Eastern District of Pennsylvania

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.

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.

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.

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.

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, 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.

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.

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.

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.

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.

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.

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.      

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.

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.

 

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.

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.

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.

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.

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.

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 – 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.

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.

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 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.

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.

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.

 

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.

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 – 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.

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.”

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.

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.

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 – 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.

 

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.

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.

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.

 

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

PHILADELPHIA – U.S. Attorney William M. McSwain announced that George Barnard, of Newtown Square, was sentenced today to five years in federal prison for defrauding lenders of almost $13 million. Barnard, 47, pleaded guilty to multiple fraud counts in April. He was also ordered to pay restitution in the amount of $12,774,941.89 and to forfeit $4,262,279.38 in proceeds he obtained through his commission of the offense.

From 2005 to March 2013, Barnard, who was one of the two owners of Capital Financial Mortgage Corporation ("CFMC") and also the owner of several title companies, defrauded banks out of almost $13 million dollars. Instead of using the money to fund mortgage loans for borrowers and pay off the borrowers’ existing mortgages, Barnard took the money for his personal benefit, including buying yachts, luxury cars, multi-million dollar beach homes in Avalon, New Jersey, and even paying the salary of a yacht captain.

“The defendant’s life of luxury came at the expense of those he defrauded,” said U.S. Attorney McSwain. “This was a sophisticated scheme that went on for almost a decade. The defendant will no longer need his personal yacht captain while he spends the next five years in a federal prison.”

There were numerous victims in this case. The defendant defrauded numerous lenders – lenders who loaned money to CFMC, lenders who bought mortgages written by CFMC, and lenders who loaned the defendant himself millions of dollars to buy his luxury beach homes and yachts. In addition to defrauding all of these lenders, the defendant also defrauded the IRS when he filed blatantly false tax returns that failed to declare millions of dollars in income and resulted in a total tax loss of at least $954,633. Finally, the defendant harmed over two dozen individual borrowers who turned to CFMC to obtain a refinance mortgage and who suddenly found their homes encumbered by not one but two separate mortgages – after the defendant failed to pay off their existing mortgages and then sold their new mortgages to other lenders.

The case was investigated by the Federal Bureau of Investigation, the Department of Housing and Urban Development, Office of Inspector General, and the Internal Revenue Service, Criminal Investigative Division, and is being prosecuted by Assistant United States Attorney Michael S. Lowe.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Kevin Hamilton, 61, of Wyncombe, PA was sentenced today to 10 months in prison. He was also ordered to pay $635,000 in restitution and to forfeit $656,421.11 in proceeds resulting from his criminal activity.        

Hamilton misused an investment banking client’s non-public information for the benefit of himself, his company, and other clients. Hamilton pleaded guilty in September, 2017 to two counts of securities fraud.

“The defendant was guided by pure greed,” said U.S. Attorney McSwain. “We should never lose sight of the fact that there are real victims in this case. The defendant’s schemes undermined the integrity of the securities markets and resulted in hundreds of thousands of dollars in losses to investors. This is textbook insider trading and a clear violation of the law. For this defendant and others like him, a prison sentence is the necessary consequence.”

First, in 2009 and 2010, Hamilton abused his position as a principal of the Philadelphia Brokerage Corporation (“PBC”) to engage in illegal insider trading in connection with the stock of BMP Sunstone Corporation. As one of three principals of PBC, Hamilton provided brokerage services to PBC’s clients while another principal was responsible for PBC’s investment banking business. In his role, Hamilton obtained access to material, non-public information about BMP Sunstone’s potential sale from the investment banking side of PBC’s business and then provided this inside information to some of his brokerage clients. In addition, Hamilton used this information to trade in his clients’ discretionary accounts with PBC and to make trades in his personal account. These activities breached PBC’s clear policies against insider trading and PBC’s duty to BMP Sunstone to keep this information confidential. As a result of this activity, Hamilton, his clients, and tippees reaped over $2.3 million in illegal profits.

The case was investigated by the Federal Bureau of Investigations, the Securities and Exchange Commission, and is being prosecuted by Assistant U.S. Attorneys Judy G. Smith and Patrick J. Murray.

Ali Charaf Damache, 53, a national of Algeria and citizen of Ireland, aka Theblackflag, pleaded guilty today to conspiracy to provide material support and resources to terrorists.  Damache was indicted in 2011 in the Eastern District of Pennsylvania on one count of conspiracy to provide material support to terrorists and one count of attempted identity theft to facilitate an act of international terrorism.  U.S. authorities extradited Damache from Spain in July 2017.  Sentencing is scheduled for Oct. 30 before U.S. District Judge Petrese B. Tucker. 

The announcement was made by Assistant Attorney General for National Security John C. Demers, U.S. Attorney William M. McSwain for the Eastern District of Pennsylvania and Assistant Director in Charge William F. Sweeney, Jr. of the FBI’s New York Field Office.

“At a time when radical terrorist groups use the Internet to recruit new members and coordinate attacks against innocent people, the National Security Division remains committed to investigating all possible threats to our country aggressively — including those that take place online,” said Assistant Attorney General Demers.  “Through close cooperation with our international law enforcement partners and the dedicated work of our agents and prosecutors, we have brought Damache to justice.  This successful outcome has made the United States safer, and I applaud the women and men throughout the law enforcement community who made it happen.”

“Counterterrorism remains my office’s highest priority, and we will continue to prevent, disrupt, and defeat violent extremism at home and abroad,” said U.S. Attorney McSwain.  The prosecutors and law enforcement agencies who brought Damache to justice in the United States work shoulder-to-shoulder, every day, to do just that.  As this case shows, our resolve to dismantle clear and present dangers to our national security is stronger than ever.”

“Damache knowingly and willingly conspired with others to wage a violent jihad overseas, actively supporting the very ideals that allow terrorism to thrive worldwide,” said Assistant Director in Charge Sweeney.  “For as long as there are those who commit to carrying out these intolerable acts, the FBI will resolutely continue to address counterterrorism as our number one priority.  The JTTF, composed of all of our local and international partners, will continue to remain dedicated to mitigating the terrorist threat, both here and abroad.”

According to the indictment, Damache, his co-defendant Mohammad Hassan Khalid, and others conspired to support, recruit, and coordinate a terrorist cell, consisting of men and women from Europe and the United States, to wage violent jihad in and around Europe.  Among those with whom Damache conspired is Colleen R. LaRose, who was a resident of the Eastern District of Pennsylvania at the time of the acts alleged in the indictment.  LaRose, aka Fatima LaRose, aka JihadJane, was sentenced to 10 years in prison for her involvement in this conspiracy.

The indictment alleges that Damache, Khalid, LaRose, and others recruited men online to wage violent jihad in South Asia and Europe and recruited women who had passports and the ability to travel to and around Europe in support of violent jihad.

As part of his guilty plea, Damache has agreed to be sentenced to a 180-month term of imprisonment and has waived his right to appeal his sentence.  Damache has further agreed that upon completing his prison sentence, he will be removed from the United States and returned to Ireland or, in the alternative, Algeria. 

This case was investigated by the FBI’s Joint Terrorism Task Force in Philadelphia and the FBI Field Divisions in New York, Denver, Baltimore and Washington, D.C., and the IRS.  The Justice Department’s Office of International Affairs and authorities in Spain provided substantial assistance.  Authorities in Ireland also provided assistance in this matter. 

The case is being prosecuted by First Assistant U.S. Attorney Jennifer Arbittier Williams and Assistant U.S. Attorney Sarah M. Wolfe of the Eastern District of Pennsylvania, and Trial Attorneys Matthew F. Blue and C. Alexandria Bogle of the National Security Division’s Counterterrorism Section. 

PHILADELPHIA – U.S. Attorney William M. McSwain, Assistant Attorney General for National Security John C. Demers, and Assistant Director in Charge of the FBI’s New York Field Office William F. Sweeney Jr. announced that an Algerian man pleaded guilty today to conspiracy to provide material support and resources to terrorists.  United States District Judge Petrese B. Tucker presided over the proceeding. 

Ali Charaf Damache, 53, also known as Theblackflag, was indicted in 2011 in the Eastern District of Pennsylvania on one count of conspiracy to provide material support to terrorists and one count of attempted identity theft to facilitate an act of international terrorism.  United States authorities extradited Damache from Spain in 2017. 

According to the indictment, Damache, his co-defendant Mohammad Hassan Khalid, and others conspired to support, recruit, and coordinate a terrorist cell, consisting of men and women from Europe and the United States, to wage violent jihad in and around Europe.  Among those with whom Damache conspired is Colleen R. LaRose, who was a resident of the Eastern District of Pennsylvania at the time of the acts alleged in the indictment.  LaRose, a/k/a Fatima LaRose, a/k/a Jihad Jane, was sentenced to 10 years in prison for her involvement in this conspiracy.  The indictment alleges that Damache, Khalid, LaRose, and others recruited men online to wage violent jihad in South Asia and Europe and recruited women who had passports and the ability to travel to and around Europe in support of violent jihad. 

As part of his guilty plea, Damache has agreed to be sentenced to a 180-month term of imprisonment and has waived his right to appeal his sentence.  Damache has further agreed that upon completing his prison sentence, he will be removed from the United States and returned to Ireland or, in the alternative, Algeria, as Damache is a citizen of both countries.

“Counterterrorism remains my office’s highest priority, and we will continue to prevent, disrupt, and defeat violent extremism at home and abroad,” said U.S. Attorney William M. McSwain.  The prosecutors and law enforcement agencies who brought Damache to justice in the United States work shoulder-to-shoulder, every day, to do just that.  As this case shows, our resolve to dismantle clear and present dangers to our national security is stronger than ever.”

This case was investigated by the FBI's Joint Terrorism Task Force in New York and the FBI Field Divisions in Philadelphia, Denver, Baltimore and Washington, D.C., and the IRS.  The Justice Department’s Office of International Affairs and authorities in Spain provided substantial assistance.  Authorities in Ireland also provided assistance in this matter. 

The case is being prosecuted by First Assistant U.S. Attorney Jennifer Arbittier Williams and Assistant U.S. Attorney Sarah M. Wolfe of the Eastern District of Pennsylvania, and Trial Attorneys Matthew F. Blue and C. Alexandria Bogle of the National Security Division’s Counterterrorism Section. 

 

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Tafari Riley, of Bala Cynwyd, was sentenced today to 87 months in federal prison for bribing two U.S. mail carriers to deliver packages containing marijuana to various locations in West Philadelphia. 

From April through December 2016, Riley, 26, corruptly paid two United States mail carriers, co-defendants Steven C. Williams and Felicia Charleston, to deliver packages to Riley which were addressed to fictitious individuals and contained large amounts of marijuana. Through this scheme, Riley possessed and distributed a staggering 2,732 kilograms of marijuana. Charleston was sentenced in May to 10 months in prison.  Williams is scheduled to be sentenced on August 1.

Law enforcement twice blocked Riley’s drug trafficking efforts. On Oct. 29, 2016, law enforcement intercepted and seized 158 pounds of marijuana at the post office before it had been delivered to Riley. Then, on September 15, 2017, agents seized 114 pounds of marijuana after it was delivered to Riley for distribution.

“The defendant bribed two federal employees to cultivate a booming marijuana business with no regard for the consequences of his actions,” said U.S. Attorney McSwain. “He abused the postal system, endangered those who lawfully use it, and corrupted two people entrusted with protecting it. Now he has received the punishment he deserves.” 

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.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that a Philadelphia man, convicted in March of multiple armed robberies and related offenses, was sentenced today to 441 months in prison.

On March 26, 2018, Nasir Thompas, 21, was convicted by a federal jury of two counts of Hobbs Act robbery and two counts of the use, carrying, and brandishing of a firearm during a crime of violence.

At trial, a 7-Eleven clerk testified that during one robbery, the defendant placed a pistol against the clerk’s forehead and threatened to kill him. A video from the Godfrey Food Mart showed the defendant pistol whipping a cashier when he failed to surrender cash as quickly as the defendant demanded. The robbery of the food mart took place in broad daylight in a store packed with people, including young children. The defendant's public assaults have left his victims shaken to this day.

“Time and again, this defendant used a gun to get what he wanted—terrorizing men, women, and children with zero regard for the havoc he wreaked,” said USA McSwain. “The steep sentence he received reflects this unfortunate reality. It also shows that if you menace a community, my office is coming for you and you will be in prison for a very long time.”

This case was investigated by the FBI and the Philadelphia Police Department. It is being prosecuted by Special Assistant U.S. Attorney Christopher Parisi.

 

PHILADELPHIA – U.S. Attorney William M. McSwain announced that the former president of a mental health clinic was sentenced today to 82 months in federal prison for perpetrating a multiyear fraud scheme through which the defendant stole over two million dollars that was supposed to be spent to help some of the most at-risk individuals in her community. 

Over a year ago, on June 23rd, 2017, a jury found Renee Tartaglione, 62, of Philadelphia, PA, guilty on 53 counts of conspiracy, fraud, theft, and tax crimes.  In addition to today’s sentence, U.S. District Court Judge Joel H. Slomsky previously ordered Tartaglione to forfeit $2.4 million in proceeds from her scheme and today ordered her to pay $2,076,024 in restitution to the Pennsylvania Attorney General’s Office, which will hold that money in trust until a successor charitable organization can be identified. 

“The defendant funneled millions of dollars, meant to help economically disadvantaged people with mental health issues, into her own pockets for her own pleasure,” said U.S. Attorney McSwain. “Nonprofit organizations – especially those that provide important services to the disadvantaged – exist for the people they serve and not for the personal enrichment of their leaders. Tartaglione can contemplate that fact while she sits in prison, where she belongs.”

According to the evidence presented at trial, between 2007 and 2015, Tartaglione, as President of the Board of Directors of the Juniata Community Mental Health Clinic (“JCMHC”), defrauded and stole money from JCMHC through a series of actions designed to benefit her personally at the expense of the clinic. For example, Tartaglione purchased the building on 3rd Street in Philadelphia that housed the clinic and then proceeded to raise the rent repeatedly, causing the clinic’s rent for the 3rd Street building to increase from $4,500 per month to $25,000 per month.

Additionally, as of 2010, Tartaglione’s company, Norris Hancock LLC, acquired an interest in a building on 5th Street in Philadelphia, and Tartaglione caused the clinic to spend money to fix up that building. In December 2012, Tartaglione leased that building to JCMHC under a lease that called for rent of $35,000 per month for the first two years, and $75,000 per month for the next three years. The rent Tartaglione charged the nonprofit clinic at both buildings was wildly in excess of the market rent.

None of the JCMHC rent increases or the lease agreements were approved by JCMHC’s Board of Directors. Tartaglione and her co-conspirators created false and fictitious documents in an attempt to make the transactions appear legitimate.

In previously ordering the forfeiture of proceeds in April 2018, Judge Slomsky ordered the forfeiture to be paid from the proceeds of the sale of Tartaglione’s properties on 3rd Street and 5th Street in Philadelphia, as well as other properties, including two homes at the New Jersey shore.  

"Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money as well as skirt their tax obligations," said Guy Ficco, Special Agent in Charge, IRS-Criminal Investigation. “It is time for Renee Tartaglione to face the consequences of her actions, which includes going to prison and being branded a convicted felon for the rest of her life.”

“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.”

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.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that a Philadelphia man was charged by indictment today with 16 counts of child sex offenses.

 David Milliner, 49, was charged with four counts of enticement of a minor to engage in illicit sexual conduct, six counts of manufacture and attempted manufacture of child pornography, one count of transfer of obscene material to a minor, four counts of receipt of child pornography, and one count of possession of child pornography.

The indictment stems from Milliner’s alleged online sexual communications with at least four minor boys, and his inducing the boys to manufacture sexually explicit images of themselves and send them to Milliner.  According to the indictment, as part of his scheme to sexually exploit the boys, Milliner allegedly falsely represented himself to be a wealthy prince by the name of Daniel David De’Rothschild, and claimed to be living in Beverly Hills, California.  In reality, Milliner was unemployed and living in Philadelphia. Some of Milliner’s victims were as young as eight years of age.

If convicted, Milliner faces a statutory maximum sentence of life imprisonment, a 15-year mandatory minimum term of incarceration, 5 years up to a lifetime of supervised release, a $4,000,000 fine, mandatory restitution to his victims, and $76,600 in special assessments. 

The case was investigated by the FBI, the Philadelphia Police Department, and the Wayland, Michigan Police Department.  It is being prosecuted by Assistant United States Attorney Michelle Rotella.

PHILADELPHIA – U.S. Attorney William M. McSwain was honored to be the keynote speaker today at The Philadelphia Inquirer Influencers of Law celebration. The event honored some of Philadelphia’s leading lawyers, recognizing their accomplishments in specialized practice as well as civic engagement and community service. U.S. Attorney McSwain’s remarks are below.

*****

Thank you very much for inviting me to speak here today. It is an honor to be with you. Thank you to the organizers of this event: The Philadelphia Inquirer, The Philadelphia Daily News, and Philly.com; Terrence C.Z. Egger, the Publisher & CEO of The Philadelphia Inquirer; and Jennifer Wolf, Director of Special Events. And thank you to reporter Jeremy Roebuck for that kind introduction. 

The title of today’s event is: “Inquirer Influencers of Law: Celebrating Lawyers Who Set the Bar High.” In reviewing the list of honorees today, there is no doubt that these words are true. Whether in the fields of litigation or corporate law, real estate or bankruptcy, civil rights or government, each of you has left a significant mark, both on the profession of law and on the City of Philadelphia. You all have made a meaningful impact in your field of practice, as well as in the business community and as part of the civic fabric of our society. Philadelphia is a thriving business and legal community because of the people in this room. So please join me in giving all of the honorees a round of applause.

The City of Philadelphia has long been known for the civic engagement of its citizens. There are countless examples, but let me focus here on a few. First, this country was founded right here in our backyard by people who were committed to public discourse and using their resources and ideas to improve their community. As one of the Founding Fathers of the United States, Ben Franklin (1706-1790) was not only a politician, but an author, scientist, inventor, diplomat, philosopher, and printer. And that is not an exhaustive list of the many hats that he wore throughout his life. Today, he may be best known for signing both the Declaration of Independence and the Constitution, and perhaps his placement on the $100 bill. But Franklin was also responsible for laying much of the groundwork of what we think of as philanthropy and civic engagement today, founding numerous societies and public institutions, including the University of Pennsylvania, Franklin and Marshall College, the American Philosophical Society, and Pennsylvania Hospital, among others.

This tradition of giving back to the Philadelphia community has been carried throughout the past centuries. We celebrate today in a building named for John Wanamaker (1838-1922), who started what is considered to be the first department store in Philadelphia. But Wanamaker was not simply a successful businessman. He also served as the U.S. Postmaster General under President Benjamin Harrison, he was active in the arts, and he co-founded the Sunday Breakfast Rescue Mission, a homeless shelter and soup kitchen. The Sunday Breakfast Rescue Mission still stands today and has since expanded in the last century to include more services for the homeless. It is the third oldest running rescue mission in the United States and currently the largest emergency homeless shelter in Philadelphia.

And in a more modern day example, there is Kenneth Frazier, a former partner at Drinker Biddle & Reath, my old law firm, who is now the chairman and CEO of Merck. But Frazier has not limited his focus to the success of his law firm and later his company. Throughout his career, he has given considerable time, energy, and resources to representing and working for individuals all over the world. For example, he has taken four summer sabbaticals to teach trial advocacy in South Africa. He also represented, pro bono, an inmate on death row, James Willie “Bo” Cochran. Based on this representation, Cochran’s conviction was overturned after he spent 19 years on death row; he was then retried and found not guilty. There is no greater civic engagement than work such as this.

Recently, however, I worry that civic engagement has started to fundamentally change. Perhaps it is because we have so many options in our lives, or perhaps it is due to the rise in the dependence on technology, but civic engagement is sometimes not what it used to be. At times, it seems that people are more inclined to “like” a photo of an event on Facebook from the comfort of their own living room than they are to actually attend the event. There is simply no substitute for showing up and donating our time and energy to the causes and the people who need us, especially those who may feel powerless.

On that topic, I want to share a story with you about a case that helped to shape me as a lawyer and a person. During law school, I heard a news report about a case involving an Iranian man who was a former Intel employee who was being sued by Intel for sending six mass email messages to Intel’s employees at their place of work. In these emails, the individual, Kourosh Kenneth Hamidi, noted what he considered to be some of Intel’s abusive employment practices and invited Intel employees to visit his website. Intel sued Mr. Hamidi under a novel theory – arguing that the emails had “trespassed” on Intel’s servers and therefore Intel had an absolute right to censor his speech as soon as the electrons from his emails touched Intel’s private computers. It doesn’t take much imagination to see how dangerous that sort of precedent could be, given that the Internet is largely a collection of private computers.

I became interested in the lawsuit and wrote an article about it for a law journal while I was a second year law student. By the time the article was published, however, California’s Superior Court had already sided with Intel.

By the time of Mr. Hamidi’s appeal, I was interning for a nonprofit civil liberties group as a third year law student, and I wrote the substance of a brief filed by the nonprofit on behalf of Mr. Hamidi. Nevertheless, the California Court of Appeals did not agree with us, and Mr. Hamidi lost again.

After clerking for a year, I went into private practice here in Philadelphia. Mr. Hamidi needed a lawyer for a possible appeal to the California Supreme Court. I volunteered to work on the case, pro bono, and I poured myself into it. We successfully petitioned the California Supreme Court to take the case and, as a very junior lawyer, I had the privilege of arguing it. Fortunately, Mr. Hamidi finally won. The case established a national precedent for the rules for electronic trespass on the Internet. In my opinion, it was a victory for free speech and, even more importantly, a victory for the continued development of the Internet.

And it really did feel like a David v. Goliath battle. On the one side, there was Intel, a massive corporation, represented by an army of lawyers at Morrison & Foerster in San Francisco. On the other side, there was Mr. Hamidi, the fired and broke Iranian immigrant, represented pro bono by two baby lawyers, myself and my good friend, the late Greg Lastowka. Intel had already won two rounds of the fight and had every reason to believe that it would continue to steamroll through the courts. 

When we first met with Mr. Hamidi, we found him to be a man who was standing up for his principles. But to Intel, he was just some weirdo loser from a far-off country. I certainly did not think that was true, and I still do not think it is true to this day. But even if it were true, so-called weirdos and losers need representation, too. And sometimes, with some help, they can accomplish incredible things that benefit us all in the long run. Even if, at the time, they aren’t very popular – and they certainly aren’t powerful. But as Albert Einstein once remarked, “What is right is not always popular and what is popular is not always right.”

As leaders of the legal community, hopefully we can leave a project, or a case, an office or a community, or anything we encounter, better off than we found it. As U.S. Attorney, I am blessed to lead an office of extraordinary individuals; prosecutors who are investigating complex cases and holding individuals and companies accountable for their conduct. Our Office pursues justice on a daily basis for everyone in our society, and particularly for victims who are often the most powerless and vulnerable among us.

But I am also challenging myself to aim higher and make improvements in the Office as best that I can. For example, I am committed to hiring more prosecutors. I am committed to bringing a greater number of cases in all areas that we prosecute. I am committed to strengthening the Office’s partnerships with law enforcement agencies throughout the Eastern District of Pennsylvania. I am committed to greater involvement and greater transparency with the community. I am committed to upholding the rule of law. 

This kind of engagement with the community has a personal benefit as well. Yes, civic engagement should be expected, and it is what is best for our society. But it also benefits us as individuals. When interviewed earlier this year by The New York Times, Kenny Frazier spoke about his legal career. When asked about his representation of Cochran, the inmate on death row, Frazier said this: that his first impression of the case was that he was “much too busy to take on another piece of pro bono litigation.” But younger colleagues convinced him to take it on. And Frazier – the Harvard Law School graduate, the successful Drinker partner, and the current chairman and CEO of one of the world’s largest pharmaceutical companies – noted that winning Cochran’s freedom has been the high point of his entire professional career. The Cochran case is a cornerstone in Frazier’s life, just as the Hamidi case is in mine. 

There is no doubt that you have all set the bar high – and you should be commended for that. But I also hope that you will not rest on your laurels. Who better to begin writing the next chapter of our City’s history than the people here today? You are the best of our profession and the City is counting on you.

To those of you who are honored here today, especially those who are receiving Lifetime Achievement Awards, I congratulate you. The recognition here today is based on outstanding work and is richly deserved. But later today, or perhaps later this week, when you go back to your firm, or back to your office, or back to your family, I encourage you to ask yourself: What more can I do? Is there a project, a cause, a case, that could use my help?

I say that knowing that everyone here is very busy. But I sincerely hope that you ask yourself that question and that you act on it. We are all depending on each other to accept that challenge and create a better tomorrow.

God Bless you, and God Bless the City of Philadelphia. Thank you.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Leaford George Cameron, 65, of Burlington, New Jersey, was sentenced today to 12 years in federal prison followed by three years of supervised release in connection with his operation of a fraudulent multi-state law practice.  Cameron was convicted in February 2018, of one count of mail fraud, two counts of wire fraud, and three counts of making false statements.

The government sought and obtained a substantial prison sentence to account for Cameron’s repeated and brazen behavior in posing, for decades, as a licensed attorney in numerous legal cases pending in federal and state courts across the United States.  Cameron is not a lawyer and has never been a lawyer, but today’s sentence marks the third time he was caught impersonating one.  In this most recent instance, Cameron operated his phony law firm while on probation for his 2014 conviction. He defrauded over 100 victims from several states and foreign countries and pocketed upwards of $200,000 in bogus attorney’s fees.  

Cameron went to great lengths to trick his victims, courts, and opposing counsel into believing that he was a real lawyer operating a real law firm.  He made up a law firm name, referring to the firm at different times as “The Law Offices of Cameron, Hamilton and Associates” and “The Law Offices of Bernstein, Cameron, Hamilton and Associates.”  He used business cards, letters, and envelopes printed with the firm’s name and the names of make-believe lawyers in the firm, and he even filed court papers purportedly signed by make-believe lawyers.  And, to establish his bona fides in court filings, Cameron used Attorney Identification Numbers stolen from licensed Pennsylvania attorneys and repeatedly stated, often under the penalty of perjury, that he was licensed to practice law.  But when it came time to file state and federal tax returns, Cameron referred to himself as a “consultant,” “litigation specialist,” or “legal consultant,” not a lawyer, to avoid getting caught.

The government also presented evidence that Cameron provided sub-standard legal services to his victims, many of whom were immigrants and low-income people.  Examples of his botched cases include one in which his client’s home was foreclosed and another in which a National Honor Society student was wrongfully deported.

“The evidence presented at trial proved, beyond a reasonable doubt, that this defendant was not only a phony lawyer, but also an incompetent phony lawyer,” said U.S. Attorney McSwain.  “Lawyers take an oath to uphold and promote the rule of law, not subvert it.  Far from a guardian of the law, Cameron is a crook whose fraud caused serious harm to his victims and the public’s trust in our legal institutions.  For justice to prevail, people must be able to trust that their lawyer is, in fact, a lawyer; that the judge assigned to their case is, in fact, a judge; and that the legal system is, in fact, fair.  Today’s sentence reflects the seriousness of Cameron’s conduct and the decades of disrespect he showed towards our legal system.”

“In betraying the trust of his clients through his rampant fraud schemes, Mr. Cameron ruthlessly exploited his victims for his own personal financial gain,” said Marlon V. Miller, Special Agent in Charge of HSI Philadelphia.  “HSI special agents and our law enforcement partners will continue to prioritize investigations of fraudsters like Mr. Cameron who undermine the integrity of our legal system and cause significant and long-lasting legal and financial complications for their victims.  HSI Philadelphia would also like to recognize the support provided by U.S. Citizenship and Immigration Services in bringing this important case to a successful conclusion.”   

The case was investigated by Special Agent Thomas Eyre of Homeland Security Investigations (HSI), within the U.S. Department of Homeland Security, with assistance provided by U.S. Citizenship and Immigration Services.  The government was represented by former Assistant United States Attorney James Petkun at trial and Assistant United States Attorney Daniel Velez at sentencing.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Colorado resident Frank J. Morelli, III, 62, was sentenced today to 84 months in federal prison, followed by three years of supervised release. Morelli previously pleaded guilty in federal court to conspiracy, wire fraud, and securities fraud charges. 

Morelli was a significant player in a scheme involving six others to defraud investors and the Securities and Exchange Commission (SEC).  As part of this scheme, Morelli and his fellow fraudsters took control of the majority of the stock in Supernova Resources, Inc. (ticker symbol SNRR), a publicly traded company that purported to manufacture interactive kiosks for, among other things, operation in national retail stores, when in reality no functioning kiosks had been placed in any well-known retail stores. 

In order to be able to manipulate Supernova stock, Morelli and his fellow fraudsters filed false documents, used nominees, and put stock in offshore accounts to hide their stock ownership, all in an effort to deceive the SEC that SNRR stock was eligible to be traded when it was not.  They also caused Supernova to issue false and misleading press releases and timed the issuance of these press releases with trades organized amongst themselves.  This gave potential investors the false impression that the stock was increasing in value based on legitimate market activity when it was not.  The fraudsters also agreed to bribe brokers in order to help carry out their scheme.  The schemers had made several million dollars from the scheme and would have continued with their plans to manipulate the stock had the SEC not halted trading in SNRR. 

“Hard working, innocent individuals who try to save money for the future are the ones who lose big when crooks like Morelli manipulate the markets with pump and dump stock schemes,” said U.S. Attorney McSwain.  “Market manipulation also causes our economy to take a hit because the public cannot trust that the markets are free and fair.  Thanks to the excellent work of the FBI, SEC, and prosecutors from this Office, Morelli’s days of profiting off of others’ misfortune, created by his own handiwork, are over.”

"All of the machinations that went into perpetuating this 'pump and dump' scheme show a clear disregard for the free market, and a willful disregard for the law," said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. "Mr. Morelli and his accomplices were scam artists, plain and simple, cashing in at the expense of unwitting investors without a second thought. The FBI is firmly committed to finding fraudsters who are selling a false bill of goods, and holding them accountable."

Morelli is the fifth of seven fraudsters to be sentenced in connection with this scheme.  James Wheeler, the CEO and President of Supernova who controlled the company on behalf of the schemers, was sentenced to 63 months’ imprisonment.  Daniel Starczewski, Morelli’s longtime partner, was sentenced to 30 months’ imprisonment.  Carl Marciniak and Jeffrey Weinfurter, stock manipulators whom Morelli recruited early in the scheme, received sentences of 24 months’ and 36 months’ incarceration, respectively.  The final two schemers, Louis Buonocore and Danny Colon, are scheduled to be sentenced later in 2018.

The case is being investigated by the Federal Bureau of Investigation, with the assistance of the SEC.  It is being prosecuted by Assistant United States Attorneys Patrick J. Murray and Judy Smith.

A federal grand jury sitting in Philadelphia indicted David Sommers, 62, of Levittown, Pennsylvania for trafficking in protected diamondback terrapins. The indictment charges Sommers with smuggling turtles and submitting false records for a package shipped to Canada and four violations of the Lacey Act for trafficking over 3,500 turtles in interstate commerce. 

The USFWS seized over 3,400 diamondback terrapin hatchlings from Sommers’ house in October while executing a search warrant. They were able to coordinate with biologists and return the hatchlings back into their New Jersey native habitat. 

Photo Credit: U.S. Fish and Wildlife Service

The indictment alleges that throughout 2017 Sommers poached diamondback terrapins and their eggs from coastal marshes in New Jersey. He would then illegally sell the turtles in violation of the Lacey Act. The Lacey Act is the nation’s oldest wildlife trafficking statute and prohibits the sale of wildlife that had been taken in violation of law. The indictment also charges that in 2014, Sommers smuggled turtles to Canada and falsely labeled the package by claiming it contained a book. 

Acting Assistant Attorney General Jeffrey H. Wood for the Justice Department’s Environment and Natural Resources Division, U.S. Attorney for the Eastern District of Pennsylvania William M. McSwain, and Acting Assistant Director Edward Grace of the Office of Law Enforcement for the U.S. Fish and Wildlife Service (USFWS) announced the indictment today.

“The distinctive coloration and pattern of the diamondback terrapin make it highly susceptible to illegal poaching and smuggling,” said Acting Assistant Attorney General Wood. “The Department of Justice will continue to work with its law enforcement partners to prosecute those who break our nation’s wildlife protection statutes for the sake of illegal profit.”  

“Wildlife trafficking decimates many species worldwide and undermines the rule of law,” said U.S. Attorney William M. McSwain. “Through the ongoing collaboration between ENRD, USFWS, and my Office, we have worked hard to stop wildlife trafficking dead in its tracks. Today’s indictment reaffirms our commitment to ending this destructive practice.” 

"It is one of the highest priorities for special agents of the U.S. Fish and Wildlife Service, Office of Law Enforcement to investigate transnational criminal organizations targeting our native wildlife species. 3,400 protected turtles, native to the United States were interdicted and returned to the wild with cooperation from other federal, state and local agencies to support imperiled wild populations,” said Acting Assistant Director Edward Grace of USFWS’s Office of Law Enforcement. 

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

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

If convicted, Sommers faces a maximum sentence of 10 years incarceration on the smuggling charge and five years for the Lacey Act violations. The indictment also seeks to forfeit from Sommers all the turtles involved in the investigation. 

An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

The USFWS conducted the investigation with assistance from the New Jersey Division of Fish and Wildlife. The government is represented by Trial Attorney Ryan Connors of the Environmental Crimes Section and Assistant U.S. Attorney Joan Burnes of the U.S. Attorney’s Office for the Eastern District of Pennsylvania.

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Arthur Miriana, the owner of a Philadelphia pain management clinic, pled guilty today to conspiracy to distribute and distribution of oxycodone and alprazolam, commonly known as Xanax.

“This defendant significantly contributed to our region’s crippling opioid epidemic,” said U.S. Attorney McSwain. “The misuse of opioids is killing our citizens, and we have to do everything possible to stop the illegal distribution of these deadly drugs under the guise of ‘pain management.’ This defendant was operating nothing more than a corrupt pill mill.”

Miriana, 52, formerly of Medford, New Jersey, owned and operated Life-Line Health and Wellness, purportedly a pain management clinic located at 1341 North Delaware Avenue, in Philadelphia, Pennsylvania. Miriana recruited drug dealers and drug addicts to visit his pain management clinic.

These drug dealers and drug addicts paid $260 to $360 in cash for prescriptions for commonly abused controlled substances such as oxycodone and Xanax. Miriana was not a physician, so he hired Dr. Barbara Schneider to sign these prescriptions. Dr. Schneider did not perform medical examinations as required to lawfully prescribe controlled substances. She typically met with “patients” only as long as it took for her to sign the prescriptions. Additionally, Dr. Schneider gave pre-signed blank prescriptions to Miriana for use when she was not in the office.

Dr. Schneider previously pled guilty to conspiracy to distribute oxycodone and alprazolam, and she is scheduled to be sentenced on September 21, 2018.

The case was investigated by the Drug Enforcement Administration and the Department of Health and Human Services Office of the Inspector General, with assistance from the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorneys Robert J. Livermore and Timothy M. Stengel.