Eastern District of Pennsylvania

PHILADELPHIA, PA – First Assistant U.S. Attorney Jennifer Arbittier Williams announced that the United States has filed a civil lawsuit against G & A Somerton Pharmacy LLC (“Somerton”), its owner Polina Khodak, and its pharmacist-in-charge, Inessa Lerner, alleging that they violated the False Claims Act when they knowingly billed Medicare for over $1 million worth of prescription drugs that were never actually dispensed to beneficiaries, during the period January 1, 2009 through December 31, 2015.  These medications included but were not limited to Lidoderm, Advair Diskus, Omeprazole, Solaraze, Nexium, Donepezil, Novolog, Meclizine, Lidocaine, and Januvia. 

The United States has also entered into a Stipulated Order and Consent Judgment with Somerton, Khodak, and Lerner, subject to the Court’s approval, which would resolve the matter without litigation.  If approved by the Court, the Judgment will require the defendants to pay nearly $1.3 million.  Significantly, it will also require Somerton and Khodak to agree to a 10-year healthcare exclusion, which will prohibit them from receiving payments from any federally funded health care insurer such as Medicare.  And it will require Lerner to enter into an integrity agreement, requiring her to undertake substantial compliance obligations. 

“Pharmacy fraud remains a priority for our Office,” said First Assistant U.S. Attorney Jennifer Arbittier Williams.  “Taxpayer dollars should be spent on needed medications, not wasted on fraud and abuse. Our Office will continue to scrutinize and pursue such conduct.” 

“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.”

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, Assistant U.S. Attorney Deborah W. Frey, Civil Chief Gregory B. David, Auditor George Niedzwicki, and paralegal Patricia Bontempo, Certified Fraud Examiner, handled the matter.   

The complaint contains allegations only; there has been no determination of liability

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Shyniquah Lightner, 27, of Philadelphia, Pennsylvania, was sentenced today to twenty years’ incarceration and fifteen years’ supervised release by United States District Judge C. Darnell Jones II for her role in a scheme to sex traffic minor children.

In 2016 and 2017, Lightner recruited two children, ages 14 and 15, to engage in commercial sex acts at a house in Philadelphia.  She advertised the children on the website Backpage.com, and she collected money from the sex buyers who came to the residence for sexual encounters with the minors.  Her co-defendant, Malik Hudson, participated in the trafficking of the 15-year-old.

“Lightner’s crimes were devastating to her minor victims,” said First Assistant U.S. Attorney Williams. “Today’s sentence of twenty years’ incarceration reflects the seriousness of her crimes and the irrevocable damage she caused, all in pursuit of financial gain. We will continue to work collectively to investigate these destructive crimes against vulnerable children.”

“Today’s sentencing is a significant step in holding Ms. Lightner accountable for trafficking children,” said Marlon V. Miller, Special Agent in Charge of HSI Philadelphia.  “Traffickers prey on the vulnerabilities of their victims, repeatedly exploiting them for their own personal gain. We will continue working with our partners at the Philadelphia Human Trafficking Task Force to hold these criminals accountable for their deplorable actions.”

The case was investigated by the Department of Homeland Security - Homeland Security Investigations, with assistance from the Philadelphia Police Department Special Victims Unit, and is being prosecuted by Assistant United States Attorney Michelle L. Morgan.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Salim Davis, 34, of Philadelphia, PA was convicted at trial of one count of being a felon in possession of a firearm, one count of possession of a firearm in connection with a drug trafficking offense, one count of possession with intent to distribute a controlled substance, and one count of aiding and abetting the making of a false statement to a federal firearms licensee.

At trial, the government presented evidence that, on December 29, 2017, at approximately 3:25 p.m., an off-duty Philadelphia Police Inspector was driving his unmarked police car in the area of 2500 Island Avenue when he heard gunshots.  Minutes later, he observed defendant Salim Davis and another man carrying firearms while walking in an alleyway near the Inspector’s car.  The Inspector commanded that they stop and put their hands up, but Davis fled and discarded his jacket.  Police eventually caught up with Davis, placed him in custody, and recovered from him money, a bottle containing 72 Alprazolam pills, and several loose pills in Davis’s pocket.  In addition, upon picking up Salim’s discarded jacket, officers recovered a Smith & Wesson, .40 caliber, semi-automatic handgun loaded with 10 live rounds.  Police later determined that the weapon they recovered was purchased by a third party on Davis' behalf at Double Action, a federal firearm licensee, in Yeadon, PA.

“This guilty verdict is another important step towards protecting our communities from drug and gun offenders who bring violence to our communities,” said First Assistant U.S. Attorney Williams. “The United States Attorney’s Office, with our law enforcement partners, will aggressively investigate, prosecute, and hold these offenders accountable. We deeply appreciate the cooperation of all of our federal, state, and local partners in defending our communities and bringing Davis to justice.”

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

The case was investigated by ATF and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorney Kate Driscoll.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Domenick Braccia, 58, of Hatfield, Pennsylvania, was sentenced to 37 months’ incarceration, one year supervised release, 150 hours of community service, a $15,000 fine and ordered to pay $2,484,864 in restitution by United States District Judge Wendy Beetlestone.  The defendant pleaded guilty to one count of conspiracy to commit health care fraud in May 2019, arising from his role in a scheme to overbill health care benefit programs for treatment and testing of drug-addicted patients at outpatient facilities owned by Liberation Way. 

Domenick Braccia was the so-called “medical director” and the only medical doctor on staff at Liberation Way’s three locations in Yardley, Bala Cynwyd, and Fort Washington.  In violation of his oath as a doctor, and as part of a multi-state scheme to defraud insurers, Braccia signed blank prescription forms and patient orders, averred to the medical necessity of testing for patients whom he never saw, and prescribed for patients he did not see.   

“We have consistently said that this case should send a message to those attempting to profit from fraud and the despair of individuals battling addiction,” said First Assistant U.S. Attorney Williams.   “With this sentence, that message has been delivered in a powerful and concrete way.  Dominick Braccia is through practicing medicine and is going to prison.  We have been proud to work with the Office of Pennsylvania Attorney General Shapiro and our other federal agency partners to bring all of the defendants in this case to justice.”

“The operators of Liberation Way shamelessly took advantage of people suffering from substance use disorder to line their own pockets,” said Attorney General Josh Shapiro. “As Medical Director, Dr. Braccia played a significant role in this fraud and betrayed the patients he was supposed to be helping. I’m proud that through collaboration with our federal law enforcement partners, we held him accountable for his despicable actions today, and we will continue to do the same with the remaining Liberation Way defendants.”

The case was investigated with the Pennsylvania Attorney General’s Office, and by the Federal Bureau of Investigation, Department of Health and Human Services, Office of Personnel Management, and the Department of Labor. It is being prosecuted by Assistant United States Attorney Nancy Beam Winter and Special Assistant United States Attorneys Kristy Christ and Robert Labar of the AG’s Office.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Liam Heim, 23, of St. Petersburg, Florida, was sentenced to 180 months’ imprisonment, and lifetime supervised release by United States District Judge Petrese B. Tucker for child exploitation offenses which occurred in Philadelphia.

In early 2018, while living in Florida, the defendant started an online forum on the messaging service Discord, through which he met a 12-year-old girl living with her parents in southern New Jersey.  Heim groomed his seventh-grade victim to believe that they were in a romantic relationship, eventually convincing her to meet with him in person so that he could sexually assault her.  On March 29, 2018, Heim flew from Florida to Philadelphia, picked up the victim in southern New Jersey, and brought her to a hotel near the airport in Philadelphia where he repeatedly sexually assaulted her over the course of an approximately 36-hour period before the victim was recovered by authorities and Heim was arrested.  The defendant ultimately pled guilty to charges of traveling in interstate commerce to engage in illicit sexual conduct with a minor, and transportation of a minor in interstate commerce with intent to engage in unlawful sexual activity.

“The harm caused by any child exploitation is devastating and long-lasting,” said First Assistant U.S. Attorney Williams. “And in this case, the conduct wasn’t limited to online communications – this defendant followed through, traveled here from out-of-state, and actually assaulted a young and vulnerable child.  There can be no doubt that our children and our community are safer now that this defendant is off the street.  We stand ready with our federal and local partners to identify and prosecute all those who would prey upon minor children.”

"The sexual exploitation of children is a heinous offense,” said Marlon V. Miller, special agent in charge of Homeland Security Investigations, Philadelphia. “This joint investigation with the Philadelphia Police Department Special Victims Unit, Collingswood Police Department and Camden County Prosecutor’s Office Special Victims Unit demonstrates HSI’s commitment to working with our law enforcement partners to bring perpetrators to justice.”

The case was investigated by Homeland Security Investigations, Philadelphia Police Department and the Camden County District Attorney’s Office, and is being prosecuted by Assistant United States Attorney Seth M. Schlessinger.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that John Karl Smith, 26, of Philadelphia, Pennsylvania was sentenced to 84 months’ incarceration and three years’ supervised release by United States District Judge Paul S. Diamond for the robbery of multiple businesses in Philadelphia during the summer of 2018.

This Hobbs Act robbery case charged the defendant with entering commercial businesses in North and Northeast Philadelphia during July and August of 2018. He entered each business, approached the clerk, produced a knife, and demanded money. The defendant robbed six businesses during his crime spree – including a corner store, multiple cell phone stores, and a pizza restaurant – and he pled guilty to six counts of Hobbs Act robbery in May 2019.

“The complete disregard that Smith demonstrated for the safety and well-being of others is appalling,” said First Assistant U.S. Attorney Williams. “The employees of these stores were simply doing their jobs, when Smith terrorized them just to make a few bucks. The streets are safer now that the defendant will be spending the next few years behind bars.”

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 Philadelphia Police Department and the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Robert E. Eckert.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Jerome Lamont Duggan, 46, of Bethlehem, Pennsylvania was sentenced to 324 months’ imprisonment, five years’ of supervised release and a $2,500 fine by United States District Judge Joseph F. Leeson, Jr., for his crimes related to trafficking a multitude of drugs throughout the Lehigh Valley.

From about March through early-May 2016, Duggan and his co-conspirators possessed with intent to distribute and distributed illegal drugs including approximately 2.4 kilograms of methamphetamine in various locations throughout Northampton and Lehigh Counties, Pennsylvania.  In March 2019, a jury found Duggan guilty of all counts of the Superseding Indictment, including one count of conspiracy to distribute 500 grams or more of methamphetamine, and counts charging possession with intent to distribute:  (a) 50 grams or more of methamphetamine; (b) 500 grams or more of cocaine; (c) 28 grams or more of cocaine base (“crack”); and (d) approximately 772 grams of marijuana. 

“Duggan and other members of this drug organization pumped huge quantities of dangerous drugs into our community,” said First Assistant U.S. Attorney Williams. “These traffickers essentially delivered destruction to our communities. Our office is determined to investigate and convict these criminals, and put them behind bars.”

“Duggan was convicted and sentenced for distributing a substantial amount of dangerous drugs such as methamphetamine, cocaine, crack cocaine, and marijuana across the Lehigh Valley,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division.  “The DEA, working with our partner federal, state, and local law enforcement agencies will continue to identify and investigate drug-traffickers like Duggan that seek to poison our communities.” 

The case was investigated by Drug Enforcement Administration-Allentown Resident Office, United States Postal Inspection Service, Homeland Security Investigations, Pennsylvania State Police, Lehigh County District Attorney’s Office Detectives, and Allentown and Bethlehem Police Departments, and is being prosecuted by Assistant United States Attorney Kishan Nair.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Mario Calderon-Medina, 55, a native and citizen of Mexico, was sentenced to 15 months’ imprisonment and one year of supervised release by United States District Judge Juan R. Sanchez for illegally reentering the United States after having been deported previously.  The defendant was found by the judge to fall within Criminal History Category II based on his previous offenses.

Calderon-Medina reentered the United States illegally after having been deported to his native Mexico four times, the most recent occurrence being in 2003.  During his most recent illegal return to this country, he committed a bank robbery in Montgomery County, PA, for which he was sentenced to 1½ to 3 years in state prison.

“The defendant has demonstrated a complete lack of respect for our country’s laws and has also now clearly shown that he represents a danger to the community if he should return again,” said First Assistant U.S. Attorney Williams.  “The need to enforce immigration law is underscored in this case when an alien not only reenters the country unlawfully, but commits a serious crime upon his reentry.”

The case was investigated by the Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations, and is being prosecuted by Assistant United States Attorneys Sarah Wolfe and Thomas Perricone.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that defendant Philip Ahr, 68, of Radnor, Pennsylvania, was sentenced to 151 months’ incarceration and 10 years’ supervised release by United States District Court Judge Michael M. Baylson after pleading guilty to three counts of distribution, receipt and possession of child pornography. His sentence requires him to register as a sex offender under Megan’s Law.

The defendant, who created online aliases like “DaddyX” and “DaddyXX” to commit these crimes, was originally arrested by the Delaware County District Attorney’s Office Criminal Investigation Division, and then later by the Federal Bureau of Investigation as part of an online investigation into the sexual exploitation and trafficking of children.

For more than four years, the defendant communicated online with hundreds of other child offenders, distributing horrific images of children being sexually abused and collecting an extensive supply of the unlawful videos and images. He did so at all times of the day and night and from various locations and devices, including at his home, his place of employment, and using his government-issued iPad which he had received as President of the Board of Commissioners in Radnor Township. During the same time that he was committing these offenses, Ahr also involved himself in numerous community service activities that were geared toward and gave him access to children of the same age that he sexually exploited as part of his crimes.

“The defendant’s days of exploiting his position of trust in our community for his perverse gratification are over,” said First Assistant U.S. Attorney Williams. “Child sexual exploitation is appallingly pervasive, exacerbated by the easy availability of online file sharing, and it demands an aggressive response. We stand ready with our federal partners to identify and prosecute individuals that perpetuate this abuse.”

This case is part of Project Safe Childhood (PSC), a program bringing together all levels of law enforcement and the communities they serve to reduce the sexual exploitation and abuse of children. The case was investigated by the Federal Bureau of Investigation, the Delaware County District Attorney’s Office, and is being prosecuted by Assistant United States Attorney Michelle Rotella.

PHILADELPHIA, PA – First Assistant U.S. Attorney Jennifer Arbittier Williams announced that Richard P. Frey, D.O., and Physicians Alliance Ltd. (“PAL”) have agreed to pay $178,398.35 to resolve liability under the False Claims Act for the alleged improper billing of “P-Stim” devices.

From May 2013 through June 2014, Frey and PAL billed Medicare for the implantation of neurostimulator electrodes, a surgical procedure typically necessitating an operating room for which Medicare reimburses thousands of dollars. Frey did not conduct surgery, however. Instead, he applied a “P-Stim” device in an office setting without surgery or anesthesia.

P-Stim is an electric acupuncture device that, pursuant to manufacturer’s instructions, is affixed behind a patient’s ear using an adhesive. Needles are inserted into the patient’s ear and affixed using another adhesive. Once activated, the device then provides intermittent stimulation by electrical pulses. It is a single-use, battery-powered device designed to be worn for approximately four days until its battery runs out, at which time the device is thrown away. Medicare does not reimburse for acupuncture or for acupuncture devices such as P-Stim, nor does Medicare reimburse for P-Stim as a neurostimulator or as implantation of neurostimulator electrodes. Other brand names for this device include Stivax, NeuroStim, ANSiStim, E-Pulse, and NSS-2 Bridge.

“P-Stim is an acupuncture device that was billed here as a surgically implanted neurostimulator,” said First Assistant U.S. Attorney Williams. “Medicare does not reimburse a dime for acupuncture devices, but it paid these defendants thousands of dollars because of their alleged improper billing. We appreciate Dr. Frey and PAL’s willingness to promptly negotiate a resolution in this matter, and we will continue working closely with our partners at CMS’s Center for Program Integrity, the Department of Health and Human Services Office of the Inspector General, and sister U.S. Attorney’s Offices around the country to hold accountable any other providers who inappropriately billed for this device and any distributors or marketers who carried out such a billing scheme.”

“Every dollar saved is critical to the sustainability of our Medicare program and the needs of our beneficiaries,” said Centers for Medicare and Medicaid Services Administrator Seema Verma. “We thank our partners at the Department of Justice and Department of Health and Human Services Office of Inspector General for working hard with us to identify, investigate, and eliminate waste, fraud and abuse in our federal healthcare programs.”

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

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

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Artavius Horne, a/k/a “Lo”, 35, of Philadelphia, PA was convicted at trial of three counts of sex trafficking minors by force, fraud or coercion.

During the week-long trial, the government presented evidence which showed that the defendant organized, operated and led a sex trafficking venture based in and around Northeast Philadelphia. As part of the scheme, the defendant recruited, enticed, harbored, transported, provided, obtained, or maintained three minor children, one of whom was 13 years old, to engage in commercial sexual encounters. Horne created internet advertisements for each of the victims on a website known as Backpage.com, and he transported them across state lines to New Jersey, New York, Washington D.C., and Maryland for the purpose of engaging in commercial sex acts. He also kept the victims in apartments throughout Philadelphia, also known as “trap houses,” where they were made to engage in commercial sex for the benefit of the defendant.

“The defendant’s days of trafficking girls by force and manipulation for his own financial benefit are over,” said First Assistant U.S. Attorney Williams. “Sex trafficking is an appallingly pervasive problem, exacerbated by the easy availability of online advertising, and it demands an aggressive response. We stand ready with our federal partners to identify and dismantle organizations that perpetuate this abuse.”

The case was investigated by the Federal Bureau of Investigation, and it is being prosecuted by Assistant United States Attorney Melanie Babb Wilmoth.

PHILADELPHIA – United States Attorney William M. McSwain announced that Jeffrey Blackwell, 46, of Philadelphia, PA was charged by Superseding Indictment with honest services wire fraud, federal program bribery, filing a false tax return, and failure to file a tax return. In a news conference today, U.S. Attorney McSwain discussed the charges against the defendant and the commitment of the U.S. Attorney’s Office to investigating and prosecuting all types of public corruption.

The 13-count Superseding Indictment, unsealed this morning, alleges that the defendant – a former City of Philadelphia employee in the Office of the City Controller – committed a series of frauds, accepting more than $22,000 in bribes and kickbacks from individuals seeking City permits and contracts. Between 2013 and 2015 while serving in the Investigations Division of the Controller’s Office, Blackwell misused his official position to enrich himself by soliciting money in exchange for official actions or the promise of official actions, but rarely provided the promised permits or contracts. These promised services included lucrative city contracts and licenses, permits for home renovation work, and even mundane permits to park a storage container on the street. Blackwell is also charged with one count of federal program bribery for allegedly accepting a bribe to award a contract with the City to install decals on Philadelphia Police vehicles and a license to operate a used car sales business. Finally, the defendant faces charges related to making a false claim on his tax return in 2012, and failing to file federal tax returns in 2014 and 2015.

 “Corruption is an insidious crime.  It is a cancer that must be attacked and destroyed wherever it is found.  It is lethal and can literally suck the life out of an organization, or even a city,” said U.S. Attorney McSwain.  “My Office is committed to the fight against corruption:  if you are an elected official, a public official or a public employee and you debase yourself and your position and betray the public through corrupt acts, you will be prosecuted and jailed.  And when doing your job, don’t try to walk up to the line between corrupt and honest behavior.  Stay far away from that line.  Instead, do your job honestly and faithfully every day in every possible way.  That is what the public deserves.”

“When government employees seek bribes and kickbacks, they’re blatantly putting their own greed ahead of the interests of the people they serve,” said Christian Zajac, Assistant Special Agent in Charge of the FBI’s Philadelphia Division. “As alleged, Blackwell traded on his official position in order to enrich himself. In doing so, he deprived the citizens of Philadelphia of their right to honest services from their city workers. The FBI is committed to investigating public corruption, in order to protect the integrity of government at all levels. We’d ask anyone who may be aware of criminal misconduct by a public official to call our Philadelphia field office, or go to tips.FBI.gov and share the information.”

“This indictment is an important victory for America's taxpayers who play by the rules,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco. “Those Americans who file accurate, honest and timely tax returns can be assured that the government will hold accountable those who don't.”

“This indictment sends a message that you can’t skirt City permitting rules,” said Philadelphia Inspector General Amy Kurland.  “The rules ensure that construction work will be done safely and honestly. We were pleased to have played a role in this investigation, and we look forward to working with our law enforcement partners to continue aggressively pursuing anyone who doesn’t play by the rules.”

“The vast majority of city employees are good people who work hard each and every day to improve the city,” said Philadelphia City Controller Rebecca Rhynhart.  “However, there are a few bad actors who abuse their positions and the public’s trust. We cannot turn a blind eye to those individuals. They must be rooted out and held to account. Today’s announcement sends a clear message that these kinds of egregious actions won’t be tolerated.”

If convicted, the defendant faces a maximum possible sentence of more than thirty years’ imprisonment.

The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service with assistance from the Philadelphia Office of the Inspector General, and is being prosecuted by Assistant United States Attorney David Ignall. An indictment, information, or criminal complaint is an accusation.

A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Matthew Laver, age 38, of Souderton, in Montgomery County, PA, entered a plea of guilty before United States District Judge Michael Baylson to multiple counts of distribution, receipt, and possession of child pornography.

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

“The harm caused by child exploitation is devastating and long-lasting, which is why we prosecute these cases aggressively,” said First Assistant U.S. Attorney Williams. “In this case, the conduct was particularly egregious because the defendant was a member of a law enforcement organization charged with enforcing the law. We stand ready with our federal and local partners to identify and prosecute all those who would prey upon minor children.”

“Law enforcement officers take an oath to serve and protect, thus our conduct must be beyond reproach ,” said Marlon V. Miller, special agent in charge of HSI Philadelphia. “Homeland Security Investigations special agents worked closely with our law enforcement partners to further prevent this perpetrator from victimizing children by distributing images of sexual assault.”

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

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

PHILADELPHIA – United States Attorney William M. McSwain announced that Dino Paolucci, 41, of Mississauga, Ontario, entered a plea of guilty to four counts of securities fraud before United States District Judge Eduardo C. Robreno.

The charges resulted from the defendant’s participation in a scheme to manipulate the price and trading volume of the stocks of LiveWire Ergogenics (“LVVV”), YaFarm Technologies (“YFRM”), Resource Ventures (“REVI”), and Medical Cannabis Payment Solutions (“REFG”). This type of scheme is commonly referred to as a “pump-and-dump.”

During the course of the scheme, Paolucci, a stock promoter, worked with others to artificially increase the price and volume of the stocks through the use of false and misleading press releases, email blasts, radio advertisements and tweets, often in coordination with planned trading by other participants in the scheme. The misleading promotion in concert with planned trading was designed to control the price and volume of the stock. In order to hide their scheme from investors and regulators, Paolucci and his fellow schemers used offshore corporations and brokerage accounts, intermediaries, and even fake names, causing tens of millions of dollars of losses to investors while gaining millions in profits for themselves.

“Stock fraud is a danger to free markets and to individual investors, and our securities laws must be vigorously enforced to protect the public,” said U.S. Attorney McSwain. “Those who defraud investors and harm our securities markets will be tracked down and brought to justice, just as Paolucci was here.”

The case was investigated by the Federal Bureau of Investigations, with assistance from the Securities and Exchange Commission. It is being prosecuted by Assistant United States Attorneys Patrick Murray and Judy Smith.

PHILADELPHIA – United States Attorney William M. McSwain announced that defendant Jack Russell Bristol, 62, of Troy, Pennsylvania, was sentenced to thirty years’ incarceration and ten years’ supervised release by United States District Court Judge Gerald J. Pappert for child exploitation offenses.

The defendant was arrested by the Department of Homeland Security Investigations as part of an online investigation involving the sexual exploitation and trafficking of children via live-streaming webcams. For more than a year, the defendant paid for live-streamed sex shows that featured children in the Philippines. The defendant sought out young girls, some as young as 8 years of age, and paid their adult handlers to have the girls strip on camera, masturbate, and engage in sex acts with other children and with adults. The investigation confirmed that Bristol spent approximately $600 every month for these live-streamed shows, and over the last few months before his arrest, had repeated contact with two sisters who were just 12 and 14 years old.

As part of his abuse of these girls, the defendant made arrangements to travel to the Philippines, where he had paid to stay with a host family that had five girls, all under the age of 18. Bristol’s plan was to have sex with the two sisters he had been communicating with online, but he was intercepted by federal agents in Philadelphia as he attempted to board a plane to the Philippines.

Bristol confessed to agents on the day of his arrest, and later pleaded guilty to all three charges in the Indictment, for which he was sentenced today: two counts of using the Internet to entice a minor to engage in sexual conduct, and one count of attempted foreign travel to engage in illicit sexual activity with a minor.

“Child predators often go to extreme lengths to get what they want, and this case is a prime example of that – this defendant was ready to travel literally to the other side of the globe,” said U.S. Attorney McSwain. “We stand ready with our federal and local partners to identify and prosecute those who would prey upon minor children.”

“Protecting children from predators is a top priority for Homeland Security Investigations,” said Marlon V. Miller, Special Agent in Charge of HSI Philadelphia. “Today’s sentencing demonstrates that we will not tolerate the sexual abuse of children anywhere in the world. HSI will vigorously investigate anyone who attempts to travel overseas to exploit and take advantage of children.”

This case is part of Project Safe Childhood (PSC), a program bringing together all levels of law enforcement and the communities they serve to reduce the sexual exploitation and abuse of children. The case was investigated by the Department of Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Michelle Rotella.

PHILADELPHIA – United States Attorney William M. McSwain announced that Robert Brennan, 81, of Perryville, MD, was arrested and charged by Indictment with four counts of making materially false statements in a matter within the jurisdiction of the executive branch of the United States government.

The Indictment alleges that on or about April 25, 2019, Brennan was interviewed by the Federal Bureau of Investigation and made a number of false statements to the investigating agents.  Brennan had served in the Archdiocese of Philadelphia from 1993 to 2004 as a priest at Resurrection of Our Lord parish (“Resurrection”).  In September 2013, the Philadelphia District Attorney’s Office filed criminal charges against him, alleging that he had sexually abused a minor, Sean McIlmail, during Brennan’s time at Resurrection.  Soon thereafter, on or about October 13, 2013, Sean McIlmail died of a drug overdose and the criminal charges against Brennan were dismissed.

In November 2013, the McIlmail family filed a civil lawsuit against the Archdiocese of Philadelphia and Brennan.  The lawsuit was settled for an undisclosed amount on or about May 2, 2018.

During the April 25, 2019 interview with the FBI, Brennan made several allegedly false statements that prior to the filing of the 2013 criminal case and civil lawsuit against him, he did not know Sean McIlmail, his father, mother or brother.  Brennan was arrested in Maryland this morning and is being transported to Philadelphia for his initial appearance in federal court today at 1:30 p.m.

“Making false statements to the FBI is a serious crime, and given the circumstances, the alleged false statements here are particularly disturbing,” said U.S. Attorney McSwain.  “We will use all of the tools at our disposal to hold this defendant accountable for his alleged actions.”

“The defendant allegedly lied to the FBI to obstruct an investigation into complaints that he sexually abused a child while serving as a priest,” said Attorney General Josh Shapiro. “I’m proud to work with our federal partners to hold him accountable. Our Office will investigate and prosecute anyone who abuses children, takes advantage of their position of power, or gives false statements to law enforcement, no matter who they are.”

 “Lying to federal agents threatens the integrity of our justice system,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “That’s precisely why it’s a crime. The FBI can't properly carry out investigations, if the people we interview think they can deceive us without consequence.”

If convicted, the defendant faces a maximum possible sentence of 32 years’ imprisonment, a $1,000,000 fine, and 3 years’ supervised release.

The case was investigated by the Federal Bureau of Investigation, with assistance from the Pennsylvania Attorney General’s Office, and is being prosecuted by Assistant United States Attorney Michelle L. Morgan.

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

PHILADELPHIA – United States Attorney William M. McSwain announced that Andrew Harris, 23, of Philadelphia, entered a plea of guilty before United States Judge Cynthia M. Rufe on the 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. Harris’ co-defendant, Justin Hiemstra, previously pleaded guilty on August 6, 2019.

These charges arose out of a plot between the defendant, then a student at Haverford College, and Hiemstra (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 defendants opened a false FAFSA application in the name of a member of the Trump family, and found that someone else had already obtained a username and password for Donald Trump. In order to reset the password, the defendants were prompted to answer challenge questions, which the original person had created when setting up the account. They were 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 un-funny plot has branded both Harris and his cohort, Hiemstra, with federal criminal convictions that they deserve.”

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

PHILADELPHIA – United States Attorney William M. McSwain announced that Jacoya Brazzle, 31, of Coatesville, Pennsylvania, was sentenced to eight months’ incarceration, five years supervised release and full restitution by United States Timothy J. Savage for stealing money from a veteran patient in her care.

The defendant was a nursing assistant at the VA Medical Center (VAMC) in Coatesville. As part of her duties, she was assigned to care for a veteran who uses a wheelchair. Brazzle learned the veteran’s ATM card PIN number, and used his ATM card to access his account – withdrawing funds on more than 10 occasions from ATMs in the Coatesville area over a two month timespan. In all, the defendant stole approximately $11,000 from the victim’s bank account.

“Our veterans deserve our gratitude for their service, and it goes without saying that they deserve safe and trustworthy care at VA Medical Centers,” said U.S. Attorney McSwain. “The defendant’s conduct here – stealing from a wheelchair-bound veteran in her care – is reprehensible. My Office will investigate and prosecute any crimes against veterans to the fullest extent possible.”

“VA employees that take advantage of vulnerable veterans in their care will not be tolerated,” said Special Agent in Charge Sean J. Smith, Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, Northeast Field Office.

The case was investigated by the Office of Inspector General for the U.S. Department of Veterans Affairs, and is being prosecuted by Assistant United States Attorney Nancy Rue.

Pharmaceutical company Mallinckrodt ARD LLC (formerly known as Mallinckrodt ARD Inc. and previously Questcor Pharmaceuticals Inc. "Questcor"), has agreed to pay $15.4 million to resolve claims that Questcor paid illegal kickbacks to doctors, in the form of lavish dinners and entertainment, to induce prescriptions of the company’s drug, H.P. Acthar Gel (Acthar) from 2009 through 2013. 

The Federal Anti-Kickback Statute prohibits a pharmaceutical company from offering or paying, directly or indirectly, any remuneration — which includes money or any other thing of value — with the intent to induce a health care provider to prescribe a drug reimbursed by a federal health care program, including Medicare. This prohibition extends to such practices as “wining and dining” doctors to induce them to write Medicare prescriptions of a company’s products. 

The government alleged that, from 2009 to 2013, twelve Questcor sales representatives marketing Acthar provided illegal remuneration to health care providers in the form of lavish meals and entertainment expenses.  The company paid this remuneration, the government alleges, with the intent to induce Acthar Medicare referrals from those health care providers, resulting in a violation of the Anti-Kickback Statute and the submission of false claims to Medicare.

“The Department of Justice will hold companies accountable for the payment of illegal kickbacks in any form,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “Improper inducements have no place in our federal healthcare system, which depends on physicians making decisions based on the healthcare needs of their patients and not on or influenced by personal financial considerations.” 

“When companies buy off doctors, patients suffer.  My Office is committed to rooting out this type of behavior and the Anti-Kickback Statute is a critical tool in that fight,” said U.S. Attorney McSwain.  “We will continue to protect the integrity of our healthcare system by holding drug companies accountable for their conduct.”

“Paying kickbacks to win business, as contended in this case, cheats taxpayers and the patients who rely on government health care programs for essential care,” 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 will continue working with our law enforcement partners to hold accountable entities paying such kickbacks.”

The allegations that are the subject of yesterday’s settlement were originally alleged in two cases filed under the whistleblower, or qui tam, provision of the False Claims Act.  The act permits private parties to sue for fraud on behalf of the United States and to share in any recovery.  The act also permits the government to intervene in such actions, as the government previously did in the two whistleblower cases.  The whistleblowers will receive approximately $2.926 million of the settlement.  The government is continuing to pursue claims in these two matters alleging that Mallinckrodt violated the False Claims Act by using a foundation as a conduit to pay illegal kickbacks in the form of copay subsidies for Acthar.  These claims are not being resolved by the settlement. 

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

This matter is being handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Eastern District of Pennsylvania, with assistance from the U.S. Department of Health and Human Services Office of Inspector General.  The two lawsuits are captioned United States of America ex rel. Strunck et al. v. Mallinckrodt ARD, Inc., No. 12-CV-0175 (E.D. Pa.) and United States of America ex rel. Clark v. Questor Pharmaceuticals, Inc., No. 13-CV-1776 (E.D. Pa.). 

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

PHILADELPHIA – United States Attorney William M. McSwain announced today that pharmaceutical company Mallinckrodt ARD LLC (formerly known as Mallinckrodt ARD, Inc. and previously Questcor Pharmaceuticals, Inc. (“Questcor”)), has agreed to pay $15.4 million to resolve claims that Questcor paid illegal kickbacks to doctors from 2009 through 2013 in the form of lavish dinners and entertainment, to induce prescriptions of the company’s drug, H.P. Acthar Gel (“Acthar”) for the treatment of complications from multiple sclerosis.

The Federal Anti-Kickback Statute prohibits a pharmaceutical company from offering or paying, directly or indirectly, any remuneration—which includes money or any other thing of value—with the intent to induce a health care provider to prescribe a drug reimbursed by Medicare. This prohibition extends to such practices as “wining and dining” doctors to induce them to write Medicare prescriptions of a company’s products.

The government alleges that, from 2009 to 2013, twelve Questcor sales representatives marketing Acthar provided illegal remuneration to health care providers in the form of lavish meals and entertainment expenses. The company paid this remuneration, the government alleges, with the intent to induce Acthar Medicare referrals from those health care providers, resulting in a violation of the Anti-Kickback Statute and the submission of false claims to Medicare.

“Federal law protects patients from medical providers who write prescriptions so they can enrich themselves and from drug companies who do not play by the rules in their marketing and promotional efforts,” said U.S. Attorney McSwain. “Kickback schemes are a form of illegal pay-to-play business practices that have no place in our health care system; they interfere with physician-patient relationships and drive up the cost of health care.”

“The Department of Justice will hold companies accountable for the payment of illegal kickbacks in any form,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “Improper inducements have no place in our federal healthcare system, which depends on physicians making decisions based on the healthcare needs of their patients and not on or influenced by personal financial considerations.” 

“Paying kickbacks to win business, as contended in this case, cheats taxpayers and the patients who rely on government health care programs for essential care,” 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 will continue working with our law enforcement partners to hold accountable entities paying such kickbacks.”

The allegations relevant to this settlement were originally alleged in two cases filed under the whistleblower, or qui tam, provision of the False Claims Act. The act permits private parties to sue for fraud on behalf of the United States and to share in any recovery. The act also permits the government to intervene in such actions, as the government previously did in the two whistleblower cases, which are captioned United States of America ex rel. Strunck et al. v. Mallinckrodt ARD, Inc., No. 12-CV-0175 (E.D. Pa.), and United States of America ex rel. Clark v. Questor Pharmaceuticals, Inc., No. 13-CV-1776 (E.D. Pa.). The government’s pursuit of these matters illustrates its emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800 HHS TIPS (800-447-8477). The whistleblowers will receive approximately $2.926 million of the settlement.

This matter is being handled by the Civil Division of the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Department of Justice’s Commercial Litigation Branch, with assistance from the U.S. Department of Health and Human Services’ Office of Inspector General, the Defense Criminal Investigative Service, the Federal Bureau of Investigation and the Office of Personnel Management. For the United States Attorney’s Office, the matter is being handled by Assistant United States Attorney Colin Cherico and Auditor George Niedzwicki.

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

PHILADELPHIA – United States Attorney William M. McSwain announced that Jason Muzzicato, 43, of Bangor, Pennsylvania was charged by Superseding Indictment with possession of firearms by an unlawful user of a controlled substance, and knowingly operating an aircraft when not registered. Muzzicato was also previously charged in June 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). These charges are pending before United States District Judge Joseph F. Leeson in Allentown, Pennsylvania.

The charges against the defendant stem from his possession of firearms and homemade bombs, while subject to the terms of a PFA order issued by the Northampton County Court of Common Pleas, and while being an unlawful user of methamphetamine. Under federal law, an individual who is subject to a PFA order is prohibited from possessing firearms. The defendant is also charged with unlawful operation of an unmanned aerial vehicle (drone). As alleged in the Superseding Indictment, the defendant possessed a DJI, Model Phantom 3, unmanned aerial vehicle (drone), seven improvised explosive devices and ten firearms, including multiple AR-15 rifles and semi-automatic pistols.

“It does not take much imagination to conjure up the enormous harm that can result from the combination of illegal firearms, explosives, and drone aircrafts,” said U.S. Attorney McSwain. “Adding methamphetamine and a disregard of court orders to the mix only serves to heighten the risk. Here the defendant’s alleged behavior violated the law and threatened public safety.”

If convicted, the defendant faces a maximum possible sentence of 33 years’ imprisonment, three years’ supervised release, a $760,000 fine, and a $400 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 Department of Transportation, Office of Inspector General, Fort Washington 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.

David Sommers, 64, of Levittown, Pennsylvania, was sentenced to six months imprisonment, three years of supervised release including six months of home detention, and to pay $250,000 in restitution for trafficking protected turtles.

From November 2011 until October 2017, Sommers poached thousands of protected diamondback terrapins and their eggs from coastal marshes in New Jersey and illegally sold the turtles.  A grand jury indicted Sommers on July 10, 2018 for his criminal conduct involving the sale, export and false-labeling of packages containing protected diamondback terrapins.  On Feb. 4, 2019, Sommers pleaded guilty to false-labeling of packages containing protected diamondback terrapins.

“Sommers used a sham business to shamelessly mask an illegal trade in threatened and protected species,” said Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Environment and Natural Resources Division.  “The Justice Department and our law enforcement partners will safeguard our nation’s natural resources and biodiversity and prosecute wildlife traffickers to the fullest extent of the law.”

“The defendant had a simple business plan: poach protected turtles and their eggs from their natural habitat, advertise them for sale online and then illegally ship them to customers by concealing the actual contents of the packages,” said U.S. Attorney William M. McSwain for the Eastern District of Pennsylvania.  “Sommers represented himself as a legitimate reptile breeder, when he was in fact endangering the lives of these animals and breaking the law.  Thanks to our partners at the New Jersey Division of Fish and Wildlife and the United States Postal Inspection Service, this defendant will be held responsible for his actions.”

Diamondback terrapins (Malaclemys terrapin) are a semi-aquatic species of turtle native to brackish waters in eastern and southern United States.  They are not found in the wild in Pennsylvania, where Sommers resided, but have a dwindling habitat range in neighboring New Jersey.  The terrapins are prized in the reptile pet trade for their unique, diamond-shaped shell markings.  The turtles are protected under New Jersey law and by an international treaty, the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

The United States, Canada and approximately 181 other countries are signatories to CITES, which provides a mechanism for regulating international trade in species whose continued survival is threatened by such trade.  Due to declining populations, CITES listed the diamondback terrapin as threatened in 2013, and New Jersey banned collecting, possessing and transporting them in 2016. 

This case was investigated by the United States Fish and Wildlife Service with assistance from the New Jersey Division of Fish and Wildlife.  It is being prosecuted by trial attorney Ryan Connors of the Justice Department’s Environmental Crimes Section and Assistant U.S. Attorney Joan E. Burnes.

PHILADELPHIA – United States Attorney William M. McSwain announced that David Sommers, 64, of Levittown, PA was sentenced to six months’ imprisonment, three years’ supervised release including six months’ home detention, and $250,000 restitution by United States District Judge Anita B. Brody for trafficking protected turtles.

From November 2011 until October 2017, the defendant poached thousands of protected diamondback terrapins and their eggs from coastal marshes in New Jersey and illegally sold the turtles. A grand jury indicted Sommers on July 10, 2018 for his criminal conduct involving the sale, export, and false-labeling of packages containing protected diamondback terrapins. On February 4, 2019, Sommers pleaded guilty to false-labeling of packages containing protected diamondback terrapins.

During the sentencing hearing, the government offered evidence that the total market value of the defendant’s sales figures and inventory of poached wildlife was worth well over $550,000.

“The defendant had a simple business plan: poach protected turtles and their eggs from their natural habitat, advertise them for sale online and then illegally ship them to customers by concealing the actual contents of the packages,” said U.S. Attorney McSwain.  “Sommers represented himself as a legitimate reptile breeder, when he was in fact endangering the lives of these animals and breaking the law.  Thanks to our partners at the New Jersey Division of Fish and Wildlife and the United States Postal Inspection Service, this defendant will be held responsible for his actions.”

“Sommers used a sham business to shamelessly mask an illegal trade in threatened and protected species,” said Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Environment and Natural Resources Division.  “The Justice Department and our law enforcement partners will safeguard our nation’s natural resources and biodiversity and prosecute wildlife traffickers to the fullest extent of the law.”

Diamondback terrapins (Malaclemys terrapin) are a semi-aquatic species of turtle native to brackish waters in eastern and southern United States. They are not found in the wild in Pennsylvania, where Sommers resided, but have a dwindling habitat range in neighboring New Jersey. The terrapins are prized in the reptile pet trade for their unique, diamond-shaped shell markings. The turtles are protected under New Jersey law and by an international treaty, the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

The United States, Canada, and approximately 181 other countries are signatories to CITES, which provides a mechanism for regulating international trade in species whose continued survival is threatened by such trade. Due to declining populations, CITES listed the diamondback terrapin as threatened in 2013, and New Jersey banned collecting, possessing, and transporting them in 2016. 

This case was investigated by the United States Fish and Wildlife Service with assistance from the New Jersey Division of Fish and Wildlife. It is being prosecuted by Assistant United States Attorney Joan E. Burnes and trial attorney Ryan Connors of the Justice Department’s Environmental Crimes Section.

PHILADELPHIA – United States Attorney William M. McSwain announced that International SOS Assistance, Inc., International SOS Government Services, Inc., International SOS, LP, Air Rescue Americas, Inc. Arnaud Vaissié; and Pascal Rey-Herme (collectively, “International SOS”), will pay $940,000 to resolve allegations that it overcharged TRICARE, a health care insurance system for members of the military services and their families, for aeromedical evacuation services by concealing discounts it received from third-party air ambulance providers in violation of the False Claims Act.

The settlement resolves allegations that, between 2013 and 2017, International SOS, a provider of overseas healthcare services for the government, submitted to TRICARE false claims for payment relating to International SOS’s provision of aeromedical evacuations.  International SOS negotiated discounts from third-party air ambulance providers, which it was required to pass along to TRICARE. Instead, International SOS did not disclose the actual cost of the aeromedical evacuation services during the quoting process; billed TRICARE at the higher non-discounted amount; and received payment from TRICARE for the inflated costs, which International SOS contends it retained as a fee. 

“My Office is committed to protecting the integrity of federal healthcare billing regulations,” said U.S. Attorney McSwain. “We will hold accountable any federal contractor who chooses to engage in conduct that undermines those regulations, and therefore overburdens American taxpayers, by overbilling federal healthcare programs.”

“Protecting the integrity of the U.S. Department of Defense’s (DoD) procurement process and combating healthcare fraud impacting the DoD are top priorities for the Defense Criminal Investigative Service (DCIS),” stated Leigh-Alistair Barzey, Special Agent in Charge of the DCIS Northeast Field Office.  “By concealing discounts and overcharging TRICARE, the DoD’s healthcare program, International SOS sought to profit at the expense of the American taxpayer.  The settlement agreement announced today is the result of a joint effort and demonstrates DCIS’ continued commitment to work with the U.S. Attorney’s Office to ensure that U.S. military members and their beneficiaries continue to receive high quality and cost-effective healthcare.”

This settlement resolves allegations in a lawsuit by a former International SOS Regional Flight Desk Manager, 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 $165,000 as his share of the recovery in the case. The relator was represented by Franklin J. Rooks, Jr., Esq. of Morgan Rooks, P.C., and Jared A. Jacobson, Esq. of Jared Jacobson Law, LLC.

“We thank the whistleblower for coming forward and providing essential assistance to the government. This concerned citizen’s information and assistance was critical to our office’s investigative efforts in this matter, and we deeply appreciate that contribution,” said U.S. Attorney McSwain.

This case was a cooperative effort among the U.S. Attorney’s Office for the Eastern District of Pennsylvania, and the Defense Criminal Investigative Service. For the United States Attorney’s Office, Assistant United States Attorneys Scott W. Reid, Colin Cherico, and Auditor Dawn Wiggins handled the investigation and settlement.

The lawsuit is captioned United States ex rel. Richard Nicholas v. International SOS Assistance, Inc., et al., Civil Action No. 16-3927 (E.D. Pa.). The claims resolved by the settlement are allegations only; there has been no determination of liability.

PHILADELPHIA, PA – United States Attorney William M. McSwain announced that Stephen Padnes, M.D., 77, of Glenside, Pennsylvania, a physician formerly licensed in Pennsylvania, was charged by Indictment with illegally distributing controlled substances and filing false tax returns (the “Indictment”).  McSwain also announced two civil law suits brought by the United States, one seeking forfeiture of $1,864,545 in cash seized from the defendant’s home (the “Forfeiture Complaint”) and the other seeking penalties and damages against him for alleged improper opioid prescribing under the Controlled Substances Act and False Claims Act (the “Civil Complaint”).

The Indictment charges that Padnes illegally prescribed Schedule II controlled substances, oxycodone and methadone, on seven occasions between December 21, 2015 and June 29, 2016, without any medical necessity and outside the usual course of medical practice.  It also charges that the defendant underreported the income earned by his medical practice, the Psychosomatic Medicine and Pain Rehabilitation Center, Inc., to the Internal Revenue Service by more than $700,000 for calendar years 2012, 2013, and 2014.  If convicted, Padnes faces a maximum possible sentence of 149 years’ imprisonment and fines up to $7,750,000.

The Forfeiture Complaint seeks forfeiture of $1,864,545 of cash seized from the defendant’s home during the execution of a search warrant in 2016.  The cash is alleged to be the cash proceeds from Padnes’ unlawful medical practice from at least 2010 to 2016.  The government alleges that, during that time, the vast majority of the defendant’s “patients” paid up to approximately $500 in cash for prescriptions for controlled substances, including Schedule II opioids such as oxycodone and methadone, that he wrote outside the usual course of medical practice and without a legitimate medial purpose.  The government also alleges that Padnes, at times, provided the prescriptions for payment without even seeing the supposed “patient.”  The cash was discovered in suitcases and a dresser located in a bedroom in the defendant’s home.

The Civil Complaint alleges that Padnes violated the Controlled Substances Act by issuing a large number of prescriptions for Schedule II opioids in 2014, 2015, and 2016 without a legitimate medical purpose.  The government alleges numerous instances where the defendant issued prescriptions for high doses of opioids without keeping medical records in the normal course of medical practice, physical exams, reevaluations, and/or monitoring of the effectiveness of the opioids he prescribed.  In one example, the government alleges that Padnes issued prescriptions for so many opioids to a patient that the patient would have needed to consume nearly 70 pills, the equivalent of 4,000 milligrams of morphine, every single day.  The government also alleges that the defendant violated the False Claims Act because Medicare and Medicaid paid to fill thousands of these prescriptions, causing a loss to these programs exceeding $1 million. 

The Controlled Substances Act provides for penalties for each prescription issued without a legitimate medical purpose up to $25,000 for violations on or before November 2, 2015, and up to $64,820 per violation after November 2, 2015.  The False Claims Act allows for damages three times the government’s loss and civil penalties between $5,500 and $11,000 for each false claim presented on or before November 2, 2015, and between $11,181 and $22,363 for each false claim presented after November 2, 2015. 

“Using every tool available – from criminal charges to civil complaints – is part of my Office’s continued commitment to fighting healthcare fraud and combatting the opioid epidemic ravaging our communities,” said U.S. Attorney McSwain.  “We will not allow criminals, whether they stand on a street corner or wear a lab coat, to cheat the system and exploit people in need of help in order to line their own pockets.  This defendant will now have to answer for years of alleged misconduct.”

“As charged in this indictment, Dr. Padnes knew that prescribing potentially deadly amounts of opioids without medical necessity could have devastating effects,” said Maureen R. Dixon, Special Agent in Charge for the U.S. Department of Health and Human Services.  “Working closely with our law enforcement partners we are committed to protecting the vulnerable patients who rely on government health programs.”

“Failure to report all income is a felony; one that could result in a prison sentence,” said Guy Ficco, IRS Criminal Investigation Special Agent in Charge. “Let the charges brought against Dr. Stephen Padnes serve as a reminder that we, along with our Law enforcement partners, stand ready to investigate and prosecute those who shirk their tax liability.”

The investigation was conducted by the Philadelphia Field Division of the Drug Enforcement Administration, the U.S. Department of Health and Human Services, Office of Inspector General, Internal Revenue Service Criminal Investigation, and the Federal Bureau of Investigation.  For the United States Attorney’s Office, the criminal matter is being prosecuted by Assistant United States Attorney Jerome Maiatico, the civil forfeiture matter is being prosecuted by Assistant United States Attorney Maria M. Carrillo, and the civil Controlled Substances Act and False Claims Act matter is being prosecuted by Assistant United States Attorney John T. Crutchlow.

An Indictment or Criminal Complaint is an accusation.  A defendant is presumed innocent unless and until proven guilty.  The civil complaints contain allegations only; there has been no determination of liability.

PHILADELPHIA – United States Attorney William M. McSwain announced that Kenneth Eugene Cherry, Jr., 31, of Philadelphia was convicted at trial of multiple criminal firearms offenses: dealing in firearms without a license, possession and transfer of a machine gun, possession of an unregistered firearm, possession of a firearm with an obliterated serial number, and multiple counts of possession of a firearm by a convicted felon.

From August 2018 until February 2019, Cherry and other co-conspirators trafficked firearms from Virginia to Philadelphia, where Cherry illegally sold them on the street for profit. During this period, Cherry sold a total of 26 firearms to an undercover ATF operative, including two Glock “Auto Sear” machinegun conversion devices, sixteen semiautomatic handguns, and eight semiautomatic assault rifles, one of which had been cut down for purposes of concealment. Cherry also provided a large amount of ammunition with the firearms he sold.

“The defendant and others in this illegal gun trafficking organization endangered everyone in their midst on a daily basis by putting semiautomatic weapons on the streets illegally,” said U.S. Attorney McSwain. “Thanks to our dedicated partners at ATF and our Office’s trial team, the defendant will now pay for his crimes and will no longer be allowed to menace the Philadelphia streets.”

“The conviction of Mr. Cherry is a victory not only for ATF but for the citizens of Philadelphia as this conviction exhibits a continued and collaborative effort to combat violent crime in our community,” said Donald Robinson, Special Agent in Charge for ATF Philadelphia Field Division. “Together with our partners at the Philadelphia Police Department and the United States Attorney’s Office, we have been successful at dismantling a group dedicated to firearms trafficking in Philadelphia. ATF remains committed to working with our partners to combat violent crime by continuing to target firearms traffickers who are putting illegal guns out on our streets.”

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

The case was investigated by the Bureau of Alcohol, Tobacco and Firearms, and is being prosecuted by Assistant United States Attorney Mark S. Miller.

PHILADELPHIA – United States Attorney William M. McSwain announced that Keenan Smith, 29, of Philadelphia was convicted today at trial with attempted robbery which interferes with interstate commerce, and using or carrying, and discharging, a firearm during and in relation to a crime of violence.

On January 31, 2018, the defendant entered the Trolley Car Diner, located in the Mount Airy section of Philadelphia, through a side door before the diner opened for business. He waited outside the manager’s office with a gun. When the manager arrived, the defendant pointed the gun at the manager’s head and told him not to move. The manager attempted to disarm the defendant, who shot himself in the hand before fleeing. The defendant sought medical treatment at nearby Roxborough Memorial Hospital, and was later arrested by the Philadelphia Police Department.

“The complete disregard that Smith had for the safety of others is appalling,” said U.S. Attorney McSwain. “The manager of this restaurant was simply showing up to do his job, and the defendant laid in wait for him and then put a gun to his head. No one should have to deal with this type of violence at their place of business or in their neighborhood. The streets of Philadelphia are safer now that the defendant has been convicted and will be held accountable for his crimes.”

“Keenan Smith attempted a violent armed robbery, terrorizing his victim at gunpoint,” said Michael T. Harpster. “He is a danger to the public, and today’s conviction ensures he’ll remain off the street for quite some time. The FBI and our law enforcement partners are committed to making this community safer by bringing to justice those willing to engage in violent crime.”

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

The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department, with assistance from the Whitemarsh Township Police Department, and is being prosecuted by Assistant United States Attorney Tim Stengel.

PHILADELPHIA – United States Attorney William M. McSwain announced that Scott Capps, 48, of Coatesville, Pennsylvania was sentenced to 48 months’ incarceration, three years’ supervised release, restitution of $2,137,580 and forfeiture of $648,600 by United States District Judge Michael M. Baylson for a fraud scheme perpetrated while he was an employee of Vanguard.

On March 14, 2019, the defendant pleaded guilty to all counts in an indictment charging him with conspiracy to commit mail fraud, money laundering, and filing false tax returns. According to the indictment, between 2011 and 2014, Capps was an employee of Vanguard, an investment management group that managed trillions of dollars in assets for account holders throughout the world. The defendant admitted that through his employment he had access to dormant accounts that were due for escheatment, which is the process of turning over abandoned funds to the state.

The defendant stole the passwords of subordinates and used those passwords to access the system used to issue checks; he then submitted requests to have checks issued on certain dormant accounts to a co-conspirator. After depositing the checks into his own account, the co-conspirator issued to Capps checks drawn on one of his accounts. The total amount of the funds that the defendant stole exceeded $2.1 million. To Vanguard’s credit, all individual accounts were made whole after the defendant’s crimes were detected. At the guilty plea hearing, Capps also admitted that for the tax years 2013 and 2014, he had filed false tax returns that failed to report the income from his scheme.

“My office takes white collar offenses like wire fraud, tax fraud and money laundering very seriously,” said U.S. Attorney McSwain. “The defendant stole more than two million dollars by abusing his position with his former employer. My Office will continue to work with our law enforcement partners to protect innocent individuals and businesses from being victimized by this type of fraud.”

“No matter what the source of income, all income is taxable,” said Guy Ficco, IRS Criminal Investigation Special Agent in Charge. “Scott Capps failed to report the money he stole and that is a violation of the federal tax laws. Today, justice is served and he is being held accountable for his conduct. The IRS is proud to have shared its hallmark expertise in following the money trail in this and other increasingly sophisticated criminal schemes.”

“Scott Capps saw it as easy money,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “Amass millions from dormant accounts, launder those funds, and enjoy. But crime truly doesn’t pay and now he’s being held accountable. We and our law enforcement partners would like to thank Vanguard management for their assistance in this matter. Know that the FBI will never let up on those who risk engaging in financial fraud.”

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

PHILADELPHIA – United States Attorney William M. McSwain and Special Agent in Charge Michael T. Harpster of the FBI’s Philadelphia Division announced that their offices and law enforcement partners are asking for the public's assistance to identify potential victims of Robert Dean Caesar, 56, most recently of Oxford, Pennsylvania. Caesar, who is currently in federal custody, was charged by indictment on November 15, 2018 with production, receipt, and possession of child pornography. He is expected to go on trial beginning September 30, 2019.

The Indictment alleges that on or about each of two separate dates (September 16, 2017 and December 30, 2017), Caesar manufactured child pornography. The Indictment further alleges that Caesar received child pornography on December 20, 2017, and possessed child pornography on January 18, 2018.

Caesar, who most recently resided in Oxford, Pennsylvania, has also lived in Philadelphia, Norristown, Cranberry Township, and Pittsburgh, Pennsylvania; Richland, New York; and Silverthorne, Colorado.

If you have information regarding the pending prosecution, or you believe you or someone you know may have been victimized by Robert Dean Caesar, the FBI requests that you contact the Philadelphia Division at 215-418-4000 or go to www.fbi.gov/RobertCaesar. Identified victims may be eligible for certain services and rights under federal and/or state law.

If convicted as charged, the defendant faces a maximum possible sentence of 100 years’ imprisonment, a mandatory minimum term of 15 years’ imprisonment, supervised release for a minimum term of five years and a lifetime maximum term, a $1,000,000 dollar fine, mandatory restitution, and up to $20,400 in special assessments.

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 is being investigated by the Pennsylvania State Police – Avondale Barracks, the Cranberry Township Police Department, and the Federal Bureau of Investigation, with assistance from the Chester County District Attorney’s Office and the Butler County District Attorney’s Office, and is being prosecuted by Assistant United States Attorney Seth Schlessinger.

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

PHILADELPHIA – United States Attorney William M. McSwain announced that Michael Walpole, 31, of Philadelphia, Pennsylvania, was sentenced to 210 months’ imprisonment (17 ½ years) and 15 years’ supervised release by United States District Judge Paul S. Diamond on child exploitation charges.

In May 2018, the defendant forced the five-year old victim to take off her pants and underwear. The defendant took off his own pants, placed his penis on the victim’s naked buttocks, and photographed this abuse. On April 2, 2019, the defendant pleaded guilty to manufacture and attempted manufacture of child pornography.

“The nature of this defendant’s crime is horrifying and the negative impact on the victim and her family can never be fully understood or appreciated, which is why my Office is committed to working with our law enforcement partners to identify, investigate, and prosecute these dangerous predators,” said U.S. Attorney McSwain.

“Those who sexually exploit children do serious lasting harm,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “Walpole involved a child victim in his own depraved fantasy and documented it. He’ll now be held accountable for his actions, locked away where he can’t victimize any more kids.”

This case were 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 (FBI) and is being prosecuted by Assistant United States Attorney Meaghan A. Flannery.

PHILADELPHIA – United States Attorney William M. McSwain announced that Troy Wragg, 37, of Philadelphia, PA was sentenced today to 22 years in prison and $54 million restitution by United States District Judge Joel H. Slomsky for perpetrating two fraud schemes.

The defendant was the founder of Mantria Corporation, based in Bala Cynwyd, PA.  From 2005 until 2009, Wragg received approximately $54 million in funds from investors across the United States with the false promise that they would earn 50% or higher returns on their investments.  The defendant told the victim investors that Mantria was a very successful company with investments in real estate and green energy.  In reality, however, Mantria was a Ponzi scheme which used new investor funds to pay “earnings” to earlier investors.

Wragg obtained these large investments through co-defendant Wayde McKelvy, who ran unlicensed investment clubs in Colorado.  In addition to advising the victims to invest their retirement savings in Mantria, Wragg and McKelvy coached the victims to obtain home equity loans, credit card loans, and other loans to raise even more funds to invest in Mantria.  Thus, when the Mantria Ponzi scheme collapsed, many of the victims were left financially devastated.

While on bail pending sentencing for the Mantria fraud, Wragg brazenly committed a second fraud scheme.  The defendant solicited an investment in an online video dating service, known as LUVR, with the false representation that the company was about to be purchased by a well-known internet entrepreneur.  In reality, no such deal ever existed and the victim lost her entire investment.

“Wragg and his co-conspirators talked a big game about their bogus trash-to-green-energy business, but it was all a lie.  And when he was caught in this lie, he just couldn’t help himself and decided to scam yet another innocent investor,” said U.S. Attorney McSwain.  “The defendant is clearly a danger to the public and deserves to be in prison for a very long time.  My office thanks the Court for delivering an appropriate sentence.”

Wragg pleaded guilty to both fraud schemes.  Co-defendant Amanda Knorr also pleaded guilty to her role in the Mantria fraud and was sentenced in April 2019 to 30 months’ in prison.  Co-defendant Wayde McKelvy was convicted on all counts at trial in October 2018.  The Court has not yet set a sentencing date for McKelvy.

The case was investigated by the Federal Bureau of Investigation with assistance from the U.S. Securities and Exchange Commission, the Colorado Division of Securities, the Arizona Division of Securities, the Tennessee Department of Financial Institutions, and the Upper Darby Township Police Department.  The case was prosecuted by Assistant United States Attorneys Robert J. Livermore and Sarah M. Wolfe.

What I witnessed last night was true heroism by the Philadelphia police.  But the crisis was precipitated by a stunning disrespect for law enforcement – a disrespect so flagrant and so reckless that the suspect immediately opened fire on every single officer within shooting distance.  Only by the grace of God did they survive.

Where does such disrespect come from?  

There is a new culture of disrespect for law enforcement in this City that is promoted and championed by District Attorney Larry Krasner – and I am fed up with it.

It started with chants at the DA’s victory party – chants of “F*** the police” and “No good cops in a racist system.”

We’ve now endured over a year and a half of the worst kinds of slander against law enforcement – the DA routinely calls police and prosecutors corrupt and racist, even “war criminals” that he compares to Nazis.

This vile rhetoric puts our police in danger.  It disgraces the Office of the District Attorney.  And it harms the good people in the City of Philadelphia and rewards the wicked.

The alleged shooter last night, Maurice Hill, is a previously convicted felon with a long rap sheet.  We have plenty of criminal laws in this City – but what we don’t have is robust enforcement by the District Attorney.  Instead, among other things, we have diversionary programs for gun offenses, the routine downgrading of charges for violent crime, and entire sections of the criminal code that are ignored. 

The criminal laws in this City – and especially the existing gun laws and drug laws – should be aggressively enforced in order to protect the public and the police.  My Office is doing all that we can.  We have prosecuted 70% more violent crime cases this year than we did last year, in response to the District Attorney’s lawlessness.  But it is now time for the District Attorney and his enablers to stop making excuses for criminals.  It is time for accountability.  It is time to support law enforcement and to put the good people of this City first.

The U.S. Attorney’s Office, in conjunction with the Philadelphia police and our federal partners, is investigating the horrible events of last night and we are considering all options at our disposal.  We will do everything that we can to support our brothers and sisters in the Philadelphia Police Department and ensure justice is done.

To the officers involved last night – those who were wounded and those who rushed to defend them – and to their families, I say thank you.  The whole City thanks you.  We owe you more than we can ever repay.

PHILADELPHIA – United States Attorney William M. McSwain announced that Behzad Sabagh, 37, of Philadelphia, Pennsylvania, was sentenced today to 1 month imprisonment, 9 months house arrest as part of 3 years supervised release, $30,000 fine and $100 special assessment plus costs of prosecution by United States District Judge Wendy Beetlestone.  Sabagh pleaded guilty to one count of conspiracy to commit honest services wire fraud in April 2019.

Sabagh was a real estate investor who regularly purchased properties at City of Philadelphia Sheriff’s sales, which are the sales of real property subject to mortgage foreclosure, tax liens, and tax delinquency. From September 2012 to August 2013, Sabagh paid bribes to an employee in the Philadelphia Sheriff’s Office Real Estate Department to assist him with his business of purchasing properties. 

The preferential treatment the employee provided Sabagh included sending him the list of properties that were actually going to sale as opposed to the publicly available list that contained properties that had been removed from the sale pool, working to get deeds for Sabagh’s properties faster than other buyers, and removing municipal liens and paying outstanding bills more quickly on Sabagh’s properties than on those of other buyers who were not providing bribes.  The employee also granted extensions of the time to pay the balance that Sabagh owed to complete his purchase of properties, beyond the limits applicable to other buyers. Sabagh paid the employee hundreds of dollars in cash five or six times for this preferential treatment.

“The laws of the land apply to everyone – and certainly to public servants who are paid with public dollars and who are supposed to serve everyone equally,” said U.S. Attorney McSwain.  “Every person doing business with the government should be on notice that federal law enforcement is watching and we will hold you accountable if you try to gain special favor by paying bribes to public employees.”

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.

PHILADELPHIA – United States Attorney William M. McSwain announced that Christopher Kauffman, 37, of Summerville, South Carolina was charged in a criminal Information with filing a false tax return.

According to the Information, Kauffman operated an accounting and tax preparation service in South Philadelphia in 2011 and 2012.  In 2012, Kauffman deposited fees from his clients into his personal bank account.  Some of the receipts included money Kauffman was supposed to use to pay the tax obligations of some of his clients.  Instead, Kauffman used the money to pay for his personal expenses.  He subsequently failed to report $160,347 in business receipts on his personal income tax return for the year 2012.

“Our tax system requires tax payers to truthfully report their income.  Professional accountants and tax preparers know that better than anyone, and yet the defendant here breached that duty,” said U.S. Attorney McSwain. “He compounded his crime by using his clients’ money as his own.  My Office will continue to aggressively pursue business people who operate in such an illegal manner.”

If convicted, the defendant faces a maximum possible sentence of three years imprisonment and a $250,000 fine.

The case was investigated by the Internal Revenue Service and the Treasury Inspector General’s Office for Tax Administration, and is being prosecuted by Assistant United States Attorney Richard P. Barrett.

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

PHILADELPHIA – United States Attorney William M. McSwain announced that Ambu, Inc. (“Ambu”), will pay $3.3 million to resolve False Claims Act allegations that it manufactured products in China and Malaysia for sale to United States government agencies in violation of the Trade Agreements Act (“TAA”).   

The settlement resolves allegations that, between December 2011 and March 2015, Ambu, a provider of medical supplies, submitted false claims to the Defense Logistics Agency (“DLA”) and the Department of Veterans’ Affairs (“VA”) for payment relating to Ambu’s sales of medical supplies. The Trade Agreements Act (“TAA”) requires that products sold to government agencies must come only from countries with which the United States has a trade agreement.  While many countries qualify as TAA compliant countries, China and Malaysia do not.  Ambu began manufacturing its products in these countries and selling them to government agencies in violation of the TAA.  Indeed, over 80% of Ambu’s sales to DLA and VA under these contracts were from these non-compliant countries during the years covered by the settlement.  Ambu executives certified that its products came from compliant countries despite allegedly knowing that most of the products were manufactured in non-compliant countries.       

“Congress passed the Trade Agreements Act as an important part of the United States’ economic, diplomatic, and defense strategy,” said U.S. Attorney McSwain.  “Contractors must follow the law and manufacture their products in TAA compliant countries, whether they like it or not.  By investigating the allegations and reaching a settlement in this case, we have put all companies doing business with the United States government on notice that the TAA is an important law that must be respected.”    

“The Defense Criminal Investigative Service (DCIS) is committed to protecting the integrity of the U.S. Defense Department’s (DoD) procurement process and ensuring that defense contractors comply with all applicable laws, such as the Trade Agreements Act (TAA),” stated Leigh-Alistair Barzey, Special Agent in Charge of the DCIS Northeast Field Office.  “The settlement agreement announced today is the direct result of a joint effort by the DCIS, Army CID, VA-OIG and the U.S. Attorney’s Office, to guarantee that medical supplies purchased by the DoD for members of the U.S. military and their dependents are manufactured in TAA compliant countries.”

This case was a cooperative effort among the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the Defense Criminal Investigative Services, the United States Army Criminal Investigation Division and the Department of Veterans Affairs Office of Inspector General.  For the United States Attorney’s Office, Assistant United States Attorney Colin Cherico and Auditor Dawn Wiggins handled the investigation and settlement.

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

PHILADELPHIA – United States Attorney William M. McSwain announced that the United States filed a civil lawsuit against Elizabeth N. Kuh, a psychiatrist practicing in Montgomery County, alleging that she wrote improper opioid and benzodiazepine prescriptions for two of her patients. According to the complaint, Kuh wrote 30 opioid and benzodiazepine prescriptions to a husband and wife couple which lacked a legitimate medical purpose, were issued outside the usual course of professional practice, and many of which resulted in false claims to Medicare.

The complaint filed by the United States alleges that Kuh had no specialization or training in pain management, but she repeatedly prescribed the couple 80mg OxyContin and benzodiazepine controlled substances. The prescriptions were allegedly issued to the couple frequently by mail without an in-person physical examination, without urine drug screens or diagnostic testing, frequently not recorded in Kuh’s records, and frequently while the wife’s pain management and other conditions were managed by other providers. Kuh’s improper prescribing continued for years, even after she learned that the wife’s opioids could be harming her mental health and contributing to hallucinations.

The complaint alleges that this prescribing by Kuh only ended shortly after the husband committed suicide. Kuh had allegedly sent multiple prescriptions of OxyContin through the mail to the husband—once again, without physical examination, urine drug screen, diagnostic testing, or attempting less dangerous alternatives. Kuh allegedly responded by mailing additional OxyContin prescriptions to the wife at her request. The United States’ suit seeks damages for the alleged false claims to Medicare, civil penalties for the improper prescriptions, and injunctive relief to restrict Kuh’s controlled substance registration.

The United States and Kuh have entered into a Stipulated Order and Consent Judgment, subject to the Court’s approval, which would resolve the matter without litigation. If approved by the Court, the Judgment would require Kuh to pay $250,000 to the United States, prohibit Kuh from ever writing another opioid prescription, and would treat any future violation as contempt of court.

“While all healthcare providers have a duty to ensure the well-being of their patients, psychiatrists have the responsibility of treating and caring for particularly vulnerable patients,” said U.S. Attorney McSwain. “Psychiatrists who write opioid or benzodiazepine prescriptions to their patients must ensure that the prescriptions are appropriate and comply with federal and state law. My Office’s Affirmative Civil Enforcement Strike Force will continue to aggressively pursue improper opioid and controlled substance prescribing, hold providers accountable, and protect the citizens of the Eastern District of Pennsylvania.”

“All registrants, to include Dr. Kuh, have an obligation to prescribe controlled substances such as opioids and benzodiazepines solely for a legitimate medical purpose and within the course of professional medical practice,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s Philadelphia Field Division. “The allegations against Kuh, who repeatedly prescribed these powerful drugs without any training in pain management and without conducting routine physical examinations, are deeply concerning.”

“Civil enforcement is an important tool to recover funds when physicians cause improper claims to the Medicare program,” said Maureen R. Dixon, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of the Inspector General. “HHS-OIG will continue to work with the Affirmative Civil Enforcement Strike Force and our other law enforcement partners to ensure the integrity of the Medicare program.”

This investigation was conducted with the Philadelphia Field Division of the Drug Enforcement Administration, the Pennsylvania Department of State’s Bureau of Enforcement and Investigation, and the Department of Health and Human Services Office of Inspector General. For the United States Attorney’s Office, Assistant United States Attorney Anthony D. Scicchitano and Auditors Dawn Wiggins and Denis Cooke handled the matter.

The complaint contains allegations only; there has been no determination of liability.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Alan Womack, 44, of Philadelphia, Pennsylvania was convicted today at trial with conspiracy to distribute over 1,000 kilograms of marijuana and conspiracy to commit money laundering.

Between 2005 and 2016, the defendant was an integral part of a drug trafficking organization that arranged for thousands of pounds of marijuana to be shipped on tractor-trailers across the country, from Phoenix to Philadelphia, on a monthly basis. The organization also arranged for truck drivers and people known as “mules” to transport hundreds of thousands of dollars from Philadelphia to Phoenix so they could pay for bulk orders of marijuana supplied by a cartel in Mexico.

The defendant and nine co-defendants were charged in a second superseding indictment in 2017 for their roles in the conspiracy which included illegal acts such as organizing the marijuana shipments, renting storage lockers where bales of marijuana would be held before transport, smuggling large amounts of cash on tractor-trailers and on airplanes, operating stash houses in Philadelphia, and possessing illegal firearms to protect their illicit business. In total, the organization was responsible for smuggling more than 8,000 pounds of marijuana across the country, while making millions of dollars over the course of a decade.

At trial, the government presented evidence in the form of testimony from cooperating witnesses, civilian witnesses and law enforcement agents. The physical evidence included recorded phone calls, video surveillance, phone records, various business records and hundreds of pounds of marijuana seized during the course of the investigation.

“Womack and other members of this drug organization pumped huge quantities of marijuana into our community for years,” said U.S. Attorney McSwain. “Drug trafficking is an inherently dangerous business and the traffickers ultimately deliver destruction to our communities. Our office is determined to investigate and convict these criminals, and put them behind bars.”

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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, 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.    

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.

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.