stemming from his sexual abuse of a 12-year-old child (Minor #1) as she slept, and recording the abuse on his cell phone. He covered the victim’s face with a cloth to avoid her eyes from looking at him, and stopped only because he thought another child sleeping nearby was stirring. The sexual assault of this child was the second in a series of assaults of children that Neal committed. At the time that he documented his sexual abuse of Minor #1, Neal already had an active arrest warrant issued by the Philadelphia Police Department for his sexual molestation of a different child (Minor #2), who was only six-years-old. And after sexually abusing Minor #1 and Minor #2, Neal then began molesting two additional young girls: another six-year-old (Minor #3) and a nine-year-old (Minor #4).
Neal was charged and pleaded guilty to these sexual offenses (assaulting Minors #1-4) in the Commonwealth of Pennsylvania, and was sentenced to 25 to 50 years in state prison for these crimes. While he was incarcerated, the video of his abuse of Minor #1 was discovered, and the defendant was then charged with the federal offense of manufacturing child pornography.
“Maurice Neal left a trail of young, vulnerable victims in his wake,” said U.S. Attorney McSwain. “In a few short months, he took advantage of every opportunity to prey upon children in homes in which he was staying, horrifically abusing four little girls within his grasp and causing incalculable damage. Working with our law enforcement partners, we will hold defendants like Maurice Neal accountable and pursue justice for the victims.”
“Put simply, Maurice Neal is a predator,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “He sexually violated multiple children, documenting some of that abuse. It’s vital that he stay locked away where he can’t hurt any more kids. The FBI and our partners at the Philadelphia Police Department won’t ever stop fighting to protect children from being so horrifically exploited.”
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 in partnership with the Philadelphia Police Department and Philadelphia District Attorney’s Office, and is being prosecuted by Assistant United States Attorney Priya DeSouza and Special Assistant United States Attorney Megan Curran.
Phoenixville Hospital and Firstsource Solutions Agree to Pay $325,000 to Resolve False Claims Act Allegations of Submitting Altered Government FormsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Phoenixville Hospital and Phoenixville Hospital Co., LLC (“Phoenixville Hospital”) has agreed to pay $100,000 to resolve alleged violations of the False Claims Act by causing the submission of altered forms to the Pennsylvania Department of Human Services, which administers Medicaid in Pennsylvania. Additionally, Firstsource Solutions, Ltd., Firstsource Solutions USA, LLC, and its predecessor Medassist, Inc. (collectively “Firstsource Solutions”), a revenue cycle management services provider operating in Pennsylvania, has agreed to pay $225,000 for processing the alleged false claims on Phoenixville Hospital’s behalf.
Phoenixville Hospital, a community healthcare provider, delivers comprehensive medical services, including emergency room care and inpatient admissions. Phoenixville Hospital accepts patients whose hospital stays are paid for by the Medicaid program. The United States contends that Phoenixville Hospital caused the submission of false claims to Medicaid for inpatient treatment and/or emergency room visits billed by Phoenixville Hospital. On certain occasions, Phoenixville Hospital allegedly caused to be altered one of the standard Pennsylvania Department of Public Welfare General Assistance Forms, the Employability Assessment Form (PA Form 1663), to exclude the option for the medical provider to certify that the self-pay patient was “Employable.” The United States contends that, in some cases, the patient was therefore not disabled and not entitled to Medicaid coverage for the treatment being billed by the hospital. The United States further contends that Phoenixville Hospital caused to be submitted such forms from January 2008 through February 2012 and that some of these claims for Medicaid beneficiaries were false in light of Phoenixville Hospital’s conduct.
Firstsource Solutions provides revenue cycle management services to hospitals, assisting with the submissions for determination of eligibility of self-pay (uninsured) patients to the Medicaid program. The government alleges that from August 2009 through February 2012, Firstsource Solutions knowingly submitted or caused the submission of false claims to Medicaid for inpatient treatment and/or emergency room visits billed by the client, Phoenixville Hospital.
The allegations that are the subject of today’s settlement were originally alleged in two cases filed under the whistleblower, or qui tam, provision of the False Claims Act. The Act permits private parties to sue for fraud on behalf of the United States and to share in any recovery. The Act also permits the government to intervene in such actions, as the government previously did in the two whistleblower cases. The whistleblowers in these cases will receive a total of approximately $60,000 of the settlement.
“My Office will continue to investigate credible allegations of fraud against federal healthcare programs, especially when the alleged conduct has potential implications for patient treatment,” said U.S. Attorney McSwain. “Hospitals that treat Medicaid patients and the entities that process Medicaid claims must know the billing and payment rules required by those programs, and abide by them. We would also like to thank the citizens and their lawyers who initially brought this case to our attention.”
“Investigating allegations of the False Claims Act is a top priority,” said Maureen R. Dixon, Special Agent in Charge for the Office of the Inspector General, U.S. Department of Health and Human Services. “We will continue to work with the U.S. Attorney’s Office to ensure the integrity of the Medicare and Medicaid Programs.”
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. Department of Health and Human Services Office of the Inspector General. For the U.S. Attorney’s Office, the investigation and settlement were handled by Assistant U.S. Attorneys Viveca D. Parker and Scott W. Reid, with assistance from auditor George Niedzwicki. The lawsuits are captioned United States ex rel. Daniel Dimarzio v. Firstsource Solutions, LTD, Firstsource Solutions USA, LLC, and Medassist, Inc., Civil Action No. 12-1464 and United States ex rel. Susan Wilson v. Phoenixville Hospital, et al., Civil Action No. 15-596.
The claims resolved by this settlement are allegations only and there has been no determination of liability.
Yemeni Man Indicted on Charges of Lying to Joint Terrorism Task Force About Supporting Anti-American and Anti-Semitic Armed InsurgencyRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Gaafar Muhammed Ebrahim Al-Wazer, 25, of Altoona, PA, was charged by Indictment with three counts of making false statements to Task Force Officers with the Federal Bureau of Investigation’s Philadelphia Joint Terrorism Task Force. The defendant was previously arrested at his home in Altoona on November 7, 2019, pursuant to a Criminal Complaint, and has been detained since then, following a finding by U.S. Magistrate Judge Marilyn Heffley that he presented a risk of flight and danger to the community.
According to the Indictment and Criminal Complaint, FBI counterterrorism investigators questioned Al-Wazer, a Yemeni citizen, on May 17, 2016 about his affiliation with the Houthi movement, known formally as Ansar Allah. Ansar Allah is the armed rebel group that toppled Yemen’s government and has fought in an ongoing civil war there for years. Al-Wazer allegedly denied to the FBI that he was aligned with the Houthi movement, whose motto is “Allah is the greatest of all, Death to America, Death to Israel, Curse upon the Jews, Victory to Islam,” and further denied that he had ever fired a weapon or participated in military or militia training.
To the contrary, however, the court documents allege that a search of Al-Wazer’s Facebook account revealed numerous postings and photographs in which he extolled and praised Ansar Allah, its objectives and its fighters who were killed in battle against the Yemeni government and its Saudi and U.S.-backed forces. In these postings, Al-Wazer was armed with automatic weapons (including a rocket-propelled grenade launcher). Al-Wazer’s Facebook account allegedly included a posting of a photograph of him and others bearing automatic assault rifles and pledging that they would stay on the path of jihad and wishing death to the United States and Israel and victory to Islam. In another posting, Al-Wazer again bears a machine gun in a photograph, which is accompanied by a pledge to Ansar Allah to the death.
“Just as when Al-Wazer was arrested and detained in November 2019, today’s Indictment demonstrates that lying to counter-terrorism officers in the course of their official duties is a crime,” said U.S. Attorney McSwain. “Al-Wazer was welcomed into our country for the educational opportunities available here, and he is entitled to hold and express his political and religious beliefs as freely as anyone else in this country -- no matter how vile and disgusting they are. But what he cannot do is lie to federal officers when directly questioned about his activities and beliefs. I want to thank our partners in the FBI’s Joint Terrorism Task Force for their continued vigilance in this case.”
“People have the right to their own beliefs — the FBI isn’t the ‘thought police,’ nor do we want to be,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “But lying to federal agents about your ideology and your actions is illegal, for good reason. If the people we interview feel they can deceive us with impunity, false information will hobble vital investigations. We can’t allow the mission of our Joint Terrorism Task Force to be derailed like that. The stakes are just too high.”
"Let the indictment of Al-Wazer serve as an example that lying to federal officers is a federal offense, and those who do so will be held accountable to the fullest extent of the law," said Brian A. Michael, Special Agent in Charge of Homeland Security Investigations (HSI) Philadelphia. “HSI and our law enforcement partners are committed to pursue justice against those who seek to harm our country and our citizens.”
If convicted, the defendant faces a maximum possible sentence of five years’ imprisonment, three years of supervised release, a $250,000 fine, a $100 special assessment, per count.
The case was investigated by the Federal Bureau of Investigation’s Philadelphia Joint Terrorism Task Force, and is being prosecuted by Assistant United States Attorney Nelson S.T. Thayer, Jr.
An indictment, information or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.