Eastern District of Pennsylvania
Press releases recorded for this federal judicial district.
Honduran Citizen Known as "Rittenhouse Rapist" Convicted of Federal Immigration CrimeRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Milton Mateo Garcia-Vasquez, 32, of Philadelphia, Pennsylvania and a citizen of Honduras, entered a plea of guilty before United States District Judge Paul S. Diamond on the charge of unlawfully re-entering the United States after being deported.
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 commit burglary, kidnapping and rape in Philadelphia. The defendant was arrested on June 23, 2014 by Philadelphia Police officers and charged with these and other crimes in connection with a rape near Rittenhouse Square. The defendant pleaded guilty to those charges in 2015 and was sentenced to a total of 22-44 years in prison.
“This case is a law-abiding citizen’s nightmare: an illegal alien who has been previously deported comes back into the country illegally and commits appalling crimes. And it is a reminder of why we are a nation of laws and why those laws – including immigration laws – should be respected and enforced. My Office will continue to enforce federal law in a neutral, non-partisan manner, which is the only way to ensure public safety. And I call on Philadelphia city officials and the District Attorney to stop treating the criminal justice system like a game in which they play political favorites. There is simply too much at stake for that sort of nonsense. The public deserves better.”
“ICE deportation officers not only identify and arrest dangerous criminals in our communities, they also remove them, thereby protecting public safety,” said Simona Flores-Lund, Field Office Director for U.S. Immigration and Customs Enforcement (ICE) Enforcement and Removal Operations (ERO) Philadelphia. “ICE continues to face significant obstacles with policies created by local officials which hinder cooperation between ICE and local law enforcement. Yet, the tireless efforts of the men and women of ICE directly contribute to making our communities safer.”
The case was investigated by Immigration and Customs Enforcement (“ICE”), and is being prosecuted by Assistant United States Attorney Mary E. Crawley.
Haverford College Student Pleads Guilty to Attempt to Access President Trump’s Tax InformationRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Justin Hiemstra, 22, from St. Paul Park, Minnesota, entered a plea of guilty before United States District Judge Cynthia M. Rufe on charges related to violations of 18 U.S.C. § 1030 for using a school computer and someone else’s username without that person’s permission in an attempt to illegally obtain President Donald Trump’s tax returns from the Internal Revenue Service.
These charges arose out of a plot between the defendant, then a student at Haverford College, and another Haverford College student, to use computers at the school’s computer lab and the Free Application for Student Aid (FAFSA) website to illegally access the tax returns. The defendant 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 defendant was prompted to answer challenge questions, which the original person had created when setting up the account. The defendant was able to answer the questions and reset the password, and then used the President’s personal identifier 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.
“No matter what you think about the President’s tax returns, clearly this kind of illegal activity cannot be tolerated or condoned. Unauthorized or false attempts to obtain any citizen’s IRS filings are a serious violation of privacy rights and a federal crime, and there’s nothing funny about it,” said U.S. Attorney McSwain. “Now this defendant is being held accountable for his actions, as he should be.”
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.
Fake Prince from Philadelphia Pleads Guilty to Child Exploitation CrimesRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that David Milliner, 50, of Philadelphia, PA entered a plea of guilty today before United States District Court Judge Petrese Tucker to four counts of online enticement of a minor, six counts of manufacturing/attempted manufacturing of child pornography, four counts of receipt of child pornography, one count of transfer of obscene material to a minor, and one count of possession of child pornography.
The charges arise out of the defendant’s sexually explicit online communications with four boys, ages 8 through 12, between September and December of 2017, during which the defendant pretended to be a prince from the royal “DeRothschild” family and enticed his victims to self-produce images of child pornography and send them to him over Instagram. At the time of the defendant’s arrest, he was in possession of images of child pornography of these victims and other children.
“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. “Child predators typically lie and manipulate children in order to get what they want, and this case is a prime example of that. We urge parents and guardians 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, the Philadelphia Police Department Special Victims Unit, and the Wayland, Michigan Police Department, and is being prosecuted by Assistant United States Attorney Kelly Harrell.
Montgomery County Doctor Charged with Illegally Prescribing OpioidsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Spiro Y. Kassis, M.D., 66, of Plymouth Township, PA, was charged by Information with 14 criminal counts of distributing dangerous and addictive opioids and other controlled substances outside the course of professional practice and without a legitimate medical purpose.
According to the Information, the defendant, who claimed to be a specialist in psychiatry and addiction medicine, operated medical offices in East Norriton Township, PA and Scranton, PA. Kassis used his offices to operate a prescription “pill mill” whereby he sold medically unnecessary prescriptions for opioids drugs such as oxycodone and burprenorphine, and other controlled substances. The defendant sold prescriptions to so-called patients for approximately $200 cash each. At the East Norriton office, Kassis saw approximately 45 “patients” per day, who lined up outside of a back room to the office. As each person filed in, Kassis collected $200 cash from the patient, counted the money, and then issued the requested prescriptions electronically to the patient’s pharmacy. Often, the defendant issued dangerous combinations of prescriptions including oxycodone, methadone, and buprenorphine, all to the same patient.
“My Office is committed to working with our law enforcement partners at all levels to find those responsible for flooding our neighborhoods with these dangerous drugs and bringing them to justice,” said U.S. Attorney McSwain. “I want to thank Montgomery County District Attorney Kevin Steele and his Office for referring this case for federal prosecution and for their cooperation as we bring drug dealers – whether they wear a lab coat or stand on a street corner – to justice.”
“The defendant, Spiro Kassis, may have had the title of doctor but he was simply a drug dealer, peddling addiction by using a prescription pad,” said Montgomery County District Attorney Kevin R. Steele. “Kassis was selling thousands of prescriptions purely to make money. Instead of being a healer and doing no harm, he was a major contributor to the opioid-heroin-fentanyl epidemic that is killing so many people in our communities.”
If convicted, the defendant faces a maximum possible sentence of 250 years in prison.
The case was investigated by the Drug Enforcement Agency; Federal Bureau of Investigation; Health and Human Services – Office of Inspector General; and Montgomery County Detective Bureau’s Narcotics Enforcement Team, and is being prosecuted by Assistant United States Attorney M. Beth Leahy, and Special Assistant United States Attorney James Price who was cross-designated by the Montgomery County District Attorney for this prosecution. The related civil actions are being handled by Assistant United States Attorney Anthony Scicchitano.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Warminster Man Sentenced to 2 ½ Years for Cyber Threats Directed at Estranged WifeRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Blair Strouse, 29, of Warminster, PA, was sentenced today to 30 months’ imprisonment by United States District Judge Petrese Tucker for charges related to cyberstalking his estranged wife.
In February 2015, the defendant began communicating online with a Brazilian citizen living in Brazil, who eventually travelled to the United States to work for a company that provided au pair services to families in the United States. When the position did not work out, the woman moved to Pennsylvania in August 2016 to be with the defendant, whom she married about one month later. Shortly thereafter, in November 2016, the defendant began mistreating the woman, and she moved out of their Warminster residence. In December 2016, the defendant began a relentless campaign to threaten and harass her and her family members who were still living in Brazil.
Over the course of several months, the defendant sent dozens of electronic communications from his home to his wife’s family members and associates – repeatedly threatening to kill and inflict serious injury upon his victims. He also offered to pay anyone willing to kill or injure his wife’s family members. Even after a judge in the Bucks County Court of Common Pleas issued a protection from abuse order against the defendant in February 2017, he continued to send harassing messages and stated that his purpose in life was to make members of his estranged wife’s family suffer.
“Threats like these made in any manner, whether via electronic communications or otherwise, are taken very seriously by my Office,” said U.S. Attorney McSwain. “It’s not an excuse to say that you were just mouthing off; if you threaten serious bodily injury or even death over the internet, that is a federal crime with consequences.”
The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Deputy United States Attorney Louis D. Lappen.
Former Sheriff of Philadelphia Sentenced to PrisonRead the Press Release
The former Sheriff of Philadelphia John Green, 72, of Philadelphia, Pennsylvania, was sentenced today to serve five years in prison followed by one year of supervised release, and ordered to forfeit $76,581 by U.S. District Judge Wendy Beetlestone of the Eastern District of Pennsylvania.
John Green was convicted of conspiring to defraud the citizens of Philadelphia of his honest services as Sheriff of Philadelphia by receiving and accepting a stream of hidden personal benefits from co-defendant James Davis in exchange for giving Davis millions of dollars of business at the Philadelphia Sheriff’s Office. From 2002 to 2011, Green accepted hidden bribes and kickbacks from his co-defendant Davis totaling over $675,000. The bribes and kickbacks that Davis gave to Green included: (1) a move-in ready home in Philadelphia for Green and his new wife in 2003, with rent-free living and then Green’s purchase of the home at a discount; (2) employment of Green’s new wife as a subcontractor when she started a new business in 2004, paying her over $89,000, and being the primary and at times sole employer of Green’s wife; (3) facilitation of over $65,000 in hidden campaign contributions to Green’s 2007 re-election campaign through others; (4) payment of over $148,000 in advertising for Green’s 2007 re-election campaign and falsely reporting the payments on the campaign finance reports; and (5) over $320,000 in payments to Green to assist him with the purchase of his retirement home in Florida in 2010. In exchange, Green gave his co-defendant Davis over $35 million of business at the Philadelphia Sheriff’s Office in the sale of homes at sheriff’s sales.
“Sheriff Green sold the business of his office for hundreds of thousands of dollars in bribes and kickbacks,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “Today’s sentence holds him accountable for his near-decade-long betrayal of the public trust.”
“Public officials hold office to serve the public good, not to line their own pockets” said U.S. Attorney William M. McSwain for the Eastern District of Pennsylvania. “When public servants abuse their authority and flout the rule of law, they disgrace themselves and the offices they hold. That is what Green did here and he is now paying the price. Every public official should be on notice after today’s sentence: federal law enforcement is watching and we will hold you accountable to the law and to the public that you are supposed to serve.”
“This type of corruption erodes the faith of citizens in the city's ability to function and causes people to question the honesty, integrity and efficiency of how the city is run,” said City of Philadelphia Inspector General Amy L. Kurland. “This case was especially significant to the city and this sentence sends a strong message that we will not tolerate employees or officials using their positions to enhance their own wealth at the taxpayers’ expense.”
Green left office at the end of 2010, over one year before the expiration of his term, after the City of Philadelphia, Office of the Controller had issued an audit report in October 2010 expressing concern about potential irregularities with respect to the funds held by the Philadelphia Sheriff’s Office relating to Sheriff’s sales. The Controller’s Office hired Deloitte Financial Advisory Services, which conducted a forensic investigation of the Sheriff’s Office. Deloitte issued a report in October 2011 that revealed the extent of the hidden business that Green had given to co-defendant Davis. Deloitte provided its findings to the government. Green pleaded guilty in April 2019.
The case was investigated by the FBI, IRS Criminal Investigation, and the City of Philadelphia Office of Inspector General. Trial Attorney Jennifer A. Clarke of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Sarah L. Grieb and Christopher Diviny of the Eastern District of Pennsylvania prosecuted the case.
Former Philadelphia Sheriff John Green Sentenced to Five Years in PrisonRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that former Philadelphia Sheriff John Green, 72, of Philadelphia, Pennsylvania, was sentenced today to sixty months’ imprisonment, one year supervised release, forfeiture of $76,581, and a $17,500 fine by United States District Court Judge Wendy Beetlestone.
Green pled guilty in April 2019 to conspiring to defraud the citizens of Philadelphia while serving as Sheriff by receiving and accepting a stream of hidden personal benefits from co-defendant James Davis, in exchange for giving Davis millions of dollars of business from the Philadelphia Sheriff’s Office.
From 2002 to 2011, Green accepted bribes and kickbacks from Davis totaling over $675,000. The bribes and kickbacks included: (1) a move-in ready home in Philadelphia for Green and his new wife in 2003; (2) employment of Green’s wife as a subcontractor when she started a business in 2004, paying her over $89,000; (3) facilitation of over $65,000 in hidden campaign contributions to Green’s 2007 re-election campaign; (4) payment of over $148,000 in advertising for Green’s 2007 re-election campaign and falsely reporting the payments on the campaign finance reports; and (5) over $320,000 in payments to Green to assist him with the purchase of his retirement home in Florida in 2010.
In exchange, Green gave his Davis over $35 million in business at the Philadelphia Sheriff’s Office through the sale of homes at Sheriff’s sales. Green left office at the end of 2010, over one year before the expiration of his term, after the City of Philadelphia, Office of the Controller, issued an audit report in October 2010 expressing concern about potential irregularities with respect to the funds from Sheriff’s sales held by the Philadelphia Sheriff’s Office. The Controller’s Office hired Deloitte Financial Advisory Services, which conducted a forensic investigation of the Sheriff’s Office. Deloitte issued a final report in October 2011 that revealed the extent of the hidden business that Green had given to Davis and provided its findings to the government.
“Public officials hold office to serve the public good, not to line their own pockets” said U.S. Attorney McSwain. “When public servants abuse their authority and flout the rule of law, they disgrace themselves and the offices they hold. That is what Green did here and he is now paying the price. Every public official should be on notice after today’s sentence: federal law enforcement is watching and we will hold you accountable to the law and to the public that you are supposed to serve.”
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the City of Philadelphia Office of Inspector General, and is being prosecuted by Assistant United States Attorneys Sarah L. Grieb and Christopher Diviny, and U.S. Department of Justice Trial Attorney Jennifer A. Clarke.
Illegal Alien from Mexico Sentenced to 1 ½ Years for Third Federal Illegal Re-Entry ConvictionRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Fernando Antonio Garcia-Bonilla, 27, of Quinlan, Texas, was sentenced to eighteen months in federal prison by United States District Court Judge Mitchell S. Goldberg. The defendant was convicted of re-entering the United States illegally after being deported on two prior occasions and after having committed three DUIs while in the country unlawfully. After he serves his sentence, the defendant will be deported to Mexico.
On August 16, 2018, the defendant, an illegal alien, native and citizen of Mexico, was charged in an indictment with one count of re-entry into the United States after previously being deported and removed from the country on or about March 2, 2017 and February 15, 2018. On March 18, 2019, the defendant pleaded guilty to the indictment.
While illegally present in the United States, the defendant was convicted of driving while intoxicated by three different Texas courts, the last of which sentenced him to serve ten years in prison, all but two of which were suspended. Additionally, this federal conviction is the defendant’s third conviction for violating this nation’s immigration laws, as he was previously federally convicted of illegal entry into the United States on February 17, 2017, in the District of New Mexico, and then convicted of illegal re-entry into the United States on August 11, 2017 in the same district. He was sentenced to serve ten months’ imprisonment following his most recent federal conviction.
“The defendant in this case has no respect for the laws of this country, be they state or federal,” said U.S. Attorney McSwain. “After being removed on two prior occasions, Garcia-Bonilla decided yet again to scorn our immigration system by entering the United States illegally, even after serving state and federal time for his crimes. He is clearly a danger to the public and does not deserve the privilege of being in our country.”
“Mr. Garcia-Bonilla’s sentencing sends a clear message that criminal aliens who illegally re-enter the United States will face criminal prosecution for flagrantly disregarding our laws,” said Simona L. Flores-Lund, Field Office Director for U.S. Immigration and Customs Enforcement (ICE) - Enforcement and Removal Operations (ERO) Philadelphia. “It should also serve as a warning to others contemplating re-entering this country illegally that ERO officers will seek to affect their removal and preserve the integrity of our immigration laws.”
The case was investigated by ICE-ERO and the Department of Homeland Security - Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Nelson S.T. Thayer, Jr.
Delaware County Man Pleads Guilty on the Eve of Trial to Violent 2018 CarjackingRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that John Leroy Gordon, 27, of Chester, Pennsylvania, entered a plea of guilty to carjacking before the Honorable Gerald J. Pappert yesterday, just before trial was set to commence.
The charge arose from the defendant’s June 26, 2018 armed carjacking of a Chester woman in front of her home. During the incident, the defendant robbed the victim of her car, which he then drove directly to Interstate 95, where he crashed it several minutes later. The defendant then fled on foot. The defendant’s flight was thwarted when he was swiftly apprehended approximately 15 minutes after crashing the stolen car, less than a half mile from the crash site, by officers from the Chester Police Department and the Pennsylvania State Police – Media Barracks.
“The defendant’s actions here both terrorized the victim and jeopardized the safety of other innocent drivers. A conviction in a high-profile, violent crime case such as this one serves justice and also brings relief to the entire community,” said U.S. Attorney McSwain. “I want to thank our investigating partners at the federal and local level who did such tremendous work bringing this defendant into custody.”
“Carjackings are terrifying for their victims, particularly when, as in this case, the perpetrator is armed,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “Each and every day, the FBI and our law enforcement partners are working together to get violent criminals off the street and make our community safer all around.”
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, Chester Police Department, and Pennsylvania State Police, and is being prosecuted by Assistant United States Attorney Sarah Damiani.
Eagleville Hospital Pays $2.85 Million to Resolve Allegations of Improper Billing for Detox TreatmentRead the Press Release
PHILADELPHIA – United States Attorney William McSwain announced today that Eagleville Hospital, which provides substance use disorder treatment in Eagleville, Pennsylvania, has agreed to pay $2.85 million to the federal government to resolve allegations that the hospital violated the False Claims Act by submitting claims to Medicare, Medicaid, and the Federal Employees Health Benefits Program (“FEHBP”) for hospital-level detoxification treatment services when the patients were ineligible for admission to receive such services or lacked documentation to support the claims.
The settlement resolves allegations in a complaint filed in federal court in the Eastern District of Pennsylvania by a whistleblower under the qui tam provisions of the False Claims Act. These provisions allow private citizens to bring civil actions on behalf of the United States and share in any recovery. The whistleblower here will receive over $500,000 of the recovery. He was represented by David Caputo of Youman & Caputo and Joseph Trautwein of Joseph Trautwein & Associates.
Contemporaneous with the civil settlement, Eagleville Hospital also entered into a five-year Corporate Integrity Agreement (“CIA”) with the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), which requires, among other things, the implementation of a risk assessment and internal review process designed to identify and address evolving compliance risks on an ongoing basis. The CIA requires training, auditing, and monitoring designed to address the conduct at issue in the case.
In his qui tam complaint, the whistleblower alleged that Eagleville Hospital admitted certain groups of its substance use disorder treatment patients for the higher-reimbursing hospital-level detoxification treatment, rather than the residential-level treatment, without satisfying the medical necessity requirements to do so. The whistleblower alleged that this practice resulted in false claims to Medicare, Medicaid, and FEHBP. This settlement agreement resolves the allegations for claims from January 2011 through December 2018.
“As our country and communities struggle with the burdens of opioid use disorder, it is critical that we protect federal healthcare programs serving individuals with those disorders and ensure that detoxification treatment providers like Eagleville Hospital are appropriately billing for the necessary services provided to their patients,” said First Assistant U.S. Attorney Jennifer Arbittier Williams. “We appreciate Eagleville Hospital’s willingness to negotiate a prompt resolution in this matter, including entering a Corporate Integrity Agreement to address compliance going forward. We also thank the whistleblower for bringing this matter to our attention. Together with his lawyers, this whistleblower allowed us to pursue this investigation and preserve the integrity of federal healthcare and opioid use disorder treatment programs.”
“We thank the whistleblower for bringing this conduct to our attention and also thank Eagleville Hospital for their assistance in resolving the matter,” said Maureen R. Dixon, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We encourage individuals and companies to work together with HHS-OIG and the U.S. Attorney’s to ensure federally funded healthcare resources are used appropriately.”
There has been no determination of civil liability. The settled civil claims are allegations only.
This case was handled by Assistant United States Attorney Anthony D. Scicchitano with investigative assistance from auditor Dawn Wiggins, HHS-OIG, and the Office of Personnel Management Office of Inspector General.
Philadelphia-Based Pharmacy Owners Agree to Pay $400,000 to Resolve False Claims Act LiabilityRead the Press Release
PHILADELPHIA, PA – United States Attorney William McSwain announced that the owners of E-Z Pharmacy II in Philadelphia have agreed to pay $400,000 to resolve liability under the False Claims Act.
Darshan Bapa Inc., doing business as E-Z Pharmacy II, and Natverbhai Patel will together pay $400,000 to the federal government to resolve allegations that they violated the False Claims Act by billing Medicare for prescription medications that were not actually dispensed during the period November 9, 2013 to December 31, 2016. These medications include Apidra, SoloSTAR, Renvela, Lantus, Revatio, Xifaxan, and Enbrel.
“Medicare fraud is a priority for our Office,” said First Assistant U.S. Attorney Jennifer Arbittier Williams. “Taxpayer dollars should not be wasted on fraud and abuse, and our Office will continue to scrutinize and pursue pharmacies that engage in such conduct. We appreciate E-Z Pharmacy II's willingness to promptly negotiate a resolution in this matter.”
“I also want to thank the Office of Audit Services,” Williams said, referring to the Philadelphia component within the Department of Health and Human Services, Office of the Inspector General. “Its referral of this matter to law enforcement made this result possible.”
“Pharmacies are responsible for all claims they submit to Medicare,” said Maureen R. Dixon, Special Agent in Charge of the Philadelphia Regional Office of the Department of Health and Human Services, Office of the Inspector General. “HHS-OIG and the U.S. Attorney’s Office take allegations of health care fraud seriously and will work together to ensure taxpayers dollars are only spent on bona fide medical claims.”
The settled civil claims are allegations only. There has been no determination of civil liability.
This case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General. It was handled by Assistant U.S. Attorney Deborah W. Frey, Civil Chief Gregory B. David, and Auditor George Niedzwicki.
Delaware Business-Exec Sentenced for Amtrak Bribery SchemeRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Donald Scott Crothers, 45, of Milford, Delaware was sentenced to 18 months’ incarceration and three years’ supervised release by United States District Judge R. Barclay Surrick for his role in a federal program bribery scheme involving millions of dollars in contracts with the National Railroad Passenger Corporation (“Amtrak”). Crothers’ co-defendant, John Gonzales, will be sentenced at a later date.
Crothers and Gonzales were both executives for a small, Delaware-based manufacturing firm; Crothers served as the firm’s Vice President for Marketing and Contract Administration. The pair bribed Timothy Miller, a Lead Contract Administrator working in procurement for Amtrak, with cash payments totaling approximately $20,000 and trips to Rehoboth Beach, Delaware. In turn, Miller awarded more than $7.6 million in Amtrak contracts to the defendants’ firm – contracts which were federally funded through US Department of Transportation/Federal Railroad Administration grants. Miller pleaded guilty on April 11, 2018.
“This defendant flouted the law to gain millions of public dollars for his firm under false pretenses,” said First Assistant United States Attorney Jennifer Arbittier Williams. “The contracting process for federally-funded transportation projects must be unbiased and competitive in order to ensure fairness for all competing businesses and taxpayers. This Office is committed to maintaining the integrity of the federal contracting system and will prosecute those who violate this important area of federal law.”
“Pursuing corrupt companies and individuals who abuse government procurement practices for personal gain demonstrates the Department of Transportation Office of Inspector General’s (DOT OIG) commitment to maintain the integrity of funds used for federal transportation goods and services,” said DOT OIG Regional Special Agent-In-Charge Douglas Shoemaker. “DOT OIG along with our law enforcement and prosecutorial partners will continue to strongly pursue such cases involving wrongdoing for corporate crimes and greed.”
“Donald Crothers tried to gin up more business for his firm — not by working harder or smarter, but through blatant bribery,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “He corrupted the government’s contracting process, yielding millions in ill-gotten gains, and is finally being held to account for his actions.”
“Today’s sentencing highlights our commitment to ensuring Amtrak’s contracting process remains free from criminal activity,” said Kevin Winters, Amtrak’s Inspector General. “We appreciate the seamless collaboration with the U.S. Attorney's Office as well as the sustained professionalism exhibited by our investigative staff and partner agencies in getting to this result.”
The case was investigated by the Amtrak Office of Inspector General, the Federal Bureau of Investigation, U. S. Department of Transportation Office of Inspector General, and the Internal Revenue Service, and is being prosecuted by Assistant United States Attorney Eric Gibson.
North Carolina Man Sentenced to over Six Years in Prison for National Counterfeit Check SchemeRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Ahmad Jamaal Becoate, 32, of Greensboro, North Carolina, was sentenced to 75 months’ imprisonment by United States District Judge Joseph Leeson, sitting in Allentown. The court also ordered the defendant to pay $443,542 in restitution and entered a forfeiture money judgment in the amount of $132,542.61. The defendant pleaded guilty in February 2019 to charges including conspiracy to commit wire fraud and pass counterfeited securities, three counts of wire fraud, and aggravated identity theft.
Becoate and eight others were charged in December 2018 by superseding indictment for involvement in an extensive scheme to defraud Walmart stores across the United States using counterfeit checks and stolen social security numbers. The conspiracy operated from at least June 2016 to July 2018. In January 2017, the defendant was charged and convicted in Michigan state court while perpetrating this scheme; he was sentenced to serve 12 months in prison on the state charge. But within days of being released from prison, the defendant went right back to the same illegal, fraudulent behavior. Becoate and his co-conspirators presented in total more than $1,000,000 in fraudulent checks between June 2016 and July 2018.
“Becoate has spent much of his adult life in prison and has shown time and again that he has no regard for the law,” said U.S. Attorney McSwain. “For years, the defendant victimized multiple businesses and individuals and his actions show he refuses to be deterred from fraud. For these reasons, he will now spend additional significant time in prison – which is exactly where he belongs.”
“Today’s sentencing should serve as a strong deterrent to organized criminal groups considering taking part in similar fraud schemes,” said Special Agent in Charge James Henry of the Secret Service Philadelphia Field Office. “This case highlights our outstanding relationship with the U.S. Postal Inspection Service and the Social Security Administration. We will continue to work with our law enforcement partners to disrupt criminal groups in the state of Pennsylvania who attempt to defraud our community and its citizens.”
The case was investigated by the United States Secret Service, the Social Security Administration – Office of Inspector General, and the United States Postal Investigative Service, and is being prosecuted by Assistant United States Attorney Mary Crawley.
Leader of Violent Drug Trafficking Group in North Philadelphia Sentenced to 18 Years in PrisonRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced today that Damon Edwards, 33, of Philadelphia, Pennsylvania, was sentenced today to 18 years in prison by the Honorable Judge Paul S. Diamond.
Edwards was a leader of a violent drug trafficking group that had operated out of the Norman Blumberg Apartment Complex, a public housing facility in Philadelphia. Edwards pleaded guilty to 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).
Edwards and others controlled drug sales in various areas of the public housing facility from 2012 to 2014. These leaders 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 groups, while the lookouts assisted other members of the groups by alerting them to the presence of law enforcement and directing customers to the shift sellers.
“This violent drug trafficking group, led by Edwards, sold crack cocaine 24 hours a day, 7 days a week, in and around the Norman Blumberg Apartment Complex in North Philadelphia,” said U.S. Attorney McSwain. “This group used and carried firearms, robbed rival drug dealers, and used intimidation, threats, and violence to further its drug trade. Philadelphia residents can rest assured that my Office will continue to aggressively investigate and prosecute cases like this to keep citizens safe and to dismantle the crack cocaine trade.”
“The investigation, arrest, and successful prosecution of Damon Edwards are evidence of the merits of consistent inter-agency collaborations,” said Philadelphia Police Commissioner Richard J. Ross, Jr. “We believe strongly in the value of these multi-tiered collaborative efforts. Mr. Edwards is a member of a violent drug trafficking organization. With his conviction and attendant sentencing, a prolific narcotics offender will be removed from the communities in which he distributed illegal and dangerous substances. We anticipate that arrests, convictions, and sentences such as this, will continue to have an appreciable impact on the safety and quality of life of our city's residents and visitors.”
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.
Montgomery County Personal Injury Attorney Charged with Mail FraudRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Neil I. Mittin, age 64, of Huntingdon Valley, Pennsylvania was charged by Information with one count of mail fraud. The defendant was an attorney who worked for approximately 38 years as an associate for a Philadelphia, Pennsylvania law firm (“the Law Firm”). The Law Firm specialized in representing plaintiffs in personal injury matters while also representing individuals in other types of legal matters.
As detailed in the Information, over the course of approximately a decade, from 2008 through 2018, Mittin engaged in a scheme to steal numerous personal injury and other legal matters from the Law Firm by removing them from the Law Firm and referring them to outside attorneys. The clients of the Law Firm whose matters Mittin stole did not ask him to refer their matters to outside attorneys, and often did not know or understand that Mittin was referring their matters to outside attorneys. The defendant concealed his conduct from the Law Firm by closing the files for those matters and making it appear in the records of the Law Firm that there was no settlement or resolution and that the cases were not viable.
Following the fraudulent referrals, the other outside attorneys to whom Mittin referred these matters then undertook the representation of the former clients of the Law Firm and attempted to resolve the matters with a settlement or a trial. If the matter was resolved successfully, those attorneys paid Mittin a referral fee, on average, of between 33 and 40 percent of the contingency fees obtained by the attorneys plus reimbursement of the costs incurred by the Law Firm before Mittin had referred the cases to the other attorneys. The defendant pocketed the payments from the outside firms, including the reimbursement for costs incurred by the Law Firm, and did not disclose to the Law Firm that the matters were resolved in this fashion.
The personal injury and other legal matters that the defendant referred to other lawyers generated approximately $10,800,000 in financial recoveries for the former clients of the Law Firm. As a result of this scheme, Mittin defrauded the Law Firm of approximately $4,200,000 in legal fees and costs, including the share of those fees and costs that he obtained from the outside lawyers.
“Attorneys of any kind, public or private, take an oath to act in accordance with the law – they are and should be held to a high standard of conduct,” said U.S. Attorney McSwain. “As alleged, the defendant defrauded his employer of millions of dollars, which is illegal conduct for an employee in any line of work, but is especially egregious for a lawyer.”
“Mittin allegedly diverted millions of dollars of business from his longtime employer, for his own benefit,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “Anyone willing to break the law and commit such fraud will be investigated and properly held accountable.”
If convicted, the defendant faces a maximum possible sentence of 20 years in prison.
The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Deputy United States Attorney Louis D. Lappen.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Texas Man Sentenced for Insider Trading SchemeRead the Press Release
PHILADELPHIA – United States Attorney William McSwain announced that Hamed Ettu, 44, of Richmond, TX was sentenced today to three years’ probation, the first nine months of which he will be required to serve in home confinement, 120 hours of community service and a fine of $15,000. U.S. District Judge Gene E.K. Pratter also imposed a forfeiture judgment of $73,244, which the defendant has already paid.
The defendant pleaded guilty in February 2019 to an Information charging him with conspiracy to commit securities fraud. According to the Information, Damilare Sonoiki, charged elsewhere, then a junior analyst at a global investment bank in New York, provided material non-public information to Ettu. Sonoiki obtained this information in violation of his duty of confidentiality that he owed to the investment bank. In a separate case, Sonoiki also allegedly passed inside information to former Philadelphia Eagles linebacker Mychal Kendricks.
Relying on the material non-public information he received from Sonoiki, Ettu illegally purchased call options in the target companies, Compuware and Move, between July and September 2014. When proposed mergers were announced for each company, the value of Ettu’s options increased significantly. During the period of the conspiracy, Ettu made a profit of more than $93,000 on the trades.
“This type of illegal behavior – insider trading based on material, non-public information – undermines faith in our financial markets and harms ordinary investors who play by the rules,” said U. S. Attorney McSwain. “Prosecuting securities fraud and thereby safeguarding the integrity of the public securities markets has been and will continue to be a top priority of my Office.”
“The manipulation of our markets undermines all the investors who take great care to play by the rules,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “Through cases like this, the FBI continues to work against such corruption to help ensure fairness in the marketplace.”
The case was investigated by Federal Bureau of Investigation and the Securities and Exchange Commission, and is being prosecuted by Assistant United States Attorney David J. Ignall.
United States Attorney McSwain Announces Arrest of Lancaster Man on Charges of Abusing Minor Children in KenyaRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Gregory Dow, 60, of Lancaster, PA was arrested and charged by Indictment with four counts of engaging in illicit sexual conduct in a foreign place. In a news conference at the Lancaster County Courthouse, U.S. Attorney McSwain discussed the charges in the Dow Indictment and also highlighted broader efforts of the U.S. Attorney’s Office for the Eastern District of Pennsylvania to protect the residents of Lancaster County.
The Indictment alleges that from on or about October 14, 2013, until on or about September 13, 2017, the defendant engaged in, and attempted to engage in, illicit sexual conduct with four different minor victims in Kenya. The defendant allegedly traveled from Lancaster County to Kenya in 2008 and started what came to be known as the Dow Family Children’s Home. He did so with the financial support of his church and other organizations. The defendant purported to be a Christian missionary who would care for these orphans, who called him “Dad.” But instead of being a father figure to them, he allegedly preyed on their youth and their vulnerability. The orphanage closed in September 2017, and the defendant now stands accused of sexually abusing at least four minor girls who lived there during that time.
U.S. Attorney McSwain also discussed recent Lancaster criminal and civil cases handled by his Office, many of which his Office adopted in collaboration with the local authorities who originally investigated the crimes.
The criminal cases include: a knifepoint carjacking in Lancaster by a Harrisburg, PA man, Suudimon Washington; the alleged attempted robbery of Smithgall’s Pharmacy in Lancaster by four men, Lamar Black, Brandon Galette, Andrew Garrett, and Johnny Straining; the alleged arson of Lancaster City Hall by Dwain London and Patrick Baker; and the alleged illegal possession of a stockpile of 27 firearms and ammunition by a convicted felon living in Lancaster, Tyshaun Williams.
The civil cases include: a civil action against Miller’s Organic Farm of Bird-in-Hand, PA to compel the owner to comply with the federal government’s basic food safety laws and regulations, and a settlement agreement with Lancaster General Hospital’s Division of Maternal Fetal Medicine resolving allegations of false claims submitted to Medicare for reports on obstetric ultrasounds that were significantly delayed.
“All of these cases tell a story about my Office working to bring justice to every corner of our District – from Philadelphia, to the Lehigh Valley, to right here in Lancaster,” said U.S. Attorney McSwain. “I am committed to bringing the resources of my Office here to help ensure that the people of Lancaster can live in safety and security. We will hold lawbreakers accountable using all of the tools at our disposal.”
The Dow 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. Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The Dow case was investigated by the Federal Bureau of Investigation, with assistance from the Lancaster City Bureau of Police and the East Hempfield Township Police Department. It is being prosecuted by Assistant United States Attorney Timothy Stengel of the Eastern District of Pennsylvania and Department of Justice Trial Attorneys Lauren Britsch and Lauren Kupersmith of the Child Exploitation and Obscenity Section (CEOS).
An Indictment, Information, or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Two Men Indicted in South Philadelphia Home Invasion Robbery of Restaurant Owners’ $1M Life Savings, Assault of Teenage DaughterRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that defendants Khaiyri Burgess, 20, and Shaquan Johnson, 20, both of Philadelphia, PA, were charged by Indictment today with Hobbs Act robbery and using, carrying and brandishing a firearm during commission of that crime.
On August 8, 2018, the defendants and a third accomplice victimized a 17-year-old girl in her Italian Market home while stealing approximately $1 million in U.S. currency and jewelry owned by her parents. Specifically, at midnight, while she lay sleeping, the men entered her bedroom, pulled her from her bed, and struck her several times. They then held her at gunpoint and robbed her family of their life savings—the proceeds of their restaurant business a block-and-a-half away on Washington Avenue in South Philadelphia.
“As alleged in the Indictment, the complete disregard that these defendants had for the safety of others, especially for a child, is appalling,” said U.S. Attorney McSwain. “No one should need to worry about having their home robbed, their child dragged out of bed and pistol whipped, and their life savings stolen. This Indictment is an example of how my Office is working to get dangerous criminals off the streets of Philadelphia.”
“ATF’s primary mission is to reduce violent crime and protect the citizens of our communities,” said Special Agent in Charge Donald Robinson. “This indictment is a perfect example of our long-standing working relationships with the Philadelphia Police Department and US Attorney’s Office to aggressively address violent crime and to hold those responsible accountable.”
"The arrests of Khaiyri Burgess and Shaquan Johnson, and the investigation which led to them, are evidence of the merits of strong and consistent inter-agency collaborations,” said Philadelphia Police Commissioner Richard Ross. "Project Safe Neighborhoods promotes, and provides a platform for, these multi-tiered collaborative efforts. With these arrests, two dangerous offenders will be removed from the communities which they have victimized. We anticipate that arrests like these will continue to have an appreciable impact on the safety of our city's residents and visitors."
This case was brought as part of Project Safe Neighborhoods (PSN), a nationwide program by the Department of Justice that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. The Department has made turning the tide of rising violent crime in America a top priority. In October 2017, to address this crime trend, the Department announced the reinvigoration of PSN. For more information about PSN, visit our website.
If convicted, each defendant faces a maximum possible sentence of life imprisonment, a mandatory minimum 7 years’ imprisonment consecutive to any other sentence of imprisonment imposed; up to 5 years’ supervised release; a $500,000 fine; and a $200 special assessment. They will also be required to forfeit the proceeds of their offense.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorneys Jeanine Linehan and Sarah Damiani.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Middlesex County, NJ Deputy Sheriff Indicted on Federal Charges for Producing and Distributing Child PornographyRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Joshua Padilla, 33, of Eatontown, New Jersey was charged by Indictment with producing, distributing, and possessing child pornography. The defendant was previously charged with multiple related felonies in February 2019 by Pennsylvania Attorney General Josh Shapiro.
The defendant, a Middlesex County Sheriff’s Deputy, recorded himself having unlawful sexual contact with a 17 year-old girl and later uploaded some of that video to an online platform. The defendant drove the minor to Northampton County, Pennsylvania to engage in this illicit sexual conduct.
“The allegations in this case are particularly disturbing because of the defendant’s position of authority and trust in the community as a law enforcement officer,” said U.S. Attorney McSwain. "We stand ready with our federal, state and local partners to identify and prosecute those who would prey upon minor children – no matter who they are.”
“As a member of law enforcement, this defendant was sworn to protect the people he served, but instead he stands charged with abusing and exploiting a minor,” said Attorney General Josh Shapiro. “I’m proud to stand with our federal law enforcement partners in our steadfast commitment to investigating and prosecuting anyone who takes advantage of children wherever we find them—without fear or favor.”
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.
If convicted, the defendant faces a maximum possible sentence of 60 years’ incarceration with a mandatory minimum term of 15 years’ imprisonment.
The case was investigated by the Pennsylvania Attorney General’s Office, the Pennsylvania State Police, and Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Josh A. Davison.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former U.S. Congressman Chaka Fattah, Sr., Resentenced to 10 Years of Incarceration for Corruption ConvictionsRead the Press Release
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that former U.S. Congressman Chaka Fattah, Sr., 62, of Philadelphia, PA was resentenced to 10 years of incarceration by United States District Judge Harvey Bartle, III.
After a month-long trial in 2016, a federal jury found defendant Fattah and various co-defendants guilty of racketeering conspiracy, wire fraud conspiracy, honest services wire fraud conspiracy, mail fraud conspiracy, and multiple counts of mail fraud, falsification of records, mortgage fraud, and false statements to a financial institution. The criminal conduct of Fattah and his racketeering enterprise was organized around five corruption and fraud schemes: a loan repayment scheme, a Blue Guardians scheme, a college tuition scheme, a mortgage fraud scheme, and a fake conference scheme. For his role in these schemes, Fattah was sentenced after trial to 10 years of incarceration.
Both parties appealed. With regard to Fattah’s appeal, the Court of Appeals remanded for a new trial as to certain bribery and money laundering counts, concluding that the jury had not been properly instructed regarding “official acts” in a bribery context. (The government thereafter announced its intention not to retry those counts.) With regard to the government’s cross-appeal, the Court of Appeals reinstated certain counts that had been dismissed by the District Court post-trial. The case was then remanded for resentencing. Today, for these additional counts, Fattah was again sentenced to 10 years of incarceration.
“Let today serve as a warning to all public officials who allow greed or a thirst for influence to overpower any desire to serve the community honestly,” said First Assistant U.S. Attorney Williams. “If you are a corrupt official, we will investigate and convict you, and we will remain steadfast behind our prosecution until the last appeal is wrapped up and the final proceeding complete. Today’s sentencing illustrates the strength of our original case and the need to put Chaka Fattah behind bars for a very long time.”
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, the Department of Justice Office of Inspector General, the NASA Office of Inspector General, the Department of Education Office of Inspector General, the Department of Commerce Office of Inspector General, and is being prosecuted by Assistant United States Attorneys Eric L. Gibson and Paul L. Gray. Jonathan Kravis, former Trial Attorney with the Criminal Division’s Public Integrity Section of the U.S. Department of Justice, also prosecuted this matter.
Bucks County Ambulance Companies and their Owners Agree to $450K+ Judgment for Defrauding MedicareRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that ambulance companies Unicare Ambulance LLC and PA Paramedics LLC, d/b/a EasternCare Ambulance based in Bensalem, PA, their owners, Damon Wade, and Wade’s ex-wife, Amy Wade, also of Bensalem, have agreed to a judgment against them jointly and severally in the amount of $459,907.42 to resolve allegations made by the United States that they made repeated false statements to state and federal officials. As part of the settlement, each defendant has also agreed to a term of exclusion of not less than five years from all federal health care programs.
According to the allegations in the complaint filed in U.S. District Court, the defendants individually or collectively made repeated false statements, from September 2015 through August 2016, in order to avoid overpayment debts to the United States’ Medicare program and to hide the fact that Damon Wade’s state paramedic license had previously been suspended because he had admitted to forging a physician’s signature. When the Pennsylvania Department of Health eventually learned the truth, it immediately revoked Unicare’s ambulance license. Despite this revocation, Unicare continued to provide and bill Medicare for ambulance services, continued to make false statements about its ownership to state and federal authorities, and kept its fraudulently-obtained reimbursement funds.
The suspicious activity at Unicare and PA Paramedics was detected initially by the Centers for Medicare & Medicaid Services (CMS) of the United States Department of Health and Human Services, its local Medicare Administrative Contractor (Novitas Solutions, Inc.), and the United States Department of Health and Human Services Office of the General Counsel. In early 2018, the CMS Center for Program Integrity revoked Unicare’s Medicare enrollment for three years for this abusive and fraudulent conduct, and suspended all pending pre-revocation Medicare payments to Unicare.
“Ownership disclosure and licensing requirements ensure that healthcare in Pennsylvania is provided by qualified, competent, and trustworthy professionals,” said U.S. Attorney McSwain. “Attempts to undermine or defraud those systems put Pennsylvanians at risk and allow sleazy operators to continue providing services under new corporate identities. This settlement is the latest example of my Office’s commitment to using all of our enforcement tools to ensure that healthcare providers are legitimate and that any debts that they incur to American taxpayers are paid.”
“Medicare providers and suppliers cannot avoid repaying their overpayment debts by submitting false and misleading information in an attempt to mask their true identity,” said Alec Alexander, Deputy Administrator of the Centers for Medicare & Medicaid Services and Director for its Center for Program Integrity. “As this case shows, the Centers for Medicare & Medicaid Services uses its regulatory authorities and works closely with our partners, including the Department of Justice and the Office of Inspector General, to eliminate fraud, waste, and abuse from the Medicare and Medicaid programs.”
“Health companies that deceive regulators and taxpayers, as contended by the government in this case, cannot be tolerated,” said Maureen R. Dixon, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Accordingly, the defendants have been barred from participating in all federal health programs for at least five years.”
This investigation was conducted with the Centers for Medicare & Medicaid Services, Department of Health and Human Services Office of Inspector General and the Department of Health and Human Services Office of General Counsel. For the United States Attorney’s Office, Assistant United States Attorneys Paul W. Kaufman and Matthew E. K. Howatt and auditor Denis Cooke handled the investigation and settlement.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Federal Government Conducts Unprecedented Seizure of Massive Cargo Ship After Finding Almost 20 Tons of Cocaine on BoardRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that, on July 4, 2019, U.S. Customs and Border Protection (CBP) executed a seizure warrant obtained by the U.S. Attorney’s Office for the Eastern District of Pennsylvania, and seized the cargo vessel MSC Gayane as being subject to possible forfeiture to the United States.
On June 17, 2019, federal, state, and local law enforcement agents boarded the MSC Gayane when it arrived at Packer Marine Terminal in Philadelphia and seized 19.76 tons of cocaine. Since that time, crew members of the MSC Gayane have been charged with knowingly and intentionally conspiring with each other and others to possess more than five kilograms of cocaine on board a vessel subject to the jurisdiction of the United States. The federal criminal investigation is ongoing.
As a result of this seizure, the MSC Gayane – a ship built in 2018 and measuring approximately two city blocks in length – has been placed under the custody of CBP and shall remain so until further proceedings or Order of the Court.
“A seizure of a vessel this massive is complicated and unprecedented – but it is appropriate because the circumstances here are also unprecedented. We found nearly 20 tons of cocaine hidden on this ship,” said U.S. Attorney McSwain. “When a vessel brings such an outrageous amount of deadly drugs into Philadelphia waters, my Office and our agency partners will pursue the most severe consequences possible against all involved parties in order to protect our district – and our country.”
“The MSC Gayane is the largest vessel seized in U.S. Customs and Border Protection’s 230-year history and follows the record seizure of almost 20-tons of cocaine discovered on the vessel,” said Casey Durst, CBP’s Director of Field Operations in Baltimore. “Seizing a vessel of this size is an unusual enforcement action for CBP, but is indicative of the serious consequences associated with an alleged conspiracy by crewmembers and others to smuggle a record load of dangerous drugs through the United States. This action serves as a reminder for all shipping lines and vessel masters of their responsibilities under U.S. and international law to implement and enforce stringent security measures to prevent smuggling attempts such as this.”
“The seizure of the MSC Gayane is another significant step toward holding accountable those who perpetuate drug smuggling crimes both here in Philadelphia and around the world,” said Marlon Miller, Special Agent in Charge of HSI Philadelphia. “HSI, in collaboration with CBP, the Coast Guard, and our state and local law enforcement partners continue to aggressively work with the U.S. Attorney’s Office for the Eastern District of Pennsylvania to comprehensively investigate this case and bring to justice those who had roles in this drug smuggling venture.”
The case is being investigated by the United States Customs and Border Protection and Homeland Security Investigations, together with a multi-agency team of federal, state, and local partners.
Delaware County Accountant Charged with Multiple Tax OffensesRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Myles Hannigan, 48, of Newtown Square, Pennsylvania, was charged by Information with one count of obstructing the due administration of the Internal Revenue Service (IRS), and seventeen counts of preparing materially false income tax returns.
Hannigan owned and operated Payroll Professionals, Incorporated (“PPI”), which operated out of Media, Pennsylvania. PPI is a third-party payroll processor that assists its clients by issuing payroll checks and forwarding tax payments to federal, state, and local authorities. PPI’s clients were small to medium-sized businesses, and the clients relied on Hannigan to prepare and file Form 941 with the IRS. Form 941 details employee wages that were paid by a company and income tax withheld and paid to the IRS based on those wages.
Beginning in January 2012 and continuing up to December 2016, Hannigan allegedly prepared and submitted Form 941s that falsely reported information to the IRS. In particular, Hannigan reported depositing more money to pay tax debt than he actually had sent to the IRS, causing 35 of PPI’s client companies (who are considered victims in this case) to collectively underpay the IRS $3,270,566.89 for those tax years. These victims/companies gave Hannigan access to all necessary funds to pay the full tax debt, but Hannigan allegedly failed to do so. Hannigan hid his behavior from these victims/companies by presenting bogus documents that purported to be confirmation of payments of taxes he had made to the IRS on their behalf, and by re-directing IRS correspondence to his business address. In essence, Hannigan is alleged to have operated a “Ponzi scheme” of borrowing from one client’s money to pay the debts of another, which collapsed when the interest and penalties owed to the IRS (which he was hiding from clients) became too big to hide.
“As alleged in the Information, this defendant – an accountant in business to handle payroll taxes – committed fraud and stole from clients and the United States government,” said U.S. Attorney McSwain. “He also stole from the pockets of all taxpayers who do the right thing by paying their taxes. It will continue to be a priority of my Office to bring tax cheats to justice and thereby protect honest taxpayers.”
If convicted, the defendant faces a maximum possible sentence of up to 54 years in prison, one year of supervised release, a fine of up to $1,805,000, and a special assessment of $1,800.
The case was investigated by the Internal Revenue Service (IRS), and the Treasury Inspector General for Tax Administration (TIGTA), and is being prosecuted by Assistant United States Attorney Jason P. Bologna.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Newark, NJ Man Sentenced to Two ½ Years for Lying to Purchase Firearms in PennsylvaniaRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Kevin Elcock, 33, of Newark, NJ was sentenced to 30 months’ incarceration by U.S. District Court Judge Jeffrey Schmehl.
The defendant was sentenced after pleading guilty to seven counts of making false statements to federally licensed firearm dealers in Northampton and Bucks Counties. From December 27, 2016 through July 31, 2018, on seven different occasions, Elcock lied about his state of residence – claiming that he lived in Pennsylvania when he actually lived in New Jersey. Those lies were a federal crime. The defendant lied in this manner because he claimed it was “easier” to purchase firearms in Pennsylvania than in New Jersey. The defendant then sold many of the guns that he purchased to people with criminal histories who would otherwise not have been able to purchase weapons legally.
“Federal laws for purchasing and owning firearms exist to protect public safety, and this defendant purposefully and arrogantly flouted those laws,” said U.S. Attorney McSwain. “Reducing violent crime by keeping illegal guns off of our streets is a top priority for the Department of Justice and my Office.”
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and is being prosecuted by Assistant United States Attorney Priya T. De Souza.
CEO, CFO and Company Sentenced in Massive Pharmaceutical Scheme to Defraud, Launder Money and Obstruct JusticeRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Dean Volkes, 55, Donna Fallon, 54, both of Long Island, NY, and Devos Ltd., doing business as Guaranteed Returns, also located in Long Island, were sentenced to five years’ incarceration, one year and one days’ incarceration, and five years’ probation, respectively, by U.S. District Judge Petrese Tucker. Additionally, Volkes and Guaranteed Returns were each ordered to forfeit $114,832,445.62 and pay restitution of $95,253,090.05, and Fallon was ordered to pay $515,221.89 in restitution. Volkes, Fallon, and the company were convicted at trial in March 2017 of mail fraud, wire fraud, theft of government property, money laundering conspiracy, obstruction of justice, and false statements in connection with a scheme to steal money from clients who relied on the business to return unused pharmaceutical products.
Volkes was the President, Chief Executive Officer, and sole owner of Guaranteed Returns, a reverse pharmaceutical distributor located in Holbrook, New York. Fallon, who is Volkes’ sister, was the company’s Chief Financial Officer. As a reverse distributor, Guaranteed Returns managed the returns of pharmaceutical products for healthcare providers, including numerous hospitals, pharmacies, and long-term care facilities, as well as Department of Defense facilities. Pharmaceutical manufacturers often allow expired drugs to be returned for a refund. Guaranteed Returns handled this process for healthcare provider clients in exchange for a fee based on a percentage of the return value.
The evidence presented at trial proved that from approximately 1999 through 2014, Guaranteed Returns promised its clients that it would hold their “indate” (not yet expired) drug products until they expired, and then return them on the clients’ behalf, in exchange for a fee. Instead, Guaranteed Returns, at CEO Volkes’ direction, stole indated drug products that it received from its clients, returned the drugs to manufacturers, and kept the refund money. Volkes created a system in which he classified clients as either “managed” or “unmanaged.” While both categories of clients were victimized, Volkes reserved special treatment for “unmanaged” clients by stealing what he could from them by ensuring that Guaranteed Returns kept the full value of the returned product for itself. The evidence demonstrated that through this fraud, Volkes and Guaranteed Returns stole more than $100 million from over 13,000 clients, including more than $20 million from numerous medical treatment facilities operated by the U.S. Department of Defense and other government agencies.
The evidence also showed that Volkes, Fallon, and Guaranteed Returns stole clients’ refund money by diverting a percentage of the refunds into internal company accounts, conspired to launder the proceeds of the fraud, and obstructed justice in connection with a grand jury investigation.
“The defendants and their company took advantage of their own clients, stealing millions of dollars, and then committed further crimes by attempting to cover up the fraud,” said U.S. Attorney McSwain. “This kind of fraud netted the defendants exactly what they deserve – a trip to prison. My Office and our law enforcement partners will not allow dishonest businesses like this to steal from customers – which, in this case, included American taxpayers.”
“At each turn, these defendants’ guiding principle was greed,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “For years, they ripped off clients – among them, the U.S. government – to the tune of millions of dollars. They’re now being held accountable for their scheme, and for their brazen attempts to cover it up by obstructing justice. The FBI and our federal partners won’t stand for criminals stealing from the government and the taxpayers who fund it.”
“These sentencings are the direct result of a joint effort by the Defense Criminal Investigative Service (DCIS), the FBI and the U.S. Attorney’s Office, Eastern District of Pennsylvania,” stated Leigh-Alistair Barzey, Special Agent in Charge of the DCIS Northeast Field Office. “The fraudulent conduct in this case was particularly egregious and undermined the integrity of the U.S. Defense Department’s procurement system. DCIS is committed to working with its law enforcement partners to identify, investigative and prosecute individuals and companies who defraud the U.S. Government and the American taxpayer.”
The case was investigated by the Defense Criminal Investigative Service and the Philadelphia office of the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Nancy Rue and Patrick J. Murray.
Philadelphia Doctor to Surrender Medical License, Pay $107k Penalty for Improper Opioid PrescriptionsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Richard Ira Mintz, D.O., a Philadelphia-area doctor, has agreed to surrender his ability to practice medicine and pay a $107,584 penalty for prescribing OxyContin (oxycodone) and Xanax (benzodiazepine) to patients without a legitimate medical purpose. Dr. Mintz agreed to do so through a settlement agreement resolving the government’s civil claims against him under the Controlled Substances Act.
The settlement agreement arises from thirteen prescriptions that Dr. Mintz wrote between 2016 and 2018. Dr. Mintz allegedly sold these prescriptions for cash without any legitimate medical purpose and outside the usual course of his professional practice.
In March 2019, Dr. Mintz pleaded guilty to eight criminal counts of unlawfully distributing some of these prescriptions;this civil resolution encompasses additional prescriptions. The civil resolution also requires Dr. Mintz to pay the $107,584 monetary penalty, consent to a term of exclusion from federal health care programs, and give up his ability to practice medicine. To ensure that Dr. Mintz does not resume practicing medicine, he agreed to surrender his medical license and Drug Enforcement Administration Certificate of Registration and further agreed not to seek to renew or reinstate either one in the future.
The criminal case was prosecuted 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 Department of Health and Human Services to focus their efforts to prevent and deter fraud, and enforce current anti-fraud laws around the country.
“This dual civil and criminal resolution is the latest example of how we will use all appropriate tools, both civil and criminal, to hold accountable anyone who breaks the law,” said U.S. Attorney McSwain. “By working together on parallel tracks, as appropriate, we can ensure an efficient administration of justice and a complete remedy for the harm. The public deserves nothing less.”
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Assistant United States Attorney Michael S. Macko handled the civil case, working in parallel with Trial Attorney Adam Yoffie of the Criminal Division’s Fraud Section who handled the criminal matter.
Our Lady of Lourdes Agrees to Pay over $1.1M to Resolve Claims It Failed to Perform Background Checks, Fraudulently Billed U.S. for Community Service GrantsRead the Press Release
PHILADELPHIA and CAMDEN – United States Attorneys William M. McSwain for the Eastern District of Pennsylvania and Craig Carpenito for the District of New Jersey jointly announced that Our Lady of Lourdes Health Foundation and two related Our Lady of Lourdes companies have agreed to pay $1,143,881.19 to resolve claims arising from Lourdes’ administration of community service grants funded through the Corporation for National and Community Service (CNCS).
From 2012 until 2017, Lourdes administered multiple grants in CNCS’s Senior Corps program, including in the Foster Grandparent Program (FGP), which places seniors in school and community settings to serve alongside youth with exceptional needs, and the Senior Companion Program (SCP), which places seniors in community and residential settings to assist other seniors who have difficulty with tasks of daily living. These programs provide small hourly stipends to the volunteers performing these services, who undergo training and must clear criminal history checks to ensure their suitability for service.
From 2014 until 2017, Lourdes either failed to perform these criminal history checks or failed to keep records of doing so. As a result, 46 individuals were permitted to serve in an FGP or SCP project without any documentation that they received one or more of the required criminal history checks. When a monitoring visit was scheduled in 2017, Lourdes employees cut-and-pasted other background checks in an attempt to conceal this failure from CNCS officials.
In addition, Lourdes employees – including two program supervisors – falsely completed time sheets showing program participants serving hours that were impossible, because the locations at which they were purportedly serving were closed.
When the United States commenced its formal investigation in 2017 and brought these issues to the attention of senior Lourdes management, Lourdes voluntarily relinquished the grants immediately and terminated all of the employees who had participated in the grant administration. Lourdes has actively cooperated with the United States since its senior management was advised of the issues in the grant programs. As part of this cooperation, it performed appropriate criminal history checks on all program participants and determined that all 46 individuals would have been permitted to participate in the programs had those checks been performed in a timely manner originally.
“Criminal history checks are a critical protection for the vulnerable populations with whom Senior Companions and Foster Grandparents work,” said U.S. Attorney McSwain. “Strict compliance with the requirements for these essential safeguards is necessary to ensure that predators do not gain access to potential victims. And every federal grantee, including community service organizations, is required to honestly and openly report the service that its volunteers perform. Every dollar spent on an hour that was not actually served is one that is not available to support other community service efforts.”
“Just as important as the work these volunteers do is the system that has been set up to ensure that they have been thoroughly vetted,” U.S. Attorney Carpenito said. “Whether they failed to keep accurate records of the results of these criminal background checks – or just failed to do them – the results were the same. Our Lady of Lourdes potentially put their clients’ safety at risk. And billing for no-show employees cannot be tolerated, especially when taxpayer dollars are being spent.”
“This fraud deprived school children and senior citizens of promised services and jeopardized their safety with bogus criminal history checks for the volunteers who served them,” said CNCS’s Inspector General Deborah J. Jeffrey. “We hope that the substantial penalties included in this settlement will deter other grantees from similar misconduct. We commend our partners at the Department of Justice for their outstanding efforts in pursuing fraud against national service programs.”
United States Attorneys McSwain and Carpenito praised Lourdes’ work in addressing the issues in these programs: “We appreciate the seriousness with which Lourdes senior management has taken this issue and the prompt, aggressive remedial actions that they took to prevent further harm to CNCS programs and potential harm to vulnerable communities. We hope this settlement will serve as a message to other managers to be vigilant in overseeing government-funded programs and to ensure that employees do not attempt to conceal any non-compliance.”
This investigation was conducted jointly by the United States Attorney’s Offices for the Eastern District of Pennsylvania and District of New Jersey with the Corporation for National and Community Service Office of Inspector General. Assistant United States Attorneys Paul W. Kaufman and Veronica Finkelstein of the Eastern District of Pennsylvania and Jessica O’Neill of the District of New Jersey handled the investigation and settlement. This case was initiated as part of the U.S. Attorney’s Office for the Eastern District of Pennsylvania’s Affirmative Civil Enforcement (ACE) Strike Force focus on grant fraud.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
“Goodie Bag” Doctor Charged with Health Care Fraud and Oxycodone DistributionRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Andrew M. Berkowitz, M.D., 60, of Huntington Valley, PA, was charged by Indictment with 19 counts of health care fraud, and 23 counts of distributing oxycodone outside the course of professional practice and without a legitimate medical purpose.
According to the Indictment, Berkowitz operated a medical practice in Philadelphia under the name ‘A+ Pain Management’, and through this practice Berkowitz fraudulently billed insurers for medically unnecessary physical therapy, acupuncture, chiropractic adjustments, and prescriptions drugs – and sometimes for treatments not provided at all.
Regardless of their individual complaint, at every visit A+ patients received a “goodie bag” which was a tote bag filled with prescription drugs for which Berkowitz submitted pharmacy claims through his company, Bucks Philadelphia Medical Care Group. The “goodie bags” typically included a combination of drugs such as Topical Analgesics, such as Relyyt and/or Lidocaine; Muscle Relaxers, such as Chloroxazon and/or Cyclobenzaprine; Anti-Inflammatories, such as Celecoxib and/or Nalfon; and Schedule IV controlled substances, such as Tramadol for pain; and/or Eszopiclone and Quazepam for insomnia and anxiety. Berkowitz obtained payments from insurers of more than $4,000 for each bag by falsely asserting that the drugs were for the benefit of the patient when, in reality, Berkowitz was the real beneficiary.
The Indictment also alleges that Berkowitz would prescribe Oxycodone to “pill-seeking” patients in exchange for their tacit approval that he would submit excessive claims to the patients’ insurers for the “goodie bag” and other medically unnecessary services. For 2015 through 2018, Berkowitz obtained an estimated $3.2 million in fraudulent proceeds from his “goodie bag” scheme.
In addition to the criminal charges, the Affirmative Civil Enforcement (ACE) Strike Force of the U.S. Attorney’s Office also filed a civil suit for an injunction to stop any future healthcare fraud and to freeze much of the defendant’s assets pending the criminal and civil investigations. The court granted the government’s request and entered a temporary restraining order against the defendants pending additional proceedings.
“The U.S. Attorney's Office is committed to bringing all of our enforcement tools to bear against healthcare fraud and drug diversion,” said U.S. Attorney McSwain. “Today's case is the latest example of our Criminal Division working in tandem with our ACE Strike Force to pursue fraud and diversion that allegedly put dangerous and addictive pills onto the street in the midst of the ongoing opioid epidemic.”
“Again and again, we're seeing these doctors with dollar signs in their eyes, willing to abandon all pretense of professional ethics,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “As alleged, Berkowitz made millions by diverting dangerous drugs to anyone who wanted them, with Medicare — and ultimately, American taxpayers — picking up the tab. The FBI, with the Philadelphia Police and our federal partners are doggedly working to put medical professionals engaged in this kind of fraud out of business.”
If convicted, the defendant faces a maximum possible sentence of 660 years in prison.
The case was investigated by the Federal Bureau of Investigation; the Philadelphia Police Department, Health and Human Services – Office of Inspector General, Office of Personnel Management – Office of Inspector General, and Department of Labor – Office of Inspector General, and is being prosecuted by Assistant United States Attorney M. Beth Leahy. The civil action is being handled by Assistant United States Attorney Anthony Scicchitano.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Two Additional Men Indicted in Connection with Attempted Robbery of Smithgall’s Pharmacy in LancasterRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Johnny Straining, 23, and Lamar Black, 29, both of Harrisburg, PA were charged by Indictment with attempted robbery which interferes with interstate commerce, and brandishing a firearm during a crime of violence. Black was also charged with possession of a firearm by a felon. The charges against the defendants stem from the October 23, 2018 attempted robbery of Smithgall’s Pharmacy in Lancaster, Pennsylvania. Two additional men – Brandon Galette and Andrew Garrett – were charged in February with federal crimes related to the same attempted robbery.
“Stemming the tide of violent crime in our communities is a top priority for my Office,” said U.S. Attorney McSwain. “People looking to make a quick buck by robbing convenience stores, pharmacies, and other businesses beware: this conduct is a federal crime, and if you are convicted, you will face stiff penalties under federal law.”
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
If convicted, Straining and Black face a maximum possible sentence of life imprisonment, with a seven-year mandatory minimum, which will be served consecutive to any other sentence imposed. Both are also subject to financial penalties, including fines and special assessments.
The case was investigated by the Federal Bureau of Investigation and the Lancaster City Bureau of Police, and is being prosecuted by Assistant United States Attorney Tim Stengel.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Seven Charged in Connection with Credit Card-Skimming Fraud SchemeRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that seven people were charged today by Indictment with conspiracy, bank fraud and aggravated identity theft. Those charged are Hamlet Tantushyan, 35, of Glendale, CA; Verzh Movsisyan, 41, of Glendale, CA; Armen Sahakyan, 41, of Burbank, CA; David Daldumyan, 29, of Van Nuys, CA; Hrchya Gyulumyan, 39, of Sun Valley, CA; Gevush Gabrielyan, 27, of North Hollywood, CA; and Roman Gridjusko, 30, of Philadelphia, PA.
The sevenc defendants were charged for their alleged involvement in a scheme to steal money from victims’ bank accounts by making fraudulent ATM withdrawals and money order purchases in multiple states with stolen debit card numbers. The victims’ debit card numbers were obtained by members of the scheme through illegally installed devices on gas station pumps, known as ‘skimmers’, that captured the victims’ debit card numbers and Personal Identification Numbers when they used their debit cards at gas stations to purchase gas.
“As alleged in the Indictment, this was a devious fraud utilizing technology to take advantage of victims who didn’t even see it coming,” said U.S. Attorney McSwain. “I want to thank the many agents and investigators who worked tirelessly to uncover this scheme and assist my Office in bringing today’s Indictment.”
If convicted Hamlet Tantushyan faces a maximum possible sentence of 187 years imprisonment and a $7,250,000 fine, defendant Vrezh Movsisyam faces a possible maximum sentence of 177 years imprisonment and a $6,000,000 fine, defendant Roman Gridjuski faces a maximum possible sentence of 25 years imprisonment and a $750,000 fine, defendant Armen Sahakyan faces a maximum possible sentence of 155 years imprisonment and a $6,000,000 fine, defendant Davit Daldumyan faces a maximum possible sentence of 93 years imprisonment and a $4,250,000 fine, defendant Hrchyan Gyulumyan faces a maximum possible sentence of 79 years imprisonment and a $2,050,000 fine, and defendant Gevush Gabrielyan faces a possible maximum sentence of 71 years imprisonment and a $3,000,000 fine.
The case was investigated by the Federal Bureau of Investigation Philadelphia Organized Crime Task Force, the United States Postal Inspection Service, the United States Secret Service, the Newark, Delaware Police Department, the Borough of Wyomissing, Pennsylvania Police Department, and the Bensalem, Pennsylvania Township Police Department, and is being prosecuted by Assistant United States Attorney K.T. Newton.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Olde Philly Pharmacy and its Owner to Pay $350,000 to Resolve Alleged Violations of Controlled Substance ActRead the Press Release
PHILADELPHIA, PA – United States Attorney William McSwain announced that Olde Philly Pharmacy has agreed to pay $350,000 to resolve allegations that three of its pharmacy stores located in Philadelphia violated the Controlled Substances Act (CSA) by failing to maintain complete and accurate records of controlled substances, including nearly 100 missing oxycodone and hydrocodone prescriptions. James Cirillo, managing pharmacist and co-owner of Olde Philly Pharmacy, is also a party to the settlement agreement.
The United States’ investigation involved three Olde Philly Pharmacy locations – 2923 East Thompson Street, 1427 East Susquehanna Avenue, and 2036-38 South 3rd Street.
As part of the settlement, Olde Philly Pharmacy has entered into a three-year Memorandum of Agreement (MOA) with the Drug Enforcement Administration, which includes additional responsibilities regarding the handling of controlled substances. The MOA imposes compliance obligations significantly more stringent than those in the applicable laws and regulations.
“Pharmacies that fail to maintain proper records of narcotics like oxycodone and hydrocodone contribute to the opioid crisis. At best, this poor record-keeping creates conditions ripe for diversion; at worst, it is a symptom of diversion itself,” said U.S. Attorney McSwain. “Pharmacies and pharmacists have a responsibility to ensure that all controlled substances are tracked through the distribution chain. For this reason, our Office is committed to ensuring total compliance with the Controlled Substances Act and we will vigorously enforce violations wherever we find them.”
Congress enacted the CSA to deter the illegal importation, manufacture, distribution, possession, and improper use of controlled substances, including prescription medications, and requires individuals and entities registered with the DEA to maintain complete and accurate records of all controlled substances and security systems so that controlled substances are not lost, stolen, or inappropriately dispensed.
The investigation was conducted by the Drug Enforcement Administration’s Philadelphia Field Division, Diversion Regulatory Group 2 (D72), and the investigation and settlement were handled by Assistant United States Attorney David A. Degnan.
U.S. Attorney’s Office Holds Debt Collector Responsible for Collection Practices, Company Agrees to Resolve False Claims Act LiabilityRead the Press Release
PHILADELPHIA – United States Attorney William McSwain announced today that BARR Credit Services, Inc., a commercial debt collection company based in Tucson, Arizona, has agreed to pay $55,793 and start a compliance program to resolve the government’s claims against it under the False Claims Act. The agreement arises from BARR Credit’s attempts to collect debts from the Federal Bureau of Prisons on behalf of Scholars in Print, a telemarketing firm in Bucks County, Pennsylvania.
In 2018, the government filed a complaint against Scholars in Print alleging that it operated a telemarketing scheme. According to the federal court complaint, the telemarketing company submitted false claims to the Bureau of Prisons for textbooks that nobody ordered or wanted. Scholars in Print allegedly hired debt collectors to collect unpaid invoices. The parties resolved that case through a consent judgment. Today’s settlement agreement follows that consent judgment.
In the agreement announced today, the United States contends that BARR Credit, one of Scholars in Print’s debt collectors, knew or should have known that the textbook invoices were fraudulent. Teachers, librarians, non-profit organizations, and public officials told BARR Credit that Scholars in Print operated a fraud scheme and explained how it worked, according to the government’s allegations in the agreement. The United States contends that BARR Credit created records describing these fraud reports, and therefore BARR Credit acted recklessly when it tried to collect similar debts from the Bureau of Prisons.
As part of the resolution, BARR Credit admitted that its quality control procedures did not adequately identify the suspect nature of Scholars in Print’s invoices. To resolve the allegations, BARR Credit will pay $55,793 and will not resume collection efforts for Scholars in Print or its operators, John Paul Ryan and Mary Motz Ryan.
BARR Credit will also start a compliance program designed to protect the public from similar harm. As part of that program, BARR Credit will implement quality control procedures, adopt policies, and monitor customer accounts to identify patterns of fraud reports or suspicious debts. BARR Credit will supervise its debt collectors to prevent them from demanding payment from public or private schools, libraries, non-profit organizations, and federal, state, or local public agencies or officials without first possessing documentary proof that the entity incurred the debt legitimately.
In addition to taking these measures, BARR Credit will train its employees annually about state and federal procurement procedures and government purchasing in order to identify fraudulent debts. BARR Credit will certify its compliance annually during the agreement’s five-year term.
While not admitting liability, BARR Credit acknowledged that any attempt to demand payment from federal agencies for alleged debts can result in False Claims Act liability if the debts are not bona fide debts that comply with federal procurement procedures.
“Debt collectors should do their homework before trying to collect payment from federal agencies,” said U.S. Attorney McSwain when announcing the resolution. “The False Claims Act governs their conduct, so they should not try to collect taxpayer money unless they have a legitimate, documented debt to back it up. My Office stands ready with our federal partners to investigate these claims to protect consumers and taxpayers.”
“The OIG is committed to investigating companies whose reckless attempts at debt collection cause them to make false claims to the Bureau of Prisons. We will work tirelessly with our law enforcement partners to ensure those who do not conduct their due diligence under the law are held accountable,” stated Lewe F. Sessions, Special Agent-in-Charge of the U.S. Department of Justice Office of the Inspector General’s Fraud Detection Office.
Assistant United States Attorney Michael S. Macko handled the case with investigative assistance from the United States Department of Justice Office of Inspector General.
Penn Medicine Agrees to Pay $275,000 to Settle False Claims Act AllegationsRead the Press Release
PHILADELPHIA, PA – United States Attorney William McSwain announced today that the Trustees of the University of Pennsylvania Health System (“Penn Medicine”) agreed to settle allegations under the False Claims Act that the Lancaster General Hospital’s division of Maternal Fetal Medicine (LGH-MFM), a component of Penn Medicine, submitted false claims to Medicaid for obstetric ultrasounds.
The government alleges that, from approximately May 1, 2017 through December 31, 2017, LGH-MFM had insufficient physician staff to properly handle its patient volume. As a consequence, the government alleges that during this period, LGH-MFM physicians failed to timely complete professional reports interpreting many of the ultrasound studies that they ordered for their obstetric patients. Such a timely report is required for Medicaid to reimburse a physician for professional interpretation of an ultrasound. Further, extreme delays in completing such a report can render the report and interpretation worthless.
Specifically, the government alleges that in many instances, LGH-MFM physicians did not finalize professional reports of ultrasound studies until more than thirty days after the ultrasound was performed. In over 10% of cases during this time period, the report was not completed until more than 90 days after the ultrasound was performed, and in some cases not until after the patient delivered. The government alleges that LGH-MFM violated the False Claims Act by nevertheless submitting claims for reimbursement to Medicaid for ultrasound interpretations when it knew or should have known the claims were not reimbursable due to the extreme delays in completing the physician’s reports.
“Maternal-fetal medicine physicians manage the most high risk and complex pregnancies,” said U.S. Attorney McSwain. “This alleged conduct not only demonstrated an abuse of the Medicaid program, but had troubling potential implications for patient care. Medicaid beneficiaries, especially expectant mothers carrying high risk pregnancies, deserve better. We thank the citizens who brought this concerning situation to our attention.”
“Timely report writing is important for patient care and the proper billing of Medicaid,” 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 is committed to working with the U.S. Attorney’s Office, our law enforcement partners, and the public to ensure the integrity of federal health care dollars.”
The U.S. Attorney’s Office opened this investigation in response to a tip from citizens. This case was not brought pursuant to the qui tam provisions of the False Claims Act
This case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General. For the U.S. Attorney’s Office, the investigation and settlement were handled by Assistant U.S. Attorney John T. Crutchlow and Auditor Dawn Wiggins.
Final Two Co-Defendants in Khalil Smith Case Sentenced to 26 and 12+ Years in PrisonRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Hasan Chaney, 30, of Philadelphia, PA was sentenced to 312 months’ imprisonment (26 years), and Braheim Ballard, 39 of Philadelphia, PA was sentenced to 155 months’ imprisonment (12 years, 9 months), both by U.S. District Judge Mitchell Goldberg. Both defendants were members of an extremely violent criminal organization led by Khalil Smith, who was sentenced to life plus 207 years’ imprisonment in November 2018.
As part of the group’s conspiracy, they planned to commit armed robberies and kidnappings of people who they believed were selling drugs. Their goal was to steal drugs, drug proceeds, and other items of value, or obtain ransom for the release of their kidnapping victims. Members of the conspiracy conducted surveillance of their victims and tracked their victims using GPS devices. They also used police scanners to monitor police radio during the commission of their crimes to evade detection and apprehension by law enforcement. In October 2017, Chaney was found guilty at trial for his participation in one incident with this gang, the Mayfair Street kidnapping, and Ballard was found guilty at trial for his participation in one incident, the Leas Way home invasion robbery in Hatfield, PA.
Members of the organization, including Chaney and Ballard, also used firearms and/or brute physical force to facilitate the commission of the robberies, kidnappings and carjackings, specifically to threaten, intimidate, and subdue the victims. They also occasionally dressed as police officers as a means to fool their victims. They shot and threatened to shoot their victims and physically restrained them with handcuffs, zip ties, electrical cords, and shoelaces and held them captive, at times, for several hours. They even went so far as to “waterboard” and pour boiling water on the genitals of some of their victims, which is what occurred during the Mayfair Street kidnapping incident on the 700 block of Mayfair Street in Philadelphia.
“Motivated by their mutual desire for drugs, money, and power, Chaney and Ballard eagerly enlisted as members of this ruthless, violent gang,” said U.S. Attorney McSwain. “This crew resorted to torture, extreme violence, intimidation, and even impersonation of law enforcement to dominate their victims and terrorize Philadelphia and the surrounding towns. Because of the dedicated work of prosecutors and law enforcement working this case for many years now, these two defendants will join the rest of their co-conspirators spending a long time where they belong – in prison. The facts of this case are an excellent example of why violent crime is an ever-present priority for my Office.”
“Key components of ATF’s mission are the reduction of violent crime and providing a positive, lasting impact on the community. The lengthy sentences that were handed down to all of these defendants are an enormous victory in the battle against violent crime for ATF. This victory is shared with our law enforcement partners, and more importantly, with the citizens of Philadelphia,” said ATF Special Agent in Charge Donald Robinson. “These sentences serve as a very strong message to violent home invasion crews who would seek to prey on our communities - ATF will continue to pursue you and see that you are held accountable for the crimes you commit. We appreciate the cooperation of all of our federal, state and local partners, and are especially appreciative of the invaluable partnership and dedication of the United States Attorney’s Office.”
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
This case was investigated by the ATF, the Philadelphia Police Department and various other local police departments throughout the Eastern District of Pennsylvania and the District of New Jersey. It is being prosecuted by Assistant United States Attorneys Salvatore L. Astolfi and Jeanine Linehan.
Northampton County Man Indicted for Possessing Homemade Bombs, Guns While Subject to Protection from Abuse OrderRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Jason Muzzicato, 43, of Bangor, Pennsylvania was charged by Indictment with possession of firearms by a person subject to a court order restraining him from harassing, stalking and threatening an intimate partner (known as a domestic violence protective order, Protection From Abuse order or PFA), and possession of an unregistered destructive device (an improvised explosive device).
The charges against the defendant stem from his possession of homemade bombs and firearms, while subject to the terms of a PFA order issued by the Northampton County Court of Common Pleas. Under federal law, an individual who is subject to a PFA order is prohibited from possessing firearms. As alleged in the Indictment, the defendant possessed seven improvised explosive devices and nine firearms, including multiple AR-15 rifles and semi-automatic pistols.
“Protection From Abuse orders are meant to protect individuals before the situation escalates,” said U.S. Attorney McSwain. “For good reasons, federal law prohibits subjects of PFA orders from possessing firearms. Here the defendant’s alleged behavior violated the law and threatened public safety.”
If convicted, the defendant faces a maximum possible sentence of 20 years’ imprisonment, three years’ supervised release, a $260,000 fine, and a $200 special assessment.
The case was investigated by the Federal Bureau of Investigation, Allentown Resident Agency, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Reading Field Office, the Washington Township Police Department, the Pennsylvania State Police, and the Bethlehem Fire Department, and is being prosecuted by Assistant United States Attorney John Gallagher.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Montgomery County Man Sentenced to 52 Years in Prison for Abuse of Autistic GirlRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that John Brown, 28, of Norristown, Pennsylvania, was sentenced to 52 years imprisonment, lifetime supervised release, a $600 special assessment, and a $25,000 assessment under the Justice for Victims of Trafficking Act by the Honorable Gene E.K. Pratter. The defendant was also ordered to have no contact with the victim or her family for the rest of his life.
In September of 2017, the defendant pleaded guilty to three counts of manufacturing sexually explicit images of his sexual abuse and exploitation of an autistic girl for more than 18 months, one count of distribution of those pornographic images over the Internet to others, and one count of possession of child pornography for his collection of thousands of images and videos of children being sexually abused and assaulted that he downloaded from the Internet.
Brown took part in a twisted plan with his codefendant to manipulate and sexually assault the child victim in this case, who had been diagnosed on the Autism spectrum and suffered from learning disabilities and mental health issues. Brown cut his hair and shaved his face so that he could pose as a teenage boy to dupe the victim into believing he was her boyfriend and gain her trust. As her “boyfriend,” Brown then engaged her in sexual activity, photographed and videotaped her, and distributed the videos and images back to his codefendant. Brown also distributed this child’s images out to others over the Internet dozens of times.
In addition to the child victim in this case, the investigation revealed Brown also had a sexual relationship with two other minor girls, and had been making plans to meet up with the father of an 11-year old girl to have three-way sex with that man’s child.
“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. “The allegations in this case are particularly disturbing because of the defendant’s abuse of a child with learning disabilities and the efforts he took to gain her trust so he could victimize her. 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 FBI, the Willistown Police Department, and the Chester County District Attorney’s Office. It was prosecuted by Assistant United States Attorney Michelle Rotella.
Crack Dealer Sentenced to 12 Years' Imprisonment for Narcotics and Firearms ViolationsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Ricky Fountain, 41, of Philadelphia, Pennsylvania, was sentenced today to 144 months’ imprisonment and five years’ supervised release after pleading guilty to four counts of distribution of cocaine base, one count of distribution of cocaine, and one count of possession of a firearm by a convicted felon. Senior United States District Judge R. Barclay Surrick imposed the sentence.
“Illegal firearms possession and drug trafficking is a deadly combination,” said U.S. Attorney McSwain. “This case is an example of federal and local law enforcement working together to stop the flow of illegal narcotics onto the streets of Philadelphia. My Office will continue to aggressively prosecute these crimes to keep our communities safe.”
The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department and is being prosecuted by Assistant United States Attorneys Mary E. Crawley and Alison Donahue Kehner.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone.
Montgomery County Man Convicted of Lying to Illegally Obtain FirearmRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Laurence Reinhard, 74, of Huntingdon Valley, Pennsylvania was convicted at trial of one count of making a false statement to a federal firearms licensee.
In 2014, the defendant pleaded guilty to providing malicious false information about an explosive and engaging in a hoax. As part of that guilty plea, he acknowledged that he would not be permitted to possess a firearm as a result of his felony convictions.
On March 10, 2018, he attempted to purchase a firearm, specifically a Smith and Wesson model 642 CT, .38 caliber from a federal firearms licensee. The defendant falsely stated that he had never been convicted of a felony on his application for the weapon.
“For good reasons, the United States regulates who is permitted to purchase and carry firearms -- it is a matter of maintaining public safety,” said U.S. Attorney McSwain. “In this case, the defendant – a previously convicted felon – lied in order to illegally obtain a weapon. I want to thank our law enforcement partners for their quick work in investigating this case and the jury for holding the defendant accountable for his crime.”
The case was investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, the Montgomery County Sheriff’s Office and is being prosecuted by Assistant United States Attorney Priya De Souza.
Three Men Charged with Gunpoint Robbery of Philadelphia Corner StoreRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced today that Donnie Smith, 40, Abid Stevens, 39, and Maurice Quinn, 41, all of Philadelphia, Pennsylvania were charged by indictment with committing a Hobbs Act Robbery and carrying and using a firearm during the commission of a federal crime. Smith was also separately charged with being a felon in possession of a firearm.
According to the indictment, on March 22, 2019, Smith, Stevens, and Quinn entered the RD Grocery, a corner store in the East Mount Airy section of Philadelphia, stole cash and a firearm from the store employee. During the robbery, two of the defendants were armed with black semi-automatic handguns.
“As alleged in the indictment, the complete disregard that these three defendants had for the safety of others is appalling,” said U.S. Attorney McSwain. “The employee of this store was simply doing their job. No one should need to worry about having a semi-automatic weapon, or any weapon, pointed at them when they go to work. This indictment is an example of how my Office is working to get dangerous criminals off the streets of Philadelphia.”
If convicted of each count in the indictment, each defendant faces a maximum possible sentence of life imprisonment, a $500,000 fine, five years of supervised release, and a $200 special assessment.
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 Robert Eckert.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia-based Company Agrees to $300,000 Judgment for Sale of Improperly Sourced Computer Supplies to Federal AgenciesRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Support of Microcomputers Associates (“SOMA”) has agreed to a judgment against it in the amount of $300,000 for selling printers and other equipment to federal agencies that was manufactured in China and other non-compliant countries.
From 2009-2017, SOMA participated in the General Services Administration’s (GSA) Advantage program, which provides a web-based ordering system for federal agencies including the Department of Defense. Companies that join GSA Advantage certify that the materials they provide are permitted for sale to the United States pursuant to the Trade Agreements Act, 19 U.S.C. § 2501, et seq., and its implementing regulations. These rules provide for the United States and its agencies to purchase American-made materials or materials manufactured in specified allied countries. Instead, SOMA ignored the Trade Agreements Act rules and offered for sale to government agencies printers and other materials manufactured in China, Vietnam, and other non-compliant countries.
SOMA cooperated in the government’s investigation. The settlement is based in part on an evaluation of SOMA’s ability to pay.
“Americans have the right to know that their tax dollars are being spent in a way that Congress intended – here, to support American jobs and American policies,” said U.S. Attorney McSwain. “When United States agencies like the Department of Defense purchase printers or other computing equipment, they need assurance of the quality and security of their purchases. The Trade Agreements Act represents Congress’s determination of how best to accomplish those goals, and the United States Attorney’s Office is ready to investigate and hold accountable GSA contractors who do not follow these clear rules.”
“Congress enacted the Trade Agreements Act with the intention of protecting the government supply chain, along with the American economy,” said GSA OIG Special Agent in Charge Gerald Garren. “GSA OIG will continue to work with its partner agencies to aggressively investigate those suppliers on the GSA Schedule who endeavor to skirt this important law through the sale of non-compliant products.”
“Companies that sell goods to the U.S. Department of Defense (DoD) and other U.S. Government agencies, while ignoring the rules and requirements of the Trade Agreements Act, undermine the federal contracting process,” stated Leigh-Alistair Barzey, Special Agent in Charge of the Defense Criminal Investigative Service’s (DCIS) Northeast Field Office. “The judgment in this case is the direct result of a joint investigative effort and demonstrates DCIS’ ongoing commitment to work with the U.S. Attorney’s Office and the GSA-OIG to ensure the integrity of the DoD procurement system.”
This settlement resolves allegations in a lawsuit filed in the Eastern District of Pennsylvania by a former SOMA executive, under the qui tam (or whistleblower) provisions of the False Claims Act. The qui tam provisions permit private parties to sue for false claims on behalf of the government and to receive a share of any recovery. The relator here will receive a portion of the funds recovered by the United States.
This investigation was conducted with the General Services Administration Office of Inspector General and the Defense Criminal Investigative Service. For the United States Attorney’s Office, Assistant United States Attorney Paul W. Kaufman handled the investigation and settlement.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Defense Supply Companies Resolve False Claims Act Liability for Substituting Surplus PartsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that two defense supply companies, and a married couple who operated them, have agreed to resolve the government’s claims that they supplied non-conforming parts to the military in violation of the False Claims Act. The government described its claims in its federal court complaint filed today.
The government’s complaint alleges that in 2015 and 2016, the defense supply companies, Liberty Air Parts, Inc., and US Supply Corporation of Greenlawn, New York, and their operators, George Onorato and Ellen Onorato of Lamoine, Maine, agreed to supply bolts, rings, knobs, and rivets for $24,379.60 to the Defense Logistics Agency Troop Support-Philadelphia. The defendants allegedly agreed to supply these parts in non-surplus condition, meaning brand new—direct from the manufacturer or authorized dealer—and not left over from other government projects.
Instead of supplying them in non-surplus condition, the defendants allegedly substituted leftover, surplus parts in secret. According to the complaint, the defendants concealed this substitution by falsifying records and making false statements. The complaint alleges that the substitution gave the defendants an advantage during the competitive bidding process, allowing them to quote prices for supposedly new, non-surplus parts while swapping them for leftover surplus parts after winning the bids.
To resolve the allegations, the defendants agreed to the entry of a consent judgment against them in the amount of $159,390.80. As part of this proposed consent judgment, the defendants admitted that they supplied parts in surplus condition in violation of contract requirements and the False Claims Act. The defendants also admitted that their substitution harmed open competition and undermined the integrity of the government’s procurement process. In addition, the defendants admitted that they acted recklessly when they responded to the government’s requests for information about the parts.
The proposed consent judgment will protect the public from future harm by prohibiting the defendants from contracting with the federal government at any time.
“My Office will not tolerate government contractors who cut corners and certainly will not tolerate product substitutions like the ones alleged here,” said U.S. Attorney McSwain. “Supplying non-conforming parts to the military isn’t fair to American taxpayers, isn’t fair to competing contractors, and most importantly, isn’t fair to our service members in uniform who trust that they will receive the supplies promised to them.”
“Preventing product substitution in the U.S. Department of Defense’s procurement chain is a top priority for the Defense Criminal Investigative Service (DCIS),” stated Leigh-Alistair Barzey, Special Agent in Charge of the DCIS Northeast Field Office. “The civil settlement agreement announced today is the direct result of a joint effort and demonstrates DCIS’ ongoing commitment to partner with the U.S. Attorney’s Office to identify, investigate and prosecute companies and individuals who sell non-conforming parts to the U.S. military.”
Assistant United States Attorney Michael S. Macko handled the case with investigative assistance from the United States Department of Defense Office of Inspector General, Defense Criminal Investigative Service.
Philadelphia Pill Mill Ringleader Sentenced to over Nine Years in PrisonRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Derrick Parks, 47, of Philadelphia, was sentenced to 110 months’ imprisonment and three years’ supervised release by U.S. District Court Judge Joel H. Slomsky. Parks has a prior criminal record, including illegal possession of a firearm.
From March to October 2012, the defendant was the ringleader of a group that conspired to illegally obtain oxycodone pills to sell on the street. Parks secured blank prescription pads from a co-conspirator who worked in a medical office, wrote out false prescriptions for oxycodone, and paid various people to fill the prescriptions in Pennsylvania and Delaware. Parks would then collect all the pills for distribution. During the months that the illegal distribution ring was operating, Parks obtained over 9,500 oxycodone pills.
“My Office is focused on targeting the worst, most dangerous offenders and getting them off the streets,” said U.S. Attorney McSwain. “In this case, a defendant who had previously been convicted of multiple offenses decided to continue to engage in illegal activity – and this time he concocted a scheme that put thousands of pills on the streets of Philadelphia in the midst of the ongoing opioid epidemic. I’m grateful that the Judge imposed a sentence that will keep the defendant out of our community for many years.”
The case was investigated by the Federal Bureau of Investigation and the Drug Enforcement Administration, and is being prosecuted by Assistant United States Attorney Elizabeth Abrams.
Argentinian National Pleads Guilty to Attempting to Smuggle Night-Vision Rifle Scope Out of U.S.Read the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced today that Sergio Ruchtein, 51, a citizen of Argentina, pleaded guilty before U.S. District Court Judge Timothy J. Savage to the federal felony of attempting to export a defense article without a license.
At the plea hearing, the defendant admitted that in early 2019 he purchased online a Pulsar Trail XP 50 LRF Thermal Rifle Scope and attempted to smuggle the device back to his native Argentina. The rifle scope is designed to be mounted to a weapon and is capable of human-size detection at night from several hundred meters. This night vision scope is a defense article on the United States Munitions List and subject to the Department of State’s International Traffic in Arms Regulations. Accordingly, an export license is required before it is shipped or transported out of the United States.
“For good reasons, the United States monitors and regulates specialized arms equipment being exported from this country,” said U.S. Attorney McSwain. “In this case, a rifle scope designed to detect human beings under cover of darkness could pose a serious risk if it were to fall into the wrong hands. I want to thank our federal law enforcement partners for their quick work in investigating this case.”
“HSI prioritizes investigations of smugglers who circumvent laws in place to guard against the export of sensitive technologies and licensable commodities from the United States,” said Marlon Miller, Special Agent in Charge, HSI Philadelphia. “While the defendant attempted to export a night vision rifle scope to South America, there is no telling where or to whom this sensitive technology was ultimately destined.”
The case was investigated by Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Josh A. Davison.
Pennsylvania Woman Charged with Fraud for Perpetrating “Grandparents Scheme”Read the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Yahaira Diaz, 33, of Pottsville, Pennsylvania, was charged by Information with aggravated identity theft, mail fraud, and access device fraud. The charges against the defendant stem from her participation in what has been popularly dubbed the “Grandparents Scheme”, a type of elder financial abuse. The charges come one day in advance of “World Elder Abuse Awareness Day” on June 15, 2019.
As alleged in the Information, 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 demand more money until the victim realized that he or she had been defrauded and stopped sending money.
In those telephone calls, to further convince the grandparents to send cash, the co-schemers described the grandchild’s situation as increasingly serious: claiming that the grandchild had been arrested for driving under the influence; that a pregnant woman was involved in the accident; that the pregnant woman and her unborn child were injured or killed; that the grandchild would not be released from prison without additional funds; and that legal and other fees were mounting.
Diaz allegedly played a leadership role in this scheme, which she and her co-schemers perpetrated 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, which is also charged in the Information. 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. If convicted, the defendant faces a maximum possible sentence of 72 years in prison, including a mandatory minimum term of two years in prison.
“Crimes against the elderly target some of the most vulnerable people in our society, and schemes like the ‘Grandparent Scheme’ are particularly heinous because they prey on a senior’s love for their family,” said U.S. Attorney McSwain. “The Department of Justice is committed to protecting our seniors from fraud, and my Office will continue to prioritize prosecuting criminals who prey on our elderly residents.”
“Trying to scam strangers out of money is criminal,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “Specifically targeting elderly victims because you figure they're easy marks is cruel. The FBI will never stop working to shut down elder fraud schemes like this to protect older folks and help them hang on to their hard-earned money.”
“Crimes like these against our elderly citizens are taken very seriously by law enforcement. The Bethlehem Police Department, working with its Federal partners, will investigate, arrest and prosecute individuals involved in criminal scams like these ‘Grandparent Scams,” said Mark DiLuzio, Chief of Police, Bethlehem Police Department. “As Chief, I would like to personally thank U.S. Attorney McSwain and his Office, the FBI, U.S. Postal inspectors, the Northampton County District Attorney’s Office and Bethlehem Police Detectives who all worked collectively and brought this person and her partners to justice. On behalf of all elderly citizens in the City of Bethlehem, thank you!”
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.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
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.
The Department of Justice also provides a variety of resources relating to elder fraud victimization through its Office of Victims of Crime (OVC), which has announced a new competitive solicitation addressing enhanced multidisciplinary teams for older victims of abuse and financial exploitation (up to $375,000 each) and funding for a National Multidisciplinary Team Technical Assistance Center (for up to $3 million), which will help facilitate the expansion of elder abuse case review across the nation. The deadline is July 7, 2019.
More information about the Department’s efforts to help American seniors is available at its Elder Justice Initiative webpage. For more information about the Consumer Protection Branch and its enforcement efforts, visit its website. Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP.
Philadelphia Man Indicted for Rash of Cell Phone Store RobberiesRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced today that Malcolm Xavier Taylor, 26, of Philadelphia, Pennsylvania, was indicted by a grand jury with four counts of robbery which interferes with interstate commerce, and use and carrying of a firearm during and in relation to a crime of violence.
The defendant is alleged to have committed a string of robberies of cell phone stores in Philadelphia, robbing four different stores over a three-week time period in November and December 2017. During all four incidents, he brandished a firearm and threatened to shoot store employees. In total, the defendant stole over a hundred cell phones and cash.
“The complete disregard for others’ safety that Taylor is accused of is appalling,” said U.S. Attorney McSwain. “The employees of these stores were simply doing their jobs, while the defendant terrorized them so that he could make a buck off of stolen cell phones. The streets are safer now that Taylor will have to answer these charges.”
“ATF’s primary mission is to combat violent crime and this investigation is a clear statement of our resolve to accomplish this mission,” said Special Agent in Charge Donald Robinson. “This indictment of Malcolm Taylor sends a clear message that ATF and its law enforcement partners will not allow violent criminals to continue victimizing our communities and neighborhoods”
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
If convicted, the defendant faces a maximum possible sentence of life imprisonment and a mandatory minimum of five years’ imprisonment.
The case was investigated by the Bureau for Alcohol, Tobacco, Firearms and Explosives, and is being prosecuted by Assistant United States Attorney Priya T. De Souza.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Man Indicted for Armed Robbery of Firstrust Bank in Bryn Mawr, PARead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Justin O’Brien, 32, of Philadelphia, was indicted by a federal grand jury with armed bank robbery. The indictment charges that on March 12, 2019, O’Brien knowingly and unlawfully, by force, violence and intimidation, took approximately $1,260 from an employee of Firstrust Bank, located at 725 Lancaster Avenue, Bryn Mawr, Pennsylvania. The indictment also charges that the defendant knowingly and unlawfully assaulted another person by the use of a dangerous weapon: a facsimile firearm (pellet gun).
“As alleged in the indictment, the defendant’s conduct in this case was reckless and stupid,” said U.S. Attorney McSwain. “Not only did O’Brien rob a bank, which is a serious offense, but he threatened bank employees with what looked like a real gun – causing them to fear for their lives. He is now facing serious federal charges and prison time over a relatively small sum of money. To all would-be robbers: let this serve as a deterrent – it’s not worth it.”
“Imagine looking down the barrel of a gun pointed at you by some stranger demanding money,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “It's not something armed robbery victims soon forget. As alleged, Justin O'Brien barged into a bank with a weapon, terrified employees, and fled with cash. Anyone willing to commit a violent crime like that needs to answer for it.”
If convicted, the defendant faces a maximum possible sentence of 25 years’ imprisonment; up to five years’ supervised release; a $250,000 fine, and a $100 special assessment.
The case was investigated by the Federal Bureau of Investigation, the Lower Merion Township Police Department, and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Thomas M. Zaleski.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
New Jersey Tax Prep Duo Plead Guilty to Fraud, Filing False Returns for Themselves and ClientsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Omar Faruq, 37, of Pennsauken, New Jersey, and co-conspirator Omar Ali, 36, also of Pennsauken, New Jersey, both entered pleas of guilty before United States District Court Judge Nitza I. Quiñones on one count each of conspiracy to defraud the Internal Revenue Service, aiding another in the filing of a false tax return, and filing a false tax return.
According to a criminal Information filed in April 2019, Faruq and Ali conspired to file false tax returns on behalf of their clients at Omar Consultancy Inc., a tax service operated by them with offices in Pennsylvania and New Jersey.
According to the plea memorandum filed for today’s court appearance, Faruq and Ali consistently used false filing status, false Schedule A deductions and expenses, false Schedule C business income and losses, and fictitious credits to decrease clients’ tax liabilities, all of which resulted in increased refunds for many of their clients. Faruq diverted portions of his clients’ returns to his own bank account as part of the conspiracy, totaling more than $300,000, and Ali diverted over $170,000 to his own bank accounts.
Faruq and Ali both also pled guilty to filing a false income tax return for themselves and their respective spouses for tax year 2014. In filing the false returns, Faruq and Ali omitted gross receipts from their tax preparation business on the 2014 tax returns and failed to report diverted funds from taxpayer-clients as income on their personal returns.
“Our tax system depends on the honesty of all citizens to truthfully file their tax returns, many of whom rely on professionals to represent their interests and to do the work honestly,” said U.S. Attorney McSwain. “Tax preparers like Faruq and Ali undermine the tax system when they prepare and file false tax returns for their clients. My Office will aggressively investigate and prosecute tax preparers like the defendants who profit by turning their tax preparation services into fraud factories.”
“While most return preparers provide excellent service to their clients, a few unscrupulous tax preparers file false and fraudulent returns to defraud the government, the tax-paying public and their own clients,” stated John R. Tafur, Special Agent in Charge, IRS Criminal Investigation, Newark Field Office. “Tax practitioners and return preparers have a duty to their clients to prepare tax returns that comply with the law and are complete and accurate. IRS Criminal Investigation will investigate and hold accountable abusive tax preparers who attempt to defraud our nation’s tax system.”
The case was investigated by the Criminal Investigation Division of the Internal Revenue Service, and is being prosecuted by Assistant United States Attorney Richard P. Barrett.
Former Bucks County Public Safety Officials Sentenced to 4 ½ and 1 ½ Years in Prison for Public CorruptionRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Robert Hoopes, 72, of Doylestown, PA, and Bernard Rafferty, 64, of Langhorne, PA were sentenced to 54 months’ and 18 months’ incarceration, respectively, by United States District Judge Gene E.K. Pratter. In September 2018, Hoopes pleaded guilty to conspiracy to commit money laundering and Hobbs Act Extortion Under Color of Official Right. In March 2018, Rafferty pleaded guilty to conspiracy to commit money laundering and honest services mail fraud.
From February 2016 until December 2016, Hoopes was the Director of Public Safety in Lower Southampton Township, Pennsylvania. In this position, Hoopes had authority over all police, fire, and emergency operations in the township. From 1992 until December 2016, Rafferty was a Deputy Constable in Bucks County.
Together with their co-defendants, including former Magisterial District Judge John Waltman who was sentenced to 78 months’ incarceration earlier this week, Hoopes and Rafferty participated in a scheme to extort bribes and kickbacks from Bucks County businessmen. They also conspired to launder money for individuals they believed were engaged in narcotics trafficking and health care fraud.
For example, in November 2016, Waltman, Hoopes, and Rafferty accepted a bribe of $1,000, as well as the promise of other fees, in exchange for Waltman, Hoopes, and Rafferty to use their positions as public officials to “fix” a traffic case before Waltman in Bucks County Magisterial District Court.
In addition, from June 2015 to November 2016, Waltman, Hoopes, and Rafferty conspired to launder funds represented to be proceeds from health care fraud, and illegal drug trafficking. From June 2016 to August 2016, Waltman, Hoopes, and Rafferty specifically laundered $400,000 in cash and took money laundering fees totaling $80,000 in cash.
“The laws of the land apply to everyone – especially to public officials who hold office to serve the public good,” said U.S. Attorney McSwain. “Hoopes and Rafferty, like their corrupt partner Waltman, chose to flout the rule of law. In doing so, they disgraced themselves and the offices they held. Every public official should be on notice after today’s sentence: federal law enforcement is watching and we will hold you accountable if you make the wrong choices.”
“Hoopes and Rafferty held positions of trust and were expected to protect and serve their community,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “Abandoning all pretense of ethics, they instead used their public roles for personal gain. They were willing to engage in what was clearly criminal behavior, so long as it benefitted their bank accounts. Such blatant corruption is toxic to the public trust, and the FBI is gratified these defendants are being held accountable.”
“Honest and law abiding citizens are fed up with the likes of those who use fraud to line their pockets,” said Guy Ficco, IRS-Criminal Investigation Special Agent in Charge. “Robert Hoopes and Bernard Rafferty disregarded the trust placed in them by the public when they made conscious decisions to accept bribes and launder money. Let this serve as a reminder that we will continue to investigate and bring to justice those who commit similar crimes.”
“This week’s sentencings reflects Homeland Security Investigations’ commitment to, and focus on, the investigation of financial crimes,” said Marlon V. Miller, special agent in charge of HSI Philadelphia. “By using their official positions for personal gain, Mr. Hoopes, Mr. Rafferty, and Mr. Waltman violated the trust placed in them by the public. HSI and our law enforcement partners will continue to vigorously investigate those who conspire to knowingly launder illicit funds derived from criminal activities.”
The case was investigated by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigations, Homeland Security Investigations, and the Pennsylvania State Police. It is being prosecuted by Assistant United States Attorneys Louis Lappen and Richard Barrett.
Dangerous Illegal Alien from Mexico Sentenced to Five Months for Fourth Illegal Entry into the CountryRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Rodrigo Fuentes-Gomez, a/k/a “Ervin Yovany Cruz,” 52, of West Chester, PA, was sentenced to five months’ incarceration by United States District Judge Mark A. Kearney. The defendant was convicted of re-entering the United States illegally after being deported on three previous occasions and after having committed other criminal offenses while in the country unlawfully. After he serves his sentence, the defendant will be deported to Mexico.
On September 27, 2018, the defendant, an illegal alien, native and citizen of Mexico, was charged in an indictment with reentry into the United States on or about July 2, 2018, after previously being deported and removed from the country on or about April 4, 1999, August 14, 2007, and June 25, 2011. On May 9, 2019, the defendant pleaded guilty.
While illegally present in the United States, the defendant has engaged in repeated criminal behavior. He has been convicted of driving under the influence, forgery and making false reports to law enforcement, as well as public intoxication. This conviction is the defendant’s second federal conviction for illegal reentry, as he was previously federally convicted of illegal entry into the United States on May 9, 2011, in the District of Arizona.
“The defendant in this case clearly has no respect for the laws of this country,” said U.S. Attorney McSwain. “After being removed on three previous occasions, Fuentes-Gomez decided yet again to snub our immigration system by entering the United States illegally – and committing multiple criminal offenses while he was here. He is clearly a danger to the public and does not deserve the privilege of being in our country. I am glad that the Judge agreed and has ordered a sentence that holds him responsible for his actions.”
“Mr. Fuentes-Gomez’s sentencing sends a clear message that criminal aliens who illegally re-enter the United States will face criminal prosecution for flagrantly disregarding our laws,” said Simona L. Flores-Lund, Field Office Director for U.S. Immigration and Customs Enforcement (ICE) Enforcement and Removal Operations (ERO) Philadelphia. “It should also serve as a warning to others contemplating re-entering this country illegally that ERO officers will seek to affect their removal and preserve the integrity of our immigration laws.”
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations, and is being prosecuted by Assistant United States Attorney Melanie B. Wilmoth.
Former Villanova University Campus Ministry Official Pleads Guilty to Child Pornography OffenseRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced today that Timothy O’Connell, 52, of Drexel Hill, PA entered a plea of guilty before the Honorable Gerald J. Pappert on one count of receipt of child pornography.
On February 10, 2018, the defendant received images depicting the sexual abuse and exploitation of pre-pubescent children. The victims depicted in the child pornography included a two-year old child 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. On January 3, 2019, the defendant was indicted for receipt of child pornography.
“Child exploitation is a pervasive problem that demands a sustained, aggressive response,” said U.S. Attorney McSwain. “The allegations in this case are particularly disturbing due to the defendant’s history as a spiritual leader in a position of community trust at Villanova. We stand ready with our federal and local partners to identify and prosecute those who would prey upon minor children.”
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.