Eastern District of Pennsylvania
Press releases recorded for this federal judicial district.
Pennsylvania Return Preparer Convicted of Filing False Returns and ConspiracyRead the Press Release
A Yeadon, Pennsylvania man was convicted by a federal jury today in the U.S. District Court for the Eastern District of Pennsylvania of one count of conspiring to defraud the United States by filing false tax returns and preparing false tax returns that generated inflated refunds for his clients and 11 counts of aiding and assisting in the filing of false tax returns announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney William M. McSwain.
According to court documents and evidence presented at trial, Deron Joe co-owned and operated a tax return preparation business. From 2007 through 2010, Joe along with his co-conspirator co-owned a tax return preparation business that prepared tax returns for clients which claimed false business expenses and other false deductions. Joe made up false Forms 2106, Unreimbursed Employee Business Expenses, and placed the false deductions on the tax returns to inflate clients’ refunds by thousands of dollars. Joe prepared false tax returns with inflated refunds in order to grow his tax preparation business.
U.S. District Judge Petrese B. Tucker for the Eastern District of Pennsylvania set sentencing for January 3, 2019. The defendant faces a statutory maximum possible sentence of 36 years in prison and a maximum fine of $1.35 million for all counts.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney McSwain commended agents of the Internal Revenue Service Criminal Investigation, who investigated the case, and Department of Justice Tax Division Trial Attorneys Christopher P. O’Donnell and Kathryn D. Sparks, who prosecuted the case.
Founder of Bogus Green Energy Firm Convicted of Running a $54 Million Ponzi SchemeRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Wayde McKelvy, of Colorado, was convicted by a jury of the following crimes: Conspiracy to Commit Wire Fraud (one count); Wire Fraud (seven counts); Conspiracy to Engage in Securities Fraud (one count); and Securities Fraud (one count). The trial was held before United States District Judge Joel H. Slomsky.
The government established at trial that McKelvy and his co-conspirators ran an elaborate Ponzi scheme operating as Mantria Corporation, which received more than $54 million in fraudulently obtained new investor funds. The co-conspirators promised investors huge returns, as high as 484%, for securities investments in supposedly profitable business ventures in real estate and green energy. In reality, Mantria was a classic Ponzi scheme in which new investor money was used to pay “returns” to early investors, and the business generated meager revenues and no actual profits.
To induce investors to invest money, McKelvy and his co-conspirators repeatedly made fraudulent representations and material omissions about the economic state of Mantria. McKelvy also promoted himself as a financial wizard through aggressive marketing tactics, even though he had little financial acumen and was an unlicensed securities salesman. McKelvy operated what he called “Speed of Wealth” clubs, which advertised on television, radio and the Internet, held seminars for prospective investors, and promised to make them rich. During those seminars and other programs, McKelvy lied to prospective investors to dupe them into investing in Mantria.
Mantria, based in Bala Cynwyd, Pennsylvania, sent McKelvy “commissions” via wire transfer to an entity he controlled called “Retirement TRACS, LLC.” Mantria also used wire transfers to pay for other portions of the Ponzi scheme, including payments for both the real estate and green energy projects. When the SEC shut down Mantria in November 2009, the pyramid scheme collapsed and was exposed.
“McKelvy repeatedly lied about Mantria’s bright future in the green energy business, often delivering his sales pitch before a live audience full of prospective investors in order to dupe as many people as he could into investing in the company. McKelvy and his co-conspirators talked a big game, promising investment returns as high as 484 percent – but it was all a ruse,” said U.S. Attorney McSwain. “Instead of high returns, the over 300 victims of this fraud unwittingly invested in uninhabitable land and a bogus trash-to-green energy business idea based on bogus scientific methodology. We are pleased that the jury held McKelvy accountable for his part in this massive fraud.”
“Wayde McKelvy actively marketed himself as some kind of financial genius, when in fact he was nothing but a fraud,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “He and his buddies lured investors in by promising sky-high returns on their money, taking full advantage of people’s trust and their hopes for the future. Ponzi schemes can do real damage to victims’ lives, and the FBI is determined to hold the perpetrators accountable.”
This case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Robert Livermore and Sarah Wolfe. Additionally, the Securities and Exchange Commission, Denver Regional Office, assisted with the investigation.
Philadelphia Man Convicted at Trial of Assault with a Dangerous WeaponRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Antonio Shaw, 31, of Philadelphia, PA, was found guilty today by a jury of one count of assault with a dangerous weapon.
On October 27, 2017, the defendant was an inmate at the Federal Detention Center in Philadelphia. The government introduced evidence at trial that the defendant was involved in a previous incident concerning a second inmate. Based on the previous incident, a third inmate attempted to grab the defendant and pull him into a cell to fight, but the defendant broke free and ran away. A short time later, after lying in wait a short distance from the cell, the defendant rushed the third inmate from his blind side and repeatedly stabbed and slashed him with a sharp object. The third inmate suffered 11 separate stab and slash wounds.
“The same laws apply inside and outside of prison,” said U.S. Attorney McSwain. “The defendant clearly has no respect for the law or the safety of others. If you assault another individual, whether out on the street or at the Federal Detention Center, we can and will hold you accountable for your crime.”
“Incarcerated prisoners cannot be allowed to engage in violent behavior with impunity,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “Maintaining a safe environment for federal inmates and the Bureau of Prisons personnel responsible for them is essential to the operation of FDC Philadelphia, and the integrity of the justice system.”
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Mark Miller.
United States Attorney William M. McSwain Announces Progress in Making Our Communities Safer Through Project Safe NeighborhoodsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain joins the Department of Justice and other United States Attorneys across the country in commemorating the one year anniversary of the reinvigoration and enhancement of Project Safe Neighborhoods (PSN) – the centerpiece of the Department of Justice’s violent crime reduction strategy. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority, directing all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.“Project Safe Neighborhoods is a proven program with demonstrated results,” Attorney General Jeff Sessions said. “We know that the most effective strategy to reduce violent crime is based on sound policing policies that have proven effective over many years, which includes being targeted and responsible to community needs.”
Over the past year, the Eastern District has successfully prosecuted many instances of violent crime and has partnered with all levels of law enforcement, local organizations, and members of the community to share information and make neighborhoods safer places to live and work.
Enforcement Action through Prosecution of Violent Offenders
A central focus of the PSN strategy is to work with local law enforcement in the nine counties we serve to ensure federal efforts are focused on prosecuting the most violent offenders. Our collaboration has yielded the desired results, and the following three cases serve as excellent examples of our enforcement efforts:
- On October 2, 2018, Kareem Murphy, of Darby, Delaware County, Pennsylvania, was convicted after a jury trial of being a felon in possession of a firearm and one count of possessing a firearm in a school zone. Murphy fired a gun into a home located less than 1,000 feet away from Delaplaine McDaniel Elementary School – the school Murphy attended as a student. As U.S. Attorney McSwain observed when the jury returned its verdict, “The defendant endangered the lives of everyone in the vicinity, even though he should have never had a gun in the first place because of his felony conviction. We are very lucky no one was hurt.”
- On August 6, 2018, Koren Jones, of Philadelphia, Pennsylvania, was sentenced to 35 years’ imprisonment after pleading guilty to two armed robberies, one attempted robbery, and related firearms offenses – all over the course of a two-day violent crime spree in November 2016. Jones’ two armed robberies were committed at local grocery stores, and the attempted armed robbery occurred at a deli in the same neighborhood. As U.S. Attorney McSwain explained after the sentencing, “By seeking and obtaining a significant prison sentence in this case, we made the neighborhoods Jones terrorized safer today than yesterday.”
- On January 26, 2018, Herick Jaramillo, of Bethlehem, Lehigh County, Pennsylvania, was charged with six counts of armed robbery. In May 2018, he pleaded guilty to robbing the same gas station six times over a two-month period. He remains incarcerated and awaits sentencing.
Law Enforcement Partnerships with Pennsylvania State and Local Agencies
In the six months since U.S. Attorney McSwain took office, he has prioritized strengthening the Office’s partnerships with local and state law enforcement partners. During his first few months in office, U.S. Attorney McSwain traveled to each of the nine counties that make up the Eastern District of Pennsylvania – many of them several times – meeting with the district attorneys as well as several local police chiefs and other law enforcement agencies to share information and ideas about how to serve the community.
Additionally, the Eastern District has participated in multiple targeted working groups to address specific areas of particular concern in the community. For example, in February 2018, the Office formed the Opioid Law Enforcement Task Force. Since 2017, the Office has also participated in Pennsylvania Office of the Attorney General’s Gun Violence Task Force to provide assistance with investigating cases involving firearms charges, many of which end up being prosecuted at the state level.
"The Project Safe Neighborhoods program is a prime example of a productive partnership between local, state, and federal governments, all working in the interest of public safety,” said Philadelphia Mayor Jim Kenney. “I applaud all of our partners on this one-year anniversary of the PSN re-launch. Collaborative efforts by our law enforcement partners such as this are key to keeping our communities safe."
"The Philadelphia Police Department recognizes that a successful violent crime prevention strategy must be comprehensive, evidence based, measurable, and include partnerships among law enforcement agencies and other stakeholders,” said Philadelphia Police Commissioner Richard J. Ross, Jr. “The Project Safe Neighborhoods (PSN) program captures each of these necessary ingredients for success. We are fortunate to have been part of the 2017 program re-launch, and join our partners in celebrating its one year anniversary."
“Every resident in the Eastern District of Pennsylvania deserves to live in a safe community,” said U.S. Attorney McSwain. “And under my leadership, my Office will continue to aggressively pursue that goal. We will work together, fight harder, and use every tool we can to hold violent criminals accountable to the fullest extent of the law. That is what PSN is all about.”
Law Enforcement Partnerships with Federal Agencies
Fostering relationships with our federal law enforcement partners has been a related area of focus. In particular, the Office’s work with FBI and ATF has contributed to our success in prosecuting violent crime.
“We are proud be a part of the Project Safe Neighborhoods initiative alongside all of our many local, state and federal partners,” said ATF Special Agent in Charge Don Robinson. “The public deserves to live peacefully in their communities without the threat of violence.
"Combating violent crime is one of the FBI's highest priorities," said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. "We're committed to this initiative and our productive partnership with the U.S. Attorney's Office and our law enforcement colleagues. Together, we’ll keep working to make everybody's neighborhood safer—corner by corner, block by block."
Community Outreach
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The PSN Call-In Program consists of regular, face-to-face call-ins of individuals who were recently released from state custody. The Call-In program ensures connections to critical assistance and support to the returning offenders.
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The STAR Re-entry Court program, which started over a decade ago under the Bush Administration, has continuously been viewed as the leading prisoner re-entry program in the federal system. STAR is a partnership between U.S. Probation, U.S. District Court, the Federal Community Defender Office, and our Office. Together, our team provides intensive supervision and resources to individuals who are returning home to Philadelphia from federal prison and are at high risk of recidivism for violent crime.
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The Eastern District’s Mental Health Court was selected this past year as a pilot program for Congress’ 21st Century Cures Act. Just last month, our Office participated in a two-day training session with other federal judicial districts with similar programs, to share ideas and learn about best practices for successfully implementing the program.
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Later this month, Relapse Prevention Court will launch in the Eastern District, and the Office will be a key contributor in identifying participants for this program. The goal of Relapse Prevention Court is to maximize opportunities for long-term recovery from substance use and to facilitate successful completion of the participant’s term of supervised release.
Improvements to Community Safety
The FBI’s official crime data for 2017 reflects that, after two consecutive years of increases in violent crime, the nationwide violent crime rate is now trending in the right direction and began to decline in the first year of the Trump Administration – decreasing by approximately one percent in 2017. The nationwide homicide rate showed a similar decrease, by nearly one and a half percent in 2017. The preliminary information we have for 2018 gives us reason for optimism that our renewed efforts are continuing to pay off.
- On October 2, 2018, Kareem Murphy, of Darby, Delaware County, Pennsylvania, was convicted after a jury trial of being a felon in possession of a firearm and one count of possessing a firearm in a school zone. Murphy fired a gun into a home located less than 1,000 feet away from Delaplaine McDaniel Elementary School – the school Murphy attended as a student. As U.S. Attorney McSwain observed when the jury returned its verdict, “The defendant endangered the lives of everyone in the vicinity, even though he should have never had a gun in the first place because of his felony conviction. We are very lucky no one was hurt.”
Man Guilty of Attempted Enticement of Minor and Travel with Intent to Engage in Illicit Sexual Conduct with MinorRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Alexander Davis, 32, of Monsey, New York, was found guilty after a jury trial for attempting to entice a minor to engage in sexual activity and for travel with the intent to engage in illicit sexual conduct with a minor. The trial took place in Easton, Pennsylvania before United States District Judge Edward G. Smith.Between December 4 and December 20, 2017, the defendant began communicating online via Craigslist with a person he believed to be a 14-year old female named “Marisa.” In fact, “Marisa” was a Special Agent with the Pennsylvania Attorney General’s Office acting in an undercover capacity. Both in online chats and later in text messages, the undercover agent repeatedly told Davis that she was a 14-year old girl. Davis asked to meet “Marisa” multiple times and peppered their communications with sexual innuendo, including volunteering to bring condoms to their first sexual encounter. Davis traveled to a McDonald’s restaurant in Bethlehem, Pennsylvania, on the agreed-upon date with condoms and was arrested.
“This predator traveled to the Eastern District of Pennsylvania with condoms in his pocket and illegal sex with a minor on his mind,” said U.S. Attorney McSwain. “At trial, he claimed that he was role-playing, thinking that he was actually communicating with an adult, but the jury did not buy that excuse. This sort of depravity has no place in our communities. Thanks to smart detective work and collaboration between state and federal law enforcement agencies, Davis’s plan never came to fruition.”
“Homeland Security Investigations leaves no stone unturned in identifying and arresting perpetrators who seek to prey upon vulnerable children in our communities,” said Marlon V. Miller, Special Agent in Charge of HSI Philadelphia. “Thanks to HSI’s partnership with the Pennsylvania Attorney General’s Office and the diligent teamwork of federal, state, and local law enforcement in this case, a potentially dangerous child predator has been convicted and will now be held accountable for his actions.”
The case was investigated by Special Agent Kathryn Murray of Homeland Security Investigations, with assistance from Special Agent Daniel Block of the Pennsylvania Attorney General’s Office, and was prosecuted by Assistant United States Attorney Josh Davison.
Darby Man Convicted at Trial of Firearms OffensesRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Kareem Murphy, 36, of Darby, PA, was found guilty today by a jury of one count of being a felon in possession of a firearm and one count of possessing a firearm in a school zone.
On February 18, 2018, the Philadelphia Police Department responded to a house in Philadelphia after an officer heard the sound of a gunshot. As law enforcement arrived on the scene, the defendant fired another gunshot through the door of the house before fleeing the scene. Police officers arrested the defendant in a nearby alley. The defendant fired the gun within 1,000 feet of the Delaplaine McDaniel Elementary School, and has previously been convicted of a felony and therefore was prohibited by law from possessing a firearm.
“The defendant fired a gun into a house and endangered everyone in the vicinity, even though he should never have had a gun in the first place because of his felony conviction,” said U.S. Attorney McSwain. “Making matters worse, his crimes occurred near an elementary school, where any one of the neighborhood’s young students could have been struck. We are very lucky that no one was injured, and I am thankful that the jury held the defendant accountable for his actions.”
“ATF’s top priority is combating violent crime; one of the ways we accomplish that mission is by keeping firearms out of the hands of violent offenders,” said Donald Robinson, Special Agent in Charge, ATF Philadelphia Field Division. “This conviction is a perfect example of the collaborative effort between ATF, the United States Attorney’s Office and the Philadelphia Police Department in targeting violent offenders and protecting our communities.”
"The Project Safe Neighborhoods program is of tremendous benefit to local law enforcement here in Philadelphia,” said Philadelphia Police Commissioner Richard Ross. “The arrest of Kareem Murphy, and the PSN collaborations that resulted in a successful prosecution, illustrate the tangible impact that strong collective effort among law enforcement agencies can have on promoting safety and enhancing quality of life in the communities we serve."
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Philadelphia Police Department and is being prosecuted by Assistant United States Attorney Nancy Rue.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
Pittsburgh Man Pleads Guilty to Fraud and Tax ChargesRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania pleaded guilty in federal court to charges of filing false income tax return and theft of government property, United States Attorney Scott W. Brady announced today.
Robert Alan Seth, Sr. pleaded guilty to two counts before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that on April 15, 2014, Seth, Sr. filed a false income tax return for the tax year 2013. Additionally, from in and around January 2009, and continuing thereafter to in and around July 2017, Seth, Sr. collected Social Security Disability Insurance benefits for himself and for his minor child in an amount totaling $248,145.90.
Judge Hornak scheduled sentencing for February 6, 2019. The law provides for a total maximum sentence of 13 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Charles A. Eberle is prosecuting this case on behalf of the government.
The Internal Revenue Service – Criminal Investigation and the Social Security Administration conducted the investigation that led to the prosecution of Robert Alan Seth, Sr.
Investment Adviser Sentenced to 78 Months’ Imprisonment for Running Ponzi SchemeRead the Press Release
PHILADELPHIA – First Assistant U.S. Attorney Jennifer Arbittier Williams announced today that Carl Frederic Sealey was sentenced to 78 months in prison for running a Ponzi scheme and bilking his clients out of more than $1.6 million. United States District Court Judge Gerald J. Pappert, who presided over the proceedings, further ordered the ex-Chairman and Chief Executive Officer of Global Standard Industries (GSI) and SEK Industries (SEK) to be taken into custody immediately to begin serving his sentence.
Sealey, 43, of Cinnaminson, New Jersey, claimed that GSI was a multi-national private equity investment firm with more than 500 employees that specialized in investments of at least $50 million, more than $15 billion in managed domestic assets, and another $33 billion offshore. Almost every investor was led to believe that the investments were risk free and that they would receive their money back with 10 percent interest within 90 days. Additionally, Sealey lulled investors by representing to them that their “deal” had been delayed and that they could get their money back quicker if they invested additional money for other “deals” that GSI had underway.
In reality, GSI only had physical offices in Philadelphia and New York City and there were not 500 investment professionals employed by GSI. More importantly, there were never any real estate closings or business takeovers underway by anyone at GSI. When investors wired money to accounts exclusively maintained by Sealey, he stole their money and used the majority of the money received from investors to support an extravagant lifestyle, including a personal driver, hotel accommodations, restaurants, spa services, retail shopping, and other personal expenditures.
“Individuals trust investment advisors with their life savings and their economic well-being,” said First Assistant U.S. Attorney Williams. “This defendant blatantly betrayed that trust by making false promises to investors with the ultimate goal of stealing their money and living the high life with their hard-earned savings. The sentence imposed in this case, and the order requiring the defendant to begin serving his sentence immediately after the hearing, reflect the seriousness of the charges.”
Sealey pleaded guilty to conspiracy to commit wire fraud and wire fraud in June 2018. In addition to the sentence of 78 months, Sealey was ordered to pay more than $1,508,325 in restitution to the victims of his scheme.
“Carl Sealey invented offices, employees, and business deals that didn’t exist, in order to win investors’ trust,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “When people bought his sales pitch, he promptly sold them out, funding his extravagant lifestyle with their money. The FBI is gratified to help bring to justice the perpetrator of such blatant fraud.”
The investigation was led by agents from the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Anita Eve.
Gladwyne Businessman and Co-Conspirator of Chaka Fattah, Jr. Is Sentenced for Embezzlement and Tax ChargesRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that David T. Shulick, 48, of Gladwyne, was sentenced today to a term 60 months’ imprisonment for embezzling funds from the School District of Philadelphia and for his part in a scheme to defraud PNC Bank and for filing false tax returns. Shulick was convicted in May 2018 after a jury trial.
At the sentencing hearing, Hon. Harvey Bartle III, found that Shulick embezzled a total of $759,735 from the School District of Philadelphia, and in the process, abused the trust placed in him by the School District.
Between 2010 and 2012, Shulick, and co-conspirator Chaka Fattah, Jr., embezzled funds from the School District of Philadelphia, in part by misrepresenting the educational services that would be provided to students pursuant to a contract between the School District and Shulick’s company, Unique Educational Experiences, Inc. (“UEE”). Shulick secured funding from the School District by promising to provide at-risk students with a level of guidance counseling appropriate for their needs, psychological support services, and school security. Shulick and Fattah Jr. hid the true costs of services provided by UEE by submitting false budgets to the School District of Philadelphia. The budgets contained false entries for benefit costs, inflated staff salaries, and salaries for staff positions that were never filled at the school operated by UEE. As a result of this scheme, defendant Shulick fraudulently obtained funds from the School District of Philadelphia that were supposed to be used to educate students.
“The Court imposed a stiff sentence for good reason in this case,” said U.S. Attorney McSwain. “Shulick promised to provide at-risk school students with counseling, security, and support services. He also promised to pay teachers a decent wage. He broke all of those promises and lined his pockets with funds that he had no business taking, all the while spending hundreds of thousands of dollars renovating his Gladwyne home and his vacation home in New Jersey. Shulick’s actions were an appalling abuse of trust, which the sentence makes clear.”
Shulick and Fattah Jr. also devised a scheme to defraud PNC Bank. Fattah Jr. had defaulted on a loan made by PNC. As part of the scheme, Shulick acted as Fattah Jr.’s lawyer and threatened PNC Bank with the possibility that Fattah Jr. might file bankruptcy if he were unable to resolve his outstanding debts, which would result in the bank receiving little or no repayment on the loan. Defendant Shulick sent a letter to PNC Bank, offering to settle PNC Bank’s claim for $2,500. The letter included a form which represented that Fattah Jr.’s monthly income was $2,500. Shulick’s companies were paying Fattah, Jr. a salary of $75,000 per year, and Shulick and Fattah Jr. had entered into an agreement to increase Fattah Jr.’s compensation.
Shulick also filed false federal income tax returns for tax years 2009, 2010, and 2011, failed to report all of his taxable income in these years, and improperly claimed itemized deductions. Shulick claimed money he had spent renovating his residence and New Jersey shore home as business expenses of his company.
“Not only did Shulick steal from a school district that can use every dollar it gets, he did so under the pretense of helping some of its most vulnerable students,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “Instead, he turned around and used that money to support his own life of luxury. David Shulick acted contemptibly and criminally. The FBI is gratified to see this fraudster brought to justice, and will continue to pursue anyone embezzling money from the United States government.”
“Not only did David Shulick use deceit and fraud to line his pockets with funds that were supposed to be used to educate students, he also skirted his tax obligations,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco. “Mr. Shulick’s sentence should serve as a reminder that no one is above the law, especially when the integrity of tax administration is at stake.”
The case was investigated by the FBI, IRS Criminal Investigation, and the U.S. Department of Education, with the cooperation of the Philadelphia School District’s Office of Inspector General. It is being prosecuted by Assistant United States Attorneys Michael T. Donovan and Christopher Mannion.
U.S. Attorney’s Office Hosts Roundtable on Sexual Harassment in HousingRead the Press Release
PHILADELPHIA, PA – United States Attorney William M. McSwain announced that his Office, along with the United States Justice Department’s Civil Rights Division, hosted a roundtable today for community organizations to discuss the problem of sexual harassment in housing. The event hosted organizations who routinely work with vulnerable populations most likely to become victims of sexual harassment in housing: local law enforcement agencies, legal aid offices, fair housing organizations, shelters, and transitional housing providers.
The Department of Justice enforces the federal Fair Housing Act, which prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin, and disability. Sexual harassment is a form of sex discrimination prohibited by the Act.
While most people are familiar with the problem of sexual harassment in the workplace, harassment also occurs in housing, and the Fair Housing Act prohibits it. The Justice Department brings cases each year involving various illegal conduct, including allegations that defendants have exposed themselves sexually to current or prospective tenants, requested sexual favors in exchange for reduced rents or making necessary repairs, made unrelenting and unwanted sexual advances to tenants, and evicted tenants who resisted their sexual overtures. Many instances of sexual harassment in housing continue to go unreported. The Justice Department’s investigations frequently uncover sexual harassment that has been ongoing for years or decades and identify numerous victims who never reported the conduct to federal authorities.
“Sexual harassment in housing is often underreported, but it is an egregious violation of a person’s right to fair housing under federal law,” U.S. Attorney McSwain said. “Landlords, superintendents, and others exploiting the power they have over tenants is intolerable. Our Office is dedicated to uncovering such violations where they exist and vigorously enforcing the law. We are working closely with the Civil Rights Division to spread the word about options to help victims who currently are experiencing sexual harassment in housing or who have experienced it in the past,” continued U.S. Attorney McSwain. “Roundtable discussions like the one we hosted today are an important way to increase awareness, share information, and build strong partnerships in the community to combat this problem together.”
Community organizations, such as local law enforcement, legal aid offices, fair housing organizations, shelters, and transitional housing providers can identify the misconduct and encourage victims to report sexual harassment to the Civil Rights Division and the U.S. Attorney’s Office. Local police departments or legal aid offices may also be able to help victims if the behavior is a crime or if there is an imminent eviction.
The Department encourages anyone who has experienced sexual harassment in housing, or knows someone who has, to contact the Division by calling (844) 380-6178 or emailing [email protected]. Individuals who believe they may have been victims of discrimination may also file a complaint with the U.S. Attorney’s Office at 615 Chestnut Street, Suite 1250, Philadelphia, PA 19106, ATTN: Jacqueline C. Romero, Civil Rights Coordinator.
Remarks by U.S. Attorney William M. McSwain at the NASA OIG ConferenceRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain was honored to speak yesterday at the conference of the NASA Office of Inspector General in Philadelphia, Pennsylvania. U.S. Attorney McSwain’s remarks are below.
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Thank you very much to Inspector General Paul Martin and the entire NASA OIG for inviting me to speak here today. It is truly an honor to join you.
I am blessed that the U.S. Attorney’s Office is filled with skilled, experienced prosecutors who want nothing more than to serve the public and do justice. But no Assistant U.S. Attorney can win a case without the help of an outstanding law enforcement partner. We are very thankful for our relationship with NASA OIG, and I am here today for two reasons: first, to express my appreciation for the work you do and, second, to talk about how we can build on our existing partnership and continue to do great things together.
Many federal, state, and local agencies work with our Office in the Criminal Division or the Civil Division, depending on the subject of their work and investigations. One attractive aspect of working with NASA is that you all are able to work equally well with both divisions of our Office, depending on the case, and you are able to achieve stellar results in both spheres.
Over the years, we have had a number of successful criminal prosecutions together. In one recent high-profile matter, United States v. Chaka Fattah, former Congressman Fattah misused NASA grant funds to help retire some of his campaign debt. NASA OIG assisted in this investigation, and Special Agent Michele Batignani testified at trial. With her great work, along with the work of AUSAs Paul Gray, Eric Gibson, and many other law enforcement partners, Fattah was convicted and is currently serving a sentence of 10 years in prison.
In another significant matter, United States v. Ding and Zotova, a Lehigh University professor (Mr. Ding) and his wife submitted proposals to NASA, seeking funding for scientific research. The defendants’ proposals claimed they would conduct the research at their business, ArkLight, and would subcontract some of the work to Lehigh, where Ding was employed as a professor. Instead, the defendants used ArkLight as a front to funnel federal grant money to themselves for research performed by students and others working under Ding’s supervision at his university lab. Defendants held Zotova (Ding’s wife) out to NASA as the “principal investigator,” but she never did any work on the contracts at issue. Special Agent Erik Saracino brought this case to our Office. It was initially a case that our Civil and Criminal Divisions worked together, but that our Criminal Division ultimately pursued. AUSA Greg David, now our Civil Division Chief – and a former NASA intern I might add – was cross-designated as a criminal AUSA to bring this case to trial with AUSA Liz Abrams. Thanks to the dedicated work of Special Agent Saracino and AUSAs David and Abrams, after a two-week jury trial, the jury convicted the defendants of six counts of wire fraud. Both were sentenced to time in prison.
Our Office has also had success working with NASA on the civil side. For example, in 2014, Thermacore, Inc. agreed to pay $965,000 to resolve False Claims Act allegations. Thermacore submitted essentially identical proposals to perform the same work to NASA and the Air Force under the Small Business Innovation Research (SBIR) program. It was awarded both and received payment under both contracts. Essentially equivalent research may not be funded by more than one agency and submissions under the SBIR Program must be certified as being non-duplicative. Under the SBIR Program, therefore, it is unlawful to receive funding for essentially equivalent work already funded under any government program or to falsely certify that work is non-duplicative. AUSA Veronica Finkelstein and Special Agent Erik Saracino worked to bring a fair and just result in this case.
I want to continue our strong partnership and continue to bring cases together in both the criminal and civil arenas. In my first few months as U.S. Attorney, we reorganized some parts of the Office. One of the most important things we did was to form the Affirmative Civil Enforcement Strike Force in our Civil Division. The ACE Strike Force, as it is more commonly known, will investigate and, when necessary, file lawsuits to prosecute fraud and abuse against government programs. It will work closely with criminal prosecutors to coordinate civil and criminal investigations where appropriate. The ACE Strike Force will investigate cases arising from a number of sources, including those brought under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. We have always had a deep bench of talented civil attorneys who all contribute to the successful prosecution of affirmative civil enforcement and will continue to do so. But with the ACE Strike Force, we will now have additional firepower to focus on these critical matters, including those brought to us by NASA OIG.
So how can we continue to bring strong cases together? Much of it comes down to maintaining open lines of communication. But it also helps to keep in mind some general considerations about how we evaluate agency referrals at the intake stage.
The first thing to keep in mind when you present cases to our Office is that we are open to exploring both criminal and civil proceedings in any given case, and we consider a range of cases—from the smaller, simpler cases to the most complex of fraud schemes. We have many tools at our disposal to stamp out fraud; the case may be appropriate for criminal investigation, civil investigation under the False Claims Act, or investigation by both divisions “in parallel” proceedings.
Along those lines, we have no minimum or threshold loss amount. We will consider any case that fits within the federal statute in play, and we understand that the deterrent impact of bringing a smaller case can be very important to an agency partner. We will take that into consideration in making a charging decision. At the same time, our Office is capable of handling the most complex white collar cases, and what we often find is that when agencies identify smaller-types of violations of agency protocol or low-level criminal conduct, it can lead to discovering other, more significant criminal conduct by the same people at the same time.
So the first takeaway here is that no case is too small to bring to our attention, and we will determine, in each case, whether the civil enforcement or criminal charging route is appropriate.
The second thing to keep in mind as you evaluate matters is related to the first point – you should consider the wide variety of different types of behavior that could potentially fall within the purview of fraud. Remember that fraud comes in many forms, limited only by the creativity (or lack thereof) of the fraudsters involved. So the fraud at issue could involve grant fraud or procurement fraud, but it just as easily could involve employee embezzlement of funds or employee theft of government property, including intellectual property.
And in any type of case, the key for us, at the intake stage, is to distinguish innocent behavior or mistakes from actions undertaken with a criminal intent to defraud. In general, investigations should center around uncovering false statements or misappropriations that demonstrate intent. For example, in cases involving procurement fraud, we might look for whether the same vendor continually wins bids. We also might look for a series of revisions to contracts’ technical specifications so only one vendor is in a position to provide those particular items. These are just a couple of examples of the types of evidence of fraud that we look for in distinguishing innocent behavior from intentionally fraudulent conduct.
So the second takeaway here is to keep an open mind in assessing matters and to look for evidence that can be viewed as establishing fraud either directly or circumstantially.
Third, though we want you to bring us all types of cases, it is equally true that cases involving a “plus factor” are of particular interest to my Office. And by “plus factor,” I mean that there is some substantial harm to a third party, or conduct that is particularly egregious and ongoing. So, for example, if you discover fraudulent conduct that, in turn, could raise safety concerns that impact third parties, as can happen when there is fraud that affects the validity of data or scientific research that others are relying upon, that sort of conduct is particularly concerning. Also, a long-standing pattern of fraud or abuse is often worthy of scrutiny.
And finally, in terms of what you, as agents, can do, it is important to know that there is a tremendous benefit to proactive agency intervention. We saw that in the Thermacore investigation. That investigation was prompted by NASA’s initiative to identify potential fraud in its SBIR contracts. But even beyond audit activities, it is important to be alert to the various additional sources of useful information to build a case, including tips from outside resources and employee exit interviews – to name just two potential sources of information.
In sum, my Office is proud of our past work with you, and we are excited about our future collaboration. Thank you for your partnership, and again, thank you for having me here today.
Remarks by U.S. Attorney William M. McSwain at the Allentown Police Academy GraduationRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain was honored to speak last week at the Allentown Police Academy Graduation of the 102nd Police Training Class in Allentown, Pennsylvania. U.S. Attorney McSwain’s remarks are below.
*****
Thank you very much to Mayor Ray O’Connell, Chief of Police Tony Alsleben, Assistant Chief Stephen Vangelo, and the entire Allentown Police Academy for inviting me to speak here today. It is truly an honor to be here with you today on this very special occasion.
First and foremost, to the 102nd Police Training Class – congratulations on a job well done! You have spent the past six months working incredibly hard, day in and day out, to achieve your dreams, all with the goal of getting to this moment. There are not many days in your life that you know for certain you will remember for decades to come. But this is one of those days. Do not let the moment pass you by. Look around, at your classmates, at your future colleagues, and most importantly, at your families, and acknowledge to yourself what you have achieved to be sitting where you are today. Everyone here is incredibly proud of you, and you deserve another round of applause.
Throughout my life, I have always been interested in how others define their core values. In the program for today’s ceremony, the Law Enforcement Code of Ethics is printed. The first line reads, “As a law enforcement officer, my fundamental duty is to serve the community.” In my mind, a life of service is the most honorable and noble pursuit one can follow. As the Code details, you will safeguard the lives of others on a daily basis. You will protect the innocent and the vulnerable. You will follow and uphold the United States Constitution at all times, not only when it is convenient, but also when it might be most inconvenient.
It is by living the core values of law enforcement that has allowed the U.S. Attorney’s Office and police departments throughout the Eastern District of Pennsylvania, including Allentown, Bethlehem, and Easton, to achieve great success in the pursuit of justice and keeping our community safe. On the 17th anniversary of the terrorist attacks last week, I was humbled to stand in the Great Hall in the Justice Department headquarters in Washington D.C. to hear Attorney General Sessions give his remarks about the day that this country was changed forever. He recalled that first responders performed one of the most heroic rescue missions in our country’s history. The Attorney General noted that since September 11, 2001, the Department of Justice has secured the convictions of over 580 defendants for terrorism or terrorism-related charges, and he reiterated that the FBI has on-going terrorism investigations in all 50 states.
But the FBI is not pursuing these investigations in a silo. One of the most important lessons from that horrific day 17 years ago is that federal, state, and local authorities must have cross-jurisdictional partnerships to ensure that there is a continuous flow of intelligence and information to assist national security and public safety field operations. There are no separations or boundaries between federal, state and local law enforcement. We all work together to ensure the continued safety of this great nation. We can only succeed with the collaboration and partnership of each of you.
These partnerships cannot be built in a day. We all need to work together when times are good so that we know exactly what to do and who to call in times of crisis. To this end, one of my first initiatives when I began serving as U.S. Attorney was to visit all nine counties that make up the Eastern District of Pennsylvania and meet with the district attorneys and local law enforcement leaders in each of them. It is a priority of my Office to continue to foster these relationships and always keep our lines of communication open. These connections are crucial to keeping the community safe.
And this collaboration has already produced results. For example, together, we continue to fight the war against the opioid epidemic. Earlier this year, the U.S. Attorney’s Office announced the creation of the Opioid Law Enforcement Task Force, comprised of federal, state and local law enforcement partners. The Task Force is responsible for developing, implementing, and coordinating a robust prosecution response to this national health emergency, and the Task Force could not be successful without your partnership.
Together, we also continue to fight violent crime and drug trafficking on a daily basis. The Department of Justice has recently reinvigorated the Project Safe Neighborhoods program, which has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. To that end, my Office has brought many cases this year combatting violent crime and drug organizations, with the help of area police departments like yours. For example, Assistant U.S. Attorneys Kelly Fallenstein and Sherri Stephan are currently prosecuting a drug organization led by Defendant Jose Sanchez-Delgado. This organization used the U.S. Mail to bring heroin and cocaine from Puerto Rico to Allentown for distribution here. The Drug Enforcement Administration and the Allentown Police Department are working this case together, with
Officer Evan Weaver and Detective Randy Fey playing a leading role as FBI Task Force Officers. A total of ten defendants were indicted and charged with distributing up to 25 kilograms of cocaine. Six of these defendants have pled guilty and the rest are working their way through the criminal justice system.
Another great example of working together is Allentown Police Detective Damian Murray, who also serves as a DEA Task Force Officer, and was named the DEA Task Force Officer of the Year for the entire Eastern District of Pennsylvania. But that is nothing new for this Department. Two years ago, in 2016, Allentown Police Sergeant Christopher Diehl was also named the DEA Task Force Officer of the Year.
I could go on and on about our successful pursuits together. It is by living by our cores values and the code of ethics that we will pursue challenging investigations, succeed in stopping crimes, and hold the responsible parties accountable. And I know that each of you will have many successes. But that does not mean that this will always be an easy road.
Indeed, it is harder today than perhaps in any time in American history to be serving in law enforcement. It has become somewhat popular in certain segments of the population to come out against the police and law enforcement. And even when a police department has an honest and open dialogue with the community about this criticism, each and every one of you will live your life under a microscope. Moreover, not only are the police under scrutiny like never before, the tools of that heightened scrutiny are ever-present. Everything that you do and everything that you say can be posted on Facebook, tweeted, and made into a national news story in a matter of seconds.
You need to be aware of this constant drumbeat of attention. But I encourage you not to shy away from it. Instead, embrace it. Because when the media and the citizens of our community actually get the opportunity to look more closely, they get to see dedicated, hard-working police officers who are keeping our communities safe every single day.
The Law Enforcement Code of Ethics notes the challenges ahead. It states that you will keep your private life unsullied “as an example to all,” and that you will “maintain courageous calm in the face of danger, scorn or ridicule.” Make no mistake – this is placing a higher standard on you than the average citizen, even when you are off-duty. The Code of Ethics notes that you “alone” are responsible for your own standard of professional performance. That being said, I want you to look around this room at your fellow graduates. You will have greater success if you help one another in being the best officers that this community expects and deserves. You are responsible for your own conduct, but you have each other to lean on and help guide one another to become the best law enforcement officers possible.
Graduates, if you remember one thing that I say today, I want you to remember this: I want you to remember the words thank you. Thank you for your future partnership with the U.S. Attorney’s Office in pursuing justice. Thank you for your future leadership in the community and for keeping all of us safe. Thank you for the sacrifices that you will make on a daily basis because of the work that you do. I know that the hours are long, the danger is real, and the salary will never match what you deserve and what you could earn in the private sector. But we do not serve for the pay or the glory. We serve because there is no greater purpose in this life than to serve others.
But our graduates today are not the only ones in this room who serve. To all of the family members here today supporting a police graduate – can you please stand up? I want all of the husbands and wives, children, mothers and fathers, sisters and brothers, aunts and uncles, grandparents – and also the close friends – to please stand up. I want to thank you for your service. These graduating men and women would never have gotten here today without you. Their long hours will be your long hours. The nights and weekends, the holidays, the sacrifices that they make will be your sacrifices, as well. And I know that you will think about the dangers that they face on a daily basis, perhaps sometimes even more than they do. You serve on a daily basis. Please know that I and every other member of this community are humbled by and grateful for your sacrifice and your service to this community and this country. Thank you for everything that you do.
In conclusion, I say to everyone here – on your longest, hardest, most challenging days, do not give up. You are on a righteous path. Remember that the U.S. Attorney’s Office stands beside you; we could not do our work without you. We see your service and we know your sacrifice. Remain determined in your pursuit of justice and hold your head high.
Thank you, congratulations, and God Bless you all.
Philadelphia Woman Pleads Guilty to Two Counts of Sex Trafficking of MinorsRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Shyniquah Lightner, 26, of Philadelphia, pleaded guilty today to two counts of sex trafficking of a minor.
Between July 2017 and September 2017, the defendant operated a prostitution ring in Philadelphia, and co-defendant Malik Hudson assisted Lightner in the operation. Lightner recruited females to work as prostitutes in this illegal business, and then created Internet advertisements in which she marketed various females as available for purchase for purposes of prostitution. These advertisements featured pictures of the females, either scantily clad or partially nude, a description of each female, and a phone number to call to arrange a meeting. Two of the females Lightner recruited and advertised were minors under 18 years of age.
“The defendant chose to recruit and sell women for money,” said U.S. Attorney McSwain. “The U.S. Attorney’s Office remains committed to aggressively investigating and pursuing cases involving the sex trafficking of minors.”
“HSI Philadelphia is pleased that the newly formed multiagency Anti-Trafficking Coalition worked jointly on this investigation, and we look forward to expanding our partnerships with private and public entities to combat human trafficking,” said Marlon V. Miller, special agent in charge of HSI Philadelphia.
“We are privileged to have collaborated with our Human Trafficking Task Force partners in the investigation, arrest, and successful prosecution of Shyniquah Lightner,” said Philadelphia Police Commissioner Richard Ross. “As a result of this collective effort, a child predator has been brought to justice. We look forward to replicating this outcome, as we continue to focus our collective investigative efforts on those who target our most vulnerable communities.”
Lightner faces a mandatory minimum sentence of 10 years in prison with a maximum possible sentence of life in prison, a minimum of 5 years up to lifetime-supervised release, a $500,000 fine, and a $200 special assessment.
The case was investigated by the Homeland Security Investigations (HSI), the Philadelphia Police Department Special Victim’s Unit (SVU) and the Philadelphia District Attorney’s Office, and is being prosecuted by Assistant United States Attorney Jessica Natali. This case is part of the Philadelphia Anti-Human Trafficking Task Force. Members of the joint task force include the HSI Philadelphia, the Philadelphia Police Department’s SVU, the Philadelphia District Attorney’s Office Family Violence & Sexual Assault Unit, the Federal Bureau of Investigation, the Salvation Army and the United States Attorney’s Office for the Eastern District of Pennsylvania. The task force brings together the expertise, training, experience, and law enforcement authorities of the partnered agencies to help identify human traffickers, and prosecute them while also protecting and aiding survivors.
National Hospital Chain Will Pay over $260 Million to Resolve False Billing and Kickback AllegationsRead the Press Release
PHILADELPHIA, PA – United States Attorney William M. McSwain today announced a $55 million civil settlement with Health Management Associates (HMA) to resolve civil allegations relating to two hospitals in Lancaster, Pennsylvania. The resolution of these claims in the Eastern District is part of a larger $260 million settlement between the Department of Justice and HMA which arose out of HMA’s fraudulent billing practices in multiple healthcare institutions across the United States.
Between 2009 and 2012, two former HMA hospitals, Lancaster Regional Medical Center and Heart of Lancaster Medical Center in Pennsylvania, billed federal health care programs for services referred to the hospitals by individual physicians and physician groups. According to the government, HMA compensated these physicians and physician groups through complex kickback arrangements in exchange for a patient referral stream. In one instance, HMA bought two businesses from a physician group for grossly inflated amounts. HMA also paid that same physician group under a contract that was styled as payment for services that were never performed or that neither party ever had any intention of performing. In another instance, HMA paid a local surgeon exorbitantly more than the fair market value of his services. According to the government, these arrangements were intentionally structured to disguise payments which were, in actuality, payments for patient referrals, not for legitimate services.
“Our resolution of this matter and the significant recovery we have obtained show once again that no matter how complex the scheme is, we will find it, stop it, and punish it,” said U.S. Attorney McSwain. “HMA covered up kickbacks for patient referrals with a host of sham joint venture agreements, lease payments, and management agreements. These sorts of improper physician inducements are a form of ‘pay to play’ business practices that will not be tolerated. Healthcare institutions cannot pad their bottom line at the expense of the American taxpayers. And most importantly, this conduct must be rooted out because it gets in the way of providing top-notch patient care to American citizens.”
The allegations resolved by the settlement were brought in eight lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The eight qui tam cases, which were filed in various districts including the Eastern District of Pennsylvania, were transferred to the U.S. District Court for the District of Columbia as part of a multi-district litigation presided over by the Honorable Reggie B. Walton.
George E. Miller and Michael J. Metts, former HMA hospital executives in Lancaster, filed suit in the Eastern District of Pennsylvania, alleging the improper financial relationships between HMA and the physicians groups. Mr. Miller and Mr. Metts will receive approximately $12.4 million as their share of the recovery from HMA in that case. “We sincerely thank Mr. Miller and Mr. Metts. Together with their lawyers, these two citizens provided essential assistance to the government throughout this case. Without the willingness of relators to shed light on allegations, preserving government program funds would be far more challenging. Their efforts played a vital role in the resolution of these cases,” said U.S. Attorney McSwain.
“Compliance with government healthcare rules requires that patients only receive treatment they actually need. Then government programs should be billed just for those services. No more, no less,” said Derrick L. Jackson, Acting Assistant Inspector General for Investigations at the U.S. Department of Health and Human Services. “Let there be no doubt—we will continue to protect federal healthcare programs and beneficiaries by holding provider organizations fully accountable.”
This case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General and U.S. Office of Personnel Management Office of the Inspector General. For the U.S. Attorney’s Office, the investigation and settlement were handled by Assistant U.S. Attorneys Charlene Keller Fullmer and Veronica Finkelstein.
The civil claims resolved by the settlement are allegations against HMA only, and there has been no determination of liability.
Physician Charged with Illegally Distributing Controlled Substances for Internet Pharmacies and with Tax FraudRead the Press Release
PHILADELPHIA, PA – United States Attorney William M. McSwain announced that Dr. Charles Garo Avetian, 55, of Newtown Square, Pennsylvania, a physician licensed in Pennsylvania, was charged today by Information with illegally distributing controlled substances and submitting false individual income tax returns.
The Information charges that Avetian, while working for entities that sold controlled prescription drugs via the Internet, issued invalid prescriptions for Fioricet, which contains butalbital, a barbiturate and Schedule III controlled substance, based solely upon his review of online questionnaires completed by the customers of the websites that employed him. The defendant is also charged with failing to report approximately $363,830 of gross receipts earned during the tax years 2012 through 2014 on his federal income tax returns.
If convicted, the defendant faces a maximum possible sentence of 139 years’ imprisonment, a three-year period of supervised release, a $7,250,000 million fine, and a $1,600 special assessment.
“The conduct alleged to have occurred in this case is drug dealing – plain and simple. Although the defendant’s chosen venue was the Internet rather than a street corner, the practical effect is the same and the impact to the community is just as bad,” said U.S. Attorney McSwain. “The consequences should similarly reflect the severity of this behavior and the alleged tax fraud.”
“There are thousands of websites that claim to be online pharmacies offering controlled substance medications without a valid prescription and from an unregulated supply chain, which pose a serious risk to public health,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration's Philadelphia Field Division. “Dr. Avetian is accused of prescribing controlled substance medications outside of the usual course of medical practice and without a legitimate medical purpose, which are violations of federal law.”
“No matter what the source of income, all income is taxable. Each of us is responsible for filing correct and accurate tax returns,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco. “We will vigorously investigate those individuals who knowingly and willfully evade their tax obligation.”
The case was investigated by the Drug Enforcement Administration, the Food and Drug Administration, and the Internal Revenue Service, Criminal Investigation, and is being prosecuted by Assistant United States Attorney Frank R. Costello, Jr.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Child Predator Sentenced to 100 Years’ ImprisonmentRead the Press Release
PHILADELPHIA – Lawrence Jamieson, 59, of Malvern, Pennsylvania was sentenced today to 100 years in federal prison for sexual abuse of a minor girl, manufacture of hundreds of sexually explicit videos and images of his abuse, and the collection of more than 14.4 million images of child pornography that he downloaded from the Internet.
Jamieson began collecting images of children being sexually assaulted approximately 15 years ago. He collected some of the most demented images imaginable of toddlers and infants being sexually assaulted by adult men and women, and in some cases, by animals.
During the same time that he was trafficking in child pornography, Jamieson’s conduct escalated, and he engaged in a plot to sexually assault a victim child who was in his care. Jamieson was well acquainted with the victim; he knew she had been diagnosed on the Autism spectrum and suffered from learning disabilities and mental health issues. He targeted this underage girl by first recruiting another adult male to pose as a teenaged boy so that they could dupe the victim into believing he was her boyfriend and gain her trust. The “boyfriend” then engaged her in sexual activity, photographed and videotaped her, and distributed the videos and images back to Jamieson. Her images were also distributed out to others over the Internet.
“Jamieson is the worst of the worst type of criminal – a child predator who derives satisfaction from abusing society’s must vulnerable members,” said U.S. Attorney McSwain. “The details in this case are horrific. This defendant amassed a collection of child pornography that exceeded 14.4 million images, reportedly the largest collection in Pennsylvania. And on top of that, he concocted and carried out a plan to sexually abuse a child within his care – someone he knew was susceptible to his influence. For more than 18 months, Jamieson and his co-defendant repeatedly lied to his victim and engaged in an unconscionable course of sexual abuse and exploitation.”
U.S. Attorney McSwain continued, “When it comes to protecting children from child predators, our actions will be swift and severe. Predators, take note: No matter who you are or where you come from, we will hunt you down, prosecute you, and put you in a jail cell for a very long time.”
In addition to the term of imprisonment, the court ordered that the defendant have no contact with the victim or her family for the rest of his life.
The case was investigated by the FBI, the Willistown Police Department, and the Chester County District Attorney’s Office. It was prosecuted by Assistant United States Attorney Michelle Rotella.
Second Former Glaxosmithkline Scientist Pleads Guilty to Stealing Trade Secrets to Benefit Chinese Pharmaceutical CompanyRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Dr. Tao Li, 45, of San Diego, California, pleaded guilty today to conspiracy to steal trade secrets from GlaxoSmithKline (GSK) to benefit a Chinese pharmaceutical company named Renopharma.
Dr. Li and two of his friends, Dr. Yu Xue and Dr. Yan Mei, created Renopharma in Nanjing, China, supposedly to research and develop anti-cancer drugs. In reality, though, Renopharma was used as a repository of stolen information from GSK. Renopharma received financial support and subsidies from the government of China. At the time, Xue was employed as a scientist at GSK working on developing biopharmaceutical products. These products typically cost in excess of $1 billion to research and develop.
Xue sent a substantial number of GSK’s scientific documents, some of which contained GSK trade secrets, to Li and Mei at Renopharma in China. The data contained information regarding multiple biopharmaceutical products under development, GSK research data, and GSK processes regarding the research, development, and manufacturing of biopharmaceutical products. Xue typically sent the documents via e-mail or transferred the documents via portable electronic storage devices. Xue sent these documents to Li and Mei with the intention to convert GSK’s information for their economic benefit. On January 5, 2016, the FBI arrested Li and seized his computer on which they found a number of GSK documents containing trade secret and confidential information which he had received from Xue. Xue previously pleaded guilty on August 31, 2018.
“Dr. Li illegally stole trade secrets to benefit himself and his company, which was financed by the Chinese government,” said U.S. Attorney McSwain. “The lifeblood of companies like GSK is its intellectual property, and when that property is stolen and transferred to a foreign country, it threatens thousands of jobs here in America. Not only is this a serious crime, but it is literally a form of economic warfare against American interests. Such criminal behavior must be prosecuted to the fullest extent of the law.”
“GSK spends top dollar on research and development to bring new medications to market,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “The theft of valuable trade secrets threatens products in the pipeline, to the detriment of both the company and the patients those drugs might help. It adds insult to injury when that know-how is diverted for the benefit of a foreign economic rival. The FBI is determined to stand up for the innovators creating products that improve people’s lives, by investigating and holding accountable those who would steal trade secrets.”
Tao Li is scheduled to be sentenced on January 4, 2018 before the Honorable Joel H. Slomsky. The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Robert J. Livermore and Katherine E. Driscoll.
Previously Deported Illegal Alien Who Went on a Philadelphia Crime Spree Sentenced Today for Illegal Re-entry after DeportationRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Franklin Renan Euceda, 29, a Honduran citizen, was sentenced today to 21 months’ imprisonment after pleading guilty to illegal re-entry after deportation.
Euceda was originally deported from the United States in 2009. Euceda re-entered the country illegally very soon afterward, according to an aunt who testified at his sentencing hearing.
Beginning in May 2016, Euceda went on a crime spree that culminated in charges of attempted murder and conspiracy to commit murder. First, on May 10, 2016, Philadelphia police arrested Euceda on charges of selling and delivering cocaine; he was released on bail. Later that same month, on May 27, 2016, Philadelphia police arrested him again, this time for possessing crack cocaine with intent to deliver. Again, Euceda was released on bail. Then, on October 29, 2016, he was arrested a third time, this time on charges of attempted murder and conspiracy to commit murder. According to the police report, Euceda and another man got into a heated argument with a security guard at a night club. After the argument, Euceda and his co-conspirator got into a car, and as Euceda drove toward the club, his co-conspirator rolled down the window and opened fire at the security guard.
Euceda eventually pleaded guilty in both drug cases and to the attempted murder and conspiracy to commit murder charges. Additionally, he was charged by federal indictment in May 2017 with one count of illegal reentry after deportation. He is currently serving a state sentence of 11½ - 23 months’ imprisonment.
“The chronology of events that took place in this case tells an all too familiar story,” explained U.S. Attorney McSwain. “Euceda, a previously deported illegal alien, returned to the United States illegally and engaged in a slew of serious crimes, enabled by an arrest-and-release cycle that occurred at the local level. His pattern of lawlessness speaks for itself: he flouted the immigration laws; he sold cocaine; he possessed crack cocaine with an intent to sell it; and he conspired to commit murder and attempted to commit murder. These crimes never should have occurred because Euceda had no right to be in the country in the first place. The sentence today ensures that Euceda is punished to the fullest extent of the laws he chose to ignore.”
U.S. Attorney McSwain continued, “The sentence also confirms that this Office will continue to hold every person accountable who violates federal law – no matter who you are or where you come from. That is the essence of the rule of law. Any other approach simply encourages a culture of lawlessness that jeopardizes the safety of our community and makes a mockery of the law.”
“ICE is focused on smart, effective immigration enforcement that prioritizes the removal of criminal aliens like Mr. Euceda,” said Simona L. Flores, field office director for the Philadelphia Field Office. “ERO Philadelphia will continue safeguarding the security of our nation by diligently pursuing criminal prosecution and the removal of criminal aliens.”
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ICE”), and is being prosecuted by Assistant United States Attorney Mark Dubnoff.
Philadelphia Man Sentenced to 20 Years in Prison Plus 20 Years of Supervised Release for Videotaping Children with Hidden CameraRead the Press Release
PHILADELPHIA, PA – United States Attorney William M. McSwain announced today that Roger Wallach, 38, of Philadelphia, PA was sentenced today to 240 months in federal prison for manufacturing videos and images of two girls, ages 10 and 11, over a period of three months.
Wallach previously pleaded guilty to nine counts of manufacturing and attempting to manufacture child pornography, and one count of possession of child pornography. As part of his guilty plea, Wallach admitted that he concealed a spy watch in a bathroom and surreptitiously recorded the 10- and 11-year-old girls as they undressed, used the bathroom, and showered. He also used the webcam on his laptop computer to record them undressing and in various states of nudity. All total, he had hundreds of sexually explicit images of both girls that he saved on his cell phone, in his iCloud account, on his laptop, and on the memory of his spy watch.
In addition to the term of imprisonment, the court imposed a 20-year term of supervised release and ordered that the defendant undergo a sex offender evaluation and treatment after his release from federal prison.
“Child predators are among the worst type of criminals,” said U.S. Attorney McSwain. “They prey on those whose very innocence makes them the most likely to be targeted. While the lengthy prison sentence and 20-year term of supervised release ordered today does not erase the defendant’s deplorable actions, it is a stern punishment that will help to protect some of society’s most vulnerable victims.”
“Wallach’s heinous crimes robbed these young girls of their innocence and childhood,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. Although, today’s sentence cannot repair the damage Wallach caused, it sends the message to other predators that the FBI remains committed to hunting them down and holding them accountable.”
The case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Michelle Rotella.
Former Philadelphia Police Officer Sentenced to 24 Months for Sending Hundreds of Threatening Text MessagesRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Bryan McGraw, 49, of Philadelphia, Pennsylvania, was sentenced today to 24 months’ imprisonment for sending hundreds of harassing text messages over a four-year period.
McGraw, a former member of the Philadelphia Police Department, sent more than 500 harassing text messages to the victim from February 2014 through March 20, 2018. During the four-year time period, the victim was dating a woman that McGraw had been romantically involved with in the past. The anonymous harassing messages included some that were threatening to the victim and to the victim’s minor daughter. McGraw pleaded guilty on May 9, 2018.
“This multi-year campaign of harassment affected innocent victims, including a minor child,” said U.S. Attorney McSwain. “McGraw’s words and actions show a complete lack of respect for the law he once swore to uphold and a lack of concern about the safety of the victims he terrorized. This Office will continue to investigate and prosecute those who weaponize electronic forms of communication to further an illegal purpose.”
“As law enforcement officers we are sworn to protect those we serve,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “Officer McGraw did more than fail to live up that commitment. He repeatedly threatened the victim in this case. Today’s sentencing affirms the FBI’s commitment to rooting out corruption at all levels of public service, especially law enforcement.”
In addition to the 24-month prison term, Chief Judge Juan Sánchez ordered McGraw to serve one year of supervised release upon release from prison and to pay a fine of $1,200 and a special assessment of $100.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Albert S. Glenn.
Convicted Felon found Guilty of Possession of Firearm, Multiple Drug Charges, and Aiding and AbettingRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Richard Winn, 35, of Philadelphia, PA, was found guilty after a jury trial for possession of a firearm by a convicted felon; possession with intent to distribute crack cocaine, heroin, and marijuana; and possession of a firearm in furtherance of a drug trafficking crime.
During the course of an unrelated homicide investigation, police learned of the address of a house at 1208 West Venango Street in Philadelphia where Winn and his co-defendant, Ameen Green, supplied drugs to other drug dealers and stored weapons to further their drug trafficking. The charges in this case stemmed from items found during the execution of a search warrant on September 15, 2017.
The defendant is a felon and qualifies as an Armed Career Criminal. Co-defendant Green previously pleaded guilty.
“Convicted felons have no business possessing deadly firearms for any reason, let alone to facilitate drug crimes that plague our community,” said U.S. Attorney McSwain. “Drugs and gun crimes decimate millions of lives every year, and as today’s verdict demonstrates, my Office will do everything in its power to fight for safer streets in our District.”
“Today’s verdict confirms the FBI’s commitment to working with our law enforcement partners to take back our communities from violent offenders and make our streets safer,” said Special Agent in Charge Michael Harpster.
This case was investigated by Special Agent Will Becker of the Federal Bureau of Investigation, with substantial assistance from the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorney Nancy Winter.
Former Bucks County Official Pleads Guilty to Money Laundering and Extortion ChargesRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Robert P. Hoopes, 71, of Doylestown, Pennsylvania, pleaded guilty today to one count of conspiracy to commit money laundering and four counts of Hobbs Act extortion under color of official right. From February 2016 until December 2016, Hoopes was the Director of Public Safety in Lower Southampton Township, Pennsylvania. In this position, Hoopes had authority over all police, fire, and emergency operations in the township. Hoopes previously operated a legal practice in the Doylestown, Pennsylvania area.
“Our citizens have the right to expect that public officials conduct themselves in a fair, honest, and impartial manner,” said U.S. Attorney McSwain. “The defendant violated the trust placed in him by his community, placing his own greed above the needs of others. Our Office will always seek to root out corruption and hold public officials accountable for their actions.”
From 2014 to 2016, Hoopes solicited, extorted, and attempted to extort bribes and kickbacks from individuals and businesses in exchange for his influence over Lower Southampton Township’s Board of Supervisors, Solicitor, officers, and employees. For example, Hoopes solicited bribe payments from Robert A. DeGoria, who was then the vice-president of an outdoor advertising company, in exchange for offering his influence to reduce lease payments that the company owed to Lower Southampton Township.
In November 2016, Hoopes and co-defendant Bernard T. Rafferty, who was then a Deputy Constable in Bucks County, accepted a bribe of $1,000, as well as the promise of other fees, in exchange for Hoopes and Rafferty using their positions as public officials to “fix” a traffic case in Bucks County Magisterial District Court.
Additionally, from June 2016 to August 2016, Hoopes, Rafferty, and co-defendant Kevin M. Biedmeran, who was then a business development manager at Philadelphia Federal Credit Union, laundered $400,000 in cash, represented to be proceeds from health care fraud and illegal drug trafficking, and accepted money laundering fees totaling $80,000 in cash.
Hoopes faces a maximum possible sentence of 100 years in federal prison for his crimes. He is scheduled to be sentenced on December 17, 2018.
Rafferty previously pleaded guilty to conspiracy to commit money laundering and honest services mail fraud. He is scheduled to be sentenced on November 9, 2018.
Biederman previously pleaded guilty to conspiracy to commit money laundering and bank bribery. He is scheduled to be sentenced on November 8, 2018.
DeGoria previously pleaded guilty to one count of making a false statement to federal agents. DeGoria is scheduled to be sentenced on November 6, 2018.
In a related case, Michael J. Savona, an attorney who also served as Solicitor in Lower Southampton Township, previously pleaded guilty to one count of making a false statement to federal agents. Savona is scheduled to be sentenced on November 7, 2018.
The case was investigated by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigations, the Department of Homeland Security, Homeland Security Investigations, and the Pennsylvania State Police, and is being prosecuted by Assistant United States Attorney Vineet Gauri.
Former GlaxoSmithKline Scientist Pleads Guilty to Stealing Trade Secrets to Benefit Chinese Pharmaceutical CompanyRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Dr. Yu Xue, 48, of Wayne, Pennsylvania, pleaded guilty to conspiracy to steal trade secrets from GlaxoSmithKline (GSK) to benefit a Chinese pharmaceutical company named Renopharma.
Dr. Xue and two of her associates, Dr. Tao Li and Dr. Yan Mei, created Renopharma in Nanjing, China. Renopharma intended to research and develop anti-cancer drugs and received financial support and subsidies from the government of China. At the time, Xue was employed as a scientist at GSK working on developing biopharmaceutical products. These products typically cost in excess of $1 billion to research and develop.
Xue sent a substantial number of GSK’s scientific documents, some of which contained GSK trade secrets, to Li and Mei at Renopharma in China. The data contained information regarding multiple biopharmaceutical products under development, GSK research data, and GSK processes regarding the research, development, and manufacturing of biopharmaceutical products. Xue typically sent the documents via e-mail or transferred the documents via portable electronic storage devices. Xue sent these documents to Li and Mei with the intention to steal GSK’s information for their economic benefit. On January 5, 2016, the FBI arrested Li and seized his computer on which they found a number of GSK documents containing trade secret and confidential information which he had received from Xue.
“Dr. Xue used her position at GSK to steal valuable trade secrets to benefit a company bankrolled by the Chinese government,” said U.S. Attorney McSwain. “We cannot allow U.S. citizens or foreign nationals to steal sensitive business information and hand it over to competitors in other countries. This sort of economic warfare presents a danger to our economic security, jeopardizes America’s position as a global leader in innovation, and will not be tolerated.”
“Trade secrets are the cornerstone of American innovation and a driver of the nation's economy,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “When a corporation spends billions of dollars developing products and processes, the theft of valuable intellectual property is a clear threat to the company. When stolen trade secrets stand to benefit a foreign economic rival, it’s a threat to our country, as well. The FBI will continue to work vigorously to combat intellectual property theft and bring those responsible to justice.”
Yu Xue is scheduled to be sentenced before the Honorable Joel H. Slomsky. The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Robert J. Livermore and Katherine E. Driscoll.
Former Reading Mayor Vaughn Spencer Convicted of Bribery and Wire FraudRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that former Reading, PA Mayor Vaughn Spencer, 71, of Reading, PA was found guilty today by a jury of one count of conspiracy to commit federal program bribery and honest services wire fraud, nine counts of bribery, and one count of honest services wire fraud.
The defendant was the former Mayor of Reading, Pennsylvania from January 2012 until January 2016. The charges primarily stem from the contracting process in the City of Reading and the defendant’s bid for re-election to a second term. In order to maximize campaign contributions for the Democratic primary in May 2015, the defendant steered engineering contracts to companies that had contributed to him in the past, and promised engineering contracts to companies who agreed to contribute to him in the future. In a further effort to maximize campaign contributions, the defendant offered a bribe to the Reading City Council president, Francisco Acosta, by agreeing to give Acosta’s wife, Reading School District President Rebecca Acosta, a campaign contribution for her district justice race, in exchange for the Acostas’ efforts to secure the repeal of the local campaign finance limits ordinance, so that Spencer could retain contributions he already had received in excess of the limit.
“Elected officials are entrusted to act in the best interests of their residents and not to use their office for their own personal gain,” stated U.S. Attorney McSwain. “Former Mayor Spencer abdicated those duties and responsibilities when he bribed other local officials in order to collect additional political contributions for his re-election campaign. If public officials do not play by the rules, then no one will. We are thankful that the jury reached a fair and just verdict.”
“While Vaughn Spencer was only a one-term mayor, he's done lasting damage to the city of Reading by compromising the public trust,” said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “Putting his own interests above those of the people he was elected to serve, he repeatedly engineered quid pro quos meant to pad his campaign coffers. The jury's swift verdict is a testament to the strength of the government's case. The FBI is committed to investigating public corruption and holding crooked officials accountable.”
“Today’s verdict underscores our commitment to work in a collaborative effort to promote honest and ethical government at all levels and to prosecute those who violate the public’s trust,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco.
“This case is a great example of hard work and cooperation between state, federal, and local agencies,” said Major Douglas Burig, Director of the Bureau of Criminal Investigation with the Pennsylvania State Police. “Citizens deserve honest work by the public officials that represent them and we thank everyone involved for ensuring justice has been served.”
The charge of bribery concerning programs receiving federal funds carries a maximum sentence of 10 years in prison and a $250,000 fine; the charge of honest services wire fraud carries a maximum sentence of 20 years in prison and a $250,000 fine; and the charge of conspiracy carries a maximum sentence of 5 years in prison and a $250,000 fine.
The case was investigated by the Federal Bureau of Investigation, Internal Revenue Service - Criminal Investigation and Pennsylvania State Police. The case is being prosecuted by Assistant United States Attorneys Michelle Morgan and Anthony Wzorek.
Downingtown Man Convicted of Exploiting USDOT Disadvantaged Business ProgramRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Stamatios “Tom” Kousisis, 60, of Downingtown, PA, and his employer Alpha Paining and Construction, Inc., were found guilty today by a jury of one count of conspiracy to commit wire fraud, three counts of wire fraud, and ten counts of making false statements. He was acquitted of two counts of wire fraud. The illegal scheme involved exploiting the U.S. Department of Transportation Disadvantaged Business Enterprise (“DBE”) Program, which is a program designed to provide small businesses owned and controlled by economically disadvantaged individuals with a fair opportunity to compete for federally funded transportation contracts.
A co-defendant, Emanouel “Manny” Frangos, 41, of Campbell, OH was acquitted of five counts of wire fraud, and a jury was unable to reach a verdict on the remaining 11 counts against him regarding conspiracy to commit wire fraud and making false statements.
Kousisis was the Project Manager of Alpha Painting & Construction Co., Inc., of Baltimore MD, and Frangos was an owner of Liberty Maintenance, Inc., of Youngstown, OH, which were both bridge painting contractors, although neither was a certified DBE in Pennsylvania. The scheme involved Alpha-Liberty JV, a joint venture between Liberty Maintenance and Alpha Painting, and Markias, Inc., a now-defunct certified DBE.
Kousisis concocted a scheme to obtain and keep two Pennsylvania Department of Transportation (“PennDOT”) contracts to rehabilitate two bridges in the Philadelphia area, the Girard Point Bridge and the 30th Street Station Bridge. These contracts required Kousisis to use a qualified DBE to provide supplies for those projects. Operating through a joint venture between Liberty Maintenance and Alpha Painting, Kousisis employed a pass-through company, Markias, to give the appearance that they had contracted with a legitimate minority “regular dealer” when, in reality, Markias performed no legitimate or economically useful function.
Without any involvement from the purported DBE “regular dealer,” Kousisis and his employees directly ordered supplies from third-party vendors, arranged for those vendors to deliver those supplies to the defendant’s job-sites, and directly negotiated the prices and other terms of those supplies with the third-party vendors. To falsely give the appearance that Markias was performing an economically useful function, Kousisis arranged for the true suppliers to send invoices to Markias, which marked the invoices up by 2.25% and forwarded them to the Kousisis. In turn, Kousisis issued two sets of checks to Markias: one to pay Markias’ fee for acting as a bogus pass-through, and the other for Markias to forward to the true suppliers to pay for the goods. Kousisis also used Markias as a vehicle through which to funnel out-of-state expenses to give the appearance that those expenses had been incurred in connection with the two Philadelphia-area bridge projects. Kousisis caused a total of approximately $4.5 million of false claims for DBE credits to be submitted to PennDOT, based on Markias’ fraudulent invoices.
Joyce Abrams, the owner of Markias, has previously pleaded guilty to conspiring to defraud PennDOT and the U.S. Department of Transportation with respect to this scheme.
“The purpose of the DBE program is noted in its title: to help disadvantaged businesses in Pennsylvania,” said U.S. Attorney McSwain. “When people like Kousisis undermine the DBE rules by cheating the system, not only is it a crime, but also it serves to harm certified DBE owners who are playing by the rules and who should be benefitting from the program. Our Office will continue to hold individuals and businesses accountable when they choose to circumvent the law for their own gain.”
“Today’s convictions demonstrate how DBE fraud harms the integrity of the DBE program and law-abiding contractors, including many small businesses, by defeating efforts to ensure a level playing field in which all firms can compete fairly for contracts,” said Douglas Shoemaker, Regional Special Agent-in-Charge of the U.S. Department of Transportation (DOT) Office of Inspector General. “Our special agents will continue to work with Federal, State, and local law enforcement and prosecutorial partners to expose and shut down DBE fraud schemes that adversely affect public trust and DOT-assisted highway programs throughout Pennsylvania and elsewhere.”
Kousisis faces a statutory maximum sentence of 130 years in prison, a possible fine, supervised release, and a $1400 special assessment. Sentencing has not yet been scheduled by the Honorable Wendy Beetlestone.
The case was investigated by the U.S. Department of Transportation Office of Inspector General, the FBI, the Department of Labor Office of Inspector General, and Amtrak Office of Inspector General. It is being prosecuted by Assistant United States Attorneys Paul Shapiro and David Troyer.
Delaware County Convicted Murderer, Opioid Dealer, and Armed Robber Sentenced to Life in PrisonRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that his office secured a life sentence today in a case involving a Delaware County man convicted of murder through the use of a firearm and conspiracy to distribute oxycodone. Michael Vandergrift, 31, of Chester, was sentenced by U.S. District Judge Gerald J. Pappert to a life sentence for murder, and an additional 240 months for the drug conspiracy conviction. In December 2017, Vandergrift and Anthony Vetri, 30, of Essington, were convicted after trial of conspiracy to distribute oxycodone from 2008 until June 4, 2013. During the conspiracy, Vetri illegally obtained large sums of oxycodone from a registered pharmacist, Mitesh Patel, who owned and operated three pharmacies in the greater Philadelphia area. Vetri then supplied Vandergrift with oxycodone, and both distributed the drugs throughout Delaware and Philadelphia Counties. During the course of the conspiracy, over 400,000 oxycodone tablets were distributed by Vetri, Vandergrift, and the other conspirators, earning over a million dollars in drug proceeds.
During the drug conspiracy, Patel illegally provided oxycodone to others, including his business partner, Gbolahan Olabode. Beginning in the fall of 2011, Vetri and Vandergrift conspired to eliminate Olabode as a competitor to boost Vetri and Vandergrift’s oxycodone supply from Patel. Vetri and Vandergrift ultimately decided to murder Olabode, and Vandergrift recruited Michael Mangold and Allen Carter to assist. On January 4, 2012, Vandergrift, Mangold, and Carter went to Olabode’s residence in Lansdowne, Pennsylvania and waited for Olabode to return home. When Olabode returned, Vandergrift and Mangold each used a firearm to fire 27 shots at Olabode as he carried groceries into his home. The assailants struck the victim 13 times in his head and body, killing him.
Patel, Mangold, and Carter all previously pled guilty to charges for their respective involvement in drug distribution, the murder of Olabode, and other offenses. In earlier proceedings, Judge Pappert sentenced Patel to a term of 15 years imprisonment, Mangold to a term of 35 years imprisonment, and Vetri received a life sentence. Carter is awaiting sentencing.
Today, Vandergrift was also sentenced for his involvement in a separate crime. On April 9, 2018, Vandergrift pled guilty to committing an armed robbery of a suspected drug dealer, “R.D.” In that incident, Vandergift lured R.D. to a home in Philadelphia with a promise of a lucrative drug transaction. Once inside the residence, R.D. was struck in the head with a firearm and held at gun point as he was robbed by Vandergrift and others of approximately $20,000. As R.D. was being led away from the scene of the robbery, he fired a concealed firearm in the direction of his robbers. No one was struck by R.D.’s shots. Vandergrift’s robbery conspirators and R.D. were convicted and sentenced in earlier proceedings.
“The defendant is a danger to the community in every sense of the word,” said U.S. Attorney McSwain. “Drug trafficking is dangerous and violent, and there is no doubt that the defendant’s victims continue to struggle with opioid addiction because of his crimes. Not only did Vandergrift flood the streets with illegal drugs, but also he murdered one drug rival in cold blood and held up another in an armed robbery. We are all safer with the defendant spending the rest of his life behind bars.”
"Michael Vandergrift and his buddies were prolific pill-pushers, cashing in on our area's opioid crisis," said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. "To maximize their profits, they moved to minimize their competition--ambushing and brutally murdering a drug rival. There were 27 shots fired, 13 that hit, and just one motive: sheer greed."
The cases were investigated by the Federal Bureau of Investigation, the U.S. Drug Enforcement Administration, the Internal Revenue Service’s Criminal Investigation Division, the Philadelphia Police Department, the Organized Crime Drug Enforcement Task Force, the Lansdowne Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorneys Jonathan B. Ortiz and David. E. Troyer are prosecuting the case.
Alien and Native and Citizen of Honduras Indicted for Illegal Reentry after DeportationRead the Press Release
PHILADELPHIA, PA – United States Attorney William M. McSwain announced that Lester Antonio Dionicio-Elias, 33, of Drexel Hill, PA, was charged today by indictment with illegal reentry after deportation.
The indictment alleges that the Dionicio-Elias, an alien and native and citizen of Honduras, was previously deported from the United States on or about May 7, 2008. At some point between May 2008 and 2013, Dionico-Elias allegedly reentered the United States illegally. If convicted of this current illegal reentry offense, the defendant faces a maximum possible sentence of 2 years’ imprisonment.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ICE”), and is being prosecuted by Assistant United States Attorney Meaghan A. Flannery.
An indictment, information or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Securities Fraud Charges Announced Today Against Former Junior Analyst for Major Investment Bank and Current NFL PlayerRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced Damilare Sonoiki, 27, of Beverly Hills, California, and Marvin Mychal Kendricks, 27, of Fresno, California were charged today by information with insider trading.
According to the information, from July 2014 to approximately March 2015, Sonoiki and Kendricks conspired together to commit securities fraud. Sonoiki, then a junior analyst at a global investment bank in New York, provided material non-public information to Kendricks, then a linebacker for the Philadelphia Eagles, regarding upcoming mergers involving four investment bank clients of the global investment bank. Sonoiki obtained and used this information in violation of his duty of confidentiality that he owed to the investment bank.
Relying on the material non-public information he received from Sonoiki, the information alleges that Kendricks purchased call options in the target companies, Compuware, Move, Sapient, and Oplink. When the proposed merger was announced in each case, the value of Kendricks’s options went up significantly. Based on the alleged insider trading related to Compuware, Mr. Kendricks made a purchase of approximately $60,000 in call option contracts, and after the public merger announcement, sold those same option contracts for approximately $138,000, which was a 130% increase. With respect to Move, Mr. Kendricks made a purchase of approximately $71,000 and sold after the public merger announcement for approximately $350,000, which constituted a 393% increase. For Sapient, Mr. Kendricks made a purchase of approximately $146,000 in call option contracts and sold them after the public merger announcement for approximately $635,000, which was a 335% increase. Finally, with Oplink, Mr. Kendricks purchased the call option contracts for approximately $446,000 and sold them after the public merger announcement for approximately $798,000, which was a 79% increase from the purchase price.
Mr. Kendricks allegedly made a profit of approximately $78,000 from his Compuware investments, approximately $279,000 from Move, approximately $489,000 from Sapient, and approximately $352,000 from Oplink, for a total of approximately $1.2 million. The information further alleges that defendant Kendricks provided defendant Sonoiki with tickets to Eagles games and approximately $10,000 in cash.
“When individuals engage in insider trading – buying and selling securities based on material, non-public information – it undermines faith in our financial markets and harms ordinary investors who do play by the rules,” said U.S. Attorney McSwain. “As alleged, Mr. Sonoiki and Mr. Kendricks cheated the market, cheated other investors, and placed themselves above the law. My Office will continue to work with our law enforcement partners to maintain the integrity of the financial markets, which is one of our top priorities.”
“At the heart of insider trading cases is the concept of a level playing field,” said Christian Zajac, Assistant Special Agent in Charge of the FBI’s Philadelphia Division. “Investors bet on individual stocks, based on public knowledge of a company’s past performance and future plans. As alleged, Mychal Kendricks used material non-public information, provided by his co-defendant, to score significant profits from expected market moves. That’s not merely gaming the system—that’s a federal crime. Insider trading has long posed a threat to U.S. financial markets, because it compromises the public’s trust that our markets operate fairly. For that reason, the FBI takes seriously our responsibility to investigate insider trading and other significant financial crimes.”
If convicted, each defendant faces a maximum possible sentence of 25 years’ imprisonment, a three-year period of supervised release, $5,250,000 fine, and a $200 special assessment. Forfeiture of all proceeds from the offenses also may be ordered.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney David J. Ignall. The U.S. Attorney’s Office also would like to thank the Securities and Exchange Commission for their assistance in this matter.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Taiwanese Exchange Student Who Threatened to Shoot up School Pleads Guilty to Federal Ammunition ChargeRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that a Taiwanese exchange student pleaded guilty today to being an alien in possession of ammunition. Sentencing is scheduled for December 11, 2018 before United States District Judge Nitza I. Quinones Alejandro.
According to the Information, An-Tso Sun, 18, also known as “Edward Sun,” is a Taiwanese national who came to the United States in August 2017 on an F-1 visa to be a student at a high school in Upper Darby, Pennsylvania. While attending school, he resided with a host-family in Upper Darby. Beginning in October 2017, Sun visited a Philadelphia shooting range on multiple occasions, where he fired a variety of firearms, including semiautomatic rifles and shotguns. Over the next few months, Sun purchased hundreds of rounds of ammunition from online vendors, and directed that they be shipped to his host-family address. In January 2018, Sun purchased pistol components from multiple online vendors and assembled them to create a functioning homemade pistol.
On March 26, 2018, after the school bell rang at the end of the day, Sun made the following statement to a fellow student: “Hey, don’t come to school on May 1st . . . I’m going to come here armed and shoot up the school. Just kidding.” That student reported the incident to school officials, who then alerted law enforcement officials. Upper Darby Police officers executed a search warrant at Sun’s residence and seized the following from Sun’s bedroom: 20 rounds of 9mm Blazer Brass ammunition; a ballistic suit, including a vest, jacket and pants; a crossbow; seven arrows; and various firearm accessories and shooting equipment. Sun’s host-mother was later interviewed and explained that, prior to the search, she had removed a number of items from Sun’s bedroom, including bullets and firearm-related items, and given the items to an attorney. Law enforcement took possession of those items, which included, among other things, a homemade semiautomatic pistol, two AK-style 30-round magazines with ammunition, two AR-15-style 30-round magazines with ammunition, and numerous additional boxes of ammunition, totaling over 1,600 rounds.
Sun was arrested by Upper Darby police and charged locally with making terroristic threats. He pled guilty to that charge in early June and was sentenced to 4-23 months’ incarceration, with immediate parole, and credit for time served. He was released to the custody of U.S. Immigration and Customs Enforcement and charged federally by complaint on June 5, 2018. He has been in federal custody since that time.
Under federal law, as a student present in the United States on an F-1 visa (a nonimmigrant visa) without a hunting license, Sun was not permitted to possess any ammunition or firearms. Sun faces a maximum possible sentence of ten years’ imprisonment, a $250,000 fine, and three years’ supervised release. As part of his guilty plea, Sun has agreed that upon completing his prison sentence, he is subject to immediate and permanent removal from the United States.
“Federal, state, and local law enforcement authorities will continue to work together to prevent tragedy and combat terrorism and threats of violence,” said U.S. Attorney McSwain. “As I have stated before, however, parents and guardians are the first line of defense in these kinds of situations involving children’s access to firearms. It should be obvious that no child should be stockpiling an arsenal – or have any access to firearms or other dangerous weapons – without their parents’ or guardians’ knowledge. Every parent needs to be involved and actively aware of what is going on in their child’s life. It is their duty and obligation, not only to the child, but also to the community at large.”
“Sadly, threats of school violence have become all too common in this country,” said Special Agent in Charge Marlon V. Miller, Homeland Security Investigations Philadelphia Field Office. “Children in this country should feel safe in their school environment and free from the violence that terrorizes communities when these senseless acts occur. Thanks to the quick action and diligent teamwork of federal, state, and local law enforcement in this particular case, a potentially devastating tragedy was averted.”
“In the case of An-Tso Sun, there is no question that this young man is a dangerous individual, who was armed with over 1,000 rounds of ammunition, ready to cause devastating harm to his classmates,” said Delaware County District Attorney Katayoun M. Copeland. “As the result of the swift response of his classmates, school officials, and the Upper Darby Police Department, no one was harmed, and Mr. Sun is now rightfully facing the severe consequences of his actions. I would like to commend Homeland Security Investigations and the Upper Darby Police Department for leading this investigation and thank United States Attorney William M. McSwain and the United States Attorney’s Office in the Eastern District of Pennsylvania for pursuing federal charges in this case and ensuring the safety of our residents.”
This case was investigated by the Department of Homeland Security, Homeland Security Investigations, with the assistance of the Upper Darby Police Department and the Delaware County District Attorney’s Office, and is being prosecuted by Assistant United States Attorney Sarah M. Wolfe.
Delaware County Man Charged with CarjackingRead the Press Release
Philadelphia, PA – U.S. Attorney William M. McSwain announced today that John Leroy Gordon, 26, of Chester, Pennsylvania, was charged today by Indictment with one count of carjacking in violation of Title 18, United States Code, Section 2119, and one count of brandishing, using, and carrying a firearm during and in relation to a crime of violence in violation of title 18, United States Code, Section 924(c)(1)(A)(ii).
If convicted the defendant faces a maximum possible sentence of life imprisonment, a mandatory minimum 7 years’ imprisonment consecutive to any other sentence of imprisonment imposed, up to 5 years’ supervised release, a $500,000 fine, and a $200 special assessment.
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.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed
innocent unless and until proven guilty.
Lancaster Heroin Trafficker Sentenced to 20 Years’ ImprisonmentRead the Press Release
Philadelphia – U.S. Attorney William M. McSwain announced that Jose Enrique Gonzalez, 48, of Lancaster, PA, was sentenced today by the Honorable Joseph F. Leeson to 20 years in federal prison and 8 years of supervised release for possession with intent to deliver heroin, carrying a firearm in relation to a drug trafficking crime, possession of an illegal firearm, and possession of a firearm after a felony conviction.
On June 14, 2016, police officers recovered more than 130 individually wrapped glassine baggies of heroin, an AK-47 assault rifle, multiple high-capacity magazines of ammunition, and a homemade silencer from Gonzalez’s vehicle in Lancaster. Law enforcement later recovered additional quantities of heroin and more than $2,300 in cash from Gonzalez’s home. At that time, Gonzalez was out on bail in another drug-related case that was then pending in the Court of Common Pleas for Lancaster County. He had been the subject of a longstanding investigation by the Lancaster County Drug Task Force.
Gonzalez was charged by a grand jury with federal drug and gun offenses on August 3, 2017. He pled guilty to all charges on May 10, 2018. In advocating for the 20-year sentence handed down today, the government argued that the sentence was appropriate in light of the seriousness of Gonzalez’s crimes and the grave harm that his heroin-trafficking had inflicted upon the community.
“By its very nature, drug-trafficking is extremely dangerous and often violent,” said U.S. Attorney McSwain. “The defendant’s illegal possession of an assault rifle, along with magazines of ammunition and a silencer, drives home this reality. With the Court’s sentence, the defendant will not be able to harm innocent civilians for the next two decades.”
“This sentence sends a stiff message to repeat-offender drug dealers who carry firearms: We will pursue all options when considering the protection of the public and that includes prosecution at the federal level,” said Lancaster County District Attorney Craig Stedman. “This collaboration of law-enforcement agencies has placed a dangerous individual in prison for decades.”
“Jose Gonzalez has demonstrated that he is a danger to the community who continued to prey on our local residents,” said Lancaster City Police Chief Jarrad Berkihiser. “Gonzalez was clearly making a considerable amount of money selling poison in our community and was prepared to defend his operation by illegally possessing an AK-47 rifle with an illegal silencer. Gonzalez thumbed his nose at the criminal justice system, the laws of the Commonwealth and the laws of the United States by being a convicted felon and continuing to commit criminal offenses while on bail for other drug related charges. This conviction shows the dedication and partnership between local, state, and federal law enforcement. The Lancaster City Police, the Lancaster County Drug Task Force and our Federal partners will not be deterred in continuing our proactive approach to the ongoing opioid epidemic and removing violent criminals from our communities. I commend the officers, investigators, the U.S. Attorney’s Office and the Lancaster County District Attorney for their work in this case.”
The case was investigated by the Lancaster County Drug Task Force, the Lancaster Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Sean P. McDonnell.
Dual Citizen of the Dominican Republic and U.S. Charged with Criminal Conspiracy and Theft of Government PropertyRead the Press Release
Philadelphia, PA – U.S. Attorney William M. McSwain announced today that Domingo Hernandez, 55, of the Dominican Republic, was arrested pursuant to an indictment charging him with criminal conspiracy to defraud the government and theft of government property. The indictment alleges that the defendant used the stolen identities of others to file fraudulent tax returns which resulted in a theft of approximately $80,397.89 from the United States Treasury and attempt to steal an additional $312,321.89 more.
If convicted, the defendant faces a maximum possible sentence of 15 years’ imprisonment, a $500,000 fine, four years’ supervised release, and a special assessment of $200.
The case was investigated by the Internal Revenue Service Criminal Investigations and the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Priya DeSouza
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
“Tacony Dungeon” Defendant Jean McIntosh Sentenced to 40 Years ImprisonmentRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced today that Jean McIntosh, 38, of Philadelphia, Pennsylvania, was sentenced today to 40 years imprisonment by United States District Judge Cynthia Rufe. McIntosh previously pleaded guilty to a multi-count indictment arising from the defendant’s participation in a decade-long racketeering enterprise led by her mother and co-defendant Linda Weston. Weston, McIntosh, and other members of the “Weston Family” defrauded the Social Security Administration by targeting extremely vulnerable, mentally ill adults qualified to receive disability benefits, confining and physically abusing them, then stole the victims’ benefits, and converted them for use by the Weston Family. Two of their victims, Donna Spadea and Maxine Lee, died as a result of the Weston Family’s intentional mistreatment of them. Weston previously received a sentence of life imprisonment plus an additional 80 years.
From approximately 2001 through October 2011, McIntosh and other co-conspirators loyal to Weston (all of whom comprised the racketeering enterprise charged in the indictment) lured mentally handicapped individuals into locations rented by Weston, McIntosh, and others in Philadelphia, Pennsylvania; Killeen, Texas; Norfolk, Virginia; and West Palm Beach, Florida. Once in captivity, the Weston Family often moved the mentally challenged captives from state to state in order to elude detection by social service and law enforcement agencies.
The Weston Family targeted victims who were estranged from their families and offered them a place to stay. Once Weston convinced them to move in, she became their representative payee with Social Security and began to receive their disability benefits and in some instances, their state benefits.
During the sentencing proceedings, the government produced victim impact statements that detailed the horrific conditions of the victims’ confinement. In order to ensure that they would be able to control their victims, Weston, McIntosh, and other Weston Family members confined these individuals to, among other areas, locked rooms, basements, closets, attics, and apartments. While confined to these locations, the captives were often kept isolated and in the dark, sedated with drugs, and poorly fed. When the victims tried to escape, steal food, or otherwise protest their confinement, members of the Weston Family punished them by slapping, punching, kicking, stabbing, burning and hitting them with closed hands, belts, sticks, bats, and hammers, among other instruments.
“It is hard to fathom this kind of disregard for the dignity of human life,” said U.S. Attorney McSwain. “The stomach-turning details of this case and unspeakable acts of cruelty McIntosh inflicted on her helpless victims serve as a stark reminder that pure evil does exist in the world. My sincere hope is that today’s sentence brings some measure of closure to the victims and their families.”
“The actions of Jean McIntosh and ‘The Weston Family’ were nothing short of monstrous,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “With money as their motive, they used and abused some of society’s most vulnerable. The torture inflicted upon their victims is unthinkable; the pain and the fear they caused, incalculable. Right now, my thoughts are with all who suffered at their hands—the survivors, as well as those who lost their lives.”
“This case remains the most appalling example of Social Security representative payee fraud and abuse the Office of the Inspector General has encountered,” said Michael McGill, Special Agent-in-Charge of the SSA OIG Philadelphia Field Division. “Justice has been served with this significant sentence. We thank our law enforcement partners for contributing to this investigation, and the U.S. Attorney’s Office for prosecuting the individuals involved in this horrific conspiracy.”
“The sentence handed down today highlights the seriousness of the defendant’s conduct,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco. “Jean McIntosh demonstrated a blatant disregard for human life and caused immeasurable hardship to innocent victims. We, along with our law enforcement partners, and the United States Attorney's Office will continue to hold those who engage in similar conduct accountable.”
“The Weston racketeering enterprise committed unspeakable acts against innocent and vulnerable members of our community,” said Richard Ross Jr., Philadelphia Police Commissioner. “An intensive inter-agency investigation resulted in the arrests and successful prosecutions of multiple offenders. With the arrest, conviction, and impending sentencing of Jean McIntosh, we sincerely hope that a feeling of closure can commence for the victims and their families.”
This case was investigated by Federal Bureau of Investigation (FBI), Internal Revenue Service (IRS), Social Security Administration, Office of the Inspector General (SSI-OIG), and Philadelphia Police Department. It is being prosecuted by Assistant United States Attorneys Faithe Moore Taylor and Richard Barrett.
Philadelphia Man Pleads Guilty to Multiple Armed RobberiesRead the Press Release
Philadelphia – U.S. Attorney William M. McSwain announced that Jonathan Foggie, 34, of Philadelphia, Pennsylvania, pled guilty today to a Superseding Information charging him with two counts of Hobbs Act Robbery, two counts of using a firearm during a crime of violence, and one count of possession of a firearm by a convicted felon.
Earlier this year, the defendant participated in numerous armed robberies. On January 11, 2018, the defendant, along with others, robbed Harris Hair Styling at gunpoint in Philadelphia. At the time, there were employees and several customers inside the salon, including a young child. When a customer placed himself between the gunmen and the child, the customer struggled with one of the robbers, and the robber shot the customer, causing permanent incapacitating injury. On January 26, 2018, the defendant, along with another individual, robbed Mike’s Service Center at gunpoint in Philadelphia. As an employee attempted to flee, the defendant hit the employee in the head with a firearm, tackled the employee to the ground, and shot the employee in his side.
Under the terms of the guilty plea, Foggie faces a maximum possible sentence of life imprisonment, with 35 years’ mandatory minimum imprisonment, a mandatory minimum five years supervised release up to a lifetime of supervised release, a $1,250,000 fine, and a $500 special assessment. A sentencing hearing is scheduled on December 10, 2018 before the Honorable Michael M. Baylson. Law enforcement continues its investigation into the other individuals responsible for these crimes.
“The defendant was a menace to the City of Philadelphia, terrorizing multiple victims and leaving some permanently injured,” said U.S. Attorney McSwain. “He clearly has no respect for the law, and we are pleased that he is now off the streets and in a jail cell.”
The case was investigated by the FBI and the Philadelphia Police Department and is being prosecuted by Assistant United States Attorney Joseph A. LaBar.
Owners of Pennsylvania Based Internet Floral Company Sentenced to Prison for Tax FraudRead the Press Release
A Pennsylvania couple that owned and operated an internet floral business were sentenced to prison today for failing to pay over employment taxes to the Internal Revenue Service (IRS) and for filing fraudulent personal and corporate tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney William M. McSwain for the Eastern District of Pennsylvania.
Andrew Bassaner (aka Andrew Bunchuk) was sentenced to 42 months in prison, and his wife and business partner, Vicki Bunchuk, was sentenced to six months in prison. The defendants were convicted in February 2018 following a jury trial.
According to the evidence introduced at trial, Andrew Bassaner and Vicki Bunchuk owned and operated Florist Concierge Inc. (FCI). For tax years 2010 through 2012, Bunchuk, aided and assisted by Bassaner, filed fraudulent corporate and personal income tax returns with the IRS. They diverted funds from FCI, which they falsely deducted as business expenses on FCI’s corporate returns and did not report as income on their personal returns. The expenses included over $200,000 in personal expenditures such as luxury cars, the down payment on a multimillion-dollar house, tickets to sporting events, and home repairs.
In addition, Bassaner and Bunchuk filed fraudulent employment tax returns for FCI that falsely classified its employees as independent contractors. Based on this fraudulent classification, Bassaner and Bunchuk claimed not to owe employment taxes on the wages paid to those individuals.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney McSwain thanked special agents of IRS Criminal Investigation, who conducted the investigation and Assistant U.S. Attorney David Ignall and Trial Attorneys Christopher O’Donnell and Jack Morgan of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Married Couple Who Teamed up to Run Floral Business and to Commit Tax Fraud Sentenced to PrisonRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that Andrew Bunchuk a/k/a/ Andrew Bassaner, 45, and Vicki Bunchuk, 45, both of Southampton, Pennsylvania, were sentenced to 42 months’ and 6 months’ imprisonment, respectively, for tax fraud. The defendants were tried together and were convicted in February 2018; Andrew Bunchuk was convicted of six counts of aiding and assisting in the preparation of false income tax returns, and Vicki Bunchuk was convicted of six counts of filing false income tax returns. Both defendants were convicted of failing to collect, account for, and pay over taxes for employees.
According to the evidence introduced at trial, Bassaner and Bunchuk were the owners and operators of Florist Concierge Corporation, a company incorporated in Pennsylvania but located in Orlando, Florida. The company was a telephone call center and internet service that accepted floral arrangement orders from customers throughout the United States. The defendants fraudulently deducted more than $200,000 in personal expenses on their income taxes, claiming they were legitimate business expenses. The expenses included luxury cars, a down payment on a multimillion-dollar house, tickets to sporting events, and home repairs.
In addition, the evidence at trial showed that the defendants failed to collect and pay over employment taxes, Federal Insurance Contribution Act taxes, and federal unemployment taxes on behalf of employees who worked for Florist Concierge for fourteen consecutive quarters from 2001 through 2014. The defendants mischaracterized employees as contractors in an attempt to avoid collecting and paying over employment taxes.
“Our tax collection system relies on citizens playing by the rules. And the system only works if fraudsters like these defendants pay the price for lying and cheating the government out of paying their fair share of taxes,” said U.S. Attorney McSwain. “These defendants have earned their time behind bars to think long and hard about what they did.”
"The defendants’ actions resulted in the loss of tax revenue to the United States government and the loss of future social security and Medicare benefits for their employees," said IRS Criminal Investigation Special Agent in Charge Guy Ficco. “Let this serve as a strong reminder that the payment of individual and business taxes is an obligation, not a choice.”
This case was investigated by the Internal Revenue Service’s Criminal Investigation Division and is being prosecuted by Assistant United States Attorney David J. Ignall and trial attorneys Christopher P. O’Donnell and Jack A. Morgan of the Tax Division of the United States Department of Justice.
Two Additional Defendants Sentenced to Prison in Conspiracy That Looted Money from Nonprofit Mental Health ClinicRead the Press Release
Two former employees of the Juniata Community Mental Health Clinic in Philadelphia were sentenced today for their roles in the conspiracy led by Renee Tartaglione, the former head of the nonprofit mental health clinic, to take money from the clinic, announced Assistant Attorney General Brian A. Benczkowski of the Department of Justice’s Criminal Division, U.S. Attorney William M. McSwain for the Eastern District of Pennsylvania, Special Agent in Charge Michael T. Harpster of the FBI’s Philadelphia Division and Special Agent in Charge Guy Ficco of IRS Criminal Investigation (CI).
Sandy Acosta, 72, of Philadelphia, Pa., former Administrator of the clinic, and Amalia Rodriguez, 48, also of Philadelphia, Pa., former billing clerk for the clinic, were sentenced today to serve 18 months and six months in federal prison, respectively, followed by three years of supervised release. Sandy Acosta and Amalia Rodriguez also were ordered to pay $793,000 in restitution to the Pennsylvania Attorney General in trust for a successor to the clinic, jointly and severally with Tartaglione, who was sentenced in July 2018, and Acosta’s daughter, former Pennsylvania State Representative Leslie Acosta, a former employee of the clinic who also participated in the scheme.
“Sandy Acosta and Amalia Rodriguez facilitated Renee Tartaglione’s theft of over $2 million from important taxpayer-funded programs for individuals in need of mental health treatment,” said Assistant Attorney General Benczkowski. “Their convictions and today’s sentences demonstrate the Justice Department’s commitment to work with our federal and state partners to hold accountable those who seek to line their own pockets by defrauding institutions that serve vulnerable individuals.”
“The defendants worked together to cheat economically disadvantaged people with mental health issues out of funds that were intended to provide treatment and other services,” said U.S. Attorney McSwain. “Instead, the defendants used these funds for their own personal enrichment, depriving others of help that they desperately needed. This was a gross abuse of the trust placed in these defendants, and I am glad that my Office and our law enforcement partners have held them accountable for their crimes.”
“Looting money from Medicare strains the system and cheats the taxpayers who fund it,” said FBI Special Agent in Charge Harpster. “This conspiracy diverted funds meant for mental health treatment for the community’s underserved—a serious breach of trust, and of the law. The FBI is committed to fighting health care fraud, one case at a time, and seeing perpetrators held accountable.”
“Ms. Acosta and Ms. Rodriguez helped steal money that was allotted for the treatment of mental health patients; depriving them of much needed mental health services,” said IRS-CI Special Agent in Charge Ficco. “Their sentences are indications of how unacceptable their actions were. IRS-Criminal Investigation is proud to have joined forces with our law enforcement partners to bring these defendants to justice.”
Sandy Acosta and Rodriguez previously pleaded guilty to wire fraud, theft from a health care benefit program, and aggravated identity theft. Sandy Acosta also pleaded guilty to conspiracy to commit money laundering. The charges arose out of the women’s agreement to cash unearned checks from the clinic and give the cash to Tartaglione, who at the time was President of the Board of Directors of the clinic.
Sandy Acosta agreed to cooperate with the government in its investigation of Tartaglione and testified at Tartaglione’s federal criminal trial in 2017. Leslie Acosta previously pleaded guilty and also agreed to cooperate against Tartaglione.
The case was investigated by the FBI, the IRS Criminal Investigation, and the Philadelphia Office of the Inspector General. Trial Attorney Peter N. Halpern of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Bea L. Witzleben of the Eastern District of Pennsylvania prosecuted the case.
Two Additional Defendants Sentenced in Conspiracy that Looted Money from Nonprofit Mental Health ClinicRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that two additional former employees of the Juniata Community Mental Health Clinic (“JCMHC”) were sentenced today for their roles in the conspiracy led by Renee Tartaglione to steal money from JCMHC.
Sandy Acosta, former Administrator of JCMHC, and Amalia Rodriguez, former billing clerk for JCMHC, were sentenced today to 18 months and 6 months in federal prison, respectively. The two women were also ordered to pay $793,000 in restitution to the Pennsylvania Attorney General in trust for a successor to JCMHC, jointly and severally with the financial obligations previously imposed on others responsible for the same fraud and theft.
“The defendants worked together to cheat economically disadvantaged people with mental health issues out of funds that were intended to provide treatment and other services,” said U.S. Attorney McSwain. “Instead, the defendants used these funds for their own personal enrichment, depriving others of help that they desperately needed. This was a gross abuse of the trust placed in these defendants, and I am glad that my Office and our law enforcement partners have held them accountable for their crimes.”
“Sandy Acosta and Amalia Rodriguez facilitated Renee Tartaglione’s theft of over $2 million from important taxpayer-funded programs for individuals in need of mental health treatment,” said Assistant Attorney General Brian A. Benczkowski. “Their convictions and today’s sentences demonstrate the Justice Department’s commitment to work with our federal and state partners to hold accountable those who seek to line their own pockets by defrauding institutions that serve vulnerable individuals.”
“Looting money from Medicare strains the system and cheats the taxpayers who fund it,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “This conspiracy diverted funds meant for mental health treatment for the community’s underserved—a serious breach of trust, and of the law. The FBI is committed to fighting health care fraud, one case at a time, and seeing perpetrators held accountable.”
Ms. Acosta and Ms. Rodriguez helped steal money that was allotted for the treatment of mental health patients; depriving them of much needed mental health services,” said IRS-Criminal Investigation Special Agent In Charge Guy Ficco. “Their sentences are indications of how unacceptable their actions were. IRS-Criminal Investigation is proud to have joined forces with our law enforcement partners to bring these defendants to justice.”
“I am pleased to partner with U.S. Attorney Bill McSwain to investigate, prosecute and root out public corruption wherever we find it,” said Pennsylvania Attorney General Josh Shapiro. “In this case, one of our legal experts provided testimony and will assist in the restitution process. This type of collaboration is key to protecting our democracy and ensuring honest government. I commend U.S. Attorney McSwain for his fine leadership.”
Sandy Acosta previously pled guilty to wire fraud, theft from a health care benefit program, aggravated identity theft, and conspiracy to commit money laundering. Rodriguez previously pled guilty to wire fraud, theft from a health care benefit program, and aggravated identity theft. The charges arose out of the women’s agreement to cash unearned checks from JCMHC and give the cash to Renee Tartaglione, who at the time was President of the Board of Directors of JCMHC.
This case was investigated by the FBI, IRS Criminal Investigation, and the Philadelphia Office of the Inspector General, with additional assistance from the Pennsylvania Attorney General’s Office. The case was prosecuted by Assistant U.S. Attorney Bea L. Witzleben and Department of Justice Trial Attorney Peter Halpern.
Defendants Who Cashed More than $2.6 Million in IRS Tax Refunds Sentenced for Participating in Stolen Identity Refund Fraud SchemeRead the Press Release
Philadelphia – United States Attorney William M. McSwain announced today that Jose Castillo, 40 formerly of Allentown, and Ivan German Sierra, 32, also formerly of Allentown, were sentenced today by Judge Edward G. Smith to 57 month and 54 month, respectively. On January 23, 2018, Castillo pleaded guilty to conspiracy to submit false claims to the United States and to misuse of a social security number. German Sierra pleaded guilty on January 31, 2018, to conspiracy to submit false claims to the United States. Judge Smith also ordered both defendants to pay restitution to the United States in the amount of $2,644,604.33.
Castillo and German Sierra conspired with others, including Juan Carlos Ortiz and Jessenia Cordero, to obtain lists of Puerto Rico residents’ names and social security numbers and to use the victims’ stolen identifying information to file fraudulent tax returns with the Internal Revenue Service (IRS). The IRS sent refund checks payable to the victims, and the co-conspirators cashed checks totaling more than $2.6 million. Ortiz was sentenced to 3 years’ imprisonment, in addition to repaying 2.5 million in restitution. Cordero was sentenced to 3.5 years’ imprisonment and ordered to repay more than $4 million in restitution.
“Crooks never stop looking for ways to take what isn’t theirs, regardless of the consequences to their victims,” said U.S. Attorney McSwain. “Identity theft is a serious matter, and those who seek to cheat the government by filing phony tax returns and collecting refund checks using stolen identities will be prosecuted to the fullest extent of the law.”
"Stealing money from the government through identity theft and fraud schemes negatively impacts everyone, as much needed funding is diverted to individuals for their own selfish gain instead of the intended government programs" said Marlon V. Miller, Special Agent in Charge of HSI Philadelphia. "HSI will continue to work with our law enforcement partners to detect and hold accountable those individuals who exploit and compromise the integrity of the taxpayer system."
“Jose Castillo and Ivan German-Sierra thought they had figured out a clever scheme to thwart the IRS and steal from American taxpayers,” said Guy Ficco, IRS Criminal Investigation Special Agent in Charge. “Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers. IRS Criminal Investigation is serious about investigating these crimes and holding accountable those who defraud the government.”
The case was investigated by the Division, Immigration and Customs Enforcement-Homeland Security Investigations, Internal Revenue Service Criminal Investigation, and the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney David J. Ignall.
Recidivist Fraudster Pleads Guilty for the Third Time to Securities Fraud, Sent to Jail by JudgeRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Howard M. Appel, 57, of Wayne, Pennsylvania, pled guilty today to one count of conspiracy to commit securities fraud. Following his plea of guilty, Appel was ordered detained by U.S. District Judge Paul S. Diamond
“This habitual fraudster manipulated the markets to further his own self-interest,” said U.S. Attorney McSwain. “Today, thanks to the hard work and diligence of the FBI, the Securities and Exchange Commission’s New York Office, and our Office, the defendant’s crimes landed him in jail, which is where he belongs.”
As part of his guilty plea, Appel admitted that after his release from prison following two prior securities-fraud related convictions, he participated in a new securities fraud scheme involving publicly traded companies, including Virtual Piggy, Inc. (ticker symbol “VPIG”), and Red Mountain Resources, Inc. (ticker symbol “RDMP”). Appel acquired title to the shares in the names of nominees in order to hide his ownership block from investors and made between $3,000,000 and $4,000,000 from his scheme by artificially inflating the share price by, among other things, engaging in coordinated buying and selling with co-conspirators. Appel also admitted that he traded on inside information that he obtained as a result of his “consulting” work for the companies, including the status of the companies’ efforts to get listed on NASDAQ.
Sentencing is scheduled for November 26, 2018. Appel faces a maximum sentence of 5 years’ incarceration, a three-year period of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greatest, and a $100 special assessment.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Michael S. Lowe. The parallel civil enforcement proceeding was filed by the Securities and Exchange Commission’s New York Regional Office, under the direction of Mark P. Berger.
Head of Drug Trafficking Organization “Little DTO” Sentenced Today to 34 Years’ ImprisonmentRead the Press Release
Philadelphia – U.S. Attorney William M. McSwain announced today that Leon Little, 38, of Cherry Hill, NJ, was sentenced today by the Honorable Cynthia M. Rufe to 408 months in prison and 5 years of supervised release for his role as the leader of a large scale oxycodone pill conspiracy that caused nearly 400,000 oxycodone pills and other drugs to be released illegally on the streets of Philadelphia, Delaware, and elsewhere. This is the largest sentence ever received in the Eastern District of Pennsylvania in a federal pill-trafficking case. Little was charged with conspiracy to distribute controlled substances and was found guilty by a jury in December 2016.
Little recruited several people to perpetrate his drug distribution scheme, including at least 55 “pseudo-patients”—individuals who posed as patients in order to acquire prescription drugs from a licensed physician in Philadelphia. Many of these pseudo-patients were recruited from the Raymond Rosen Projects, a government-assisted housing development located in North Philadelphia. Little provided the cash required to pay for all doctor’s appointments, the costs of filling prescriptions received from the doctor as well as forged prescriptions and payment to the pseudo-patients and drivers for their services. Little also recruited several others to carry out the scheme: Heather Herzstein, the receptionist at the doctor’s office who arranged the office visits; Brendin Strand, a customer who purchased the drugs; and Colise Harmon, James Alexander, and John Baldwin—all drivers who recruited and transported pseudo-patients to the doctor’s office.
Once Little fraudulently acquired the drugs, he collected and stored the filled prescriptions, packaged the drugs for re-distribution, and distributed to them to his customers. Little sold the oxycodone pills and other prescriptions drugs and profited over $3,000,000. He used those proceeds to perpetuate the scheme; purchase vehicles, real estate and a UPS franchise; and gamble over $1 million dollars at various casinos.
“Today, the streets of Philadelphia and our region are safer now that Leon Little will be behind bars for years to come,” said U.S. Attorney McSwain. “This defendant was the mastermind behind a massive scheme involving highly addictive drugs, and he lived high on the hog at the expense of other peoples’ misery. The opioid crisis is hitting our region hard, and we are taking action. I commend the hardworking prosecutors from my office and our law enforcement partners for putting this case together and holding this defendant accountable for the destruction he caused.”
“Little ran a prescription drug trafficking ring that was responsible for the distribution of more than 380,000 tablets of controlled substances in and around Philadelphia. He was also responsible for recruiting numerous people from government-assisted housing developments to act as “pseudo-patients” to fraudulently obtain these prescription drugs in furtherance of his criminal activities,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “After being found guilty of numerous federal drug and money laundering charges, Little has received a sentence that is appropriate for drug traffickers that seek to exploit some of the most vulnerable members of our society.”
“We continue to see the devastating effects illegal prescription drugs are having on our society,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco. “Today’s sentencing of Leon Little demonstrates how IRS-CI, along with our federal law enforcement partners, and the Department of Justice will band together in the fight against prescription opioid abuse.”
The case was investigated by the Drug Enforcement Administration, Internal Revenue Service Criminal Investigation Division, Federal Bureau of Investigation Health Care Fraud Task Force, Philadelphia Police Department, and North Coventry Police Department, and was prosecuted by Assistant United States Attorney Tomika N.S. Patterson.
Philadelphia Woman Indicted for Social Security FraudRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Saudia Shuler, 44, of Philadelphia, Pennsylvania, was charged today by indictment with six counts of wire fraud, one count of theft of government funds, and two counts of social security fraud.
According to the indictment, the defendant applied for benefits from the Social Security Administration, claiming she was disabled and unable to work. After Social Security approved the benefits, the defendant allegedly continued working, including operating her own restaurant. This work and income were never reported to Social Security, in violation of program rules. The defendant’s alleged actions resulted in a loss to the government of $36,785.67.
If convicted, the defendant faces a maximum sentence of 140 years’ incarceration, a period of supervised release, full restitution to the government of $36,785.67, a fine, and a special assessment.
The case was investigated by the Social Security Administration, Office of Inspector General and is being prosecuted by Special Assistant United States Attorney Christopher E. Parisi.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Regional Medicare Fraud Strike Force Launched and Additional Federal Prosecutors Assigned to PhiladelphiaRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain and Assistant Attorney General Brian A. Benczkowski of the U.S. Justice Department’s Criminal Division announced today the formation of the Newark/Philadelphia Regional Medicare Fraud Strike Force. The Strike Force will bring together the resources and expertise of prosecutors, data analysts, and law enforcement agencies to investigate and prosecute cases involving fraud, waste, and abuse within our federal healthcare programs and cases involving illegal prescribing and distribution of opioids and other dangerous narcotics. In addition to the information sharing and resource coordination the Strike Force will bring to bear on these complex matters, the Eastern District of Pennsylvania will add two additional attorneys to its ranks who will focus entirely on these matters.
The prosecutors assigned to the Eastern District of Pennsylvania come from the Health Care Fraud Unit in the U.S. Justice Department’s Criminal Division’s Fraud Section, where they have gained a wealth of subject-matter expertise. The federal investigative agencies and state partners participating in the Strike Force include Department of Health and Human Services Office of Inspector General (HHS-OIG); Drug Enforcement Administration (DEA); Federal Bureau of Investigation (FBI); U.S. Postal Inspection Service (USPIS); Department of Defense, Office of Inspector General, Defense Criminal Investigative Services (DOD-OIG); and Pennsylvania Office of Attorney General, Medicaid Fraud Control Unit.
As part of the kickoff event, U.S. Attorney McSwain and Assistant Attorney General Benczkowski met with senior leadership from the law enforcement partners involved to discuss the Strike Force’s work. Assistant Attorney General Benczkowski then offered remarks to the entire Eastern District Office before departing for Washington, DC.
“Combatting the opioid epidemic and healthcare fraud abuses are major priorities of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Pennsylvania,” said U.S. Attorney McSwain. “Healthcare fraud schemes are driven by greed, and all American taxpayers pay the price for criminals who prey on providers and beneficiaries alike. My Office is honored and proud to welcome the DOJ Medicare Fraud Strike Force to our District in order to attack these problems with our law enforcement partners.”
“The devastation the opioid epidemic is inflicting on communities across the country and here in the Mid-Atlantic region is staggering—and health care fraud has played a role in feeding that epidemic,” said Assistant Attorney General Benczkowski. “It is estimated that each year tens of billions of dollars in American taxpayer money are lost to fraud, waste, abuse and improper payments. According to the CDC, in 2016, more than 40 percent of all U.S. opioid overdose deaths involved a prescription opioid. Our Medicare Fraud Strike Forces, which we have now expanded into Newark and Philadelphia, constitute one of our most important and effective means for containing these threats to the American people.”
On June 28, 2018, Attorney General Jeff Sessions recently noted the success of the Strike Force model while announcing the largest ever health care fraud enforcement action on Health Care Fraud Takedown Day. The takedown involved 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics.
Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the prosecutors in the 10 Medicare Fraud Strike Force locations have charged over 3,700 defendants who collectively have falsely billed the Medicare program for over $14 billion.
“Bringing the time-tested, proven-effective Strike Force model along with additional prosecutors and investigators to the Philadelphia region will no doubt be highly successful in our ongoing battle against health care fraud,” said Maureen Dixon, Special Agent in Charge for HHS-OIG. “We look forward to working closely with the U.S. Attorney for PA’s Eastern District and our fellow law enforcement partners to protect taxpayer funds supporting federal health programs and the millions who rely on those benefits.”
“In addition to its drug law enforcement mission, the Drug Enforcement Administration regulates more than 13,000 registrants in Philadelphia and over 76,000 registrants across the Commonwealth of Pennsylvania. A small number of these registrants engage in the unlawful diversion of prescription medications and are responsible for the illegal distribution of opioids and other dangerous narcotics,” said Jonathan Wilson, Special Agent in Charge of the DEA Philadelphia Field Division. “Using its law enforcement and regulatory authorities, the DEA will work closely with our partner agencies in the Regional Strike Force as it investigates the unlawful diversion of controlled substance medications and health care fraud.”
“Medicare fraud shorts the pool of funds available for truly necessary treatment and services, and costs American taxpayers money,” said Michael Harpster, Special Agent in Charge of the FBI's Philadelphia Division. “As for prescription fraud—that can cost people their lives. Here in Philadelphia, in the heart of the opioid epidemic, it seems like the FBI is opening pill mill cases right and left. This Regional Strike Force allows us to pool our resources, intelligence, and expertise against doctors and other medical professionals who put their own financial health ahead of their patients’ wellbeing.”
“The United States Postal Inspection Service is committed to the Health Care Fraud Task Force and combating the opioid crisis,” said Inspector-in-Charge Daniel Brubaker. “USPIS will continue to work with our partners every day to protect the public from opioid related schemes that unlawfully use the U.S. Mail.”
“The opioid epidemic requires a strong, coordinated law enforcement response,” Attorney General Josh Shapiro said. “So far in 2018, my office has destroyed more than 26 tons of drugs. I believe that the strike force will have a direct impact on our efforts to get even more drugs and drug dealers off our streets. That is why I am proud to partner with the U.S. Attorney’s Office, the Federal Bureau of Investigation, the Department of Health and Human Services’ Office of Inspector General, the Drug Enforcement Agency and the Justice Department’s Criminal Division on this important new initiative.”
Former Department of Veterans Affairs Employee Pleads Guilty to Fraud Against His Former EmployerRead the Press Release
PHILADELPHIA, PA – U.S. Attorney William M. McSwain announced that Shawn Edmonds, a 43-year old resident of Willow Grove, Pennsylvania, pleaded guilty today before the Honorable Gerald J. Pappert to five counts of wire fraud and three counts of aggravated identify theft related to a scheme to defraud the Department of Veterans Affairs of over $800,000.
Edmonds was an employee at the Department of Veterans Affairs in Philadelphia where his duties included the review, approval, and authorization of veteran claims. Edmonds accessed the personal identification information of veterans and veteran spouses in order to manipulate pre-existing claims and create fake claims using veteran identities. Prior to authorizing the fictitious claims, Edmonds changed the direct deposit information for the claims, thereby diverting the stolen funds to the accounts of over 15 co-schemers. Edmonds then received a portion of the stolen monies as a kickback. Edmonds manipulated records internally to avoid detection in this scheme, which occurred between July 2011 and April 2013.
“This defendant used his access to sensitive personal information of our nation’s veterans—those who have honorably served our country—to enrich himself,” said U.S. Attorney McSwain. “This Office will not tolerate government employees using their position to commit fraud against the government, and we will prosecute those who abuse the public’s trust to the fullest extent of the law.”
“The American public expects the Department of Veterans Affairs to spend limited taxpayer funds efficiently and economically. Fraud and other corrupt behavior by VA employees wastes precious dollars intended to provide critical benefits to our disabled veterans. Today’s guilty plea should serve as a deterrent to those who would seek to use their position of public trust to defraud the VA,” said VA OIG Special Agent-in-Charge Sean J. Smith. “We appreciate the commitment of the U.S. Attorney’s Office throughout this significant investigation. We will continue to work closely with our law enforcement partners to prevent this type of fraud and hold wrongdoers accountable.”
The case was investigated by the Department of Veteran Affairs, Office of Inspector General and Social Security Administration, Office of Inspector General and is being prosecuted by Assistant United States Attorney Alicia Freind.
Defendant Released from Local Custody Despite Outstanding ICE Detainer Pleads Guilty to Illegal Reentry following Philadelphia Conviction for Rape of ChildRead the Press Release
Philadelphia, PA – U.S. Attorney William M. McSwain announced that Juan Ramon Vasquez, a citizen of Honduras, pleaded guilty today to illegal reentry after deportation. In May 2009, the defendant was deported from the United States. Thereafter, in March 2014, the defendant was found back in the United States by U.S. Department of Homeland Security’s Immigration and Customs Enforcement (“ICE”) officers. At that time, Vasquez was in the custody of the Philadelphia Department of Prisons.
The City of Philadelphia thereafter chose not to comply with a detainer lodged by ICE for the defendant, who was instead released from custody by the Philadelphia Department of Prisons. After his release, the defendant was rearrested and convicted for rape of a child and unlawful sexual contact with a minor. The defendant is currently serving a sentence of 8 to 20 years in state prison.
The defendant, having now pleaded guilty to the federal charge of illegal reentry after deportation, faces a maximum possible sentence of two years in federal prison. He is scheduled to be sentenced on November 20, 2018, by the Honorable Nitza I. Quiñones Alejandro.
“The facts of this case highlight the danger posed by the City of Philadelphia’s decision to disregard ICE detainers and release previously deported aliens from local custody,” said U.S. Attorney McSwain. “Those of us in the law enforcement business should be doing everything in our power to protect vulnerable children from predators like Vasquez. Instead, this defendant received a free pass from the City of Philadelphia and its Department of Prisons, headed straight back into our community, and committed a heinous crime he never would have had the chance to commit had the City of Philadelphia complied with the ICE detainer.”
The case was investigated by ICE’s Enforcement and Removal Operations and is being prosecuted by Assistant United States Attorney Vineet Gauri.
Co-Conspirator of Reputed “Godfather of Payday Lending” Sentenced to Prison and Ordered to Forfeit $9,621,800Read the Press Release
PHILADELPHIA, PA – U.S. Attorney William M. McSwain announced today that Adrian Rubin, 61, of Jenkintown, was sentenced to 37 months’ imprisonment and three years’ supervised release, ordered to pay a $100,000 fine and $400 special assessment, and ordered to forfeit $9,621,800 in proceeds from his crimes. Rubin previously admitted to collecting unlawful debt from payday loans and helping his sons, Blake and Chase Rubin, orchestrate a multi-million-dollar telemarketing scam.
Adrian Rubin previously pleaded guilty to one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (“RICO”), one count of conspiracy, and two counts of mail fraud. The RICO conspiracy charge arose from Rubin’s participation in a conspiracy to collect debt from so-called “payday loans” – short-term consumer loans that typically come due on the borrower’s next payday – that had annual interest rates exceeding 780 percent. Such loans are illegal in Pennsylvania and many other states. Rubin admitted that in 2012, he collected $2,069,327 in payday loan debt.
Rubin’s RICO co-conspirators included Charles M. Hallinan, the reputed “godfather of payday lending,” and Wheeler K. Neff, who served as Hallinan and Rubin’s lawyer. Rubin admitted that he conspired with Hallinan and Neff to hide his payday lending behind a California-based Indian tribe for the purpose of circumventing state usury laws. Hallinan and Neff were both convicted by a federal jury last November of RICO and other charges. In July 2018, Judge Robreno sentenced Hallinan to 14 years’ imprisonment. In May 2018, Judge Robreno sentenced Neff to eight years’ imprisonment.
Rubin also obtained $7,552,473 in proceeds from an illegal telemarketing scheme to defraud more than 70,000 people into purchasing worthless credit cards. The credit cards were marketed as the Platinum Trust Card and the Express Platinum Card and were based on false and misleading representations that the products worked like regular credit cards and could help customers establish or improve their credit. Chase Rubin also was sentenced today to 32 months’ imprisonment, filed $100,000, and ordered to pay forfeiture and restitution. Blake Rubin is scheduled to be sentenced on August 8, 2018, and another co-conspirator, Justin Diaczuk, is scheduled to be sentenced on August 14, 2018.
In addition to the prison sentence imposed today, Judge Robreno ordered Rubin to forfeit $2,069,327 in payday loan proceeds and all $7,552,473 in proceeds from the telemarketing scam.
“The attorneys and staff in our Office work diligently to secure the criminal forfeiture of assets obtained through ill-gotten gains,” said U.S. Attorney McSwain. “The sentences and sizable forfeiture judgment we obtained in this case proves that we will do everything within our power to ensure that crime does not pay.”
The case was investigated by the Federal Bureau of Investigation, Internal Revenue Service Criminal Investigations, and the United States Postal Inspection Service. It was prosecuted by Assistant U.S. Attorneys Mark Dubnoff and Joel Sweet, and the forfeiture filings were handled by Assistant U.S. Attorney Maria Carrillo.
Philadelphia Man Sentenced to 35 years for Armed Robbery SpreeRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced today that Koren Jones a/k/a “Kuron Jones,” 25, of Philadelphia, was sentenced by U.S. District Judge Robert F. Kelly to 35 years’ imprisonment, followed by 5 years of supervised release. Jones pleaded guilty earlier this year to committing two armed robberies, one attempted armed robbery, and related firearms offenses—all over the course of a two day violent crime spree in November 2016.
During the first armed robbery, which occurred at a local grocery store, Jones pointed a gun directly at the cashier, threatened to shoot her, and eventually shot a customer in both legs, causing the victim severe injuries. Jones fled from the store with $200 from the cashier.
The next day, the defendant committed a second armed robbery, this time at a different local grocery store. Jones entered the store wearing a ski mask, pointed a gun at the cashier, and demanded cash. Jones fired the gun directly at the cashier and narrowly missed striking him; the cashier gave the defendant approximately $250 before Jones fled from the store. Later that same day, Jones attempted to commit an armed robbery of a deli a few blocks away; this time, the cashier wrestled the gun away from Jones, but not before it accidentally discharged.
“Senseless acts of violence like the ones Jones committed during his two-day crime spree threaten our neighborhoods and render citizens afraid to participate in the most basic activities of daily living—like shopping at a local grocery store,” said U.S. Attorney McSwain. “No one should have to live in fear like that. By seeking and obtaining a significant prison sentence in this case, we have made the neighborhoods Jones terrorized safer today than yesterday. My Office will continue to work tirelessly with local law enforcement to combat violent crime in order to keep our citizens secure.”
“In a two-day stretch of violence, Koren Jones targeted three places of business and terrorized numerous people,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “He showed zero regard for human life—opening fire on frightened witnesses, leaving both physical and emotional scars. This lengthy sentence makes the streets of Philadelphia safer. May it also provide his victims with a measure of peace.”
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. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
This case was investigated by the FBI and the Philadelphia Police Department. It is being prosecuted by Assistant U.S. Attorney Katherine Driscoll.
U.S. Attorney Announces the Creation of Affirmative Civil Enforcement Strike ForceRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced today that he has established an Affirmative Civil Enforcement (“ACE”) Strike Force within the Office’s Civil Division.
The ACE Strike Force will investigate and, when necessary, file lawsuits to prosecute fraud and abuse against government programs, including healthcare and procurement fraud, enforce federal civil rights statutes, and combat the opioid crisis. It will work closely with criminal prosecutors to coordinate civil and criminal investigations where appropriate. The ACE Strike Force will investigate cases arising from a number of sources, including those brought under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery.
“We have a deep bench of talented Civil attorneys who all contribute to the successful prosecution of affirmative civil enforcement and will continue to do so,” said U.S. Attorney William M. McSwain. “But with the ACE Strike Force, we will now have additional firepower to focus on these critical matters.”
“The ACE Strike Force will continue the Civil Division’s long history of successfully combating fraud and enforcing important federal laws through civil investigations and actions,” said Civil Division Chief Gregory B. David.
Five Civil Assistant U.S. Attorneys comprise the initial ACE Strike Force. Assistant U.S. Attorney John T. Crutchlow will serve as the team leader. The ACE Strike Force will be supervised by Deputy Civil Chief Charlene Keller Fullmer and Civil Chief Gregory B. David.
Second Postal Carrier Sentenced Prison for Delivering Marijuana Packages to Drug DealersRead the Press Release
PHILADELPHIA — United States Attorney William M. McSwain announced that a second U.S. Postal carrier was sentenced to prison today for taking bribes in exchange for delivering packages containing marijuana to drug dealers. Steven C. Williams, 43, of Philadelphia, was sentenced today to 15 months’ imprisonment.
One of Williams’ co-conspirators, U.S. Postal carrier Felicia Charleston, 36, of Philadelphia, was sentenced in May 2018 to 10 months’ imprisonment.
Williams delivered and attempted to distribute 5,468 kilograms of marijuana. Williams diverted packages to co-conspirators at a variety of locations in West Philadelphia. He pleaded guilty in April 2018.
“We can’t have postal workers moonlighting by conspiring with drug dealers,” said U.S. Attorney McSwain. “Drug dealers do enough damage to our communities without the helping hands of government employees. The vast majority of postal carriers in this district perform their jobs with honesty and integrity. But in this case, the defendant was corrupted by the lure of an easy buck. Prison is a just result and a deterrent to such behavior.”
Williams and Charleston were postal carriers at the West Market Post Office in Philadelphia, and Williams recruited Charleston to assist in the illegal scheme. They both delivered packages to members of a drug organization at 48 N. Hobart Street and other locations in West Philadelphia. The drug dealers then distributed the marijuana to their customers.
“The Postal Service employs 600,000 nationwide, the majority of whom are dedicated, hard-working individuals worthy of America’s trust," said Monica Weyler, U.S. Postal Service Office of Inspector General Special Agent in Charge, Philadelphia. “However, a very small number of them choose to violate that trust by engaging in misconduct or criminal activity. Special agents with the U.S. Postal Service Office of Inspector General work with other law enforcement agencies to find those employees, investigate them, and seek their criminal prosecution and removal from the Postal Service, as we did in this case. To report criminal activity or serious misconduct by postal employees, contact USPS OIG special agents at 888-USPS-OIG or www.uspsoig.gov.”
The case was investigated by the United States Postal Service, Office of Inspector General (USPS-OIG), Homeland Security Investigations (HSI) Border Enforcement Security Taskforce (BEST), and the Pennsylvania Office of Attorney General, Bureau of Narcotics Investigations (BNI) and is being prosecuted by Assistant United States Attorneys Anita Eve and Tomika N.S. Patterson.
Recidivist Securities Fraudster Charged with Multi-million Dollar Stock Manipulation SchemeRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Howard M. Appel, 57, of Wayne, Pennsylvania, was charged today in a criminal information with one count of conspiracy to commit securities fraud.
The information alleges that Appel—a former licensed stockbroker with two prior securities-fraud related convictions—secretly acquired large blocks of stock in publicly traded companies, including Virtual Piggy, Inc. (ticker symbol “VPIG”), and Red Mountain Resources, Inc. (ticker symbol “RDMP”), to manipulate the market in those stocks. As alleged, Appel acquired title to the shares in the names of nominees in order to hide his ownership block from investors and made between $3,000,000 and $4,000,000 from his scheme. Using nominee accounts was necessary because he previously lost his license and was barred by the Financial Industry Regulatory Authority (“FINRA”) from selling securities or associating with any member firm.
The information further alleges that Appel and his co-schemers manipulated the stock price by taking numerous actions that were hidden from investors and security regulators including: working as a paid “consultant” to recruit investors, raise capital, and get the companies running; engaging in coordinated buying and selling, which he closely monitored, to raise the share price; and preventing co-conspirators from selling their shares without his permission. The information further alleges that Appel encouraged unwitting investors to buy large blocks of stock by touting the companies’ supposed impending success while, at the same time, selling off shares from his nominee accounts—sometimes to those same investors. Appel also allegedly traded on inside information that he obtained as a result of his “consulting” work for the companies, including the status of the companies’ efforts to get listed on NASDAQ. As alleged, none of these facts was disclosed to the investing public in any of the public filings the company and Appel were required to make.
Appel faces a maximum sentence of five years’ incarceration, a three-year period of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greatest, and a $100 special assessment.
“As alleged, Appel orchestrated an end run around his FINRA bar by conspiring with others, at least one of whom was a licensed stockbroker, to use nominee accounts to manipulate the market and turn an illegal multi-million dollar profit,” said U.S. Attorney McSwain. “Apparently undeterred, this habitual fraudster once again used his market know-how to further his own self-interest and to violate the law. The efforts of our Office and the Securities and Exchange Commission’s New York Office demonstrate our steadfast commitment to using all of the tools at our disposal—both civil and criminal—to enforce the federal securities laws.”
The criminal case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Michael S. Lowe. The parallel civil enforcement proceeding was filed by the Securities and Exchange Commission’s New York Regional Office, under the direction of Mark P. Berger.
An indictment or information is an accusation. A defendant is presumed innocent unless and until proven guilty