Eastern District of Pennsylvania

PHILADELPHIA – On December 19, 2019, United States Attorney William M. McSwain addressed the Board Meeting of the Philadelphia Chamber of Commerce. He discussed the priorities that he has set for the U.S. Attorney’s Office during his tenure, including those with a direct impact on the Philadelphia business community, such as anti-corruption and anti-violent crime efforts. He also detailed some of his corresponding outreach to different communities in the Eastern District of Pennsylvania. Finally, he shared his hopes for the City’s future. U.S. Attorney McSwain was introduced by the Chamber President, Independence Blue Cross CEO Daniel J. Hilferty. U.S. Attorney McSwain’s remarks as prepared for delivery are below.

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Thank you, Dan, for that kind introduction and for the invitation to be here today. I would also like to thank Rob Wonderling for extending the invitation. There are two senior members of my executive team here this morning that I wanted to acknowledge – Clare Putnam Pozos and Alison Kehner. Thank you both for your outstanding leadership and for joining me today.

First, I wanted to give you a bit of background. The United States Attorney’s Office for the Eastern District of Pennsylvania is one of 94 field offices of the United States Department of Justice. Each field office has a presidentially appointed United States Attorney who serves as the chief federal law enforcement officer for the District. I was nominated by the President in December 2017, confirmed by the Senate in March 2018, and sworn into office on April 6, 2018. My Office is one of the largest U.S. Attorney’s Offices in the country, with about 140 Assistant U.S. Attorneys (100+ in Criminal Division, 30+ in Civil Division). We serve a population of over 5 million and cover a geographic area of roughly 4,700 square miles across nine counties in southeastern Pennsylvania – Berks, Bucks, Chester, Delaware, Lancaster, Lehigh, Montgomery, Northampton, and Philadelphia counties. 

When I first became U.S. Attorney, I set two strategic goals for the Office: (1) to increase productivity within the Office and (2) to increase transparency with the community. Over the previous decade, productivity had been in a steady decline in terms of the number of criminal prosecutions pursued and the number of defendants charged. I pledged to reverse that trend and to aggressively prosecute those who violate federal law in this District, no matter who those offenders are. I am pleased to announce that our efforts have been successful: our Criminal Division logged 669 prosecutions in fiscal year 2019 (ending on September 30, 2019), up from 478 in the previous fiscal year. That is a 40 percent increase in the number of criminal cases filed in this District and represents the highest number of cases charged by the Office in the last nine years. Similarly, the number of defendants indicted in fiscal 2019 – another measure of Office productivity and case complexity – has seen a significant increase. We charged 894 defendants this past year, up from only 599 in fiscal year 2018, which is a 49 percent increase.

Similarly, the Civil Division’s productivity is the highest it has been in years, and the number of civil cases the Office is proactively pursuing is on the rise. In the past year, our Office recovered over $123 million in civil settlements in 50 cases against companies accused of committing fraud, waste, or abuse against the government. And we have the most new case openings and affirmative civil enforcement investigations in our pipeline in the Office’s history.

We have also had success in increasing transparency with the community. I created a new unit, the Office of Public Affairs and External Engagement (OPAEE). The mission of that unit is to promote transparency and information-sharing with the community, foster relationships with law enforcement stakeholders and the public, and work with community groups on deterrence initiatives and crime prevention. Why was this so important to me? It is my firm belief that the citizens of this District have a right to know about the types of cases we bring and how our resources are allocated. One of my core values is accountability, and it is reflected in our increased transparency.

I also want it to be more difficult for criminals to commit crimes. I want to educate the community about how residents can best work with law enforcement and protect themselves. If we prosecute a case and no one ever hears about it, it will only directly affect the defendants and their loved ones, the victims and their loves ones, and those involved in the judicial process. But if prosecuting that same case could serve as a deterrent to others thinking about engaging in similar conduct, or educate law-abiding citizens about best practices, it is all the better to get the message out there.

As federal prosecutors, we spend a lot of time in the office, with defense counsel, and in the courtroom. But I wanted to expand our reach. I see a lot of familiar faces in the room, and there is a good reason for that. As many of you know, my Senior Advisor Clare Pozos and I have visited dozens of organizations over the past six months. We have traveled not only all over Philadelphia, but throughout the nine counties of the Eastern District, to businesses in Allentown and Reading and Malvern, and everywhere in between. We wanted to introduce ourselves to the community and explain our priorities. We wanted to highlight the good work that our Office is doing every day. And, importantly, we wanted to hear what was on your mind. What were your biggest concerns when it comes to the Department of Justice, to law enforcement, and to the safety of both your employees and your organization as a whole? In short, what keeps you up at night?

One such issue is cybersecurity. Everyone we’ve met with has mentioned it as one of their top priorities and concerns. But the response to cybersecurity fears and even incidents seemed to vary.  Some individuals mentioned that they were not sure they’d ever want to call the FBI or the U.S Attorney’s Office about a hack or a ransomware attack because they would never want to go through a public trial, or perhaps they were worried that 50 FBI agents would suddenly show up on their company doorstep in riot gear. When we explained that the overwhelming majority of investigations and cases never go to trial, and that we can work with you to keep things as quiet as possible, many people were ready to reevaluate. Meanwhile, others mentioned that they have always been open to reaching out to us, but were unclear about whom to call, when to call, and what to reasonably expect from the call.

As a result, we acted right away. We want to make it as clear and as easy as possible for you to work on cybersecurity issues with the federal government. Thus, in November, we partnered with the FBI to hold a Federal CyberSecurity Conference at the National Constitution Center and invited everyone we met during our outreach, plus many more. We had over 150 attendees from the greater Philadelphia area, and we were able to explain to people – including employees from your organizations – how we work with individuals and corporations on keeping their data and their computer systems safe from harm. Our hope is that with outreach such as this, we are empowering the community with the knowledge and information to be safer and more secure.

It was satisfying to be able to provide that kind of service and support when we saw a need.  But of course cybersecurity was not the only issue that came up during our meetings. Two additional issues were continually raised at our meetings with Philadelphia-based organizations: (1) the prevalence of violent crime on our City streets, and (2) the continued existence and pervasiveness of public corruption. I would like to address both of these issues.

I am going to tell you something that many of you already know: Philadelphia is not safe. The federal government is working hard to keep you, your families, and your employees safe from harm. But in my view, not everyone in local Philadelphia government shares this goal. In 2018, which was District Attorney Larry Krasner’s first year in office, Philadelphia endured 351 homicides, the most in over a decade, and an 11% increase as compared to 2017. There were 1,365 shooting victims in the City in 2018, the most since 2011, also an 11% increase as compared to 2017. And although this year is not quite over, the situation is no less grim. According to Philadelphia Police Department statistics, as of December 11, 2019, there have been 338 homicides this year to date, which is a 3% increase as compared to the total homicide rate on that same date last year. The Philadelphia Inquirer recently wrote about the murder of a 16-year old girl, Ceani Smalls, who was simply getting off the bus in North Philadelphia earlier this month, noting that she was the 106th child to be shot in Philadelphia in 2019 alone.

As many of you in this room may remember, Philadelphia in the 1970s and 1980s was not safe. For example, leaders of organized crime families including Nicodermo “Little Nicky” Scarfo, Giovanni Stanfa, and Joseph “Skinny Joey” Merlino had a penchant for violence, taking over parts of the City block by block with extortion, racketeering, narcotics trafficking, and murder. Manufacturing was collapsing and the population was falling. Many were moving out of the City to the suburbs and beyond. Crime spiked. Abandoned buildings, empty lots, and graffiti proliferated. You could not walk down the street without being confronted with trash-strewn sidewalks. As I was growing up in Chester County, Philadelphia sometimes seemed to me less like a destination and more like a place to avoid if you could.

The Philadelphia of today looks different from that, thanks in part to strong leadership from the Mayor’s Office during the 1990s and early 2000s. From 1992 until 2000, Ed Rendell, to his credit, changed the future of the City, with The New York Times labeling his work “the most stunning turnaround in recent urban history.” Mayors Street and Nutter oversaw Philadelphia in its new prime. By 2011, census data revealed that Philadelphia had achieved its first confirmed population growth in 60 years. And growth continues. Developers are breaking ground on skyscrapers, and economic development is something that is a reality instead of a pipedream. National retailers, restaurants, and other businesses have populated streets that used to be overrun by crime. People are flocking to our world class institutions of higher learning – Penn, Temple, Drexel, and more – and importantly, they are choosing to stay here, find jobs, and raise a family. This is the Philadelphia of tomorrow that we want to create: one of economic growth and prosperity, safe from violence and corruption.

This change did not happen overnight, and it did not happen by accident. The success of this City is powered by individuals like you and by successful and growing businesses. And Philadelphia will be a world-class city only if everyone in it has an opportunity to thrive. But that kind of growth and success is not possible if our streets are not safe. It is not possible if the City is subjected to the worst excesses of a District Attorney who in fact knows very little about law enforcement – and what’s worse, does not care to know. Here is the clear-eyed truth: the only way to effectively deter homicide and other violent crime is to put fear into the hearts of those who would commit such atrocities – fear of the law enforcement consequences. The Philadelphia District Attorney’s Office isn’t putting fear into the hearts of anybody who is contemplating a life of violent crime.   

Ceani Smalls should never have been in danger of being shot and killed while getting off a bus. She should have been given the opportunity to grow up in an environment that enabled her to flourish and reach her full potential. Every child in Philadelphia should have the opportunity to grow up in a safe neighborhood. I do not believe that that opportunity is being provided under the current City leadership, nor is it a priority. It certainly is not a priority of the District Attorney.

My Office, however, is doing everything that we can to pick up the slack. The Violent Crime unit in my Office charged the largest number of cases last year of all the units in the Office. Of the 669 total cases charged this past year, the Violent Crime unit charged nearly 1/3 of them. It charged a whopping 208 cases as compared to 136 in fiscal year 2018. That is a 53% increase in just one year.

And as part of the U.S. Justice Department’s national reinvigoration of its Project Safe Neighborhoods program, we have put additional resources into the Violent Crime unit to step up enforcement efforts in our PSN target districts, many of which are in Philadelphia. In fiscal year 2019, of the 208 violent crime cases charged, 143 are from PSN districts. And we intend to continue this upward trend in the upcoming year because Philadelphia is counting on us.

Given the circumstances, it must also be part of our strategy that if we believe that the DA’s Office has badly mishandled a major case, we will consider stepping in and righting the wrong if we have federal jurisdiction. For example, when Jovaun Patterson shot Philadelphia shop owner, Li (“Mike”) Poeng, with an assault rifle during an attempted robbery of Mr. Poeng’s convenience store in South Philly on May 5, 2018, the Philadelphia District Attorney’s Office originally charged Patterson with multiple crimes, including attempted murder and aggravated assault, but then dropped the attempted murder charges and agreed to an overly lenient plea deal of 3 ½ to 10 years imprisonment. As a result of this shooting, Mr. Poeng is confined to a wheelchair, and the District Attorney’s Office did not even have the decency (a decency which, by the way, is mandated by state law) to notify Mr. Poeng when they made this outrageously low offer.

This was a case that we could take, and so we did. In February, my Office charged Patterson with one count of attempted robbery which interferes with interstate commerce, and one count of using, carrying and discharging a firearm during and in relation to a crime of violence. On the gun charge alone, Patterson faces a statutory maximum of life imprisonment and a statutory minimum of 10 years’ imprisonment, which must run consecutively to any other sentence imposed on the attempted robbery count. This week, in federal court, Patterson pleaded guilty to all charges and currently is awaiting sentencing in the custody of federal prison.

We will continue to prosecute these kinds of cases whenever possible in order to preserve the promise of Philadelphia’s future. I do not want the Philadelphia of tomorrow to backslide into the Philadelphia of the 1980s, or the Baltimore, MD or Newark, NJ of today. Philadelphia should be a city where an educated workforce want to remain, where businesses open their doors, and where families want to stay and raise their children.

Safe streets alone, however, are not enough for Philadelphia to prosper. Safety from violent crime goes hand-in-hand with ethical and law-abiding public servants leading the City. Citizens will be more likely to live here and start a family if they do not have to worry about their children getting shot on their way to school. But businesses won’t open if, at every turn, the owner has to pay a bribe to get a permit or make a donation to some public official’s phony charity. There should be no corruption tax to live and work in the City of Philadelphia. But too often, there is. Too often in this City, our public officials lack a sense of shame – they believe that their positions exist to enrich themselves rather than to serve the public.

The examples of corruption are, sadly, all around us. Just this month, West Philadelphia State Representative Movita Johnson-Harrell, who was the former head of the Victim Witness Services Unit for District Attorney Krasner, was charged with stealing more than half a million dollars from a nonprofit to fund a lavish lifestyle, including fur coats, family vacations, and designer clothes. Johnson-Harrell, who has now resigned in disgrace, was only elected on March 12th of this year in a special election. And why was there a special election? It was to replace former State Representative Vanessa Lowery Brown, who also had to resign in disgrace after being convicted of accepting $4,000 in cash bribes from an FBI informant. It makes you wonder how long West Philadelphia will have to wait to be represented by someone who is not corrupt.

These problems are not limited to one neighborhood, however; they are citywide. Former District Attorney Seth Williams pleaded guilty in the middle of his federal public corruption trial and received a five year prison sentence. Former Congressman Chaka Fattah is also in federal prison, after being convicted at trial in June 2016 for racketeering, bribery, bank fraud, mail fraud, money laundering, and falsifying records. He will be in federal prison until October 2025.  Mr. Fattah is held at the same prison as his son, Chaka Fattah Jr., who was also prosecuted by my Office for a multitude of fraudulent schemes.

Renee Tartaglione is currently serving her federal sentence for operating a fraudulent addiction and mental health nonprofit from which she skimmed more than $2 million to enrich herself. Let’s not forget former State Senator Vince Fumo, who finished his four years in federal prison after having been convicted of a staggering 137 counts of corruption, conspiracy, and fraud.

Then there’s former Philadelphia Sheriff John Green, the City’s longest-serving sheriff, who is serving a five year prison sentence for accepting hundreds of thousands of dollars in bribes for awarding millions of dollars of city work to a friend.

And then there is the biggest case of them all. Earlier this year, my Office charged union leader John Dougherty, current Philadelphia City Councilman and Democratic Majority Leader Robert Henon, and six other individuals in a 116-count Indictment involving a multitude of federal crimes, including embezzlement, wire fraud, and public corruption. As a reminder, an indictment is only an accusation, and every defendant is presumed innocent unless and until proven guilty. But the allegations here are stunning. The Indictment alleges that Dougherty and others used many thousands of Local 98 dollars that were recorded as scholarships and charity donations meant for many, and instead spent that money on providing a lavish lifestyle for a select few. For example, according to the Indictment, thousands of dollars in Boyd’s gift cards were falsely reported to the union as a purchase for “Gift cards for Scholarship Banquet.” Thousands of dollars spent on meals for Dougherty and his friends and family became attributed instead to things like a “rehabilitative Local 98 member assistance program” and “Toys and Turkeys (for food baskets).” Dougherty allegedly placed family members on the payroll and paid them thousands of dollars for union work, even when these family members were in fact on vacation, attending school full-time, or otherwise not engaged in work for Local 98.

The Indictment goes on to allege that Dougherty and Councilman Henon had an illegal quid pro quo relationship, with Henon stating to Dougherty at one point that “I don’t give a f*** about anybody, all right, but f***ing you and us, and you know that.” Yes, those are the words of your City Council majority leader. The case is set for trial in September 2020. If you haven’t read the Indictment, I invite you to check it out, assuming you have a strong stomach.

It should go without saying, but I want to say it, anyway, because unfortunately we need to be reminded of this: not every major American City is like this. Most cities do not have their leaders – their Congressmen, their district attorneys, their sheriffs, their council members, their state reps, their union leaders and more – indicted and convicted of corruption, bribery, and embezzlement. And certainly if it happens elsewhere, it does not happen to a degree of this magnitude.

When I became the U.S. Attorney, public corruption was one of my top priorities and will remain so. No one should have to pay a corruption tax to do business in the City of Philadelphia. I deliberately talk about the time that these former public officials are serving in federal prison because it is our job at the U.S. Attorney’s Office to make sure that our public officials understand that there will be severe consequences if they cross the line. And we are going to be loud about it because we want our public officials to come nowhere near the line, but instead focus on serving the public interest. Public service, after all, is what they signed up for and what they were elected to do. And if they do what they are supposed to do because I do what I’m supposed to do, then you will all have the freedom and the opportunity to help your employees, your families, and the rest of our community better prepare for the Philadelphia of tomorrow – one with a bright and optimistic future.

The year 2019 marked tremendous accomplishments by the men and women in my Office. I am very proud to serve in an Office comprised of individuals who have chosen to dedicate their lives to the cause of justice. I look forward to what lies ahead in 2020 knowing that together, with everyone in this room, we will continue to enhance the lives of the people of Philadelphia.

I very much appreciate the opportunity to be with you today. God Bless you, and God Bless our wonderful City. Thank you.  

PHILADELPHIA – United States Attorney William M. McSwain announced that Ramzi Al Najar, 43, of Staten Island, New York, was convicted of tobacco smuggling after a week-long jury trial presided over by United States District Court Judge Petrese B. Tucker.

The defendant operated Capital Trade, Inc., a tobacco wholesaler based in Bristol, Pennsylvania. During the charged conduct, Al Najar and his associates transported almost $40 million worth of tobacco from Pennsylvania to New York, while failing to pay millions of dollars in New York state excise taxes on that tobacco. In order to hide his scheme, the defendant and his associates created false invoices and filed false documents with Pennsylvania and New York regulators which substantially underreported the amount of tobacco sold. Al Najar also failed to register and report as an interstate seller of smokeless tobacco as required by the Prevent All Cigarette Smuggling Act (PACT Act).

“Tobacco is a product that poses serious health risks, and therefore it is heavily regulated by the government,” said U.S. Attorney McSwain. “Here, the defendant attempted to skirt the system and cheat everyone who pays taxes on tobacco products. The defendant has to play by the rules, just like everyone else, or suffer the consequences. My Office will continue to work with our partners at the federal, state, and local levels to investigate and prosecute this type of fraud.”

“This jury verdict sends a clear message that the illegal interstate diversion of tobacco products will not be tolerated,” said William S. Walker, Acting Special Agent in Charge of Homeland Security Investigations (HSI) Philadelphia.  “Smuggling tobacco in order to evade taxes costs state and local jurisdictions millions of dollars per year. Utilizing our unique customs and law enforcement authorities, HSI is positioned to target and investigate these types of crimes. Our special agents will continue tracking down criminals like Mr. Al Najar and his co-conspirators along with our law enforcement partners so they can be held accountable for their crimes.”

The case was investigated by the Department of Homeland Security, Homeland Security Investigations, the Food and Drug Administration, Office of Criminal Investigation, and the Pennsylvania Attorney General’s Office, Criminal Division, with assistance from: the Bureau of Alcohol, Tobacco, Firearms, & Explosives, the New York State Department of Tax and Finance, Criminal Investigations Division, the Bronx, New York District Attorney's Office, and the Pennsylvania Department of Revenue, Criminal Investigation Division. The case was prosecuted by Assistant United States Attorneys Robert J. Livermore and Frank A. Weber.

PHILADELPHIA— First Assistant United States Attorney Jennifer Arbittier Williams announced this morning that former Universal Community Homes Chief Executive Officer and Board President Abdur Rahim Islam, 62, of Philadelphia, PA; former Chief Financial Officer and Secretary of Universal’s Board Shahied Dawan, 68, of Philadelphia, PA; Philadelphia City Councilman Kenyatta Johnson, 46, and his spouse, political consultant Dawn Chavous, 40, both of Philadelphia, PA; were charged today in a twenty-two-count indictment alleging a wide-ranging racketeering conspiracy and related crimes including bribery, honest services fraud, multiple counts of wire fraud, and tax offenses.

The charges were announced at a press conference held by First Assistant U.S. Attorney Williams, FBI Assistant Special Agent-in-Charge Christian Zajac, and IRS Criminal Investigations Special Agent-in-Charge Guy Ficco.

According to the Indictment, the charges stem from criminal schemes orchestrated by Islam and Dawan through Universal Companies which included thousands of dollars in bribe payments to public officials and the misappropriation of hundreds of thousands of dollars from Universal. The Indictment, summarized briefly below, describes the various schemes.

“As alleged in the Indictment, Universal Companies, including its real estate and education arms, constituted a RICO enterprise, hijacked by the defendants Islam and Dawan to engage in a pattern of criminal activity that spanned two states and several years. In pursuing their criminal objectives, Islam and Dawan bribed public officials, including Johnson, with Universal’s funds, and hid those bribes as consulting fees paid through Chavous’ consulting firm,” said First Assistant U.S. Attorney Williams. “These charges are based on a pattern of activity which violates multiple federal and state laws including mail fraud, honest services mail fraud, honest services wire fraud, wire fraud, obstruction of justice, bribery, and use of an interstate facility in aid of racketeering.”

“What we have here is four people pretending their motives were purely civic-minded, when, in fact, they were unlawfully conspiring to enrich themselves,” said Christian D. Zajac, Assistant Special Agent in Charge of the FBI’s Philadelphia Division. “As alleged in the indictment, Abdur Rahim Islam and Shahied Dawan stole nearly half a million dollars from Universal — money for themselves, and to use as bribes to further their financial pursuits. Councilman Kenyatta Johnson accepted their payoffs and based his official actions on those bribes, with Dawn Chavous providing him cover. The FBI is committed to fighting public corruption at every level, and we would ask anyone with knowledge of wrongdoing by public officials to call the FBI, or share the information online at tips.fbi.gov.”

“IRS-Criminal Investigation is proud to have provided its financial expertise in this investigation,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco. “We, along with our law enforcement partners and the Department of Justice, are committed to aggressively investigating individuals who engage in corruption, tax fraud, or other types of white-collar crimes.”

Bribery and Honest Services Fraud in Philadelphia

Islam and Dawan are charged with engaging in a corrupt scheme in which Philadelphia City Councilman Kenyatta Johnson and his spouse, Dawn Chavous, received payments in excess of $66,000 in exchange for Johnson using his public office to take official actions to benefit Islam, Dawan, and Universal, including but not limited to: introducing and voting upon spot zoning legislation related to the Royal Theater, a property formerly held by Universal, and blocking reversion to the City of Philadelphia of another property held by Universal after it failed to develop the property pursuant to its agreement with the City of Philadelphia;

Bribery and Honest Services Fraud in Milwaukee

Islam and Dawan are also charged with engaging in a corrupt scheme in which Michael Bonds, the former president of the Milwaukee Public Schools (MPS) Board of Directors, received approximately $18,000 in exchange for Bonds using his official position to take a series of official actions advantageous to Islam, Dawan, and Universal, including but not limited to: advocating for and voting in favor of Universal’s expansion of charter school operations in Milwaukee, motioning the MPS Board to lease MPS property to Islam, Dawan, and Universal, motioning the MPS Board to approve more favorable lease terms to the benefit of Islam, Dawan, and Universal, and voting in favor of the more favorable lease terms;

Theft and Embezzlement at Universal

Also according to the Indictment, between 2010 and 2016, Islam drew significant sums of money from Universal in the form of bonuses and travel or expense reimbursements, in addition to his annual salary. Although Universal’s Board of Directors was charged with reviewing and approving Universal’s financials and major initiatives on a quarterly or annual basis, defendants Islam and Dawan used their positions as CEO and CFO, respectively, to pay themselves bonuses without the approval or knowledge of the Board. Islam and Dawan paid themselves annual five-figure bonuses even while Universal was hemorrhaging money due to the failed charter school expansion in Milwaukee.

The Indictment also alleges that Islam and Dawan used Universal’s funds to pay Islam excessive, inflated, or outright fraudulent reimbursements for “travel” or other purported “business expenses.”  Islam would pad his “expenses” related to the operation of Universal, including its charter schools, with a variety of personal expenses that should not have been reimbursed. For example, Islam submitted his personal car insurance, political contributions, personal vacations, and gym memberships as “business expenses,” which were reimbursed by Universal and also not included as income on his IRS Forms 1040. Islam’s “reimbursements” were reviewed and approved by Dawan outside the standard procedures for Universal and without proper and detailed supporting documentation. Islam and Dawan also authorized Islam to receive large sums of “pocket money” or per diem from Universal. In total, Islam and Dawan stole approximately $463,000.

If convicted as charged, the defendant face the following statutory maximum sentences:

• Islam: 303 years’ imprisonment; 3 years supervised release, a $4,350,000 fine, and a $2,100 special assessment;
• Dawan: 285 years’ imprisonment; 3 years supervised release, a $3,750,000 fine, and a $1,500 special assessment;
• Johnson: 40 years’ imprisonment; 3 years supervised release, a $500,000 fine, and a $200 special assessment;
• Chavous: 40 years’ imprisonment; 3 years supervised release, a $500,000 fine, and a $200 special assessment.

The Federal Bureau of Investigation and Internal Revenue Service Criminal Investigations Division conducted this investigation. The FBI and IRS received assistance from the Department of Education Office of Inspector General. Assistant United States Attorneys Eric L. Gibson and Mark B. Dubnoff are prosecuting the case. Trial Attorney Ivana Nizich of the Criminal Division’s Organized Crime and Gang Section in the Department of Justice provided assistance.                                                                     

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

PHILADELPHIA – United States Attorney William M. McSwain announced that Michael Hughes, 31, of Philadelphia, PA, was convicted today at trial of two counts of robbery which interferes with interstate commerce, and two counts of using, carrying, brandishing, and discharging a firearm during and in relation to a crime of violence arising from two armed robbery and shooting incidents in August 2016.

In November 2017, Hughes and his co-defendant, Nashadeem Henderson, were charged in a five-count Indictment. The charges stem from Henderson’s and Hughes’s participation in an armed robbery and shooting of a marijuana dealer in the area of 2600 Allegheny Avenue in Philadelphia; and an armed robbery and shooting of a pizza deliveryman employed by Mimmo’s Pizza in the area of 3000 North Taney Street in Philadelphia. Henderson pleaded guilty prior to the trial.

“The defendants in this case had no regard for the lives of their victims – shooting at them indiscriminately, which could have easily killed them,” said U.S. Attorney McSwain. “Philadelphia is in the midst of a public safety crisis, with alarming rates of homicides and shootings. This crisis will not be solved by pretending that it does not exist or by coddling violent criminals. It will be solved through accountability for violent acts, and my Office is doing everything it can to investigate and aggressively prosecute violent crimes like those here.” 

“Two armed robberies and two victims shot, in just five days,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “And had Hughes and his accomplice not been stopped, it’s no stretch to imagine what further mayhem they might’ve caused. It’s incredibly fortunate no one was killed by these two, so willing to use violence as a means to their criminal end. The FBI Violent Crimes Task Force will continue to investigate and bring to justice those who consider armed robbery a reasonable way to make themselves some money.”

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

The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorneys Amanda Reinitz and Roberta Benjamin.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Dr. James E. Moylan, 57, a Philadelphia chiropractor and the former Chair of the Philadelphia Zoning Board of Adjustments, was sentenced to 15 months’ imprisonment, three years’ supervised release, $52,898 restitution to the International Brotherhood of Electrical Workers (IBEW) Union Local 98, and $77,885 restitution (plus penalties and interest) to the IRS by United States District Court Judge Jeffrey L. Schmehl for stealing civic funds and filing false federal income tax returns. 

The defendant was charged by Indictment in January 2019 with 17 counts of wire fraud and four counts of filing false federal income tax returns.  In October 2019, Moylan pleaded guilty to all charges, admitting that he defrauded both Local 98 and a related entity – 298, Inc., a non-profit organization – of more than $50,000 in funds which he claimed he would use for community support and education, but which he actually used to pay his personal mortgage and business expenses. Moylan also filed false federal income tax returns for the years 2012 through 2015, in which he underreported more than $200,000 in income and claimed false business expenses.  

“Moylan knew what his responsibilities were as a public official and as a taxpayer, and he ignored them for his own personal benefit,” said First Assistant U.S. Attorney Williams. “In doing so, he cheated a non-profit organization meant to benefit the entire community, and he cheated all taxpayers by lying to the IRS. This office and our partners will continue aggressively investigating and prosecuting fraudsters who choose to line their pockets rather than operate honestly.”

“Mr. Moylan’s failure to pay his fair share of taxes is a slap in the face to honest and law-abiding citizens who do not shirk their tax obligations,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco. “The sentence he received today underscores our relentless pursuit of those who would attempt to defraud America's tax system.”

The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service, and is being prosecuted by Assistant United States Attorneys Paul L. Gray, Frank R. Costello, and Bea Witzleben. 

READING, PA – United States Attorney William M. McSwain and Acting Special Agent in Charge of Homeland Security Investigations (HSI) Philadelphia William Walker announced today that 13 individuals from Reading were charged in a 22-count Superseding Indictment with offenses including conspiracy to participate in a racketeering enterprise; conspiracy to commit sex trafficking by force, fraud, and coercion of a minor; various violent crimes in aid of racketeering offenses including murder, attempted murder, kidnapping, and assaults with dangerous weapons; sex trafficking; and child exploitation and firearms offenses.

The charged individuals are:

• Shaquile W. Newson, a/k/a “Raw,” a/k/a “San,” 26;
• Alexander M. Malave, a/k/a “Buju,” a/k/a “Ace,” 28;
• Karvarise E. Person, a/k/a “Crazy K,” a/k/a “Killa,” a/k/a “K,” 30;
• Fatiema S. Bivens, 28;
• Isaiah Rowe, a/k/a “Izzy,” 21;
• James Goode, a/k/a “Jamil,” 44;
• Yojang Torres-Rosario, a/k/a “Domi,” 26;
• Richard Poulson, a/k/a “ATL,” 26;
• Jessica Lopez, a/k/a “Mother of the Sevens,” 39;
• Ryan Nunez, 23;
• Tyashia Monroe, a/k/a “Little Baby,” 19;
• Wendy Espada, 28; and
• Michael Diaz-Walker, a/k/a “Big Mike,” 32.
   

The charges stem from a years’ long investigation by Homeland Security Investigations and the Reading Police Department for crimes committed by a gang called “The Sevens,” operating primarily from a boarding house located on 125-127 South 4th Street in Reading.

The racketeering conspiracy allegedly operated out of the boarding house as far back as December 2017, and it continued until in or about March 2019. Multiple acts of violence in furtherance of the conspiracy were perpetrated against many victims over this period of time. More specifically, the Superseding Indictment discusses 15 victims of sex trafficking and violent crime, two of whom are minors. The Superseding Indictment also sets out 43 overt acts in furtherance of this sex trafficking and drug trafficking conspiracy.

The charges describe a shocking series of dehumanizing and violent actions. For example, the Superseding Indictment recounts how one victim was held down while her hair was cut with gardening shears and was told she would be taken for a “trunk ride” if she did not comply with the gang’s demands. It describes how other victims were shot, assaulted with a baton, stabbed with a knife, and hit with a hammer. Another was murdered. It details how another victim, a minor, was forced to have a sexual encounter with a gun held to her head; how that same victim was assaulted with a baton and hammer and locked naked in a dog kennel. It also describes how pictures of that victim’s abuse were used to advertise online the Sevens’ sex trafficking business.

“The allegations here against the Sevens gang describe a level of depravity that is hard to imagine,” said U.S. Attorney McSwain. “We have stopped this violence and the Sevens gang will no longer menace the streets of Reading. This is fitting in that January 2020 is National Slavery and Human Trafficking Prevention Month. My Office is committed to working with all of our federal, state, and local law enforcement partners to rid our District of the scourge of human trafficking.”

“The Sevens gang not only operated a sex trafficking ring involving minors, but also allegedly perpetrated crimes of drug trafficking, assaults, robberies, and even homicides,” said Acting Special Agent in Charge Walker. “These horrific crimes were taking place in our own backyard. Thanks to HSI’s close partnership with the Reading Police Department and our law enforcement colleagues in the area, we were able to track down these violent criminals, and most importantly, put a stop to an illicit operation that would have undoubtedly resulted in more innocent victims. It’s critical that members of the public educate themselves on human trafficking crimes so they recognize the indicators and alert law enforcement accordingly. An educated public can help law enforcement rescue victims of these heinous situations and ensure those committing these acts are punished.”

“I would like to thank the U.S. Attorney’s Office for the Eastern District of Pennsylvania and Homeland Security Investigations for their cooperation and support during this lengthy investigation,” said Captain Paul Reilly, Investigations Division, Reading Police Department. “The City of Reading is safer after the removal of the Sevens’ gang members from our streets. These individuals preyed on the young, weak and vulnerable members of our community. They held no reservations in resorting to violence to handle disputes or to enforce their authority in the community.”

If convicted, all defendants face up to lifetime imprisonment.

The case was investigated by Homeland Security Investigations and the Reading Police Department, and is being prosecuted by Assistant United States Attorney Sherri A. Stephan.

An Indictment, Information, or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

A Pennsylvania doctor pleaded guilty today to unlawfully distributing oxycodone to his patients.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania and Special Agent in Charge Michael T. Harpster of the FBI’s Philadelphia Field Office made the announcement.

Timothy F. Shawl, M.D., 60, of Garnet Valley, Pennsylvania, pleaded guilty to five counts of unlawful distribution of controlled substances before U.S. District Judge R. Barclay Surrick of the Eastern District of Pennsylvania.  Sentencing has been scheduled for May 5, 2020, before Judge Surrick. 

As part of his guilty plea, Shawl admitted that he wrote prescriptions for controlled substances that were outside the usual course of professional practice and not for a legitimate medical purpose.  He further admitted that he wrote prescriptions, usually for oxycodone,  for certain patients without seeing, treating or examining them; generally, patients just picked up an envelope with their prescription from the receptionist at Shawl’s office.  He further admitted that for one patient, he had not conducted a physical examination in at least five years, despite regularly prescribing controlled substances. This patient died on Jan. 7, 2019, just three days after Shawl last prescribed oxycodone for her, and the cause of death was drug intoxication.

This case was investigated by the FBI with assistance from task force officers from the Philadelphia Police Department and Pennsylvania Office of the Attorney General.  Trial Attorney Debra Jaroslawicz of the Criminal Division’s Fraud Section is prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.

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.  

 

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Ana Molina, 56, of New Jersey, entered a plea of guilty before United States District Court Judge Harvey Bartle III to seven counts of mail fraud and four counts of aggravated identity theft arising from a scheme to defraud people who sought her help pursuing legitimate immigration status in the United States.

The defendant owned and operated Ana Molina & Associates, a/k/a Molina Multilegal Services, on Castor Avenue in Philadelphia, PA, through which she falsely claimed to be an attorney (or at times a paralegal) who could obtain lawful immigration status for them from United States Citizenship and Immigration Services (“USCIS”).

Molina charged her clients approximately $1,500 to register for permanent legal residency or otherwise adjust immigration status, and she charged approximately $500 to provide a “sponsor” for those applicants who did not already have one. Sponsors are typically United States citizens who have sufficient financial resources to ensure that an applicant will not likely become dependent on financial assistance from the United States government. For the alleged “sponsors,” Molina used personal identification information, including bank statements and tax returns, which belonged to former clients without their knowledge or consent. Molina prepared and mailed the applications and other forms that contained the false information about the applicants and their alleged “sponsors” to USCIS.

“This defendant took advantage of people trying to do the right thing and seek lawful status in this country,” said First Assistant U.S. Attorney Williams. “Her clients were from foreign countries, were unfamiliar with our laws and regulations, and trusted Molina to help them, rendering them vulnerable targets for her scam. We stand ready with our federal partners to investigate and prosecute fraud offenses like this one that prey on law abiding victims.”

"Ms. Molina was entrusted with sensitive personal information to assist her clients, and instead, chose to betray that trust and enrich herself,” said William S. Walker, Acting Special Agent in Charge for Homeland Security Investigations, Philadelphia. “We will continue to work with the U.S. Attorney’s Office to ensure that scams like this are thoroughly investigated and prosecuted.”             

The case was investigated by the U.S. Department of Homeland Security, Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Anita Eve.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams and Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division announced that Timothy Shawl, M.D., 60, of Garnet Valley, PA entered a plea of guilty before United States District Court Judge R. Barclay Surrick on five counts of unlawful distribution of controlled substances.

The defendant was charged by Indictment in September 2019 as part of a coordinated healthcare fraud enforcement action across seven federal districts, involving more than $800 million in loss and more than 3.25 million opioid pills distributed in “pill mill” clinics. During his guilty plea today, Shawl admitted that he wrote oxycodone prescriptions that were not for a legitimate medical purpose, and which were in fact issued without Shawl treating, examining, or even seeing the patients who received the prescriptions. Shawl further admitted that, with regard to one patient, he had not conducted a physical examination on the patient for at least five years, despite regularly prescribing controlled substances to the patient. This patient died on Jan. 7, 2019, just three days after Shawl last prescribed oxycodone for her, and the cause of death was drug intoxication.

“Today’s guilty plea from Dr. Shawl is the tangible result of the Healthcare Fraud Strike Force delivering on its mission to stop fraud, waste, and abuse within our federal health care programs and to stem the tide of illegal opioid distribution,” said First Assistant U.S. Attorney Williams. “Our Strike Force acts as a force multiplier, bringing together health care fraud prosecutors, civil enforcement attorneys, data analysts, and law enforcement agencies to do this important work. Today’s guilty plea should serve as a warning to any medical professional engaged in this type of illegal behavior.”  

This case was investigated by the FBI with assistance from task force officers from the Philadelphia Police Department and Pennsylvania Office of the Attorney General. Trial Attorney Debra Jaroslawicz of the Criminal Division’s Fraud Section is prosecuting the case.

PHILADELPHIA – United States Attorney William M. McSwain announced that Darrell Wylie, 27, and Namir White, 29, both of Philadelphia, PA were convicted at trial on all charges arising from their involvement in illegal gun sales and the gunpoint robbery of a cooperating government informant.

Wylie and White were both charged in December 2019 with robbery, theft of government funds, using and carrying a firearm during and in relation to a crime of violence, being a felon in possession of firearms, and aiding and abetting. Wylie was also charged at the same time with possession with the intent to distribute heroin and fentanyl, and possession of a firearm in furtherance of a drug trafficking crime. White was also charged at the same time with dealing in firearms without a license.

Between April and August 2017, White sold 11 handguns to a Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) cooperating witness in nine separate transactions. Wylie sold two additional guns to the cooperating witness in two transactions in October 2017. Neither defendant possessed a federal firearms license as necessary to lawfully engage in the business of dealing in firearms. Moreover, both defendants had been convicted of felony offenses prior to the above referenced transactions. Each of the transactions was audio and video recorded; in each case, the cooperating witness used funds provided by ATF to make the purchases.

Finally, in November 2017, the defendants jointly agreed to sell three more guns to the cooperating witness, for a total price of $3,200 cash. As in all of the prior controlled transactions, the cooperating witness was provided with government funds, in cash, to make the purchase. The witness met with White and Wylie as planned. However, instead of selling him the guns as agreed, the defendants took the cash from him and, while Wylie threatened him with a pistol, announced that they would keep the money and that he would be shot if he resisted. The cooperating witness fled and reported what had occurred to the ATF agents who were monitoring the transaction. Both defendants were soon arrested, and Wylie was found with a pistol in his waistband and approximately 20 packages of fentanyl-laced heroin.

Both defendants now face significant sentences as career offenders: as much as 360 months to lifetime incarceration.

“The conviction of Wylie and White is a victory for the citizens of Philadelphia because their lawless gun trafficking endangered everyone living and working here,” said U.S. Attorney McSwain. “So far this year, Philadelphia has already seen more than 20 homicides in half a month. We will continue to work aggressively to enforce the laws on the books and to keep guns out of the hands of those, like convicted felons, who are not permitted to possess them.”

“ATF’s top priority is combating violent crime; one of the ways we accomplish that mission is by keeping firearms out of the hands of violent offenders,” said Donald Robinson, Special Agent in Charge, ATF Philadelphia Field Division. “These convictions are a perfect example of the collaborative effort between ATF, our partners at the Philadelphia Police Department and the United States Attorney’s Office in targeting violent offenders and protecting our communities.”

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Joseph A. LaBar.

PHILADELPHIA – United States Attorney William M. McSwain announced today that David W. Miller, Jr., of Warminster, PA has agreed to pay the United States $12,000 to resolve civil allegations that he made fraudulent insurance claims to the United States Postal Service.

The government’s investigation began when a proactive review of claims data disclosed that Miller had made a large number of insurance claims to the Postal Service during 2017 and 2018. The government alleges that Miller falsely claimed that packages he sent or received via Priority Mail arrived damaged, when they were not, and that Miller submitted false information and documentation to support his postal insurance claims. The government contends that as a result, Miller improperly received between $1,830 and $9,100 from the Postal Service.

“Fraud should never pay, and we are committed to ensuring that it does not,” said U.S. Attorney McSwain. “My Office places a high priority on enforcement in all types of fraud against the government and works with its law enforcement partners to identify and investigate these matters. This case should serve as notice that we will come after anyone who steals from the United States government, with every tool we have.”

Kenneth Cleevely, Special Agent in Charge, Eastern Area Field Office, U.S. Postal Service Office of Inspector General (USPS OIG), stated: “Ancient Greek playwright Sophocles once wrote, ‘Things gained though unjust fraud are never secure.’ In this case, Mr. Miller attempted to obtain what he thought would be free money from the U.S. Postal Service. However, due to the investigative efforts of special agents with the U.S. Postal Service Office of Inspector General and our law enforcement partners, he is learning the hard way that there is no such thing. USPS OIG special agents vigorously investigate allegations of fraud targeting the Postal Service, and will pursue the appropriate remedy when fraud is discovered.”

To report fraud, waste, or abuse within the Postal Service, contact the USPS OIG hotline at www.uspsoig.gov or 888-USPS-OIG.

The settled civil claims are allegations only. There has been no determination of liability.

The case was investigated by the U.S. Postal Service Office of the Inspector General. It was handled by Assistant United States Attorney Mark J. Sherer, Fraud Investigator Frank O’Conner, and Auditor Denis Cooke.

PHILADELPHIA – United States Attorney William M. McSwain announced that Jeffrey Cooley, 66, of Toledo, OH was sentenced to one month incarceration, 12 months’ supervised release, and a $210,000 fine by United States District Court Judge Joshua D. Wolson for filing a false tax return which reported that Cooley had purchased an offshore trust company years after he actually did in order to evade paying appropriate taxes.

Cooley served as global president of Newell Rubbermaid from 1998 to 2004. Sometime in or around 2005, after his retirement, Cooley and others purchased an offshore trust company named Southpac Trust (BVI) Limited, an asset protection company that owned and operated a bank in the Cook Islands. According to the charges in this case, Cooley’s 2012 tax return falsely reported that he had purchased Southpac in 2012, when in fact he had co-owned it continuously through nominee entities since 2005.

On October 3, 2019, Cooley pleaded guilty. In addition to the charged conduct, Cooley admitted that, after purchasing Southpac in 2005, he established an offshore bank account in Switzerland in the name of a nominee entity which allowed him to covertly receive his income from Southpac and its subsidiaries. Cooley received more than $300,000 of income into this Swiss account. In addition, in order to access these funds covertly, Cooley traveled from his home in the United States across the border into Canada multiple times to withdraw funds in cash via debit cards. Cooley no longer owns or holds any interest in Southpac.

“This case is an example of sheer greed,” said U.S. Attorney McSwain. “Cooley was already wealthy through his earnings as the president of a globally recognized company, but that simply wasn’t enough for him. Instead, he felt the need to cheat in order to line his pockets through fraud. He invested in a company and then went to great lengths to hide that investment so he wouldn’t have to pay his fair share of taxes. That was an intolerable affront to every honest American taxpayer.”

“Every American who pays his or her taxes should be offended that a select few use anonymous offshore accounts to evade their tax liability,” said Guy Ficco SAC, IRS Criminal Investigation. “We owe it to every American taxpayer to use all lawful means to identify and prosecute individuals, like Mr. Cooley, who willfully and intentionally violate their known legal duty to pay their fair share of taxes.”

The case was investigated by the Internal Revenue Service – Criminal Investigation and by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Patrick J. Murray and by First Assistant United States Attorney Jennifer Arbittier Williams.

PHILADELPHIA – United States Attorney William M. McSwain announced that Matthew Laver, 38, of Souderton, in Montgomery County, PA was sentenced to 144 months’ incarceration and ten years’ supervised release by United States District Court Judge Michael M. Baylson for multiple child exploitation offenses including distribution, receipt, and possession of child pornography.

The defendant pleaded guilty in September 2019 after authorities conducted an investigation that revealed his collection of almost 4,000 images and videos depicting the sexual abuse of children, which he downloaded and distributed to other users on the internet over approximately ten years. The investigation also revealed that Laver trafficked in child pornography that depicted children as young as infants being sexually assaulted and raped -- and that he did so during the time that he was employed as a Montgomery County Sheriff’s Officer.

“This is an appalling case,” said U.S. Attorney McSwain. “The defendant was a member of a law enforcement organization charged with enforcing the law and protecting the public, but he was actually a child predator. Laver’s crimes are also particularly disturbing due to the very young ages of some of the children depicted in his child pornography ‘collection.’ We stand ready with our federal and local partners to identify and prosecute all those who would prey upon minor children, no matter who they are.”

This case is part of Project Safe Childhood (PSC), a nationwide program bringing together all levels of law enforcement and the communities they serve to reduce sexual crimes against children. The Department of Justice and U.S. Attorney’s Offices work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce sexual crimes against children.

The case was investigated by the Department of Homeland Security, and is being prosecuted by Assistant United States Attorneys Eileen Zelek and Michelle Rotella.

PHILADELPHIA – United States Attorney William M. McSwain announced that Louis Mathis, 49, of Philadelphia, PA was sentenced to 120 months’ imprisonment, three years’ supervised release, and restitution of $398,960 by United States District Court Judge Gerald J. Pappert following his conviction on charges of Hobbs Act robbery and interstate transportation of stolen goods.  A co-defendant, Hasan Knight, is scheduled to be sentenced for his conviction on similar charges on Friday, January 17, 2020 at 10:00 a.m., also before Judge Pappert.

Defendants Mathis and Knight both pleaded guilty to federal charges in October 2019, arising from a series of robberies, burglaries, and thefts of department stores in Philadelphia and its surrounding counties in Pennsylvania and New Jersey in 2016. The men and their accomplices robbed or burglarized these businesses, typically to obtain high-end clothing and jewelry, and transported the stolen merchandise (in cars they had stolen) to Philadelphia. Mathis, the leader of this crew of thieves, then fenced the stolen items to shops on Jewelers’ Row and South Street in Philadelphia and to designer clothing sellers.

“Mathis and his accomplices thought they could make a quick buck by victimizing legitimate businesses and passing off the stolen goods as their own,” said U.S. Attorney McSwain. “They were wrong. We will aggressively use all available tools at the federal level to protect businesses and their employees against this type of predation and to keep the community safe.”

“This smash-and-grab crew got bolder as it went along — from overnight break-ins to brazen robberies during business hours that terrified employees and patrons,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “They looted these places, fenced the stolen goods, and pocketed the illegal proceeds. In the end, though, crime doesn’t pay, and has instead led to an extended stay in federal prison. The FBI Violent Crimes Task Force is gratified to see Mathis and his criminal crew off the street.”

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 Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Sarah Damiani.

PHILADELPHIA – United States Attorney William M. McSwain announced that Milton Mateo Garcia-Vasquez, 32, of Philadelphia, PA and a citizen of Honduras, was sentenced to the statutory maximum of 24 months’ imprisonment by United States District Court Judge Paul S. Diamond for unlawfully re-entering the United States after being deported.

Garcia-Vasquez pleaded guilty to illegal re-entry after deportation in August 2019. The defendant was previously deported and removed from the United States on June 18, 2013, and never requested or received authorization to re-enter the country. Nonetheless, he broke the law by re-entering the country and then proceeded to brutally rape a young woman near Rittenhouse Square in Philadelphia. The defendant grabbed the young woman from behind while she was walking back to her apartment, pushed her into the apartment and sexually assaulted her. He then left, but soon returned to the apartment and sexually assaulted the victim a second time. Garcia-Vasquez was arrested on June 23, 2014 by Philadelphia Police and charged with burglary, kidnapping and rape. He pleaded guilty to those charges in 2015 and was sentenced to a total of 22-44 years in state prison.

“Responsible public policy involves protecting public safety by setting up incentives for people to follow the law. Sanctuary city polices do just the opposite by incentivizing illegal aliens to come to sanctuary jurisdictions, like Philadelphia, where they are led to believe that our nation’s immigration laws will not apply to them,” said U.S. Attorney McSwain. “A natural consequence of this policymaking is that illegal aliens are drawn to Philadelphia, where some of them commit heinous crimes that never would have occurred if they weren’t here in the first place. This is a terrible tragedy for the innocent victims of such crimes. But it is also a tragedy for our justice system because it normalizes the unfair and un-American idea that the rule of law should not apply to a certain segment of society -- namely, illegal aliens. Anyone who cares about the rule of law or equal treatment under the law should find sanctuary city policies utterly repugnant. We at the U.S. Attorney’s Office will continue to enforce the rule of law in a neutral, non-partisan manner, rather than playing favorites.”

The case was investigated by the Department of Homeland Security – Immigration and Customs Enforcement, and is being prosecuted by Assistant United States Attorney Mary E. Crawley.

PHILADELPHIA – United States Attorney William M. McSwain announced that a Philadelphia-based personal injury law firm, Simon & Simon, P.C., has entered into a settlement agreement with the United States to resolve allegations that it failed to reimburse the United States for certain Medicare payments. The government had made these payments to medical providers for the firm’s clients.

The government’s investigation arose under the Social Security Act’s Medicare Secondary Payer provisions. This law authorizes Medicare, as a secondary payer, to make conditional payments for medical items or services under certain circumstances. When an injured person receives a settlement or judgment, Medicare regulations require entities who receive the settlement or judgment proceeds, such as the injured person’s attorney, to repay Medicare within 60 days for its conditional payments. If Medicare does not receive timely repayment, these regulations permit the government to recover the conditional payments from the injured person’s attorney and anyone else who received the settlement or judgment proceeds.

The government alleged that at various points between 2014 and 2019, Medicare made conditional payments to healthcare providers to satisfy medical bills of eight of the firm’s clients. Although Medicare demanded that Simon & Simon repay the resulting Medicare debts, the firm allegedly failed to do so.

Under the terms of the settlement agreement, Simon & Simon agreed to pay a lump sum of $6,604.59. The firm also agreed to (1) name a person responsible for paying Medicare secondary payer debts; (2) train the employee to ensure that the firm pays these debts on a timely basis; (3) review any additional outstanding debts to ensure compliance; and (4) provide written certifications of compliance. In addition, Simon & Simon acknowledged that any failure to submit timely repayment of Medicare secondary payer debt may result in liability for the wrongful retention of a government overpayment under the False Claims Act.

The resolution here follows a similar one against Rosenbaum & Associates, a Philadelphia personal injury firm that settled with the United States in 2018. When an attorney fails to reimburse Medicare, the United States can recover from the attorney—even if the attorney already gave the money to the client. Congress enacted these provisions to ensure that Medicare receives timely reimbursement for its conditional payments.

“This settlement agreement should remind personal injury lawyers and others of their obligation to reimburse Medicare when they receive settlement or judgment proceeds for their clients,” said U.S. Attorney McSwain. “Lawyers need to set a good example and follow the rules of the road for Medicare reimbursement. If they don’t, we will move aggressively to recover the money for taxpayers.”

There has been no determination of civil liability. The settled civil claims are allegations only.

The case was handled by Assistant U.S. Attorney Michael S. Macko, acting upon a referral from Eric S. Wolfish, Assistant Regional Counsel for the United States Department of Health and Human Services, Office of the General Counsel, Region III.

A Philadelphia-area doctor was sentenced to 12 months and one day in prison and ordered to pay a $100,000 fine yesterday for the illegal distribution of oxycodone.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania, Special Agent in Charge Michael T. Harpster of the FBI’s Philadelphia Field Office, Special Agent in Charge Maureen Dixon of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Philadelphia Regional Office, Special Agent in Charge Jonathan A. Wilson of the U.S. Drug Enforcement Administration’s (DEA) Philadelphia Field Division and U.S. Marshal Eric S. Gartner of the Eastern District of Pennsylvania made the announcement.

Richard Ira Mintz, D.O., 69, of Dresher, Pennsylvania, was sentenced by U.S. District Judge Michael M. Baylson of the Eastern District of Pennsylvania, who also ordered Mintz to serve three years of supervised release and 90 days of home confinement following release. Mintz pleaded guilty in March 2019 to eight counts of distributing controlled substances (oxycodone) outside the scope of professional practice and not for a legitimate medical purpose.

Mintz has surrendered his medical license and DEA Certificate of Registration.

The FBI, HHS-OIG, DEA, U.S. Marshals Service, Pennsylvania Attorney General’s Office, and Philadelphia Police Department investigated the case. Trial Attorney Adam G. Yoffie of the Criminal Division’s Fraud Section is prosecuting the case. Assistant U.S. Attorney Michael S. Macko of the Eastern District of Pennsylvania handled the parallel civil case, in which Mintz paid a $107,584 monetary penalty.

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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.  

PHILADELPHIA – United States Attorney William M. McSwain announced that Omar Faruq, 37, and Omar Ali, 36, both of Pennsauken, New Jersey, were sentenced today by United States District Court Judge Nitza I. Quiñones for their roles in conspiring to file false tax returns while operating a tax preparation business in Upper Darby, Pennsylvania. Judge Quiñones sentenced Omar Faruq to 24 months’ imprisonment, three years’ supervised release, and restitution of $688,362; she sentenced Omar Ali to 18 months’ imprisonment, three years’ supervised release, and restitution of $573,322. Faruq and Ali must pay the restitution to the United States Department of Treasury.

Codefendants Faruq and Ali pleaded guilty in June 2019 to filing false tax returns on behalf of their clients at Omar Consultancy Inc., a tax service they operated with offices in Pennsylvania and New Jersey. In filing tax returns for their clients, Faruq and Ali consistently used false filing status, Schedule A deductions and expenses, Schedule C business income and losses, and fictitious credits to decrease a client’s tax liabilities, all of which resulted in increased refunds for many of their clients. Faruq and Ali then diverted portions of these refunds into their own bank accounts as part of the conspiracy.

“These defendants – professional tax preparers – committed fraud and stole from the United States government, while duping their clients,” said U.S. Attorney McSwain. “The defendants also stole from the pockets of all taxpayers who do the right thing every April and pay their fair share of taxes. With tax season approaching, these sentencings serve as a warning for anyone considering this type of fraud.”

“With this year’s filing season just around the corner, today’s sentencings are a good reminder of how important it is to do your homework when choosing a professional tax preparer,” stated John R. Tafur, Special Agent in Charge, IRS Criminal Investigation, Newark Field Office. “Taxpayers should be selective in choosing a tax preparer and have confidence knowing that person will prepare accurate tax returns and safeguard their financial information. Those tax preparers who choose to abuse our tax system will end up on the radar screen of IRS Criminal Investigation.”

The case was investigated by Internal Revenue Service, Criminal Investigations, and is being prosecuted by Assistant United States Attorney Richard P. Barrett.

PHILADELPHIA – United States Attorney William M. McSwain and Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division announced that Richard Ira Mintz, D.O., 69, of Dresher, Pennsylvania was sentenced to one year and one day imprisonment, three years’ supervised release, and $100,000 fine by United States District Court Judge Michael Baylson for illegally distributing controlled substances.

The defendant pleaded guilty in March 2019 to eight counts of distributing controlled substances (oxycodone) outside the scope of professional practice and not for a legitimate medical purpose. Mintz has surrendered his medical license and DEA Certificate of Registration. From approximately July 2016 through July 2018, Mintz worked at a medical practice in Philadelphia where he sold fraudulent and medically unnecessary oxycodone prescriptions. He wrote the prescriptions in the names of three individuals whom he had never met or examined.

“As our District is struggling under the weight of the opioid epidemic, this doctor used his prescription pad to harm rather than heal,” said U.S. Attorney McSwain. “He saw an opportunity to make money off of those struggling with addiction and took advantage of the situation out of sheer greed. Physicians who abuse their positions of trust within the community for financial gain will be held accountable by my Office.”

“Dr. Mintz pleaded guilty to federal drug distribution charges for selling prescriptions for powerful and addictive prescription painkillers such as oxycodone without any legitimate medical purpose and for profit,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s Philadelphia Field Division. “Medical doctors, like all DEA registrants that are entrusted with handling controlled substances, need to do so in accordance with good faith medical practice and for legitimate medical purposes.”

This case originated as part of a regional Medicare Fraud Strike Force that operates in the Eastern District of Pennsylvania and the District of New Jersey. The Strike Force is a joint initiative between the Department of Justice and the Department of Health and Human Services to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 federal districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. 

The case was investigated by the Federal Bureau of Investigation (FBI), the U.S. Department of Health and Human Services - Office of Inspector General (HHS – OIG), the U.S. Drug Enforcement Administration (DEA), the U.S. Marshals’ Service, the Office of Pennsylvania Attorney General and the Philadelphia Police Department. Trial Attorney Adam G. Yoffie of the Criminal Division’s Fraud Section is prosecuting the case. Assistant U.S. Attorney Michael S. Macko of the Eastern District of Pennsylvania handled the parallel civil case, in which defendant Mintz paid a $107,584 monetary penalty.

PHILADELPHIA – United States Attorney William M. McSwain announced today that Tree of Life, Inc., and its owners and operators, Ada and Victor Vidal, agreed to settle allegations under the False Claims Act and Anti-Kickback Statute that they submitted thousands of fraudulent Medicaid claims for outpatient mental health services that were never rendered to their patients, including forgery of psychiatrists’ and therapists’ signatures on patient progress notes and treatment plans. As part of the settlement with the United States, Tree of Life and the Vidals agreed to pay $1.65 million and will be excluded from participating in federal healthcare programs. As a result, Tree of Life has closed its operations effective December 31, 2019.

Tree of Life was a for-profit, behavioral health clinic in Northeast Philadelphia that provided outpatient psychiatric and psychotherapy mental health services to individuals, including to low income patients. Between 2008 and 2013, Tree of Life allegedly submitted thousands of fraudulent Medicaid claims for outpatient mental health services. Specifically, Tree of Life billed Medicaid for services never rendered, billed Medicaid for falsely inflated services, created false patient progress notes and billing sheets, and forged psychiatrists’ and therapists’ signatures on patient progress notes and treatment plans. Tree of Life also allegedly submitted billing for therapy provided by unqualified individuals and the clinic paid kickbacks to a social worker for referrals of patients.

The government further contends that Tree of Life’s fraudulent scheme included the submission of bogus claims for therapy sessions provided to clients who were hospitalized at the time of the alleged therapy session, submission of claims for therapy sessions provided by therapists who no longer worked for Tree of Life at the time of the alleged therapy session, and submission of claims for therapy sessions allegedly provided on days when the office was closed. Tree of Life even submitted claims for clients who were deceased at the time of the alleged therapy. As a consequence, federal healthcare payers, including Medicaid, overpaid Tree of Life by millions of dollars.

“The fraud in this case is particularly egregious as it affects the treatment and care of low-income Philadelphians seeking mental health services,” said U.S. Attorney McSwain. “Receiving payments from Medicaid and not providing the billed services to those individuals who deserve appropriate treatment cheats those patients who need care, in addition to defrauding the federal government and therefore, American taxpayers. This resolution represents our commitment to holding accountable those who engage in fraud that affects the residents of Philadelphia and the Eastern District of Pennsylvania.”

“Exclusion is an important tool in our ongoing battle against health care fraud,” said Maureen R. Dixon, Special Agent in Charge of the Office of the Inspector General for the U.S. Department of Health and Human Services. “We will continue to work closely with the United States Attorney’s Office to ensure the integrity of taxpayer funds and to protect beneficiaries of federal healthcare programs, while excluding from federal programs those providers who engage in fraud.”  Under the terms of the Settlement Agreement, Tree of Life agreed to be excluded for 25 years, Ada Vidal agreed to be excluded for 20 years, and Victor Vidal agreed to be excluded for 15 years.

This settlement resolved a lawsuit filed under the False Claims Act in the U.S. District Court for the Eastern District of Pennsylvania by the former Clinical Director of Tree of Life, Erika Desjardins. 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 qui tam complaint was filed by Robert A. Davitch, Esquire of Sidkoff, Pincus & Green, P.C. and Sidney L. Gold, Esquire of Sidney L. Gold & Associates, P.C. “We thank the relator and the relator’s counsel for their invaluable contribution in this case. Without this type of information from citizens, detecting fraud and conserving government program funds would be much more difficult,” said U.S. Attorney McSwain. The whistleblower in this case, Ms. Desjardins, will receive $330,000 as her share of the recovery. She allegedly confronted Ada Vidal about the fraud and was allegedly fired for refusing to participate in the scheme.

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

This matter was investigated by the U.S. Department of Health and Human Services’ Office of Inspector General. For the U.S. Attorney’s Office, the investigation and settlement were handled by Assistant U.S. Attorney Veronica J. Finkelstein and health care fraud auditor George Niedzwicki. Additional assistance was provided by health care fraud auditors Denis Cooke and Dawn Wiggins.

The case is captioned Erika Desjardins v. Tree of Life Behavioral Services, Inc.; Tree of Life Professional Behavioral Health Services, Inc.; and Tree of Life Professional Behavioral Health Systems, Civil Action No. 14-2039 (E.D. Pa.). The claims resolved by this settlement are allegations only and there has been no determination of liability.

PHILADELPHIA – United States Attorney William M. McSwain announced that several defendants were sentenced by the Honorable Juan R. Sanchez for their involvement in a years’ long drug distribution conspiracy and related crimes, the last of whom, Bryant Calloway, was sentenced today to lifetime imprisonment.

From about 2010 until about May 7, 2015, a group of individuals sold crack cocaine at all times of day and night on a public playground located at the intersection of 52nd and Westminster Streets, in West Philadelphia, and on its surrounding streets known collectively as “the Grounds.” “The Grounds” drug distribution group relied on a number of street level sellers who were supplied by Frederick Porter. Porter, in turn, purchased cocaine and crack cocaine from Robert Mack, the ultimate supplier for “the Grounds” group. Meanwhile, mere blocks away, a rival drug distribution group also sold crack cocaine, at all times of day and night, out of another neighborhood public playground, called “the Pit,” located near to the intersection of  51st and Funston Streets, also in West Philadelphia. “The Pit” group was led by Sean Gilliam, who supplied the street level drug dealers.

Both groups were investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) after a series of shootings, over drug turf, that occurred between the rival groups in 2013. The shootings began on August 5, 2013, when Bryant Calloway, a member of “the Pit” drug group, shot and killed Brian Littles, a seller for “the Grounds” group, in an effort to expand “the Pit’s” drug territory. In retaliation for Littles’ murder, Calloway was shot several times by James Wilson, a member of “the Grounds.”  Then, in response to Calloway being shot, Sean Wilson, a member of “the Pit,” went to “the Grounds” area and shot an innocent bystander that he believed, wrongly, was responsible for Calloway’s shooting. The ATF investigation resulted in the defendants being charged for their involvement in drug distribution, firearms offenses, shootings, and murder. All charged defendants, from each group, were convicted by either guilty plea or jury verdict and have now been sentenced.

The defendants associated with “the Grounds” are:

• Robert Mack, a/k/a “Tweet,” age 53, sentenced to 17 years’ imprisonment;
• Kenneth Riley, a/k/a “Kenny,” age 26, sentenced to 10 years’ imprisonment;
• James Wilson, a/k/a “J.T.,” age 28, sentenced to 15 years’ imprisonment;
• Mark Samuel, age 28, sentenced to 6 ½ years’ imprisonment; and
• Xavier Towel, a/k/a “Zay,” age 26, sentenced to 20 months’ imprisonment.

The defendants associated with “the Pit” are:

• Bryant Calloway, a/k/a “Bigs,” age 32, sentenced to lifetime imprisonment;
• Sean Gilliam, a/k/a “Shizzy Ones,” age 42, sentenced to 12 years’ imprisonment;
• Sean Wilson, a/k/a “Lil Shizz,” age 26, sentenced to 15 years’ imprisonment;
• Tonie Henderson, a/k/a “Tone,” age 29, sentenced to 12 ½ years’ imprisonment; and
• Tyree Johnson, a/k/a “Riq,” age 43, sentenced to 9 years’ imprisonment.

“These two violent drug gangs wreaked havoc in this West Philadelphia neighborhood, terrorizing the people living there,” said U.S. Attorney McSwain. “When we see concentrated violence like this, it is often the case that a small group of people is causing the destruction. These perpetrators need to be arrested, charged and aggressively prosecuted in order to protect those who are trying to live peacefully and to deter others from similar lawlessness. All of these criminals will now be serving lengthy sentences in federal prison – which is where they belong.”

“A key component of ATF’s mission is to combat and reduce violent crime. The sentence that was handed down today is another victory in the battle against violent crime for ATF, our law enforcement partners, and more importantly, the citizens of Philadelphia,” said ATF Special Agent in Charge Donald Robinson.  “This sentence is a perfect example of the collaborative effort between the ATF, the United States Attorney’s Office and the Philadelphia Police Department to target violent offenders that are responsible for drug trafficking and related gun violence in our communities.”

“The investigation, arrests, and successful prosecution of the members of these two dangerous rival groups serve as evidence of the merits of sustained collaboration between law enforcement agencies. We expect the attendant sentencings to have an appreciable impact on the safety and quality of life for the residents of the Mill Creek community,” said Acting Philadelphia Police Commissioner Christine Coulter.

The case was investigated by Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorneys Jonathan B. Ortiz and Seth Schlessinger.

PHILADELPHIA – United States Attorney William M. McSwain announced that Darryl Goodman, 55, and Nieem Cann, 26, both of Philadelphia, PA, were arrested and charged by Indictment for a series of violent robberies across the Delaware Valley over a four month period early last year.  The ten-count Indictment charges Goodman and Cann with various offenses including conspiracy, Hobbs Act robbery, brandishing a firearm, carjacking, and possession of fentanyl with intent to deliver.  

Between February and May 2019, the defendants are alleged to have perpetrated a string of violent robberies and attempted robberies of delivery workers and drivers for a pharmaceutical supplies company, TXX Services.  The defendants’ alleged attacks on TXX drivers spanned a large geographic area that includes the City of Philadelphia, Montgomery County, Delaware County and into New Jersey.  For each robbery, the defendants—working with other co-conspirators—would travel to TXX Services’ warehouse in Cherry Hill, NJ in the early morning hours and then follow a delivery van along its route.  Goodman and Cann would then assault the driver in the course of a delivery, carjack the delivery van and abduct the victim, and drive the van to another location in order to raid its supplies and resell them on the street.  In one of the incidents alleged in the Indictment, the robbery of a TXX delivery worker at Mercy Fitzgerald Hospital in March 2019, the defendants managed to steal over $140,000 worth of controlled substances and hospital supplies, including numerous vials of fentanyl citrate, a highly addictive opioid pain medicine. 

“The allegations here are appalling, as the defendants ruthlessly stalked their victims before violently assaulting them,” said U.S. Attorney McSwain. “The TXX employees were simply doing their jobs, delivering much-needed medicine and supplies to healthcare centers, and of course should not have had to worry about having a gun pointed at them.  It takes a special kind of depravity to steal medicine and hospital supplies in this manner.  We will continue to work relentlessly to hold dangerous criminals accountable and get them off of the streets.”

“Not only did these defendants allegedly commit a string of brazen, violent carjack robberies, they did so in order to steal and sell controlled pharmaceuticals, including fentanyl, on the street,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “Know that the Philadelphia Violent Crimes Task Force is working each and every day to stop dangerous criminals who have decided to make their money preying on the public.”

If convicted, both defendants face a maximum possible sentence of life imprisonment.

The case was investigated by the Federal Bureau of Investigation’s Violent Crimes Task Force and is being prosecuted by Assistant United States Attorney Sara Solow.

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

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced today that Bucks County dentist Dr. Pranathi V. Reddy will pay $150,000 and stop prescribing Schedule II opioids for four years to resolve allegations that she diverted controlled substances for personal use and overdosed on one occasion, and that she failed to comply with various record-keeping requirements for controlled substances.

The settlement resolves allegations that, on October 14, 2018, Reddy diverted a package of controlled substances for her personal use, which resulted in an overdose and her transport to the hospital. It also resolves allegations that, from June 2017 through November 2018, she failed to maintain various records of the controlled substances she used in her professional practice as a dentist. For example, the settlement resolves allegations that Reddy failed to maintain an initial inventory of her controlled substances, document the transfer of controlled substances on the required forms, and failed to maintain the controlled substances at her registered locations.

In addition to the $150,000 penalty, Reddy is now barred from purchasing, prescribing, or dispensing any Schedule II controlled substances for at least the next four years. She is also subject to a number of monitoring requirements, including reporting her controlled substance purchasing, dispensing, and prescribing to the Drug Enforcement Administration.

“Controlled substances, especially opioids, pose extraordinary risks to our communities, including to healthcare providers,” said First Assistant U.S. Attorney Williams. “When providers are granted the privilege of purchasing and prescribing controlled substances, they also accept the weighty responsibilities that come along with those privileges, including ensuring that controlled substances are used for a legitimate medical purpose and generating the records necessary for accountability and transparency. Unfortunately, sometimes they fail to comply with these critical responsibilities, and that is when it is necessary for our Office to step in and work with our law enforcement partners to use all available enforcement tools to hold these providers responsible.”

“Dr. Reddy, like all DEA registrants that are licensed and entrusted with the safe handling of powerful controlled substances, failed to accurately document and secure these same controlled substances in accordance with federal regulations,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s Philadelphia Field Division. “In the midst of the current opioid crisis, even medical professionals are not immune from the perils of substance use disorder.”

This investigation was conducted with the Pennsylvania Department of State’s Bureau of Enforcement and Investigation and the Drug Enforcement Administration’s Philadelphia Field Division and Camden, New Jersey Resident Office. 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.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced today that Sung W. Sohn, 50, of Burford, Georgia was sentenced to 12 months’ and one day imprisonment, and ordered to pay $224,000 in restitution by Chief United States District Judge Juan R. Sánchez for the interstate transportation of stolen property related to a scheme he perpetrated to steal and ship hundreds of office printers by misusing a product rewards program.

In September 2019, the defendant pleaded guilty to an Information charging him with interstate transportation of stolen property in 2017 and 2018.  During this time period, Sohn stole, and then sold and shipped, over 600 office printers by misusing a product rewards program offered to Sohn’s employer by Company 1, a manufacturer of office printers and printer supplies.  

Sohn worked in Philadelphia for a company that purchased printers manufactured by Company 1.  The company offered reward points to customers that also purchased ink and toner from Company 1.  In June of 2017, Sohn used an account number he found on a shipping box and associated it to his employer’s rewards account with Company 1.  The account number was not for an account actually used by the employer, and it generated far more points than would be possible given his employer’s ink and toner purchases.  Sohn then redeemed these improperly obtained reward points in order to receive free printers from Company 1, sold the printers online, and kept the proceeds for his personal use.  Sohn fraudulently obtained 604 printers in this way, which was a loss to Company 1 at retail value of $293,000.

“This Office takes white collar fraud and theft offenses very seriously,” said First Assistant U.S. Attorney Williams. “And that’s exactly what this was – it was theft.  The defendant took advantage of his position with his employer to improperly hoard rewards points and sell printers to which he was not entitled. We will continue to work with our law enforcement partners to protect innocent individuals and businesses from being victimized by this type of fraud.”

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

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Fallyn Mathis, 37, of Philadelphia, Pennsylvania, was sentenced to two years’ probation and ordered to pay full restitution in the amount of $12,628 by United States District Judge Cynthia M. Rufe, for collecting unemployment compensation while, at the same time, earning income from her seasonal employment with the Internal Revenue Service (IRS).

The defendant pled guilty in this case to one count of theft of government money in August 2019.  The charge stems from Mathis’ intermittent conduct between 2015 and 2017, during which time the defendant repeatedly certified her eligibility for federal unemployment compensation benefits through the Department of Labor's recertification process, while she was actually in active-work status with, and receiving a salary from, the IRS.  Each false certification prompted the payment of unemployment compensation funds that were electronically deposited into her bank account. Mathis was not entitled to receive more than $12,600 in unemployment benefits that she collected during this time period.

“While serving as an employee of the IRS, a federal government agency working on behalf of taxpayers, the defendant abused the government’s unemployment compensation system for a substantial amount of time,” said First Assistant U.S. Attorney Williams.  “Mathis was essentially double-dipping at taxpayers’ expense; taking funds to which she was not entitled and that should have gone to someone actually struggling with unemployment.”

“The Treasury Inspector General for Tax Administration is committed to identifying and prosecuting Internal Revenue Service employees who fraudulently abuse Federal benefits programs,” said J. Russell George.  “We appreciate the assistance provided by the Pennsylvania Department of Labor and the commitment of the U.S. Attorney for the Eastern District of Pennsylvania in prosecuting this defendant.”

The case was investigated by the Treasury Inspector General for Tax Administration, and is being prosecuted by Assistant United States Attorney J. Jeanette Kang.

PHILADELPHIA – United States Attorney William M. McSwain announced that Jovaun Patterson, 30, of Philadelphia, Pennsylvania entered a plea of guilty before United States District Court Judge Mitchell S. Goldberg on charges of one count of attempted robbery which interferes with interstate commerce (known as Hobbs Act robbery), and one count of using, carrying, and discharging a firearm during and in relation to a crime of violence.  These charges stem from the defendant’s attempted armed robbery on May 5, 2018, of the KCJ, Inc. convenience store during which Patterson shot the store owner Li (“Mike”) Poeng with an assault rifle, leaving Mr. Poeng in a coma and eventually confined to a wheelchair.

Prior to federal prosecutors filing these charges by Indictment in February 2019, Patterson was arrested by Philadelphia police for the May 5, 2018 incident and charged with attempted murder, aggravated assault, robbery–threat of immediate serious injury, possession of a firearm by a prohibited person, possession of a firearm on a street in Philadelphia, possession of an instrument of crime, simple assault, and reckless endangerment of another person.  On November 15, 2018, the Philadelphia District Attorney’s Office permitted Patterson to enter a negotiated guilty plea to charges of only aggravated assault, robbery–threat of immediate serious injury, and possession of an instrument of crime.  The DA’s Office also agreed to a sentence of only 3½ to 10 years’ imprisonment.  That plea deal was in line with the soft-on-crime priorities of Philadelphia District Attorney Larry Krasner.  Thereafter, the U.S. Attorney’s Office stepped in to bring federal charges and ensure justice was done. 

“Violent crime is a severe and growing problem in Philadelphia, and fighting that trend is a top priority of my Office,” said U.S. Attorney McSwain.  “The Philadelphia District Attorney, Mr. Krasner, does not share that priority – preferring to look out for violent offenders like Mr. Patterson, who received a ridiculously lenient plea deal because of Mr. Krasner.  I can assure the citizens of Philadelphia that my Office sees the problem and is working hard to do what we can to stem the rising tide by bringing federal charges when we are able, which is what occurred here.  Now, this defendant will face a potential sentence that reflects the severity of his crime.”

“ATF’s top priority is combating violent crime; one of the ways we accomplish that mission is by keeping firearms out of the hands of violent offenders,” said Donald Robinson, Special Agent in Charge, ATF Philadelphia Field Division.  “This case is a perfect example of the collaborative effort between ATF, our partners at the Philadelphia Police Department and the United States Attorney’s Office in targeting violent offenders and protecting our communities.”

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

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

A Pennsylvania doctor pleaded guilty to fraud and drug importation charges for his role in a scheme to illegally import medications not approved by the U.S. Food and Drug Administration (FDA) and administer these medications to his patients, and unlawfully distributing oxycodone to his patients.

Thomas J. Whalen, D.O., 65, a Havertown, Pennsylvania, rheumatologist pleaded guilty to one count of health care fraud, one count of importation contrary to law and two counts of distribution of controlled substances before U.S. District Judge Timothy J. Savage of the Eastern District of Pennsylvania.  Sentencing is scheduled for April 1, 2020, before Judge Savage.

“The defendant endangered his patients’ health and safety by importing and administering non-FDA approved medications,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “This plea shows that medical professionals who prioritize profit over patient care will face the consequences for their crimes.”

“This guilty plea from Dr. Whalen is the latest example of my office’s commitment to stopping health care fraud and diversion,” said U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania. “We work closely with our partners in the Fraud Section’s Health Care Fraud Strike Force and will continue to root out fraud in the medical profession. Specifically, we are committed to stopping criminals in the medical profession from stealing from public programs, threatening the safety of patients, and pushing illegal pills onto the streets.”

“Dr. Whalen placed the health of countless patients at risk by administering non-FDA approved drugs,” 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.  Our watchdog agency, along with our law enforcement partners, will continue to protect the public and root out dangerous and costly fraud schemes.”

“Dr. Whalen has pleaded guilty to the unlawful distribution of oxycodone, which is a powerful prescription painkiller,” said Special Agent in Charge Jonathan A. Wilson of the U.S. Drug Enforcement Administration’s (DEA) Philadelphia Field Division.  “Of particular concern is that he knowingly prescribed oxycodone to patients who were abusing illegal street drugs such as cocaine and heroin.  Doctors have a professional and moral obligation to treat patients who are struggling with substance use disorder – not enable it.” 

“Dr. Whalen imported and used non-FDA approved drugs from Turkey and the United Kingdom, without any regard for the safety and health of his patients. In addition, he prescribed powerful pain killers to patients already struggling with addiction,” said Acting Special Agent in Charge William Walker of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Philadelphia. “Doctors take an oath to do no harm. This oath was clearly betrayed by not only committing healthcare fraud for his own financial gain, but by contributing to our nation’s opioid crisis. Thanks to our partnership with Customs and Border Protection, we have brought one more person to justice, and many more individuals out of harm’s way.”

“When health care professionals import unsafe, untested prescription drugs from outside the drug supply chain that the FDA oversees, the American public's health and trust are jeopardized,” said Special Agent in Charge Mark S. McCormack of the FDA’s Office of Criminal Investigations (FDA-OCI), Metro Washington Field Office.  “The FDA is committed to pursuing and bringing to justice those who attempt to subvert the safeguards of our closed drug supply by distributing unapproved products.”

“Dr. Whalen falsely billed federal benefit programs, pocketing over a million dollars he wasn’t entitled to,” said Special Agent in Charge Michael T. Harpster of the FBI’s Philadelphia Field Office. “Between that and his unlawful diversion of prescription opioids, Whalen was doing damage on many levels. The FBI will continue to crack down on crooked medical professionals more interested in their profits than their patients.”  

In pleading guilty, Whalen admitted that, from about January 2014 through March 2018, he illegally imported non-FDA-approved biologic medications, including Remicade, Synvisc, Synvisc-One, Orencia, Prolia/Xgeva and Boniva.  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 his patients with the non-FDA-approved medications and then falsely billed federal health care benefit programs approximately $2.3 million and was paid directly approximately $1.1 million, and pocketed the profits for himself, he admitted. 

Whalen also admitted to unlawfully distributing oxycodone by prescribing oxycodone to patients outside the course of his professional practice and without a legitimate medical purpose. In particular, with two patients, Whalen prescribed oxycodone despite knowing from a review of patients’ urine drug screen tests that the patients were using illicit drugs, including heroin and cocaine, and/or that each was not taking the mediations that Whalen prescribed.

HHS-OIG, DEA, HSI, FDA-OCI and the FBI investigated the case with assistance from U.S. Customs and Border Protection.  Trial Attorney Debra Jaroslawicz of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Paul J. Koob of the Eastern District of Pennsylvania are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

PHILADELPHIA – United States Attorney William M. McSwain announced that Thomas J. Whalen, D.O., 65, of Havertown, Pennsylvania, pled guilty to charges related to his unlawful importation of foreign, non-FDA approved injectable medications that he falsely billed to health care benefit programs in the amount of nearly $2.3 million. The Delaware County rheumatologist also pleaded guilty to unlawfully distributing oxycodone. Whalen knowingly prescribed oxycodone to patients actively using illicit drugs, including heroin and cocaine.

Whalen pled guilty to an Information charging him with one count of health care fraud, one count of importation contrary to law, and two counts of distribution of a controlled substance. He is scheduled to be sentenced on April 1, 2020, by U.S. District Judge Timothy J. Savage, who accepted his plea. Whalen faces a maximum possible sentence of 70 years’ imprisonment, a $2,500,000 fine, 3 years’ supervised release, and a $400 mandatory special assessment.

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 his patients with the non-FDA approved medications and then billed federal health care programs, pocketing approximately $1.1 million in illicit gains.

Whalen also prescribed oxycodone to patients abusing illicit drugs. The Information lists two patients to whom Whalen prescribed oxycodone despite receiving multiple urine drug screening results for each that revealed that the patients were simultaneously abusing cocaine and heroin.

“This guilty plea from Dr. Whalen is the latest example of my Office’s commitment to stopping health care fraud and diversion,” said U.S. Attorney McSwain. “We work closely with our partners in the Fraud Section’s Health Care Fraud Strike Force and will continue to root out fraud in the medical profession. Specifically, we are committed to stopping criminals in the medical profession from stealing from public programs, threatening the safety of patients, and pushing illegal pills onto the streets.”

“Dr. Whalen placed the health of countless patients at risk by administering non-FDA approved drugs. Such medications are not paid for by Medicare due to the risk they may pose to patient health,” said Special Agent in Charge Maureen R. Dixon of the U.S. Department of Health and Human Services Office of Inspector General. “Our watchdog agency, along with our law enforcement partners, will continue to protect the public and root out dangerous and costly fraud schemes.”

“Dr. Whalen has pleaded guilty to the unlawful distribution of oxycodone, which is a powerful prescription painkiller. Of particular concern is that he knowingly prescribed oxycodone to patients that were abusing illegal street drugs such as cocaine and heroin,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division.  “Doctors have a professional and moral obligation to treat patients that are struggling with substance use disorder – not enable it.” 

“Dr. Whalen imported and used non-FDA approved drugs from Turkey and the United Kingdom, without any regard for the safety and health of his patients. In addition, he prescribed powerful pain killers to patients already struggling with addiction,” said William Walker, Acting Special Agent in Charge of HSI Philadelphia. “Doctors take an oath to do no harm. This oath was clearly betrayed by not only committing healthcare fraud for his own financial gain, but by contributing to our nation’s opioid crisis.” Walker continued, “Thanks to our partnership with Customs and Border Protection, we have brought one more person to justice, and many more individuals out of harm’s way.”

“When healthcare professionals import unsafe, untested prescription drugs from outside the drug supply chain that the FDA oversees, the American public health and trust are jeopardized,” said Mark S. McCormack, Special Agent in Charge, FDA Office of Criminal Investigations Metro Washington Field Office. “The FDA is committed to pursuing and bringing to justice those who attempt to subvert the safeguards of our closed drug supply by distributing unapproved products.”

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, and the Federal Bureau of Investigation investigated the case. Trial Attorney Debra Jaroslawicz with the Criminal Division’s Fraud Section and Assistant United States Attorney Paul J. Koob are prosecuting the case.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Gerald Griffith, also known as “Jerry Porecca,” 47, of Philadelphia, Pennsylvania, entered a plea of guilty before United States District Court Judge Nitza I. Quinones Alejandro, to two counts of bank robbery, two counts of armed bank robbery, and four counts of Hobbs Act robbery arising from his unrelenting crime spree between July and December 2018.  He was charged by Indictment in April 2019.

For a period of about six months, the defendant robbed or attempted to rob four separate banks—two while brandishing what appeared to be a gun—as well as a Shop Rite supermarket, a Wawa convenience store, a Sonoco A-Plus gas station, and a Dollar General retail store, all in Northeast Philadelphia. 

Griffith’s series of robberies began on July 9, 2018, when he attempted to rob the BB&T Bank at 6633 Roosevelt Boulevard by threatening to blow up the bank, and then approximately ten minutes later robbed the Firstrust Bank at 9303 Krewstown Road, again by verbal threat.  About one month later, Griffith moved on to armed bank robbery, holding up the Fishtown-area BB&T Bank at 2330 East York Street on August 21, and then the BB&T Bank located at 2601 Orthodox Street the very next day.   At these last two bank robberies, Griffith brandished what the bank tellers described as a long, shiny silver handgun, threatening them not to press “any buttons” and demanding that they give him “hundreds.” 

In addition, Griffith robbed the Shop Rite at 6301 Oxford Avenue earlier that summer, and between December 5 and December 8, he robbed the Wawa at 3200 Richmond Street, and then attempted to rob the Sonoco-A-Plus at 3200 Richmond Street and the Dollar General at 3501 Cedar Street.

“The complete disregard that Griffith displayed for the safety of others over such a sustained period of time is appalling,” said First Assistant U.S. Attorney Williams. “He terrorized this neighborhood for months, affecting dozens of people who are now living with the repercussions of having been targeted by him.  The employees of these banks and stores were simply doing their jobs when the defendant threatened them with violence and then an actual weapon. The streets of Philadelphia are safer now that Griffith has been convicted and is facing significant prison time.”

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

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Matthew Newcomer and Sara Solow.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Michael Gerstenberg, 51, of Emmaus, Pennsylvania was sentenced to 18 months’ imprisonment, 3 years’ supervised release, and ordered to pay full restitution in the amount of $750,427.36 by United States District Judge Jeffrey L. Schmehl for failing to collect, account for, and pay federal employment taxes for employees of the defendant’s company, A. E. Logistics Inc., and for his scheme to inflate the wages of his former girlfriend on Internal Revenue Service (IRS) forms and tax returns as a means to syphon additional funds from that company for his personal use.   

According to court documents, A.E. Logistics Inc. was a corporation created and controlled by the defendant doing business as a trucking company in Allentown, PA.  During the period January 2012 through December 2014, Gerstenberg caused A.E. Logistics to make thousands of dollars of expenditures for his personal benefit while, at the same time, failed to pay IRS payroll taxes which were withheld from his employees’ paychecks. For example, Gerstenberg caused A.E. Logistics to spend thousands of dollars to pay for a wide variety of extravagant personal expenses such as a Caribbean vacation and other travel, gambling, jewelry, fine dining, country club dues, nightclubs, and entertainment for himself, members of his family and his personal friends. 

The defendant also placed his former girlfriend on the company’s payroll and reported inflated wages for her on IRS forms and tax returns as a means to syphon additional funds from that company for his personal use.  Her “wages” were deposited into a joint account controlled by Gerstenberg, and he paid no income taxes on those wages when he prepared the couple’s tax returns. 

According to court documents, Gerstenberg had previously been convicted of failing to pay state employment taxes in Pennsylvania, and he violated the conditions of his state probation by committing the federal offenses for which he was sentenced today.      

“Business owners are required to follow and apply our tax laws just like everyone else, and they must accurately report their employees’ income so that everyone pays their fair share of federal taxes.  In fact, employees rely on their employers to do the right thing in this regard,” said First Assistant U.S. Attorney Williams.  “This defendant chose not to do that, instead enriching himself at the expense of his employees and the taxpayers.  Perhaps after this second tax conviction, the defendant will finally have learned his lesson that this type of crime is a serious crime and will be aggressively prosecuted.”

“Instead of paying over employment taxes withheld from his employees’ wages, Mr. Gerstenberg used the money to fund his lavish lifestyle,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco. “He did so at the expense on his employees; robbing them of future social security and Medicare benefits. Let his sentence serve as a warning to those contemplating similar conduct.”

The case was investigated by IRS Criminal Investigations, and is being prosecuted by Assistant United States Attorney Eric L. Gibson.

PHILADELPHIA – United States Attorney William M. McSwain announced that Justin Hiemstra, 22, of St. Paul Park, Minnesota, and Andrew Harris, 23, of Philadelphia, Pennsylvania were both sentenced today to two years’ probation and 200 hours of community service by United States District Judge Cynthia M. Rufe.  In August 2019, Hiemstra pled guilty to using a school computer and someone else’s username without that person’s permission in an attempt to illegally obtain then-Presidential candidate Donald Trump’s tax returns from the Internal Revenue Service.  Harris pled guilty to the same charges in September 2019.

These charges arose out of a plot between the defendants, then students at Haverford College, to use computers at the school’s computer lab and the Free Application for Student Aid (FAFSA) website to illegally access the tax returns.  Hiemstra and Harris opened a false FAFSA application in the name of a member of the Trump family and found that someone else had already obtained a username and password for Donald Trump.  In order to reset the password, the defendants were prompted to answer challenge questions, which the original person had created when setting up the account.  The defendants were able to answer the questions and reset the password.  They then used the President’s personal identifying information, including his social security number and date of birth, to attempt to import the President’s federal tax information into the bogus FAFSA application.  Ultimately, this illegal attempt failed.

“Hiemstra and Harris thought they could manipulate and outsmart the FAFSA application process in order to obtain Donald Trump’s tax returns for their own purposes.  As it turns out, that was not such a smart move:  they committed a serious violation of privacy rights and a federal crime in the process,” said U.S. Attorney McSwain.  “Now they have both been held accountable.  And those who complete the FAFSA application, please take note: this Office takes these kinds of cybersecurity breaches seriously and we are doing everything we can to keep your personal information safe.”

The case was investigated by the Department of Education – Office of Inspector General and the Treasury Inspector General for Tax Administration, and is being prosecuted by Assistant United States Attorney Anthony J. Wzorek.

PHILADELPHIA – United States Attorney William M. McSwain announced that John C. Dellarocco, Jr., 25, of Holmes, Pennsylvania, was sentenced to 240 months’ imprisonment, and a lifetime of supervised release, by United States District Judge Petrese B. Tucker for online enticement and manufacturing child pornography. The defendant pled guilty in August 2019.

These charges arise from an investigation into the defendant’s communications with at least eleven minor female children on an Internet-based application on which the defendant persuaded or attempted to persuade the girls to engage in sexual activity and sexually explicit conduct, photograph themselves engaging in that conduct, and then transmit the images to the defendant via the Internet.  In all of these cases, Dellarocco was surreptitiously recording the chats and exposures and saving the videos on flash drives or his cell phone – evidence which was later discovered by investigators.

“Child exploitation is a pervasive problem – made more so by the accessibility of the Internet and digital media – that demands an aggressive response,” said U.S. Attorney McSwain.  “This case is particularly disturbing because of the number of children the defendant was able to target and communicate with on the Internet.  We urge parents and caregivers to monitor what their children do online, and we stand ready with our federal and local partners to identify and prosecute those who would prey upon minor children.”

The case was investigated by the Federal Bureau of Investigation and the Delaware County Criminal Investigation Division, and is being prosecuted by Assistant United States Attorney Roberta Benjamin.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that defendants Joseph Fabiilli, 58, of Middle Village, New York, and Christopher Knight, 55, of Forest Hills, New York, were charged by Indictment and arrested for conspiracy to commit securities fraud and securities fraud, related to their manipulation of the securities of Mainstream Entertainment, Inc., n/k/a Volt Solar Systems, Inc. 

The Indictment alleges that Fabiilli, Knight and others manipulated the stock of Mainstream Entertainment, Inc., a publicly traded security, through fraudulent press releases, a fraudulent securities disclosure filed with the U.S. Securities and Exchange Commission, and other fraudulent communications, and through manipulative stock trading.  The defendants and others were thus able to fraudulently inflate the price of Mainstream Entertainment stock, and then sell their own shares at inflated prices, reaping illicit proceeds – a scheme which is commonly referred to as a “pump and dump”.

“The United States’ securities laws exist to safeguard the integrity of the markets and to protect individual investors who play by the rules.  Accordingly, they must be vigorously enforced,” said First Assistant U.S. Attorney Williams. “These defendants allegedly violated these laws and will be held accountable if convicted.  The U.S. Attorney’s Office appreciates the substantial assistance provided by the U.S. Securities and Exchange Commission in investigating this case.”

“Fraudsters use ‘pump and dump’ schemes to enrich themselves, at the expense of innocent investors,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “The FBI is committed to cracking down on such harmful market manipulation, to protect both the public and our financial system.”

If convicted, the defendants face a maximum possible sentence of 50 years imprisonment, a $500,000 fine, a 3-year period of supervised release, and a $200 special assessment.

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

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

PHILADELPHIA – United States Attorney William M. McSwain announced that Sarah Norton, 38, of Jewett City, Connecticut was convicted at trial of attempted enticement of a minor and traveling to engage in illicit sexual conduct with a minor arising from her interactions with a 14 year-old boy.

The defendant, a married mother of three, met the victim while “gaming” online.  She then used online and cell phone communications to attempt to seduce the victim into engaging in sexually explicit contact.  Norton traveled from her home in Connecticut to Pennsylvania to meet with the boy for sex in a hotel room that she had rented, near where the child lived.  Norton’s plan was foiled after the victim’s father became suspicious of the messages the victim had on his cell phone and interrupted the plan.

“Those who sexually target children are among the most depraved in our society,” said U.S. Attorney McSwain. “This is true no matter the gender of the offender or the excuses served up for this type of behavior.  We will aggressively pursue and prosecute anyone who targets children for their own sexual gratification.”

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

The defendant faces a maximum possible sentence of lifetime incarceration, a mandatory minimum ten years imprisonment, a mandatory minimum five years supervised release up to lifetime supervised release, a $500,000 fine, a $10,200 in special assessments. 

The case was investigated by the Upper Macungie Police Department and the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Sherri A. Stephan.

PHILADELPHIA – United States Attorney William M. McSwain announced that Darius Carter, 40, of Philadelphia, Pennsylvania was convicted today at trial of two counts of Hobbs Act Robbery (i.e., robbery which interferes with interstate commerce) arising from the robbery of two cell phone stores on the same block in the Fairhill section of North Philadelphia, both within one week in October 2018.

During the first incident, two men entered a Boost Mobile store on the 2700 block of North Fifth Street -- one of whom was the defendant, who brandished what appeared to be a Glock-style pistol, took $600 and fled.  During the second incident five days later, the defendant entered a second store alone, a Metro PCS on the same block, and took $500 while once again displaying what appeared to be a handgun. 

“The complete disregard that Carter displayed for the safety of others is appalling,” said U.S. Attorney McSwain. “The employees of these stores were simply doing their jobs, while the defendant terrorized them in a very short span of time.  The streets of Philadelphia are safer now that Carter has been convicted and is facing significant prison time.”

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

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and is being prosecuted by Assistant United States Attorneys Kelly Harrell and Nancy Winter.

PHILADELPHIA – United States Attorney William M. McSwain announced that Brian Glantz, 24, of Glenside, PA entered a plea of guilty before United States Magistrate Judge Lynne A. Sitarski to one count of simple assault arising from an incident in which he punched a Philadelphia Police Officer.

On November 17, 2018, a demonstration was held at Independence National Historic Park under a permit granted to a group identified as “We the People.”  As National Park Service rangers and other law enforcement officers engaged in crowd control duties to disperse the crowd at the end of the rally, members of a counter-demonstration, including the defendant, pushed themselves against the officers and sought to physically confront the permitted group.  During the confrontation, and while still on federal park property, officers sought to arrest Glantz, when he assaulted a Philadelphia Police Captain by punching him in the face.  The defendant continued to resist the officers’ efforts to arrest him, kicking his legs and wrestling with the officers, until he was ultimately subdued and taken into custody.

“The right to peaceful demonstration is a dearly held freedom in our country, with the operative word being ‘peaceful,’” said U.S. Attorney McSwain.  “In order to safeguard that right, law enforcement officers are routinely called upon to monitor and provide security at large public gatherings.  Punching a police officer when that officer is working to protect our freedoms is a vile and cowardly act.  And when it happens on federal property, it is also a federal crime, and will be treated as such.”

The defendant faces a total maximum sentence of 1 year imprisonment, 5 years’ probation and $100,000 fine.

The case was investigated by the National Park Service, and is being prosecuted by Assistant United States Attorney Christopher Diviny.

PHILADELPHIA – United States Attorney William M. McSwain announced that Dino Paolucci, age 42, of Mississauga, Ontario, was sentenced to 84 months’ imprisonment by United States District Judge Eduardo C. Robreno for participating in five stock manipulation schemes in 2012 and 2013.  In addition, the Court also ordered Paolucci to pay $2 million in forfeiture.

Paolucci’s sentence arose from what is commonly referred to as a “pump and dump” scheme, stemming from his manipulation of the price and trading volume of the stock of five public companies: AGR Tools, Inc. (“AGRT”), LiveWire Ergogenics (“LVVV”), YaFarm Technologies (“YFRM”), Resource Ventures (“REVI”), and Medical Cannabis Payment Solutions (“REFG”).  As part of these manipulations, Paolucci and his co-schemers obtained control over the companies, distributed shares of stock to themselves and their nominees through fraudulent means, issued false and misleading press releases and promotions regarding the companies in order to artificially inflate the price and/or trading volume of the stocks, and then sold their shares into the manipulated markets – thereby reaping millions.  For good measure, they also concealed all of their illegal activity from the U.S. Securities and Exchange Commission (the “SEC”).

Paolucci played a critical role in the scheme by orchestrating the false and misleading promotions used to “pump up” the stocks in question.  He issued most of his promotions by widely distributing email newsletters (“email blasts”) touting the stocks under various business names, including the Bull Exchange, Market Bulls, Best Penny Newsletter, Gain the Green, Insane Pennies, OTC Market Alerts, and Penny Players Club.  While Paolucci was disseminating the email blasts, he was also coordinating with his co-schemers regarding the press releases being issued and the stock that they were selling.  All of this coordination, however, was hidden from the market and the SEC.  For example, Paolucci and his fellow schemers used offshore corporations and brokerage accounts, as well as fake corporations, intermediaries, and even fake names, causing tens of millions of dollars of losses to investors while gaining millions in profits for themselves.

“The United States’ securities laws exist to safeguard the integrity of the markets and to protect individual investors who play by the rules.  Accordingly, they must be vigorously enforced,” said U.S. Attorney McSwain. “Schemers like Paolucci and his co-conspirators work hard to cover their tracks, while defrauding investors and harming our securities markets.  But we will work even harder to track them down and bring them to justice.”

“Paolucci tricked people into investing under false pretenses, and those victims’ losses became his ill-gotten gains,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “While investors know they’re taking a chance when buying securities, they don’t anticipate the odds being stacked against them from the get-go. This case underscores the FBI’s commitment to protecting the investing public and bringing ‘pump and dump’ fraudsters to justice.”

The case was investigated by the Federal Bureau of Investigation - Philadelphia and Boston Field Offices, with assistance from the Securities and Exchange Commission Offices in Chicago and Boston, the U.S. Department of Justice's Office on International Affairs, the Alberta Securities Commission, and the United States Attorney's Office for the District of Massachusetts.  It is being prosecuted by Assistant United States Attorneys Patrick Murray and Judy Smith.

PHILADELPHIA – United States Attorney William M. McSwain announced that Fred Arena, 41, of Salem, NJ, entered a plea of guilty before United States District Court Judge John R. Padova on charges of making false statements to government agents. Arena, who was an employee of a federal contractor at the Philadelphia Navy Yard and as such was required to obtain a federal security clearance, lied to obtain the clearance. He also subsequently lied to federal investigators who asked him about his answers to questions on the security clearance paperwork. He was arrested and detained in October 2019, and is currently in federal custody.

On January 10, 2019, Arena completed the standard Form SF-86 to obtain a federal security clearance for his employment. On that form, he was required to disclose whether he had ever been a member of an organization that used (or advocated the use of) force or violence to prevent others from exercising their constitutional rights. He falsely answered that he had not. In fact, Arena was an avowed member of Vanguard America, a white supremacist group that fits that description. On the same application, Arena was asked whether he had property repossessed within the past seven years. He falsely answered that he had not. In fact, Arena had previously defaulted on a car loan, and his car was repossessed within the seven year window.

“Lying on federal security clearance forms and to government agents will land you in big trouble,” said U.S. Attorney McSwain. “And the nature of Arena’s deception – attempting to conceal his affiliation with a white supremacist group in order to obtain employment with a federal contractor – is extremely disturbing. Furthermore, no employee working for the federal government in any capacity has any business being a member of a white supremacist group or espousing white supremacist views. Employees paid with American taxpayer dollars are held to the highest standards so as to ensure their commitment to serve the public in a fair, lawful manner.”

“Joining a group that espouses extremist ideology is not itself illegal — but lying to the FBI certainly is,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “Arena lied about his history to obtain a security clearance he never should’ve had. He then lied to the federal agents who questioned him about it. If the people we interview think they can deceive us without consequence, vital investigations will be stymied and our justice system sorely compromised.”

The case was investigated by the Federal Bureau of Investigation – Joint Terrorism Task Force, the Defense Counterintelligence and Security Agency, the Gloucester County Prosecutor’s Office, the Salem County Prosecutor’s Office, the New Jersey State Police, the Camden County Police Department, the Naval Criminal Investigative Service (NCIS), and the New Jersey Office of Homeland Security and Preparedness, with assistance from the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney for the Eastern District of Pennsylvania Joseph LaBar and Assistant United States Attorney for the District of New Jersey Martha Nye.

PHILADELPHIA – United States Attorney William M. McSwain announced that Vontez Scales, 29, of Philadelphia, PA, was convicted at trial of conspiracy to distribute methamphetamine and heroin, and possession with intent to distribute heroin and fentanyl, arising from his sales and purchases of large quantities of drugs to and from co-conspirators.

Scales was a member of a large drug trafficking group, known as the ”Skipworth” drug trafficking organization, that operated for months in 2018 and distributed millions of dollars worth of crystal methamphetamine, heroin, fentanyl and cocaine in Philadelphia, Bucks County, Berks County and Delaware County. Scales’ co-conspirators, Damir Skipworth, a/k/a “Meech” (who was the ring leader), Jarrett Cobb, a/k/a “Chi,” Tyrone Smith, a/k/a “Ho,” Rahim Amin, a/k/a “Skinny Rah,” John Richard Thornton, Scott Martin, and Natasha Powell all previously pleaded guilty to federal drug trafficking charges in this case and face significant prison terms.

Scales bought crystal methamphetamine in pound quantities from a co-conspirator, with the intention to sell it, and in turn sold large quantities of heroin laced with fentanyl back to the co-conspirator to distribute to other members of the group. Scales used the cash proceeds from his drug dealings largely for car rentals, hotels and luxury clothing, including purchases at Saks Fifth Avenue alone of over $28,000. Scales was previously convicted twice of drug trafficking, each of which resulted in lengthy prison terms.

“Scales and other members of this drug trafficking organization pumped huge quantities of poison into Philadelphia and the surrounding suburbs,” said U.S. Attorney McSwain. “Drug trafficking is an inherently dangerous business and those engaged in it ultimately deliver destruction to our communities. Our Office is determined to protect the communities impacted by drug trafficking by investigating and convicting criminals like Scales and putting them behind bars.”

“Scales, who has two prior convictions for drug offenses, was found guilty of distributing substantial quantities of dangerous illegal street drugs such as methamphetamine, heroin, and fentanyl,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “Even after serving lengthy prison terms for his prior convictions, Scales’ greed led to his continued drug trafficking activities and utter disregard for the law and the communities affected by him. Scales now faces a lengthy prison sentence for his drug trafficking.”

“Drugs don’t stop at county borders. This makes collaborative efforts like this one essential,” said Bucks County District Attorney Matthew Weintraub. “We in law enforcement are fortunate to have excellent federal, state, county and local partners in our fight to bring drug dealers to justice. This conviction was the culmination of teamwork at its finest.”

“The investigation, arrest, and successful prosecution of Vontez Scales provides another example of the value of consistent collaboration between law enforcement partner agencies,” said Acting Philadelphia Police Commissioner Christine Coulter. “We anticipate that the conviction and attendant sentencing of Vontez Scales will have an appreciable impact on the quality of life in the neighborhoods in which the recidivist offender operated.”

The case was investigated by the Drug Enforcement Administration, Bucks County Detectives Bureau and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorneys Christopher Parisi and Andrea Foulkes.

PHILADELPHIA – United States Attorney William M. McSwain and the Department of Justice announced that Rising Pharmaceuticals Inc. (Rising), a generic pharmaceutical company headquartered in New Jersey, was criminally charged for conspiring to fix prices and allocate customers for a generic hypertension drug, and in a related enforcement action, reached a civil settlement for violations of the False Claims Act, subject to bankruptcy court approval.

According to a one-count felony charge filed today in the United States District Court for the Eastern District of Pennsylvania, from about April 2014 until at least September 2015, Rising participated in a criminal antitrust conspiracy with a competing manufacturer of generic drugs and its executives to fix prices and allocate customers for Benazepril HCTZ, a medicine used to treat hypertension. This charge is the fourth in the Department of Justice’s Antitrust Division’s ongoing criminal investigation into the generic pharmaceuticals industry; previously, two executives were charged and pleaded guilty to criminal antitrust violations, and a corporation, Heritage Pharmaceuticals Inc., was charged and entered into a deferred prosecution agreement with the Antitrust Division in May 2019.

U.S. Attorney McSwain and the Antitrust Division also announced a deferred prosecution agreement resolving the charge against Rising, under which the company admits that it conspired to fix prices and allocate customers for Benazepril HCTZ. Under the deferred prosecution agreement, Rising agrees that $1,543,207 is the appropriate amount of restitution it owes to victims of the Benazepril HCTZ conspiracy. To account for Rising’s separate agreement with the Department of Justice’s Civil Division, which requires Rising to pay approximately $1.1 million in civil damages for False Claims Act violations predicated on Rising’s antitrust conduct, the deferred prosecution agreement calls for an offset of Rising’s restitution, to $438,066. The deferred prosecution agreement also requires Rising to pay a $1.5 million criminal penalty, reduced from the fine of approximately $3.6 million called for under the U.S. Sentencing Guidelines, as a result of Rising’s inability to pay a larger fine without impeding its ability to pay restitution and in light of its ongoing bankruptcy proceedings that will result in liquidation. Both the deferred prosecution agreement and civil settlement agreement are pending approval in the bankruptcy court. Once approved, the deferred prosecution agreement will be filed in district court.

In addition, under the deferred prosecution agreement, Rising has agreed to cooperate fully with the Antitrust Division’s ongoing criminal investigation. To allow Rising to comply with the agreement’s terms, the United States will defer prosecuting Rising for three years, or until its ongoing bankruptcy proceedings become final, whichever comes first. The agreement will not be final until accepted by the court.

The Antitrust Division entered into this deferred prosecution agreement with Rising based on the individual facts and circumstances of this case. Among those facts and circumstances, the agreement specifically identifies the company’s substantial and ongoing cooperation with the investigation to date, including its disclosure of information regarding criminal antitrust violations involving drugs other than those identified in the criminal charge and the agreement. According to the agreement, this cooperation has allowed the United States to advance its investigation into criminal antitrust conspiracies among other manufacturers of generic pharmaceuticals. Other facts and circumstances identified in the agreement include Rising’s agreement to pay restitution, and the fact that a conviction (including a guilty plea) would result in substantial delay to Rising’s ongoing bankruptcy proceeding and liquidation. The agreement ensures that Rising is held accountable for its criminal conduct and preserves the United States’ ability to prosecute the company should material breaches occur.

In the separate civil resolution, Rising has agreed to pay $1.1 million to resolve allegations under the False Claims Act related to the price-fixing conspiracy, subject to bankruptcy court approval. The government alleged that between 2013 and 2016, Rising paid and received remuneration through arrangements on price, supply, and allocation of customers with another pharmaceutical manufacturer for certain generic drugs in violation of the Anti-Kickback Statute, and that its sale of these drugs resulted in claims submitted to the Medicare and Medicaid programs.

“My Office is proud to announce our next round of enforcement actions in this criminal and civil investigation with the Antitrust Division and the Civil Division,” said U.S. Attorney McSwain. “We and our partners at the Antitrust and Civil Divisions remain heavily focused on price-fixing and market allocation in generic drugs and addressing the impact on federal healthcare programs like Medicare and Medicaid. These criminal and civil resolutions with Rising, if approved by the bankruptcy court, are yet another important accomplishment in that area.”

“Hypertension medicines are vital for patient health, and engaging in schemes to price fix these generic medicines is illegal and could potentially be dangerous, as some patients may have an inability to pay for the medicines they need,” said Maureen R. Dixon, Special Agent in Charge of the Philadelphia Regional Office of the Inspector General, Department of Health and Human Services. “HHS-OIG will continue to work with our law enforcement partners to investigate allegations of companies engaging in actions that put the public and the Medicare program at risk.”

“Today’s charge, like the previous corporate and individual charges announced in this investigation, publicly affirms the Antitrust Division’s steadfast commitment to prosecuting the companies and executives who fixed prices of generic pharmaceuticals,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “Rising and its co-conspirators exploited patients that rely on Benazepril HCTZ as a low-cost alternative to brand-name medications to treat high blood pressure. The deferred prosecution agreement is an important step in restoring integrity to the generics industry. It will require from Rising not only an admission of guilt, a criminal penalty and cooperation in the ongoing investigation, but also restitution to the direct purchasers that bought Benazepril HCTZ at artificially inflated prices.”

“The U.S. Postal Service Office of Inspector General appreciates the opportunity to assist in these critical generics industry antitrust investigations,” said Special Agent in Charge Scott Pierce. “Aggressively pursuing those companies and executives who foster behavior related to price fixing, bid rigging and market allocation helps to ensure an open process by which generic pharmaceuticals can be competitively priced and sold. Working closely with the Department of Justice and our counterparts at the Federal Bureau of Investigation, the U.S. Postal Service Office of Inspector General stands ready to support these vital efforts going forward.”

“The FBI is proud to join our partners in this effort to uncover companies and individuals who attempt to exploit necessary medicines to cheat the economic system and illegally amass wealth,” said Timothy R. Slater, Assistant Director in Charge of the FBI’s Washington Field Office. “Today’s announcement shows the FBI’s level of commitment to investigating allegations of antitrust violations and illuminating criminal behavior so that the perpetrators can be held accountable.”

The criminal charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the generic pharmaceutical industry, which is being conducted by the Antitrust Division with the assistance of the United States Postal Service Office of Inspector General, the FBI’s Washington Field Office and the U.S. Attorney’s Office for the Eastern District of Pennsylvania. Anyone with information on market allocation, price fixing, bid rigging and other anticompetitive conduct related to the generic pharmaceutical industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.

The civil settlement was handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Eastern District of Pennsylvania with support from the Department of Health and Human Services Office of the Inspector General. Except for those facts admitted to in the deferred prosecution agreement, the claims resolved by the civil settlement are allegations only, and there has been no determination of liability.

PHILADELPHIA – United States Attorney William M. McSwain announced that Yahaira Diaz, 33, of Pottsville, PA was sentenced to 65 months’ imprisonment and ordered to pay more than $165,000 in restitution by United States District Judge Jeffrey Schmehl for her leadership of an elder fraud scheme commonly known as the “Grandparents Scheme.” The defendant was immediately taken into custody after the hearing today.

The scheme operated as follows: an individual called an elderly victim posing as the grandchild of the victim, or posing as an attorney representing the grandchild. The caller claimed that the grandchild was in a vehicular accident and was arrested for driving under the influence (or some type of legal trouble). The caller then said that the grandchild needed money for bail or legal representation, and persuaded the victim to send thousands of dollars in cash via overnight delivery service to an address where the schemers retrieved the package. The schemers then continued to call the victim and demanded more money until the victim realized that he or she had been defrauded and stopped sending money.

Diaz played a leadership role in this scheme, which was based in Allentown and Bethlehem, Pennsylvania. For example, she identified and arranged for access to residential locations where her co-schemers instructed victims to send the fraud proceeds. Diaz recruited and controlled additional participants in the scheme who allowed her to use their residences for the receipt of proceeds, and who helped retrieve the packages and shared the proceeds with other co-schemers. Diaz engaged in numerous incidents of the Grandparents Scheme, as well as credit card fraud. In the Grandparents Scheme, Diaz and her co-schemers defrauded at least 10 elderly victims of at least $158,800 and attempted to defraud those victims of at least an additional $69,000.

“Diaz’s actions here were despicable: she callously preyed upon vulnerable seniors by exploiting their concern for their loved ones. And she played a leadership role, which makes her actions even more deserving of condemnation,” said U.S. Attorney McSwain. “Today, Diaz got what she deserved. My Office will continue to prioritize prosecuting criminals who prey upon our elderly residents.”

“Yahaira Diaz played a central role in this scam,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “She had no compunction about swindling elderly victims out of their money, or playing on their emotions to do so. The FBI will never stop working to shut down elder fraud schemes like this, to protect older folks from those who would take advantage of them.”

The case was investigated by the Federal Bureau of Investigation, the United States Postal Service, the Bethlehem Police Department, and the Northampton County District Attorney’s Office, and is being prosecuted by Deputy United States Attorney Louis D. Lappen.

The Department of Justice is committed to combating elder fraud. The Department’s historic 2018 and 2019 Elder Fraud Sweeps collectively brought criminal and civil actions against more than 500 defendants responsible for defrauding more than $1.5 billion from at least 3 million victims.

PHILADELPHIA – United States Attorney William M. McSwain announced that Anmol Singh Kamra, 27, of Upper Darby, PA was convicted today at trial with conspiracy to distribute oxycodone outside the usual course of professional practice and with no legitimate medical purpose. 

Kamra, a pharmacy technician at Campus Pharmacy in West Philadelphia, conspired with George Fisher, a physician, and Frank Brown, both charged separately, to illegally distribute thousands of oxycodone pills to people suffering from addiction.  From about December 2012 through about March 2016, Kamra, Fisher, and Brown orchestrated and executed a scheme to turn the pharmacy into a “pill mill” in which Kamra knowingly filled fake oxycodone prescriptions written by Fisher in sham “patient” names, and gave the oxycodone pills to Brown to sell in street level drug deals. 

At times, Kamra would sell drugs without a prescription and then request that Fisher backdate a fake prescription in an attempt to cover the tracks.  At trial, Kamra testified that this backdating of prescriptions was a mere “courtesy” on behalf of the doctor so patients could receive their prescriptions in a timely manner, but undercover video evidence showed otherwise.  This small pharmacy in West Philadelphia sold so many opioids that some were hidden some under the sink for fear that their distributor would notice the over-abundance and cut them off for exceeding the allowable limit.

“Kamra was operating nothing more than a corrupt pill mill,” said U.S. Attorney McSwain. “The misuse of opioids is killing our citizens, and this defendant significantly contributed to our region’s crippling opioid epidemic.  We have to do everything possible to stop the illegal distribution of these deadly drugs, especially by professionals entrusted to prescribe and monitor their use.”

“Kamra diverted thousands of oxycodone pills to the street, taking advantage of those struggling with addiction amid our area’s devastating opioid crisis,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “Yet another medical professional, looking to profit from someone else’s misery. The FBI will never stop working to put pill mills out of business, and the people who run them behind bars.”

The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorneys Mary Kay Costello and Amanda Reinitz. 

PHILADELPHIA – United States Attorney William M. McSwain announced that Charles Salley, a/k/a “Dark Lo,” a/k/a “Ron Harvey,” 37, of Clayton, Delaware, was charged by Indictment with witness tampering.

The Indictment alleges that on November 6, 2019, during the trial United States vs. Abdul West, et al. involving members of a violent drug trafficking organization known as “Original Block Hustlaz” (or OBH), a cooperating witness received a threatening letter from Salley under the pen name “Ron Harvey,” a pseudonym Salley has used in various rap songs. The Indictment further alleges that Salley, who also goes by the stage name “Dark Lo,” threatened physical violence against the cooperating witness and others if the witness testified at trial against Salley’s OBH associates.

On November 13, 2019, United States Magistrate Judge Lynne A. Sitarski ordered Salley detained in federal custody pending trial in this matter.

“Witness intimidation has no place in the criminal justice system and will be dealt with swiftly and harshly,” said U.S. Attorney McSwain. “This is not a game. If you attempt to intimidate a federal witness, you can stand by for the consequences.”

If convicted, the defendant faces a maximum possible sentence of 20 years’ imprisonment and a fine.

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

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

PHILADELPHIA – United States Attorney William M. McSwain announced that Richard Meleski, 58, of Chalfont, PA, was arrested and charged by Indictment with healthcare fraud, mail fraud, Stolen Valor, creating fraudulent military discharge papers, and making false statements stemming from his scheme to defraud the Veterans’ Administration (VA) of hundreds of thousands of dollars in benefits.

The Indictment alleges that the defendant faked serving in the U.S. military, specifically the Navy SEALs, and even falsely represented that he had been a Prisoner of War, in order to secure healthcare benefits from the VA worth over $300,000. Due to these false representations, Meleski received healthcare from the VA in Priority Group 3, effectively receiving healthcare before deserving military service members. In reality, the defendant never served a single day in the U.S. military.

Meleski also allegedly filed for monetary compensation from the VA for Post-Traumatic Stress Disorder (PTSD) he claimed to have suffered as a result of an armed conflict in Beirut in which he had supposedly rescued injured teammates. In his application for disability benefits for PTSD, Meleski also falsely represented that he had been awarded the Silver Star for his heroic actions during his supposed time as a Navy SEAL. He also allegedly submitted another application to the VA for monetary compensation in which he used the obituaries of actual Navy SEALs, claiming that he had served alongside them.

Finally, Meleski also allegedly filed for disability benefits from the Social Security Administration (SSA) for injuries that were supposedly aggravated by his service in the U.S. military. He falsely testified under oath about these injuries in connection with a SSA Disability proceeding.

“These allegations are truly shocking and a huge insult to anybody who has worn our country’s uniform. If proven, Meleski deserves to face the consequences under the law. My Office will aggressively root out and prosecute this type of conduct with the seriousness of purpose that it deserves,” said U.S. Attorney McSwain.

If convicted, the defendant faces a maximum possible sentence of 68 years imprisonment, 3 years supervised release, a $2,250,000 fine, a $900 special assessment, and restitution of $302,121.21.

The case was investigated by Department of Veterans Affairs-Office of the Inspector General and Social Security Administration-Office of the Inspector General, and is being prosecuted by Special Assistant United States Attorney Megan Curran.

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

PHILADELPHIA – United States Attorney William M. McSwain announced that Yasheam Washington, 31, of Philadelphia, PA was convicted today at trial for being a felon in possession of a firearm.

The evidence at trial showed that in November 2018, while police were patrolling the 1300 block of Chew Avenue in Philadelphia, they observed the defendant sleeping behind the wheel of a running car that was illegally parked. The officers became increasingly concerned for the defendant’s safety and pulled him out of the car, at which point they observed a firearm right underneath him, which they soon learned was loaded with live ammunition. As a previously convicted felon, Washington was prohibited from possessing a firearm.

“This is the second trial conviction secured by my Office this week of a felon illegally possessing a firearm in Philadelphia,” said U.S. Attorney McSwain. “As I have said many times, firearms in the hands of convicted felons undeniably pose a serious threat to public safety. Unlike the District Attorney, my Office and I treat illegal gun possession cases like the serious crimes that they are. That is what is needed in order to combat the City’s epidemic of homicides and shootings. The District Attorney is enabling this epidemic in many ways, not the least of which by routing illegal gun possession cases into diversionary programs designed for low-level, non-violent offenders -- not dangerous criminals and potential murderers.”

“ATF’s top priority is combating violent crime; one of the ways we accomplish that mission is by keeping firearms out of the hands of violent offenders,” said Donald Robinson, Special Agent in Charge, ATF Philadelphia Field Division. “This conviction is a perfect example of the collaborative effort between ATF and our partners at the Philadelphia Police Department and the United States Attorney’s Office in targeting violent offenders and protecting our communities.”

“The arrest and successful prosecution of Yasheam Washington, a recidivist offender, evidences the value of sustained collaboration between law enforcement partner agencies,” said Acting Philadelphia Police Commissioner Christine Coulter. “We anticipate that his conviction and attendant sentence will have an appreciable impact on the safety of the community we serve.”

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, with substantial assistance from the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorneys Erica Kivitz, Eric Henson, and Daniel Velez.

PHILADELPHIA – United States Attorney William M. McSwain announced that Alan Eder Torres-Gomez, 30, was charged today by Indictment with illegal reentry after deportation.

As has been previously reported publicly, Torres-Gomez was charged with state offenses in Philadelphia on September 14, 2018, and on that same day, he was charged federally by criminal complaint with illegal reentry after deportation. A United States Magistrate Judge then issued a federal warrant for his arrest. That federal arrest warrant was lodged at the Curran-Fromhold Correctional Facility in Philadelphia where Torres-Gomez was being held on his state charges. His state charges were dismissed on November 26, 2018, but Torres-Gomez did not appear on his federal charges because the City of Philadelphia released him from custody on November 28, 2018 without first notifying Immigration and Customs Enforcement (ICE) or the United States Marshals Service, despite the existence of the federal warrant.

As a result, Torres-Gomez has been on the loose for months, but he is now thankfully back in federal custody, no longer able to pose a threat to the community. And now he will have to answer the federal charges of illegal reentry after deportation.

The Indictment alleges that Torres-Gomez, an alien, and native and citizen of Mexico, was previously deported from the United States on or about August 11, 2009 and December 12, 2016. Following the latest of his deportations, Torres-Gomez allegedly reentered the United States illegally. If convicted of this current illegal reentry offense, the defendant faces a maximum possible sentence of 2 years’ imprisonment.

“Philadelphia’s sanctuary city policy politicizes law enforcement by playing favorites in which one group of people (illegal aliens) is singled out as not having to follow the law. This creates a double-standard that is un-American, morally wrong and makes a mockery of the rule of law," said U.S. Attorney McSwain. "It also threatens public safety when, as here, the City ignores lawful federal arrest warrants and detainers. Nobody who cares about equal treatment under the law – or about public safety – can support the City’s policy. We at the U.S. Attorney’s Office will continue to enforce the rule of law in a neutral, non-partisan manner, rather than playing favorites.”

The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Timothy M. Stengel

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

PHILADELPHIA – United States Attorney William M. McSwain announced that Gaafar Muhammed Ebrahim Al-Wazer, 25, of Altoona, PA, was ordered detained in federal custody on three counts of making false statements to Task Force Officers with the Federal Bureau of Investigation’s Philadelphia Joint Terrorism Task Force. 

According to the Criminal Complaint filed against the defendant and the government’s motion to detain him, 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 fought in an ongoing civil war there for years.  Al-Wazer 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 Complaint alleges 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, and in which Al-Wazer was armed with automatic weapons (including a rocket-propelled grenade launcher).  Al-Wazer’s Facebook account 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. 

FBI agents arrested Al-Wazer at his home in Altoona on November 7, 2019.  In federal court today, United States Magistrate Judge Marilyn Heffley found that the defendant posed a risk of flight and/or a danger to the community and therefore ordered him detained. 

“The defendant was admitted to this country on a student visa and has availed himself of the generosity and the educational opportunities that the United States offers to students from all across the world,” said U.S. Attorney McSwain.  “Al-Wazer is, of course, entitled to hold and lawfully express his political and religious opinions as freely as anyone else in this country, no matter how hateful or odious they may be.  What he is not entitled to do, however, is lie about those beliefs when asked about them by counter-terrorism officers in the course of discharging their duties.  I want to thank our partners in the FBI’s Joint Terrorism Task Force for their continued vigilance.” 

“Al-Wazer blatantly lied to federal agents and these charges are the consequence of his actions,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “If people we speak to think there is no downside to deceiving FBI agents, critical lines of investigation will be compromised and our very justice system stalled. Our Joint Terrorism Task Force can't afford to be deterred in this way.”

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.

PHILADELPHIA – United States Attorney William M. McSwain announced that Christopher Hogg, 61, of Bryn Mawr, PA, and Rennie Rodriguez, 52, of Broomall, PA were arrested and charged by complaint with conspiracy to commit wire fraud in a multi-million dollar insurance premium financing fraud scheme.  Hogg was arrested in New York City on Tuesday and had his initial appearance before a United States Magistrate Judge yesterday in the Eastern District of Pennsylvania.  Rodriguez was arrested earlier this week at his office in Broomall and had his initial appearance on Tuesday in the Eastern District of Pennsylvania.

The complaint alleges that Rodriguez, a licensed insurance broker, and Hogg, a businessman, conducted a scheme involving the issuance of fraudulent insurance premium finance loans, which were originated by an insurance premium finance company and funded by banks.  They conducted this scheme with the assistance of a third person who was an employee of the insurance premium finance company.  Between at least November 2016 and January 2018, the employee approved approximately 37 premium finance loans, or loan supplements, originated by insurance agencies controlled by Rodriguez, purportedly to purchase policies to insure entities owned or controlled by Hogg and/or Rodriguez, or in a few instances controlled by other individuals.  These loans were purportedly for the purpose of financing insurance premiums.  However, as Hogg, Rodriguez, and the employee knew, there were no underlying insurance policies, and Hogg and Rodriguez used the proceeds for other purposes.  The loans totaled approximately $21,357,645.

Instead of paying insurance premiums (because there were no actual insurance policies), Rodriguez kept some of the proceeds for himself and distributed most of the other proceeds to bank accounts controlled by Hogg, or in a few instances to other individuals/entities.  Rodriguez and Hogg used some of the proceeds from newer loans to make loan payments to the premium finance company or to the banks on older loans.  Had loan payments not been made on at least some loans, the premium finance company and the banks likely would have become suspicious.  Additionally, between approximately October 2016 and December 2017, Hogg made approximately 40 kickback payments, totaling $873,118, to the finance company employee who had approved the fraudulent loans.  The employee has admitted to law enforcement that these payments were made to him because he approved the bogus loans.

“Licensed insurance brokers are supposed to act like trusted professionals, not crooks,” said U.S. Attorney McSwain. “The allegations here are particularly disturbing because of the lengths these two defendants allegedly went to in order to perpetuate their fraud and the huge amount of money they were able to steal through this scheme.”

“The ability of IRS Special Agents to follow the money trail is essential for conducting not only tax investigations, but also for proving cases like this”, said Guy Ficco, Special Agent in Charge of IRS-Criminal Investigation.  “Those who conduct this type of fraud should know that they will be held accountable by IRS-CI and our law enforcement partners, and they will have to face the consequences of their actions.”    

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

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

PHILADELPHIA – United States Attorney William M. McSwain announced today that Juan Jarmon, 32, of Philadelphia, Pennsylvania, was sentenced to thirty years’ imprisonment and six years’ supervised release by United States District Judge Paul S. Diamond for crimes committed while he was the leader of a violent drug trafficking group operating out of the Norman Blumberg Apartments public housing facility in North Philadelphia.

Following a jury trial in March 2019, the defendant was convicted on 23 counts, including conspiracy to distribute 280 grams or more of crack cocaine and distribution of crack cocaine within 1,000 feet of public housing (a drug-free zone). Jarmon controlled drug sales in various areas of the Blumberg Apartments in 2013 and 2014. Throughout the period that the drug trafficking conspiracy operated, Jarmon and other members of his gang were responsible for distributing thousands of grams of crack cocaine throughout this community.

Jarmon’s group obtained bulk crack and cocaine; cooked and packaged crack cocaine into bundles; hired, fired, and supervised shift sellers and lookouts; levied taxes on members and customers; and provided protection from other drug trafficking groups. The shift sellers were the daily workers employed by the leaders to sell crack cocaine in the locations controlled by the group, while the lookouts assisted other members of the group by alerting them to the presence of law enforcement and directing customers to the shift sellers. In order to ensure around-the-clock sales of crack cocaine, Jarmon threatened rivals who disrupted his drug trafficking business, and physically assaulted shift sellers. In one instance, the defendant violently attacked a female drug dealer in order to obtain drug proceeds, cracking her head against a table, requiring hospitalization.

“To anyone engaged in drug trafficking and violence, I say this: find another line of work. Because if you don’t, you will face federal prosecution and considerable jail time for your efforts,” said U.S. Attorney McSwain.  “Here, Jarmon and his co-defendants used firearms, robbed rival drug dealers, and used intimidation, threats, and violence to further their ‘business’ of moving poison on our streets. Philadelphia residents can rest easier knowing that Jarmon is behind bars and his drug gang has been destroyed.”

“We are privileged to have collaborated with our law enforcement partners in the investigation, arrest, and successful prosecution of Juan Jarmon,” said Acting Philadelphia Police Commissioner Christine Coulter. “With his conviction and attendant sentencing, this violent recidivist offender will be unable to continue inflicting harm upon the residents of the Blumberg Apartments and the surrounding community.”

“Jarmon coordinated a vast network of drug dealers selling crack cocaine 24 hours a day in the former Norman Blumberg Apartment Complex.  Jarmon was responsible for the distribution of thousands of grams of crack cocaine throughout his community, and used violence and intimidation to further his drug trafficking activities,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “For the drug-traffickers like Jarmon that prey on the most vulnerable members of our society, the federal criminal penalties are severe.” 

“For years, Juan Jarmon and his drug crew used intimidation and violence to maintain control of the Blumberg Apartments complex and surrounding area,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “The FBI and our law enforcement partners are determined to help free our communities from the stranglehold of narcotics traffickers. The city of Philadelphia is safer with Jarmon behind bars.”

This case was investigated by the United States Attorney’s Office, Federal Bureau of Investigation, and Drug Enforcement Administration in collaboration with the Philadelphia Police Department and Philadelphia District Attorney’s Office.  It is being prosecuted by Assistant United States Attorneys Jerome Maiatico and Yvonne Osirim.

PHILADELPHIA – U.S. Attorney William M. McSwain announced today that Timothy O’Connell, 52, of Drexel Hill, PA was sentenced to 78 months’ incarceration, 10 years’ supervised release, a $5,000 fine, and a $5,000 special assessment by United States District Judge Gerald J. Pappert after pleading guilty to one count of receipt of child pornography in June 2019.

In February 2018, the defendant received images depicting the sexual abuse and exploitation of pre-pubescent children. The victims depicted in the child pornography included a one-year-old child who had previously been identified by the Federal Bureau of Investigation in another child abuse investigation. At the time he committed the crime, the defendant was employed as Associate Director of Campus Ministry at Villanova University.

“Child pornography offenses are always abhorrent,” said U.S. Attorney McSwain. “But this case is particularly disturbing due to the defendant’s history as a spiritual leader at one of our region’s most respected institutions of higher education. To Villanova’s credit, they cooperated with our investigation and helped us to resolve this matter. Most importantly, we stand ready with our federal and local partners to identify and prosecute anyone who would prey upon minor children -- no matter their position in the community.”

“Those who seek out child pornography help drive a demand for such depraved images, leading to more young children being sexually exploited,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “The men and women of the FBI who investigate these disturbing cases are determined to bring to justice those involved with child pornography and protect innocent children from sexual victimization.”

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

The case was investigated by the Federal Bureau of Investigation and the Villanova University Department of Public Safety, and is being prosecuted by Assistant United States Attorney Priya T. De Souza.