Eastern District of Pennsylvania
Press releases recorded for this federal judicial district.
Two Pennsylvania Men Plead Guilty to Conspiring to File Federal Tax Returns Using Stolen IDsRead the Press Release
Two Philadelphia, Pennsylvania men pleaded guilty to conspiring to file federal tax returns using stolen IDs, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Louis D. Lappen for the Eastern District of Pennsylvania.
According to the indictment and information presented to the court, Moise Olivier, 27, and Hans Pierre, 28, opened bank accounts in the names of “Moise Olivier Tax Service” and “Hans Pierre Tax Service” even though neither had a tax service. Using stolen personal ID information, members of the conspiracy electronically filed returns seeking fraudulent refunds and directed that the refunds be deposited by the Internal Revenue Service (IRS) into the Moise Olivier and Hans Pierre Tax Service bank accounts. Olivier and Pierre withdrew cash from the accounts to provide to other co-conspirators. Olivier admitted to causing a tax loss of $181,805.10. Pierre admitted to causing a tax loss of $95,157.41.
Olivier is scheduled to be sentenced on May 2, and Pierre, who pleaded guilty on Feb. 8, is scheduled to be sentenced on April 27, before U.S. District Court Judge John R. Padova. Both face statutory maximum sentences of 10 years in prison, a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Lappen commended special agents of Internal Revenue Service-Criminal Investigation and the FBI, who conducted the investigation, and Assistant U.S. Attorney David Ignall and Trial Attorney Eric B. Powers of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Media Pharmacist Faces Additional Charges in Conspiracy to Distribute OxycodoneRead the Press Release
Mitesh Patel, 36, of Media, Pennsylvania, was charged today by Superseding Indictment with conspiracy to distribute oxycodone, money laundering conspiracy, and filing false tax returns, announced Acting United States Attorney Louis D. Lappen.
According to the Superseding Indictment, from 2008 through June 2013, Patel was a pharmacist, registered in Pennsylvania, who conspired with others to illegally distribute oxycodone, a Schedule II controlled substance. From 2009 through 2013, Patel owned three pharmacies, Dava Pharmacy, Dava #2 Pharmacy, and Drexel Hill Pharmacy, that he used to order sums of oxycodone which he then provided to his coconspirators for distribution. Patel provided sums of the ordered oxycodone to his coconspirators for distribution without prescription and in exchange for money. Patel then used various bank accounts associated with his pharmacies to launder the drug proceeds in a manner intended to conceal the unlawful origin of the money. Additionally, Patel filed false tax returns for the tax years of 2010, 2011, and 2012, for not reporting his actual taxable income.
If convicted the defendant faces a maximum of 49 years in prison, a special assessment of $500, a lifetime of supervised release, and a potential fine. The government is also seeking forfeiture of the proceeds of Patel’s unlawful activities including, but not limited to, a sum of $2,733,300.00.
The case was investigated by the Drug Enforcement Administration, the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation, and the Philadelphia Police Department as part of the Organized Crime Drug Enforcement Task Force program. The case is being prosecuted by Assistant United States Attorneys Jonathan B. Ortiz and David E. Troyer.
A Superseding Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Delaware County Podiatrist Sentenced to 8 Years in Prison for Health Care FraudRead the Press Release
PHILADELPHIA – Today, a federal judge sentenced Stephen A. Monaco, a former podiatrist, to 97 months’ imprisonment for defrauding Medicare, Medicaid and private victim insurance companies, announced Acting United States Attorney Louis D. Lappen. Defendant Monaco pleaded guilty to health care fraud on August 23, 2016, and surrendered his DEA license.
Between January 2008 and October 31, 2014, the defendant, who operated A Foot Above Podiatry in Havertown, PA, submitted fraudulent bills to Medicare for at least approximately $5 million dollars for certain podiatric procedures that were not performed at all, and other procedures that were not medically necessary. In some cases, Monaco provided “pill seeking” patients with prescriptions for oxycodone, a dangerous and addictive opioid medication, in exchange for payments from health insurance providers. Individuals seeking oxycodone from Monaco received painful injections in their toes and feet, for which Monaco submitted fraudulent claims to the patients’ insurance providers. Monaco administered these medically unnecessary injections to create the appearance of legitimacy for his prescription of opioids.
In addition to the prison term, The Honorable Juan R. Sánchez ordered the defendant to serve three years of supervised release upon release from prison, and to pay restitution in the amount of $4,960,295. The defendant was also ordered to forfeit assets traceable to the offense.
The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General, the Federal Bureau of Investigation, the Drug Enforcement Administration, the Office of Personnel Management Office of the Inspector General, the United States Railroad Retirement Board Office of Inspector General, and the Pennsylvania Office of Attorney General Medicaid Fraud Control Section. The case is being prosecuted by Assistant United States Attorneys M. Beth Leahy and Jennifer B. Jordan.
Philadelphia Man Charged with Three Counts of Bank RobberyRead the Press Release
Raheem Pleasant of Philadelphia, PA, was charged today by Indictment with three counts of bank robbery in connection with a string of robberies that occurred in the Philadelphia area in December and January, announced Acting United States Attorney Louis D. Lappen. The Indictment alleges that on three separate occasions between December 17, 2016 and January 2, 2017, Pleasant entered and robbed branch locations of TD Bank, an FDIC-insured institution, by use of force and violence, and by intimidation.
If convicted the defendant faces a maximum sentence of 60 years in prison.
The case was investigated by the Federal Bureau of Investigation’s Violent Crimes Task Force and local law enforcement agencies, and is being prosecuted by Assistant United States Attorney Sean P. McDonnell.
An Indictment, Information, or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Four People Charged with Sex Trafficking Minors in PhiladelphiaRead the Press Release
A superseding indictment was returned today against four people charged with engaging in the sex trafficking of minors in Philadelphia announced Acting United States Attorney Louis D. Lappen. Charged in the superseding indictment are: Collin Cowell (26), a/k/a “Tyson,” Rocio Ramos (38), a/k/a “Delci,” Idalis Mendez (20), a/k/a “Dali,” and Robert Broaddus (23), of Philadelphia, Pennsylvania.
According to the indictment, the defendants are charged with sex trafficking 3 Minors. Mendez was further charged with one count of production of child pornography. Cowell and Mendez were also charged with one count of distributing child pornography.
If convicted, the defendants face the following statutory maximum possible sentences: Cowell, life imprisonment with a 10-year mandatory minimum term of imprisonment; Ramos, life imprisonment with a 10-year mandatory minimum term of imprisonment; Mendez, life imprisonment with a 15-year mandatory minimum term of imprisonment; and Broaddus, life imprisonment with a 10-year mandatory minimum term of imprisonment, plus possible fines, restitution, and special assessments.
The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Melanie Babb Wilmoth.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Owner of Electrical Contracting Firms Received Two Year Prison Sentence for Tax FraudRead the Press Release
Joseph White, 48, of Newtown Pennsylvania was sentenced today to a 2-year term of imprisonment and ordered to pay $1.2 million in restitution by United States District Court Judge Gerald A. McHugh. The sentence arose from Joseph White’s guilty plea to a Criminal Information which charged him with willfully attempting to evade the payment of taxes announced Acting United States Attorney Louis D. Lappen.
According to the Criminal Information, Joseph White was the owner of PCE Electric Corporation and Thomas Edison Electric Corporation, located in Southampton, Pennsylvania from 2000 through 2011. The Criminal Information further charged that Joseph White diverted funds from his two corporations which he used for personal consumption without accounting, for tax purposes, for the income that he had diverted from his two corporations.
In addition to engaging in a corporate diversion scheme, the Criminal Information further charged that Joseph White registered the title to multiple vehicles that he purchased in the name of HAPPE, a partnership that he formed and registered with the Nevada Secretary of State. In addition to imposing a prison sentence up Joseph White, Judge McHugh ordered White to attend Gamblers Anonymous after he is released from prison while serving a period of supervised release.
“This sentence should send a clear message; schemes to evade the payment of taxes are a violation of the Federal Tax laws and the consequences of such schemes can and will result in jail time.” said Gregory Floyd, Acting Special Agent in Charge IRS Criminal Investigation, Philadelphia Field Office.
The case was investigated by the Internal Revenue Service’s Criminal Investigation Division Philadelphia Field and was prosecuted by Assistant United States Attorney Floyd J. Miller
Philadelphia Man Sentenced Year in Prison for Theft of Government FundsRead the Press Release
Kenneth Duffy, 64, of Philadelphia, Pennsylvania, was sentenced to a year and a day in prison today, announced Acting United States Attorney Louis D. Lappen. In 2016, the defendant pled guilty to one count of theft of government funds, for stealing Social Security benefits intended for his deceased mother for nearly 20 years. After defendant Duffy’s mother died in January 1997, he continued to take her retirement benefits until his fraud was discovered in the summer of 2016. During that time, he kept his deceased mother’s name on the bank account where the funds were deposited, and continued to pay bills in his deceased mother’s name. When contacted by the Social Security Administration, which was trying to verify whether or not the decedent was alive and receiving her benefits, the defendant lied, stating that his mother was alive and living with his sister, in an effort to mislead the agency.
In addition to the prison sentence, the Honorable Harvey Bartle III ordered full restitution to the Social Security Administration of $235,995, and three years of supervised release upon completion of the prison sentence.
The case was investigated by the Social Security Administration, Office of Inspector General, and is being prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.
Philadelphia Man Recieves 192 Month Prison Sentence for Orchestrating String of Bank RobberiesRead the Press Release
PHILADELPHIA – David Thomas, a/k/a “David Thompson”, 23, of Philadelphia, PA, was sentenced today by U.S. District Court Judge Gerald A. McHugh to 192 months in prison for his role orchestrating and executing four bank robberies over a two-month period from May through July 2015. The Court further ordered Thomas to pay restitution in the amount of $48,408, representing the aggregate of funds stolen during the robberies. On May 14, 2015, Thomas robbed Wells Fargo, located at 52 North Bryn Mawr Avenue, Bryn Mawr, PA. On June 2, 2015, Thomas and others robbed this same Wells Fargo branch. On June 30, 2015, Thomas and others robbed TD Bank, located at 8600 Germantown Avenue, Philadelphia. Finally, on July 15, 2015, Thomas, armed with a loaded semi-automatic pistol and assisted by others, robbed TD Bank, located at 5501 Ridge Avenue, Philadelphia.
The case was investigated by the Federal Bureau of Investigation and the Philadelphia and Lower Merion Police Departments. It is being prosecuted by Assistant United States Attorney Eric A. Boden.
Owner of Mortgage Foreclosure Recuse Firm Pleads Guilty to Tax FraudRead the Press Release
Drew Alia, 40, of Philadelphia, PA pled guilty today to an Information which charged him with willfully failing to file federal income tax returns for tax years 2010 through 2013 before United States District Court Judge Paul Diamond, announced Acting United States Attorney Louis D. Lappen.
Alia, an attorney, according to the Information, operated a home mortgage recuse service which was designed to assist home owners who were facing foreclosure to secure financing in order to prevent a home mortgage foreclosure. The Information alleged that Alia realized gross income of $28,000 in 2010; $107,000 in 2011, $144,000 in 2012, and $71,000 in 2013 all of which he failed to report on federal income tax returns that he was required to file in each of the aforementioned years.
“As we begin the 2017 filing season, American taxpayers are reminded that the term voluntary compliance means that each of us is responsible for filing a tax return when required and for paying the correct amount of tax," said Internal Revenue Service Criminal Investigation Acting SAC Gregory Floyd. "That responsibility should not be taken lightly. Mr. Alia chose to ignore his duty to file and pay taxes; thus he must be held accountable for his actions."
Alia faces a maximum of 4 years of imprisonment, a fine of up to $400,000 and 1 year of supervised release when he sentenced.
The case was investigated by Internal Revenue Service’s Criminal Investigation Division Philadelphia Field Office and is being prosecuted by Assistant United States Attorney Floyd J. Miller.
PENNSYLVANIA Man Pleads Guilty IN FALSE TAX REFUND SCHEMERead the Press Release
WASHINGTON – A Pennsylvania man pleaded guilty today to conspiring to defraud the United States and to aiding and abetting the filing of false claims for tax refunds, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Louis D. Lappen for the Eastern District of Pennsylvania.
According to the indictment and information presented to the court, Shamback Francois, 27, engaged in a scheme to fraudulently obtain income tax refunds through the filing of false returns using stolen personal identifying information. At least one of Francois’s co-conspirators electronically filed the false tax returns, which directed that the fraudulently claimed refunds be deposited into a bank account in the name of Shamback Tax. Francois did not have a tax preparation service, but had opened up the account in order to facilitate the crime. Francois withdrew funds from this account to pay his co-conspirators. As part of the plea, Francois admitted to causing a loss of $425,841.14.
Francois is scheduled to be sentenced on April 18 before U.S. District Court Judge John R. Padova. Francois faces a statutory maximum sentence of 10 years in prison for the conspiracy count and a statutory maximum sentence of five years in prison for the false claims count. He also faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Lappen commended special agents of Internal Revenue Service-Criminal Investigation and the FBI, who conducted the investigation, and Assistant U.S. Attorney David Ignall and Trial Attorney Eric B. Powers of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Folsom Man Charged One Count of Theft of Government FundsRead the Press Release
Abdulai Kamara, 47, of Folsom, Pennsylvania, was charged by Information with one count of theft of government funds, announced Acting United States Attorney Louis D. Lappen. According to the Information[1], the defendant received Social Security benefits intended for his deceased paramour, after her death in May 2012 until June 2014. The defendant’s alleged actions resulted in a loss to the government of approximately $47,992.30.
If convicted, the defendant faces a substantial period of incarceration, a 3‑year period of supervised release, restitution to the government of $47,992.30, a fine of up to $250,000, and a $100 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 Amanda R. Reinitz.
[1] An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Bank Founder Sentenced to PrisonRead the Press Release
PHILADELPHIA – Barry R. Bekkedam, 49, of Hobe Sound, FL, was sentenced today by U.S. District Court Judge C. Darnell Jones, II, to 11 months in prison and was ordered to pay a $100,000 fine for his role in a fraud conspiracy to obtain $13.5 million in public funds for NOVA Bank. On April 27, 2016, Bekkedam and co-defendant Brian Hartline were found guilty of conspiracy to defraud the United States, TARP fraud, and two counts of false statements to the federal government. Hartline had served as President and Chief Executive Officer of NOVA Bank and Bekkedam had served as Board Chairman. Their scheme involved the Troubled Asset Relief Program (TARP) and was devised to defraud the government of more than $13 million.
“Lending drives economic growth and law enforcement plays an important role in protecting banks’ ability to lend by removing criminals from their ranks,” said Christy Goldsmith Romero, Special Inspector General for TARP. “TARP is intended for healthy banks. NOVA was not a healthy bank. As NOVA’s founder, Bekkadam wielded enormous influence over the bank, allowing him to orchestrate a conspiracy with its CEO to cook the bank’s books to make it appear that the bank had healthy capital levels. SIGTARP stands united with the United States Attorney’s Office in combatting fraud in banks.”
Bekkedam and Hartline, with others, formed NOVA Bank in 2002. Bekkedam also owned and operated a financial advisory company, Ballamor Capital Management, and advised Ballamor clients to invest in NOVA. But in 2008, NOVA faced risk of failure because of bad loans and investments. In October 2008, NOVA Financial Holdings, Inc., of Berwyn, Penn., the parent company of NOVA Bank, applied for approximately $13.5 million through the U.S. Department of the Treasury Troubled Asset Relief Program. In June 2009, NOVA Bank was approved to receive the TARP funds on the condition that the bank raised $15 million in additional, private capital.
Bekkedam and Hartline devised a scheme to make NOVA bank appear more financially sound than it was – that new money was being invested in the bank. As part of the scheme, the defendants arranged for NOVA Bank to loan money to three individuals to transfer to NOVA’s parent company so it would appear as though the bank had new capital from an outside investor. In fact, the “new money” investment was the bank’s own money.
The bank ultimately did not receive TARP funds, and in October 2012, the bank failed and was closed by state and federal banking regulators.
The case was investigated by the Federal Bureau of Investigation, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Internal Revenue Service Criminal Investigations, the Federal Deposit Insurance Corporation Office of Inspector General, the Office of Inspector General of the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau. It is being prosecuted by Assistant United States Attorney David J. Ignall
Pennsylvania Man Pleads Guilty in False Tax Refund SchemeRead the Press Release
A Pennsylvania man pleaded guilty today to conspiring to defraud the United States and to aiding and abetting the filing of false claims for tax refunds, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Louis D. Lappen for the Eastern District of Pennsylvania.
According to the indictment and information presented to the court, Shamback Francois, 27, engaged in a scheme to fraudulently obtain income tax refunds through the filing of false returns using stolen personal identifying information. At least one of Francois’s co-conspirators electronically filed the false tax returns, which directed that the fraudulently claimed refunds be deposited into a bank account in the name of Shamback Tax Service. Francois did not have a tax preparation service, but had opened up the account in order to facilitate the crime. Francois withdrew funds from this account to pay his co-conspirators. As part of the plea, Francois admitted to causing a loss of $425,841.14.
Francois is scheduled to be sentenced on April 18 before U.S. District Court Judge John R. Padova. Francois faces a statutory maximum sentence of 10 years in prison for the conspiracy count and a statutory maximum sentence of five years in prison for the false claims count. He also faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Lappen commended special agents of Internal Revenue Service-Criminal Investigation and the FBI, who conducted the investigation, and Assistant U.S. Attorney David Ignall and Trial Attorney Eric B. Powers of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
University of Pennsylvania Health System Agrees to Settle Voluntary Disclosure of Improper Medicare Billing for Unnecessary Stent ProceduresRead the Press Release
The United States announces that it has settled allegations under the False Claims Act with the University of Pennsylvania Health System (“UPHS”) for improperly billing Medicare for stent procedures two interventional cardiologists performed at Pennsylvania Hospital between 2008 and 2012. UPHS voluntarily disclosed the allegations to the U.S. Attorney’s Office and has agreed to pay $845,000 to resolve the matter. The cardiologists no longer work at Pennsylvania Hospital.
The government launched an investigation based on the UPHS voluntary disclosure. The investigation determined that UPHS submitted bills to Medicare for services provided by the cardiologists that the United States alleges were medically unnecessary, resulting in overpayments to UPHS. After it discovered the problem, UPHS cooperated with the government’s investigation, and implemented a new quality assurance plan for procedures performed in the Pennsylvania Hospital cardiac catheterization lab. In addition, UPHS notified potentially affected patients of its internal review of stent procedures and offered free evaluations by UPHS’ cardiologists. UPHS also voluntarily disclosed the allegations to state regulators.
This matter was investigated by the Office of the Inspector General of the Department of Health and Human Services, and by Auditor Dawn Wiggins and Healthcare Fraud Analyst Ray Uhlhorn of the U.S. Attorney’s Office. The case was handled by Assistant U.S. Attorney Susan R. Becker.
Former Resident of Medford Lake, NJ and Beaufort, SC Accused of Threatening President Obama’s Life on FacebookRead the Press Release
PHILADELPHIA - An indictment[1] was filed today charging William Peterman, Jr., formerly of Medford Lake, NJ and more recently of Beaufort, SC, with threatening to kill President Barack Obama. According to the indictment, on January 10, 2017, posted on his Facebook page that he “will kill” President Barack Obama.
With the increased use of various forms of social media comes increased online threats that vary in nature. Law enforcement agencies as a whole, take such online based threats seriously and they can easily evolve into federal criminal charges for those individuals making them. Threats against the President of the United States and others that the United States Secret Service is statutorily authorized to protect is the Secret Service’s number one investigative priority. “This case and the resulting indictment demonstrates the Secret Service’s proactive stance investigating threats against those we are sworn to protect,” said James Henry, Special Agent in Charge of the U.S. Secret Service Philadelphia Field Office. “When brought to our attention - whether in person, electronically or written, the Secret Service takes every threat very seriously.”
If convicted, Peterman faces a statutory maximum sentence of five years’ imprisonment, a possible $250,000 fine, a period of supervised release, and a $100 special assessment.
The case was investigated by the United States Secret Service, the Burlington County (NJ) Prosecutor’s Office, and the Mercer County (NJ) Sheriff’s Office and is being prosecuted by Assistant United States Attorney Anita Eve.
[1] An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Rare Notebooks Returned to Girard College CollectionRead the Press Release
Two rare early 19th century notebooks, that had been taken more than ten years ago from the Stephen Girard Collection at Girard College, were returned to Girard College today by the Federal Bureau of Investigation and the United States Attorney’s Office, announced Acting United States Attorney Louis D. Lappen. These 1809 and 1811 notebooks are two of four account books that had been kept by H.J. Roberjot, Stephen Girard’s clerk and right-hand man, to document expenditures by Girard. At that time, Stephen Girard was the richest man in the United States.
Girard College President Clarence Armbrister has described the notebooks as painting a picture of the daily life of Stephen Girard, the founder of Girard College, particularly in terms of Girard’s generosity and charitable nature. According to President Armbrister, Girard’s best known act of philanthropy was the endowment of Girard College in his will in 1831. Girard College opened its doors on its 43-acre campus in Philadelphia, Pennsylvania in 1848 and has educated children for over 168 years. Today, Girard College is a five-day boarding school, grades 1 through 12, for students from families headed by a single parent or guardian and with limited financial resources. All accepted students receive full scholarships for the length of their enrollment at Girard College.
This case was investigated by the Federal Bureau of Investigation Art Crime Team and was handled by Assistant United States Attorney K.T. Newton.
Lancaster Man Charged with Possesion and Distribution of Child PornographyRead the Press Release
Irvin Randall Newswanger, 48, of Lancaster, PA, was charged January 12, 2017, by Indictment1 with possession and distribution of child pornography announced Acting United States Attorney Louis D. Lappen.
If convicted the defendant faces a maximum possible sentence of 40 years’ imprisonment, with a mandatory minimum of 5 years imprisonment, lifetime supervised release, a $500,000 fine and a $200 special assessment.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Roberta Benjamin.
1An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Convicted Felon Charged with Possession of A FirearmRead the Press Release
Hyneith Harmon, 24, of Philadelphia, PA, was charged today by Indictment[1] with 2 counts of possession of a firearm by a convicted felon, announced Acting United States Attorney Louis D. Lappen. The indictment alleges that on or about November 3, 2015, Harmon, who has a prior felony conviction, possessed a Kimber .45 caliber pistol, and on December 12, 2015, he possessed a Colt .38 revolver.
If convicted the defendant faces a maximum of 20 years imprisonment.
The case was investigated by the Bureau of Alcohol Tobacco and Firearms, and is being prosecuted by Assistant United States Attorney Virgil B. Walker.
[1]An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Two Postal Carriers and Marijuana Organizations Charged with Bribery in Connection with Marijuana TraffickingRead the Press Release
Philadelphia - Acting United States Attorney Louis D. Lappen today announced three indictments[1] that collectively charged postal carriers Steven C. Williams, 42, and Felicia Charleston, 35, with using their positions as United States postal carriers to distribute large quantities of marijuana to conspiring with Chester Wynter, 49, Barrington Russell, 44, Damion Parkes, 44, Gillion Watson, 32, Marvia Shirley, 32, Patrick Purrier, 38, and Anthony Washington, 27.
In each of the three indictments, Williams was charged with conspiring with members of marijuana organizations to commit bribery, bribery of a public official, and conspiring with the members of the marijuana organizations to distribute at least 100 kilograms of marijuana. According to the indictments, Williams was a postal carrier at the West Market Post Office in Philadelphia and was responsible for delivering United States Postal Services’ packages to addresses in West Philadelphia, which included 48 N. Hobart Street and other addresses in West Philadelphia. Williams allegedly used his position as a postal carrier to divert packages from the addressee to Wynter, Russell, Parkes, Purrier and Washington for the purposes of distributing the marijuana contained within the packages, in return for cash. In two of the three indictments, Charleston was similarly charged with conspiring with members of marijuana organizations to distribute at least 100 kilograms of marijuana. According to these indictments, Charleston also worked at the West Market Post Office in Philadelphia and was responsible for delivering United States Postal Services’ packages to addresses in West Philadelphia, but she left her postal route to divert packages from the addressee to Wynter, Russell, and Washington for the purposes of distributing the marijuana contained within the packages.
According to the indictments, once the packages were delivered to Wynter, Russell, Parkes, Watson, and Shirley at 48 N. Hobart Street, and to Purrier and Washington at various locations in West Philadelphia, these marijuana conspiracy members distributed the marijuana to their customers.
Based on the quantity of the marijuana involved, the defendants face the following sentences:
Williams – a statutory maximum sentence of life imprisonment, a mandatory minimum sentence of ten years’ imprisonment, and a $28,500,000 fine
Charleston – a statutory maximum sentence of life imprisonment, a mandatory minimum sentence of ten years’ imprisonment, and a $20,250,000 fine
Wynter and Russell – a statutory maximum sentence of life imprisonment, a mandatory minimum sentence of ten years’ imprisonment, and a $10,500,000 fine
Parkes - a statutory maximum sentence of life imprisonment, a mandatory minimum sentence of ten years’ imprisonment, and a $10,250,000 fine
Watson and Shirley - a statutory maximum sentence of life imprisonment, a mandatory minimum sentence of ten years’ imprisonment, and a $10,000,000 fine
Purrier - a statutory maximum sentence of 65 years’ imprisonment, a mandatory minimum sentence of five years’ imprisonment, and a $5,750,000 fine
Washington - a statutory maximum sentence of life imprisonment, a mandatory minimum sentence of ten years’ imprisonment, and a $12,500,000 fine.
“This indictment is a great example of how our different law enforcement partners can combine resources to combat corruption within the federal government," said Acting United States Attorney Louis D. Lappen. "The U.S. Attorney’s Office will continue to investigate and prosecute postal service and other federal employees who undermine the integrity of government operations through bribery and other unlawful conduct.”
“The vast majority of the Postal Service’s 600,000 employees nationwide 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, PA. "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.
[1] An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Man Found Guilty of Defrauding the Federal Supplemental Nutrition Assistance ProgramRead the Press Release
Philadelphia - a federal jury in Philadelphia convicted Abdoulaye Diallo on all counts of an indictment charging him with defrauding the federal Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, and with conspiring to do so, announced Acting United States Attorney Louis D. Lappen. Diallo owned and operated the Brothers Food Market, a grocery store on Germantown Avenue near Venango Street in Philadelphia. The jury convicted Diallo of conspiring with another individual to buy SNAP benefits for cash from those who had SNAP benefit cards (also known as PA Access cards) between September 2011 and February 2015. The jury also found Diallo guilty of exchanging SNAP benefits for cash on five different dates during that period, each of which constituted wire fraud and SNAP benefit fraud. The amount of money charged to the SNAP Program varied from $300 to almost $600 for each transaction.
The case was tried before United States District Judge Cynthia M. Rufe. Judge Rufe will sentence the defendant at a later date. The court did not set a sentencing date.
Diallo’s convictions were on six counts of wire fraud, six counts of defrauding the SNAP Program, and one count of conspiracy to do so. Diallo faces a maximum sentence of 20 years on each wire fraud count, and five years imprisonment on each SNAP fraud count and on the one conspiracy count. The court could also impose a fine, order forfeiture and order that Diallo pay restitution.
The SNAP Program is administered by the Food and Nutrition Service of the United States Department of Agriculture. It is intended to provide funds to assist low income families in purchasing food.
The case was investigated by the Office of Inspector General, United States Department of Agriculture and by Homeland Security Investigations, with the assistance of the Philadelphia Police Department. The case was tried by Assistant United States Attorneys Floyd J. Miller and Albert S. Glenn.
Philadelphia Man Charged with Bank FraudRead the Press Release
An Indictment[1] was returned today charging Ansu Sanoe, 26, of Philadelphia, Pennsylvania, with 2 counts of bank fraud, announced Acting United States Attorney Louis D. Lappen.
The Indictment alleges that Sanoe and his co-schemers posed as other people using false identification documents, opened up false business bank accounts at TD Bank and Citizens Bank, made deposits of counterfeit checks into those bank accounts, wired funds between the accounts, and withdrew the funds before the banks realized that the checks were fraudulent.
Sanoe faces a maximum sentence of 60 years’ incarceration, a five-year period of supervised release, a fine of $2,000,000, and restitution of at least $125,000.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Michael S. Lowe.
[1] An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty
Guatemalan Man Charged with Illegal Reentry After DeportationRead the Press Release
Morel Geronimo Bail, a/k/a “Ivan Antonio Velasquez-Vasquez,” of Quarryville, PA, was charged today by Indictment with illegal reentry after deportation, announced Acting United States Attorney Louis D. Lappen. The indictment alleges that on or about December 14, 2016, Bail, an alien, and native and citizen of Guatemala, was found in the United States after having been deported from the United States on or about April 2, 2014.
If convicted the defendant faces a maximum possible sentence of ten years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Eric L. Gibson.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former IRS Employee Sentenced in Tax Fraud SchemeRead the Press Release
PHILADELPHIA - Modestine Gillette, a/k/a/ “Cookie,” 48, of Philadelphia was sentenced today to twelve months and one day imprisonment for carrying out three separate schemes that defrauded her former employer – the Internal Revenue Service (“IRS”). Gillette pleaded guilty on November 6, 2015.
Between October 2008 and March 2012, Gillette was employed on an as needed basis by the IRS as a Contact Representative. A Contact Representative provides administrative and technical assistance to individuals and businesses who wish to ask the IRS about their tax related questions. It is a violation of IRS regulations for an IRS employee to assist other persons in filing their taxes for compensation.
During her time of employment, Gillette arranged for the deposit of multiple tax refunds into a bank account that she controlled. Among the deposits to this account was a false federal income tax return in the name of a real person, identified here as JB. JB did not file a 2009 tax return because she was in and out of jail, homeless shelters, and rehabilitation centers, and therefore did not have any income to report. The return that Gillette filed in JB’s name falsely reported $9,975 in business income as a hair stylist, falsely claimed the maximum Earned Income Tax Credit of $3,043, and falsely sought a refund of $2,975. JB never saw that return, had no knowledge of it, and did not authorized it to be filed.
Gillette also prepared and filed federal tax returns for SH for 2009 and 2010. Both of those returns featured false and inflated refund requests. From the resulting 2009 refund Gillette kept for herself $3,836. Gillette kept the entirety of the 2010 refund. Other than a preparation fee of $400, SH was not aware that Gillette kept any of the refunds claimed in her name.
Gillette also filed a 2009 federal income tax return for RH. That return featured a false and inflated refund request. Gillette kept $1,000 out of the total refund. RH was not aware that these funds had been taken by Gillette.
Gillette prepared and filed a 2009 federal income tax return for VW. That tax return also included an inflated claim for a refund. Of the total refund, $1,400 was deposited into the account controlled by Gillette. VW did not authorize Gillette or anyone else to receive any portion of her tax refund.
Gillette prepared 2010 and 2011 federal income tax returns for KD. In both cases, the returns claimed false and inflated requests for refunds. Gillette kept $3,100 from the 2010 refund in KD’s name, and $1,000 from KD’s 2011 refund. KD did not authorize Gillette or anyone else to receive any portion of her tax refund. KD understood that Gillette was to receive only a fee of $50 as payment for preparing each return.
These false and fraudulent returns are summarized below:
Claimed Refund Amount True Refund Owed Amount deposited into Victim account Amount Given to Victim Amount Kept by Gillette1
SH 2009
$5,036.00
$630.00
$0.00
$600.00
$4,436.00
2
SB 2010
$1,933.00
$533.00
$0.00
$0.00
$1,933.00
3
JB 2009
$2,975.00[1]
$0.00
$0.00
$0.00
$0.00
4
RH 2009
$5,216.00
$706.00
$4,216.00
$0.00
$1,000.00
5
VW 2009
$6,616.00
$2,924.00
$5,216.00
$0.00
$1,400.00
6
KD 2010
$4,402.00
$904.00
$1,302.00
$0.00
$3,100.00
7
KD 2011
$4,054.00
$3,127.00
$3,054.00
$0.00
$1,000.00
$12,869.00
1 The IRS did not release the refund.
In addition, because she was a seasonal employee there were periods when Gillette was not working for the IRS. Despite the fact that she owned and operated a child daycare business, Gillette filed for and received unemployment benefits for the following time periods:
- 9-1-09 to 2-15-11; and
- 8-13-11 to 7-7-12; and 9-1-12 to 6-15-13.
As a result of this fraud, Gillette obtained unemployment benefits totaling approximately $46,322, to which she was not entitled.
Finally, for tax year 2011, Gillette filed a federal joint income tax return, in which she failed to report: (i) approximately $5,033.00 that she stole from S.H. and K.D., individuals for whom she prepared 2010 tax returns; (iii) about $35,138.00, that she received as income from the child care business; and (iii) about $3,929.54 that her spouse received as income from the child care business.
The case was investigated by the Treasury Inspector General for Tax Administration, the Department of Labor Office of Inspector General, and the Internal Revenue Service Criminal Investigations. It was prosecuted by Assistant United States Attorney Paul G. Shapiro.
Shire PLC Subsidiaries to Pay $350 Million to Settle False Claims Act AllegationsRead the Press Release
Washington - The Justice Department announced today that Shire Pharmaceuticals LLC and other subsidiaries of Shire plc (Shire) will pay $350 million to settle federal and state False Claims Act allegations that Shire and the company it acquired in 2011, Advanced BioHealing (ABH), employed kickbacks and other unlawful methods to induce clinics and physicians to use or overuse its product “Dermagraft,” a bioengineered human skin substitute approved by the FDA for the treatment of diabetic foot ulcers. Shire plc is a multinational pharmaceutical firm headquartered in Ireland, with its United States operational headquarters in Lexington, Massachusetts. Shire sold the assets associated with Dermagraft in early 2014.
“This settlement represents the largest False Claims Act recovery by the United States in a kickback case involving a medical device,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Kickbacks by suppliers of healthcare goods and services cast a pall over the integrity of our health care system. Patients deserve the unfettered, independent judgment of their health care professionals.”
The settlement resolves allegations that Dermagraft salespersons unlawfully induced clinics and physicians with lavish dinners, drinks, entertainment and travel; medical equipment and supplies; unwarranted payments for purported speaking engagements and bogus case studies; and cash, credits and rebates, to induce the use of Dermagraft. The Anti-Kickback Statute prohibits, among other things, the payment of remuneration to induce the use of medical devices covered by Medicare, Medicaid and other federally-funded health care programs, including the Department of Veterans Affairs (VA). Claims filed in violation of the Anti-Kickback Statute are considered false or fraudulent under the False Claims Act. In addition, the Anti-Bribery statute and the Federal Acquisition Regulations prohibit bribes to government officials or employees, including VA physicians, to obtain a contract or favorable treatment under a supply contract. The United States alleged that as a result of their violation of these provisions, ABH and Shire submitted or caused to be submitted to federally-funded health care programs hundreds of millions of dollars of false claims for Dermagraft.
“Flagrant and systemic kickback activity of the type at issue in this case is designed to impair and undermine a physician’s independent medical judgment, and will not be tolerated,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida (MDFL). “This lawsuit and today’s historic settlement demonstrate our office’s vigilant and on-going efforts to safeguard federal health care program beneficiaries from the effects of such illegal and deplorable conduct.” In addition to this landmark civil settlement, Mr. Bentley’s office continues to work diligently to bring to justice those individuals responsible for these illegal actions. Already, the MDFL has obtained the criminal convictions of three high-level executives who supervised the implementation of the illegal kickback scheme, as well as a number of healthcare providers who received kickbacks.
The U.S. Attorney’s Office for the District of Columbia also played an active role in this investigation, seeking redress in the civil agreement announced today for the losses sustained by the VA. “Giving kickbacks and gratuities to healthcare providers corrupts medical treatment by interjecting personal financial incentives into decisions that should focus on what is best for a particular patient,” said U.S. Attorney Channing D. Phillips for the District of Columbia. “These types of unlawful incentives are particularly troubling when they seek to corrupt the medical treatment provided to our nation’s veterans. We will aggressively pursue any company that engages in such reprehensible and unlawful conduct, which seeks to put a company’s financial gains ahead of providing the best medical treatment for those who bravely served in our Armed Forces.”
The U.S. Attorneys’ Office for the Eastern District of Pennsylvania and the Middle District of Tennessee also contributed to the investigation and resolution of these matters. “Fraud against the health care program that exists for the benefit of our veterans, some of our most cherished citizens, as well as fraud against the Medicare program, is reprehensible and unacceptable,” said the Acting U.S. Attorney Louis D. Lappen for the Eastern District of Pennsylvania. “This resolution again demonstrates the capacity of the Department of Justice and our law enforcement partners across the country to work together to address unlawful conduct nationwide that affects veterans and other beneficiaries of federally funded health care programs.”
“The best interest of the patient is, and must be, the primary factor in a physician’s decision regarding patient care,” said U.S. Attorney David Rivera for the Middle District of Tennessee. “As such, federal law protects patients from medical providers who enrich themselves through bribes and kickbacks by making illegal the payment of remuneration to induce the use of medical devises covered by federally-funded health care programs. Such kickback schemes that interfere with physician-patient relationships and drive up the cost of healthcare for everyone, will be vigorously pursued and aggressively prosecuted.”
U.S. Department of Veterans Affairs healthcare providers are obligated to render care free of any improper financial influences” said Special Agent in Charge Michael E. Seitler of the U.S. Department of Veterans Affairs, Office of Inspector General (VA OIG), Northwest Field Office. “This is particularly important at VA, since we care for many of this nation’s heroes who have sacrificed their own welfare for our freedom. In this case, ABH saw a dramatic rise in its sales to the VA during the period of time it provided illegal inducements to multiple VA clinicians across the country. These corrupt practices served to erode the public trust in our healthcare system. The VA OIG is committed to investigating, and bringing to justice, those who engage in these illegal practices.”
In addition to the kickback allegations, the settlement also resolved allegations that Shire and its predecessor ABH unlawfully marketed Dermagraft for uses not approved by the FDA, made false statements to inflate the price of Dermagraft, and caused improper coding, verification, or certification of Dermagraft claims and related services.
The allegations resolved by the settlement were brought in six 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 whistleblower shares to be awarded in this case have not yet been determined.
The six qui tam cases, all of which were either filed or transferred to the U.S. District Court for the Middle District of Florida, are captioned: United States ex rel. Vinca v. Advanced BioHealing, Inc., Case No. 8:11-cv-176-T-30MAP; United States ex rel. Harvey v. Advanced BioHealing, Inc., Case No. 8:16-cv-303-T-30TBM; United States ex rel. Medolla v. Advanced BioHealing, Inc., Case No. 8:12-cv-575-T-30TBM; United States, et al., ex rel. Petty v. Shire Regenerative Medicine, Inc., Case No. 8:14-cv-969-T-30TBM; United States ex rel. Webb v. Advanced BioHealing, Inc., Case No. 8:14-cv-1055-T-30EAJ; and United States, et al., ex rel. Montecalvo v. Shire Regenerative Medicine, Inc., Case No. 8:16-cv-268-T-30TBM.
These matters were investigated by the Civil Division’s Commercial Litigation Branch; the U.S. Attorneys’ Offices for the Middle District of Florida, District of Columbia, Middle District of Tennessee and Eastern District of Pennsylvania; the FBI; the U.S. Department of Health and Human Services (HHS) Office of Inspector General; the VA OIG and the Department of Defense Criminal Investigative Service.
Shire, which cooperated in the government’s investigation, has been operating under a Corporate Integrity Agreement entered into with HHS that was implemented in late 2014, after the alleged unlawful conduct resolved by today’s settlement occurred, in connection with the settlement of separate False Claims Act allegations.
“Patients must be able to trust that decisions made by their doctors are based on unbiased professional judgment and not personal gain,” said Chief Counsel Gregory E. Demske to the HHS Inspector General. “The Office of the Inspector General will continue to monitor Shire’s compliance with federal healthcare programs through its oversight of Shire’s Corporate Integrity Agreement.”
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $31.4 billion through False Claims Act cases, with nearly $19.6 billion of that amount recovered in cases involving fraud against federal health care programs.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Philadelphia Man Charged with Theft of Government FundsRead the Press Release
Anthony Molinero, 70, of Philadelphia, Pennsylvania, was charged by Information with one count of theft of government funds, announced Acting United States Attorney Louis D. Lappen. According to the Information[1], the defendant received retirement benefits intended for his mother, after his mother’s death in May 2000 until March 2014. The defendant’s alleged actions resulted in a loss to the government of approximately $150,999.
If convicted, the defendant faces a term of imprisonment, a 3‑year period of supervised release, restitution to the government of $150,999, a $250,000 fine, and a $100 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.
Abington Memorial Hospital to Pay $510,000 to Resolve Drug Diversion AllegationsRead the Press Release
Abington Memorial Hospital (AMH) has agreed to pay the United States $510,000 to resolve allegations that failures in AMH’s controls and practices enabled its employee to divert controlled substances for illegal, non-medical uses. In addition to this monetary settlement, AMH has implemented a program to prevent, identify, and address future diversions. The resolution was announced by Acting United States Attorney Louis D. Lappen.
In 2013, an investigation was launched after AMH disclosed to the Drug Enforcement Administration (DEA) that a pharmacist at AMH’s inpatient pharmacy had stolen large volumes of controlled substances (prescription medications) from the hospital. Altogether, over the course of at least 85 different occasions between February 1, 2010 and August 20, 2013, the pharmacist stole more than 35,000 pills, including highly addictive painkillers such as oxycodone. DEA’s ensuing audit of AMH’s controlled substances revealed pill count discrepancies totaling over 35,000, missing or incomplete medication inventories, and altered or missing drug records, all in violation of AMH’s responsibilities under the Controlled Substances Act and federal regulations.
In a related federal criminal matter, in 2015, the AMH pharmacist, Renata Dul, pleaded guilty to 25 counts of possession with the intent to distribute oxycodone and was sentenced to six years of imprisonment and three years of supervised release.
Since the investigation began, AMH has worked cooperatively with the DEA and the U.S. Attorney’s Office to address the identified deficiencies in AMH’s handling of controlled substances. The plan includes upgrades to AMH’s inpatient pharmacy computer systems; physically enclosing the controlled substances vault; installing new and additional security cameras and badge swipe access; adding a rotary depositary safe; adding a new, locked controlled substances and anesthesia carts; retaining outside consultants to review and improve AMH’s controlled substances policies and practices; purchasing additional intravenous lock boxes; creating a Drug Diversion Prevention & Monitoring Committee and a Task Force for Controlled Substances Infusions-Wasting; improving inventory practices to account for bulk and unit dose medications broken down individually; instituting daily, biweekly, weekly, monthly, and yearly controlled substances-diversion monitoring activities; centralizing the ordering of controlled substances; increasing training for proper controlled substance storage; tracking serial numbers used in dispensing of controlled substances script pads to nursing units; and revising controlled substances policies and procedures to ensure uniformity and require biannual review. In addition, AMH has hired and trained a lead supervisor pharmacy technician, on a full-time basis, whose primary responsibility is monitoring the controlled substances operational workflow from ordering through dispensing.
“Hospitals like Abington Memorial have a special responsibility to ensure that controlled substances are used for patient care and not diverted for non-medical uses,” said Acting U.S. Attorney Lappen. “Diversion leads to illegal sales of addictive prescription drugs that have had a devastating impact on members of our community. We commend Abington Memorial Hospital for disclosing its diversion problems and for working to improve its practices and address potential diversion by hospital personnel.”
“The illegal diversion of prescription medication is a violation of federal law and of primary concern to the DEA. All too often the diversion and misuse of powerful prescription opioids such as oxycodone leads to heroin use, overdose, and even death,” said Gary Tuggle, Special Agent in Charge of the DEA’s Philadelphia Field Division. “We are confident that the steps that Abington Memorial Hospital has taken to secure controlled substances will prevent incidents such as this in the future.”
The case was handled by Assistant United States Attorneys Mark J. Sherer and Paul W. Kaufman, and was investigated by DEA diversion investigators James J. Corbett and Ashley F. Wade, Group Supervisor Regina Spaddy, and Diversion Program Manager Donetta M. Spears.
Philadelphia Man Pleads to Fraud Conspiracy Involving Tax and Other Financial CrimesRead the Press Release
Louis Lappen, Acting United States Attorney for the Eastern District of Pennsylvania, announced today that Zaki M. Bey, 38, of Philadelphia pleaded guilty to one count of conspiracy to commit loan fraud and bank fraud, one count of conspiracy to defraud the Internal Revenue Service, and one count of conspiracy to commit wire fraud.
to court documents, Bey conspired with others to prepare fraudulent mortgage applications to obtain thirteen properties located in the Germantown section of Philadelphia and in New Jersey. Bey and the co-conspirators also furnished fraudulent payroll account documents, paystubs and financial statements to defraud financial institutions and lenders. In 2007 and 2008, Bey was responsible in securing more than $2 million in residential loans on properties purchased in the names of straw buyers. With the assistance of others, Bey would receive a payout for purported construction expenses ranging from $17,864.26 to $60,000 at the closing of each settlement. Bey was not completing any construction on these properties. In total, Bey obtained total settlement proceeds for construction costs of $435,074.26.
filed false tax returns for 2007, 2008, 2009 and 2010 claiming false withholding payments and false Forms 1099-OID (“Original Issue Discount”) income for his company, Natural Home Builders. was successful in receiving a false tax refund from the IRS in the amount of $148,296 for tax year 2009. In 2012, after assessed a deficiency, BEY mailed checks to the Internal Revenue Service from a closed bank account in an attempt to repay the fraudulent tax refund. also assisted another individual in filing a falsely amended tax return with the IRS that included false withholding taxes and Form 1099-OID income.
Beginning in 2010 to 2013, Bey and others submitted fraudulent auto loan applications and furnished fraudulent payroll documents, paystubs and financial statements to automobile dealerships located in Philadelphia and New Jersey. Bey was able to obtain at least 7 automobiles purchased through straw buyers.
maximum penalty under federal law is 45 years of imprisonment, 5 years of supervised release, $1,500,000 fine and a $300 special assessment fee.
case was investigated by IRS Criminal Investigations. It is being prosecuted by Assistant United States Attorney James Pavlock.
Two Key Figures of Illegal Prescription Drug Distribution Operation Found GuiltyRead the Press Release
Philadelphia - Following a three-week jury trial, a federal jury convicted two key players in a prescription drug conspiracy that illegally distributed more than 380,000 Oxycodone pills, as well as Alprazolam, into communities in the Eastern District of Pennsylvania. Leon Little, the head of the “Little Drug Operation” (LDO), was convicted yesterday in federal court of 50 counts, including 1 count of conspiracy to distribute controlled substances, 24 counts of distribution of oxycodone, 9 counts of acquiring a controlled substance by fraud, and 16 counts of money laundering, announced United States Attorney Zane David Memeger. Additionally, one of Little’s accomplices, Colise Harmon, was convicted of 34 counts, including 1 count of conspiracy to distribute controlled substances, 15 counts of distribution of oxycodone, and 4 counts of acquiring a controlled substance by fraud. Little faces up to 846 years’ imprisonment and Harmon faces up to 336 years’ imprisonment.
“Like the rest of the nation, the Eastern District of Pennsylvania has been greatly impacted by the prescription drug abuse epidemic,” said United States Attorney Zane David Memeger. “Heroin and opiate-based prescription medication – such as oxycodone – are two of the most abused drugs in this area. And just like street drugs, prescription drug abuse produces the same problems: addiction, crime, and broken families. Today’s convictions reflect the great work of our law enforcement partners to use the criminal justice system, one of the many weapons available, to curb this epidemic.”
“The illegal diversion and sale of prescription opioids such as oxycodone has caused considerable damage to communities and the loss of numerous lives across our region,” said Gary Tuggle, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “Leon Little and Colise Harmon have been convicted of running a pill distribution network responsible for distributing over 380,000 dosage units of oxycodone. For that, the penalties are severe.”
"All financial transactions leave a trail and we have the unique expertise to follow those leads" said Akeia Conner, Special Agent in Charge, IRS Criminal Investigation. "The special agents of IRS Criminal Investigation are committed to taking the profit away from drug traffickers and putting those individuals in jail. The convictions of Leon Little and Colise Harmon should serve as a warning to those who are considering similar conduct."
Between July 2010 and August 2012, the LDO recruited and paid 55 individuals to pose as patients in order to acquire prescription drugs, such as oxycodone and alprazolam (otherwise known as Xanax), from a physician in Bala Cynwyd, Pennsylvania. Many of these “pseudo-patients” were recruited from the Raymond Rosen Projects, a government-assisted housing development located in north Philadelphia. The pseudo-patients primarily received prescriptions for 10 milligram and 30 milligram tablets of oxycodone in exchange for money. The LDO also paid for the doctor’s visit and the costs for filling the prescriptions. Little also collected and stored the filled prescriptions, packaged the drugs for re-distribution, and distributed them to his customers in Philadelphia.
Harmon served as a driver for the LDO who facilitated the coordination of pseudo-patients. Little paid Harmon, along with two others to drive pseudo-patients to the doctor and to specific pharmacies in Philadelphia, PA to have the prescriptions filled, as well as to serve as pseudo-patients.
Little orchestrated the entire scheme by paying the doctor’s receptionist and sole employee to schedule the pseudo-patients’ appointments, write prescriptions for oxycodone using the doctor’s prescription pad and without the doctor’s consent, and distribute the forged prescriptions to the LDO. She also falsely verified with pharmacies that the forged prescriptions received from LDO pseudo-patients were legitimate. Little and Harmon also distributed the oxycodone pills to customers and resellers.
Based on the average retail sale price of the oxycodone tablets on the street, the LDO took in more than $3.3 million dollars. Little used the proceeds from the illegal pill scheme to purchase jewelry, designer clothes, and vehicles, including a Can-Am Spyder valued at over $17,000 and to gamble approximately $1.9 million at various casinos. Little also facilitated the laundering of $85,000 in drug proceeds in an attempt to conceal the proceeds of his drug trafficking.
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. It was prosecuted by Assistant United States Attorney Tomika N.S. Patterson.
U.S. Attorney Reaches Settlements for Violations of the Federal Disadvantaged Business Enterprise RegulationsRead the Press Release
PHILADELPHIA – Louis D. Lappen, First Assistant United States Attorney for the Eastern District of Pennsylvania, announced today that the United States had reached a civil settlement with Ernest Bock and Sons, Inc. (“EBS”) resolving civil claims concerning EBS’ improper use of United States Department of Transportation (“DOT”) funds for two Southeastern Pennsylvania Transportation Authority (“SEPTA”) construction projects. In addition, he announced that the United States filed a civil lawsuit and entered into a consent judgment with Atrium International (“Atrium”), the DBE who improperly received USDOT funds in connection with the two SEPTA construction projects. To resolve the government’s civil claims against it, EBS has paid the United States $450,000 pursuant to the settlement agreement; Atrium has agreed to pay $45,000 pursuant to the consent judgment.
First Assistant Lappen stated: “EBS and Atrium subverted the aims of the U.S. Department of Transportation’s Disadvantaged Business Enterprise program and thus denied qualified DBEs the opportunity to participate in the program and to do the work that SEPTA commissioned. These civil resolutions demonstrate the Department of Justice’s commitment to ensure that contractors who receive federal funds will follow the law.”
“As evidenced by this settlement agreement entered into by EBS and the consent judgement with Atrium, we remain steadfast in our commitment to maintaining the integrity of the DOT’s DBE program,” said Douglas Shoemaker, regional Special Agent-in-Charge of DOT’s Office of Inspector General. “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. Working with the Secretary of Transportation and other DOT leaders, and our law enforcement and prosecutorial colleagues, we will continue to protect the taxpayers’ investment in our nation’s infrastructure from fraud, waste, abuse and violations of law.”
Background for the DOT’s DBE Programs
Beginning in 1980, the U.S. Department of Transportation issued regulations to increase the participation of minority and disadvantaged business enterprises in federally-funded construction contracts. To become certified as a DBE, a company must be owned and controlled by socially and economically disadvantaged individuals. Recipients of DOT construction grants, such as SEPTA, must establish a DBE program that sets goals for the percentage of a project’s work that should be awarded to DBEs (“DBE goals”).
General contractors may only count funds paid to DBEs toward the attainment of DBE goals if the DBEs performed a “commercially useful function.” A DBE does not perform a “commercially useful function” if its “role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of DBE participation.” A DBE subcontractor performs a “commercially useful function” when it is responsible for the execution of the work of the contract; it actually performs, manages, and supervised the work involved; and it furnishes the supervision, labor and equipment necessary to perform its work.
EBS’ and Atrium’s Fraud
EBS and Atrium served as the general contractor and DBE contractor, respectively, on two projects commissioned by SEPTA that were funded by DOT: 1) the renovation of the Folcroft, Clifton-Alden and Morton rail stations (S788407) and 2) the R5 signage project (S781109). The DBE goals for the two projects were 13 percent and 7 percent, respectively.
Although Atrium was listed as the DBE on these two SEPTA projects, it never performed any useful commercial functions on the projects between 2010 and 2011. Instead, EBS selected and used a non-DBE subcontractor to complete the duties that Atrium was supposed to perform. Atrium was aware of this arrangement and accepted a commission for improperly lending its DBE status and acting as a “pass-through” on these projects. EBS falsely certified to SEPTA that Atrium was performing the delegated DBE tasks on the projects. Furthermore, Atrium submitted certified payrolls to the Department of Labor that falsely claimed that the individuals performing the work were its employees and acting under its supervision when that was not true. Atrium and EBS pursued that false reporting after they had been criticized in a 2010 Philadelphia Office of Comptroller’s Report for violating Philadelphia Minority Business Enterprise during a construction project at the Philadelphia Airport.
As part of its settlement, EBS has paid the government $450,000. Atrium International has agreed to pay the government $45,000 in connection with a stipulated consent judgment entered on December 21, 2016 by Judge O’Neill.
For the United States Attorney’s Office for the Eastern District of Pennsylvania, this investigation and settlement was handled by Assistant United States Attorney Eric D. Gill.
The claims settled by this settlement agreement and consent judgment are allegations only, and there has been no determination of liability.
Repeat Drug Trafficker Sentenced to 17 Years in Postal StingRead the Press Release
PHILADELPHIA – Angel Catalino Ivostraza-Torres, 53, of North Philadelphia, PA, was sentenced today to 204 months in federal prison in connection with an undercover investigation conducted by the U.S. Postal Inspection Service. Ivostraza-Torres pleaded guilty on August 11, 2016, to attempted possession with intent to distribute 500 grams or more of cocaine.
During the investigation, Ivostraza-Torres was caught transporting a U.S. mail package that had contained nearly a kilogram of cocaine hidden inside of a printer. Ivostraza-Torres delivered the package to an auto detailing business located in the Fairhill section of Philadelphia before being arrested by postal inspectors. A laboratory test confirmed that the net weight of the cocaine that had been inside the package was 991 grams. Prior to his arrest in this case, Ivostraza-Torres had been convicted of drug trafficking four other times.
In addition to the prison term of 17 years, U.S. District Court Judge Mitchell S. Goldberg ordered 8 years of supervised release.
This case was investigated by the U.S. Postal Inspection Service and prosecuted by Assistant U.S. Attorneys Jerome M. Maiatico and Clare Putnam Pozos
Philadelphia Man Charged with Intent to DistributeRead the Press Release
Eddie Baez, 31 of Philadelphia, Pennsylvania, was charged today by Indictment with one count of possession with intent to distribute 500 grams or more of cocaine, one count of possession with intent to distribute 500 grams or more of cocaine within 1000 feet of a playground and one count of attempt to possess with intent to distribute 500 grams or more of cocaine, all in violation of Title 21, United States Code, Sections 841(b)(1)(B), 846, and 860, announced United States Attorney Zane David Memeger.
If convicted the defendant faces a maximum of 120 years imprisonment, a mandatory minimum of 5 years imprisonment, a period of supervised release, a $10 million dollar fine, and a $200 special assessment.
The case was investigated by the United States Postal Inspection Service and is being prosecuted by Assistant United States Attorney Priya De Souza.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Man Charged with Assaulting A Postal Service EmployeeRead the Press Release
Kenneth Stalling, age 34, of Philadelphia, Pennsylvania, was charged today by indictment[1] with one count of assaulting a federal employee, that is a United States Postal Service employee while he was engaged in his official duties, on or about October 19, 2016, in Philadelphia, Pennsylvania, announced United States Attorney Zane David Memeger.
If convicted of all counts, Stalling faces a maximum sentence of 20 years’ imprisonment, a $250,000 fine, three years’ supervised release, and a $100 special assessment.
This case has been investigated by the United States Postal Inspection Service, and the Philadelphia Police Department. The case has been assigned to Assistant United States Attorney Thomas M. Zaleski.
[1]An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Registered Sex Offender Charged with Production of Child PornographyRead the Press Release
Darren Dozier a/k/a “Dante Dozier”, 54, of Philadelphia, Pennsylvania, was charged today by Indictment with three counts of production of child pornography, one count of transportation of child pornography, and one count of offenses committed by a registered sex offender, for offenses committed in 2015 against a child under the age of 13 years, announced United States Attorney Zane David Memeger. The defendant was previously convicted in the Commonwealth of Pennsylvania for rape and related offenses.
If convicted the defendant faces a maximum possible sentence of life imprisonment, a mandatory minimum of 35 years, a minimum 5-year term up to a lifetime of supervised release, a $1.25 million dollar fine, mandatory restitution, forfeiture, a $500 special assessment, and a $20,000 special victims assessment.
The case was investigated by the Federal Bureau of Investigations and the Philadelphia Police Department Special Victims Unit and is being prosecuted by Assistant United States Attorney Priya De Souza.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Man Charged with Using Social Media to Commit Bank and Aggravated Identity TheftRead the Press Release
An Indictment[1] was returned today charging Steven Ronald Randall, 24, of Philadelphia, Pennsylvania, with 2 counts of bank fraud and 10 counts of aggravated identity theft, announced United States Attorney Zane David Memeger.
The Indictment alleges that Randall used social media service Facebook to solicit persons to provide him with their bank ATM cards and PIN numbers so that he could deposit bad checks into their accounts and withdraw the funds before the banks and other financial institutions realized that the checks were bad. The Indictment alleges that Randall went to numerous ATM machines in Philadelphia and the surrounding area to make the deposits and withdrawals, and also used the ATM cards and PIN numbers at various stores, including Walmart, CVS, RiteAid, Wawa, 7-Eleven, Pathmark, and Giant, to purchase goods and obtain cash back prior to the banks discovering that the checks were bad. The Indictment further alleges that Randall paid the account holders a portion of the over $47,000 he unlawfully obtained as a result of the scheme.
Randall faces a maximum sentence of 80 years’ incarceration, including a mandatory two-year term of imprisonment, a five-year period of supervised release, a fine of $4,500,000, and restitution of at least $52,000. He also faces a likely advisory sentencing guideline range of somewhere between 61 months’ and 286 months’ imprisonment.
The case was investigated by the United States Postal Inspection Service and is being prosecuted by Assistant United States Attorney Michael S. Lowe.
[1] An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty
[1] An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty
Norristown Man Indicted for Illegal Reetnry After DeportationRead the Press Release
Jose Arcadio Garduno-Gomez, 24, of Norristown, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about June 22, 2016, Garduno-Gomez, an alien, and native and citizen of Mexico, was found in the United States after having been deported from the United States on or about March 5, 2011.
If convicted the defendant faces a maximum possible sentence of twenty years’ imprisonment.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations and is being prosecuted by Assistant United States Attorney Kevin L. Jayne.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Bucks County Judge, Lower Southampton Director of Public Safety, and Pennsylvania Deputy Constable Charged with Conspiracy and Money LaunderingRead the Press Release
John I. Waltman, 59, of Trevose, Pennsylvania, Robert P. Hoopes, 69, of Doylestown, Pennsylvania, and Bernard T. Rafferty, 62, of Langhorne, Pennsylvania were charged in an Indictment,[1] unsealed earlier today, with one count of conspiracy to commit money laundering and three counts of money laundering, announced United States Attorney Zane David Memeger.
Waltman has been a Magisterial District Judge in Bucks County, Pennsylvania since 2011. Hoopes has been the Director of Public Safety in Lower Southampton, Pennsylvania since February 2016. In this position, Hoopes has authority over all police, fire, and emergency operations in the township. Hoopes previously operated a legal practice in Doylestown, Pennsylvania. Rafferty has been a Deputy Constable in Bucks County since 1998. Rafferty controls Raff’s Consulting LLC, a corporation registered with the Pennsylvania Department of State on May 30, 2011.
According to the Indictment, from June 2015 to November 2016, Waltman, Hoopes, and Rafferty conspired to launder funds represented to be proceeds from health care fraud, illegal drug trafficking, and bank fraud. Moreover, from June 2016 to August 2016, Waltman, Hoopes, and Rafferty laundered $400,000 in cash, represented to be proceeds from health care fraud and illegal drug trafficking, and took money laundering fees totaling $80,000 in cash.
If convicted, the defendants each face a maximum possible sentence of 80 years in prison, three years of supervised release, a $1 million fine, and a $400 special assessment.
[1] An Indictment, Information, or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Shillington Man Charged with Aggravated Identity TheftRead the Press Release
Mark Vega, 34, of Shillington, Pennsylvania was charged today by Indictment1 with Mail Fraud and Aggravated Identity Theft, announced United States Attorney Zane David Memeger. According to the indictment, Vega obtained stolen identities and used the names, dates of birth, and social security numbers of these victims to apply for credit cards with Discover Financial Services and American Express Company. According to the indictment, Vega also had himself added as an authorized user on these credit card accounts.
If convicted the defendant faces a maximum possible sentence of 84 years in prison, with a two year mandatory minimum, a $1,500,000 fine, three years of supervised release, and a $600 special assesment
The case was investigated by the United States Postal Inspection Service, the Internal Revenue Service-Criminal Investigation Division, the Federal Bureau of Investigation, and the Cumru Township Police Department and is being prosecuted by Assistant United States Attorney David J. Ignall.
1 An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Namibia Man Charged in Wire Fraud CaseRead the Press Release
Karl Christian Loibenbock, a/k/a “Karl Christian Loibenboeck,” a/k/a “Christian Bock,” of Windhoek, Namibia, was charged today by Indictment[1] with one count of wire fraud, announced United States Attorney Zane David Memeger.
According to the Indictment, from September 2013 to November 9, 2016, Loibenbock falsely represented that he procured and sold high-quality rough diamonds from Angola that were not certified as required by the Kimberley Process. In reality, Loibenbock was attempting to pass off topaz stones – which Loibenbock procured in Namibia – as rough diamonds to defraud a United States customer. On November 7, 2016, Loibenbock traveled from Namibia to the United States to complete the sale of approximately 100 carats of purported rough diamonds in his attempt to defraud the United States customer out of approximately $250,000.
Launched in 2003, the Kimberley Process is an international initiative to prevent rough diamonds from being used to finance civil wars in diamond-producing countries. The Kimberley Process controls trade in rough diamonds between participating countries through domestic implementation of a certification scheme that makes the trade more transparent and secure. According to the Kimberley Process, rough diamonds must be shipped in sealed containers and exported with a Kimberley Process Certificate that certifies that the rough diamonds have not benefited rebel movements.
If convicted, the defendant faces a maximum possible sentence of 20 years in prison, three years of supervised release, a $250,000 fine, and a $100 special assessment.
The case was investigated by the Department of Homeland Security, Homeland Security Investigations, and the United Kingdom’s National Crime Agency, and is being prosecuted by Assistant United States Attorney Vineet Gauri.
[1] An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Dominican Man Charged with Illegal Reentry After DeportationRead the Press Release
Daniel Acosta-Domiguez, a.k.a. “Daniel Acosta,” a.k.a. “Jonathan Amador-Alvarez,” 33, of Philadelphia, PA, was charged today by Indictment1 with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about October 18, 2016, Jorge-Jimenez, an alien, and native and citizen of the Dominican Republic, was found in the United States after having been deported from the United States on or about May 21, 2013.
If convicted the defendant faces a maximum possible sentence of twenty years.
The case was investigated by Homeland Security Investigations (“HSI”) and Enforcement and Removal Operations (“ERO”) of Immigration and Customs Enforcement (“ICE”), and is being prosecuted by Special Assistant United States Attorney Josh A. Davison.
1 An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former Congressman Chaka Fattah Sentenced to 10 Years in Prison for Participating in Racketeering ConspiracyRead the Press Release
Former Congressman Chaka Fattah Sr., 60, of Philadelphia, was sentenced to 120 months in prison for participating in a racketeering conspiracy involving several schemes intended to further his political and financial interests by misappropriating federal, charitable and campaign funds, among other things.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania, Special Agent in Charge Michael Harpster of the FBI’s Philadelphia Division and Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) Philadelphia Field Office made the announcement.
Fattah was sentenced by U.S. District Judge Harvey Bartle III of the Eastern District of Pennsylvania, who also ordered Fattah to pay $600,000 in restitution and to forfeit $14,500. On June 21, 2016, Fattah was convicted of participating in racketeering, bribery, wire fraud, honest services fraud and money laundering conspiracies, and for bribery, mail fraud and money laundering.
“Chaka Fattah was a long-serving and powerful member of the U.S. House of Representatives who was entrusted by his constituents with serving their best interests,” said Assistant Attorney General Caldwell. “Instead, he perverted that trust and turned his office into a criminal organization designed to support his own political and financial interests.”“As a former congressman, Fattah conspired with his co-defendants in a series of schemes to use his position for personal gain at the expense of the public good,” said U.S. Attorney Memeger. “We are pleased with today’s outcome while also recognizing the tragedy of this defendant’s fall from grace. We hope that the lengthy prison sentence imposed today deters those public officials who might be tempted to engage in corruption, as our office remains committed to investigating and prosecuting public corruption at all levels of government.”
“Chaka Fattah represented his district in Congress for over 20 years,” said Special Agent in Charge Harpster. “And, if not for his sheer greed and venality, probably could have kept his seat for 20 more. He's repeatedly deemed this case a ‘witch hunt’ against him by the government. But in truth, Mr. “Today’s sentence sends a clear message that the laws of the land apply to everyone, regardless of position or power,” said Chief Weber. “Public officials who fail to faithfully discharge the duties of their office will be investigated, prosecuted and subjected to the full punishment of the law for their actions.”
According to the evidence presented at trial, Fattah and certain associates borrowed $1 million from a wealthy supporter for his failed 2007 campaign for mayor of Philadelphia, and disguised the funds as a loan to a consulting company. After he lost the election, Fattah returned $400,000 of unused campaign funds to the donor and arranged for Educational Advancement Alliance (EAA), a non-profit entity founded and controlled by Fattah, to repay the remaining $600,000 using charitable and federal grant funds that passed through two other companies, including one run by co-defendant Robert Brand. To conceal the contribution and repayment scheme, Fattah, his co-conspirators, and others created sham contracts and made false entries in accounting records, tax returns and campaign finance disclosure statements.
Following his election defeat, Fattah also sought to extinguish approximately $130,000 in campaign debt owed to a political consultant by agreeing to arrange for the award of federal grant funds to the consultant. Fattah directed the consultant to apply for a $15 million grant (which ultimately he did not receive) on behalf of a then-non-existent non-profit entity. In exchange for Fattah’s efforts to arrange the award, the consultant agreed to forgive the campaign debt.
In addition, Fattah misappropriated funds from his mayoral and congressional campaigns to repay his son’s student loan debt. To execute the scheme, Fattah arranged for his campaigns to make payments to a political consulting company, which the company used to make 34 successful loan payments on behalf of Fattah’s son, totaling approximately $23,000, between 2007 and 2011.
Beginning in 2008, Fattah communicated with individuals in the legislative and executive branches in an effort to secure for co-defendant Herbert Vederman an ambassadorship or an appointment to the U.S. Trade Commission. In exchange, Vederman provided money and other items of value to Fattah. As part of this scheme, the defendants sought to conceal an $18,000 bribe payment from Vederman to Fattah by disguising it as a payment for a sham car sale.
Fattah’s four co-defendants Vederman, Brand, Karen Nicholas and Bonnie Bowser were convicted alongside Fattah for charges in connection with the schemes on June 21, 2016. Judge Bartle also sentenced Vederman today to 24 months in prison and ordered him to pay a $50,000 fine. Sentencing is set for Dec. 13, 2016 for Brand and Nicholas and Dec. 14, 2016 for Bowser.
The FBI and IRS-CI investigated the case with assistance from the Justice Department’s Office of the Inspector General, the NASA Office of Inspector General and the Department of Commerce’s Office of Inspector General. Trial Attorneys Eric L. Gibson and Jonathan Kravis of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Paul L. Gray of the Eastern District of Pennsylvania are prosecuting the case.
Former Congressman Chaka Fattah Sentenced to 10 Years in Prison for Participating in Racketeering ConspiracyRead the Press Release
Philadelphia – Former Congressman Chaka Fattah Sr., 60, of Philadelphia, was sentenced to 120 months in prison for participating in a racketeering conspiracy involving several schemes intended to further his political and financial interests by misappropriating federal, charitable and campaign funds, among other things.
U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Michael Harpster of the FBI’s Philadelphia Division and Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) Philadelphia Field Office made the announcement.
Fattah was sentenced by U.S. District Judge Harvey Bartle III of the Eastern District of Pennsylvania, who also ordered Fattah to pay $600,000 in restitution and to forfeit $14,500. On June 21, 2016, Fattah was convicted of participating in racketeering, bribery, wire fraud, honest services fraud and money laundering conspiracies, and for bribery, mail fraud and money laundering.
“As a former congressman, Fattah conspired with his co-defendants in a series of schemes to use his position for personal gain at the expense of the public good,” said U.S. Attorney Memeger. “We are pleased with today’s outcome while also recognizing the tragedy of this defendant’s fall from grace. We hope that the lengthy prison sentence imposed today deters those public officials who might be tempted to engage in corruption, as our office remains committed to investigating and prosecuting public corruption at all levels of government.”
“Chaka Fattah was a long-serving and powerful member of the U.S. House of Representatives who was entrusted by his constituents with serving their best interests,” said Assistant Attorney General Caldwell. “Instead, he perverted that trust and turned his office into a criminal organization designed to support his own political and financial interests.”
“Chaka Fattah represented his district in Congress for over 20 years,” said Special Agent in Charge Harpster. “And, if not for his sheer greed and venality, probably could have kept his seat for 20 more. He's repeatedly deemed this case a ‘witch hunt’ against him by the government. But in truth, Mr. Fattah and his co-defendants have no one to blame but themselves. Tackling public corruption remains an FBI priority, for the simple fact that no one is above the law.”
“Today’s sentence sends a clear message that the laws of the land apply to everyone, regardless of position or power,” said Chief Weber. “Public officials who fail to faithfully discharge the duties of their office will be investigated, prosecuted and subjected to the full punishment of the law for their actions.”
According to the evidence presented at trial, Fattah and certain associates borrowed $1 million from a wealthy supporter for his failed 2007 campaign for mayor of Philadelphia, and disguised the funds as a loan to a consulting company. After he lost the election, Fattah returned $400,000 of unused campaign funds to the donor and arranged for Educational Advancement Alliance (EAA), a non-profit entity founded and controlled by Fattah, to repay the remaining $600,000 using charitable and federal grant funds that passed through two other companies, including one run by co-defendant Robert Brand. To conceal the contribution and repayment scheme, Fattah, his co-conspirators, and others created sham contracts and made false entries in accounting records, tax returns and campaign finance disclosure statements.
Following his election defeat, Fattah also sought to extinguish approximately $130,000 in campaign debt owed to a political consultant by agreeing to arrange for the award of federal grant funds to the consultant. Fattah directed the consultant to apply for a $15 million grant (which ultimately he did not receive) on behalf of a then-non-existent non-profit entity. In exchange for Fattah’s efforts to arrange the award, the consultant agreed to forgive the campaign debt.
In addition, Fattah misappropriated funds from his mayoral and congressional campaigns to repay his son’s student loan debt. To execute the scheme, Fattah arranged for his campaigns to make payments to a political consulting company, which the company used to make 34 successful loan payments on behalf of Fattah’s son, totaling approximately $23,000, between 2007 and 2011.
Beginning in 2008, Fattah communicated with individuals in the legislative and executive branches in an effort to secure for co-defendant Herbert Vederman an ambassadorship or an appointment to the U.S. Trade Commission. In exchange, Vederman provided money and other items of value to Fattah. As part of this scheme, the defendants sought to conceal an $18,000 bribe payment from Vederman to Fattah by disguising it as a payment for a sham car sale.
Fattah’s four co-defendants Vederman, Brand, Karen Nicholas and Bonnie Bowser were convicted alongside Fattah for charges in connection with the schemes on June 21, 2016. Judge Bartle also sentenced Vederman today to 24 months in prison and ordered him to pay a $50,000 fine. Sentencing is set for Dec. 13, 2016 for Brand and Nicholas and Dec. 14, 2016 for Bowser.
The FBI and IRS-CI investigated the case with assistance from the Justice Department’s Office of the Inspector General, the NASA Office of Inspector General and the Department of Commerce’s Office of Inspector General. Assistant U.S. Attorney Paul L. Gray of the Eastern District of Pennsylvania, and Trial Attorneys Eric L. Gibson and Jonathan Kravis of the Criminal Division’s Public Integrity Section are prosecuting the case.
Doctor Found Guilty of Drug Distribution and Causing the Death of A PatientRead the Press Release
.PHILADELPHIA – Following a three-month jury trial, Jeffrey Bado, formerly a physician with two practices in the Philadelphia area, was convicted today in federal court of 308 felony counts, including two counts of maintaining a drug-involved premises, one count of drug distribution resulting in death, 269 counts of drug distribution, 33 counts of health care fraud, and two counts of making false statements to federal agents, announced United States Attorney Zane David Memeger. Bado faces a twenty-year mandatory minimum sentence for the charge of drug distribution resulting in death, and up to twenty years in prison for each of the other drug distribution counts.
“We are tremendously gratified with the jury’s verdict in this important prosecution,” said United States Attorney Zane David Memeger. “This verdict represents the culmination of an outstanding effort from our prosecutors and law enforcement partners to hold accountable those individuals, particularly those in the medical profession, whose illegal conduct fuels the epidemic of prescription drug abuse that is wreaking havoc on our society. We will continue to investigate and prosecute these dangerous drug dealers, whether they are doctors, pharmacists, or otherwise, as well work with the community to help reverse the trend of serious drug abuse.”
Bado maintained medical offices in Roxborough, in 2010 and 2011, and in Bryn Mawr, from 2011 to 2013. Evidence at trial showed that Bado had prescribed large amounts of oxycodone and methadone to clients of his practice outside the usual course of professional practice and without medical necessity. In one instance, Bado’s illegal drug distribution caused the death of a drug addicted patient. By the time Bado’s practice closed in 2013, Bado was charging new patients $800 cash per visit, returning patients $400 cash, and refusing to accept medical insurance. Bado’s patients received at most a cursory physical examination and little other medical care or treatment. However, they did receive what government expert Stephen Thomas, M.D., testified were prescriptions for staggering amounts of opioids.
Bado issued prescriptions tailored to the needs of drug addicts and dealers; he complied with patients’ requests for specific concentrations of oxycodone and, without medical justification, switched patients’ prescriptions to pill concentrations commanding a higher street value. Even when Bado knew patients were addicted to oxycodone, were using illegal drugs, or were not taking the oxycodone prescribed, he continued to provide prescriptions for large amounts of oxycodone. Multiple former patients testified to becoming addicted to oxycodone prescribed by him. There was no evidence at trial suggesting Bado had referred patients to opioid addiction treatment.
Bado was also convicted of health care fraud, having fraudulently billed Medicare and private insurers for patient visits that occurred when Bado was out of the country. Bado directed his staff to see patients, provide them with pre-signed prescriptions, and submit fraudulent insurance claims as if he had seen the patients himself. Bado was convicted of making false statements to federal agents concerning these billings.
The case was investigated by the Federal Bureau of Investigation, the Department of Health and Human Services Office of the Inspector General, and the Internal Revenue Service. It was prosecuted by Assistant U.S. Attorneys Maureen McCartney, Jason P. Bologna, Andrew J. Schell, and Nancy Beam Winter.
United States Settles with Eyeland Optical Centers over Medicaid False ClaimsRead the Press Release
PHILADELPHIA – The United States announces that it has settled allegations under the False Claims Act with Eyeland Optical Centers, a chain of eye care centers in Pennsylvania. The settlement resolves allegations that Eyeland had billed Medicaid for more than four lenses per year, in violation of Pennsylvania’s Medicaid regulations, and retained those payments even once it became aware that it had done so. Eyeland has agreed to pay $135,328.56 to resolve these claims.
The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General. It was prosecuted by Assistant United States Attorneys Paul W. Kaufman and David A. Degnan.
South Whitehall Township Man Charged with Conveying False Information About A BombRead the Press Release
Donald Lee Haas, 60 years old of South Whitehall Township, Pennsylvania, was charged today by Indictment with three counts of conveying false information using a telephone, and one count of conveying false information about carrying a bomb onto an airplane, announced United States Attorney Zane David Memeger. The defendant is alleged to have made bomb threats to Lehigh Valley International Airport, TGI Friday’s restaurant, and the Lehigh Valley Mall, on May 17, 2016, in Lehigh County, in the Eastern District of Pennsylvania.
If convicted, defendant Haas faces a maximum possible sentence of 50 years imprisonment, a three-year period of supervised release, a $1,000,000 fine, and a $400 special assessment.
The case was investigated by the Federal Bureau of Investigation, Allentown Resident Agency, the Lehigh Northampton Airport Authority Police Department, the South Whitehall Township Police Department, and the Allentown Police Department, and is being prosecuted by Assistant United States Attorney John Gallagher.
An initial appearance of the charges has been scheduled for Friday, December 16, 2016, at 2:30 p.m., before the Honorable Henry S. Perkin, United States Magistrate Judge, at the Edward N. Cahn U.S. Courthouse and Federal Building, 504 Hamilton Street, in Allentown, Pennsylvania.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Illegal Alien Charged with Possession of A FirearmRead the Press Release
Federico Sanchez-Bello, 36, of Norristown, PA, was charged today by Indictment[1] with being an illegal alien in possession of a firearm, announced United States Attorney Zane David Memeger. The indictment alleges that on or about September 4, 2016, Sanchez-Bello, a native and citizen of Mexico unlawfully in the United States, possessed a .45 caliber semi-automatic pistol.
If convicted the defendant faces a maximum possible, sentence of ten years imprisonment.
The case was investigated by Homeland Security Investigations (“HSI”) and the Norristown Police Department, and is being prosecuted by Special Assistant United States Attorney Josh A. Davison.
[1]An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Delaware Man Sentenced to Ten Years for Passing Forged Oxycodone PrescriptionsRead the Press Release
Yesterday, a federal judge sentenced Khar Abdulah, 40, of New Castle, Delaware to ten years in prison for his role in schemes to distribute oxycodone, commit health care fraud and commit aggravated identity theft, announced United States Attorney Zane David Memeger. The Honorable Paul S. Diamond, United States District Judge, also ordered Abdulah to pay full restitution to the health care benefit programs that the defendant and his co-conspirators had defrauded, and further ordered Abdulah to serve three years of supervised release upon his release from prison.
On March 18, 2016, a grand jury in Philadelphia returned a second superseding indictment charging Abdulah and a codefendant with conspiring to distribute oxycodone, a Schedule II controlled substance, conspiracy to commit health care fraud and aggravated identity theft. From March 2012 until August 2013, Abdulah forged prescriptions for oxycodone, filled them at pharmacies using stolen health insurance information, then sold the pills on the street. On August 16, 2016, Abdulah pleaded guilty to all charges against him in the indictment.
The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Mary E. Crawley.
Philadelphia Man Charged with Illegal ReentryRead the Press Release
Angel Miguel Jorge-Jimenez, 26, of Philadelphia, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about October 18, 2016, Jorge-Jimenez, an alien, and native and citizen of the Dominican Republic, was found in the United States after having been deported from the United States on or about May 21, 2013.
If convicted the defendant faces a maximum possible sentence of twenty years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Special Assistant United States Attorney Josh A. Davison.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Bar Owner and Former Investment Advisor Sentenced to 78 Months and Ordered to Pay 429,000 Restitution for Defrauding Clients in Order to Purchase A South Street BarRead the Press Release
William Joseph Boyle, 47, of Bala Cynwyd, Pennsylvania, was sentenced today to 78 months and ordered to pay $429,000 in restitution, 3 years supervised release, $1000 special assessment, and forfeiture of $415,000. following his convictions on five counts of mail fraud, three counts of wire fraud, one count of securities fraud, and one count of investment adviser fraud, announced United States Attorney Zane David Memeger.
Boyle had previously pled guilty and admitted that he continued to hold himself out as a stock broker and investment adviser even after his licenses were suspended and after he was permanently barred by FINRA from working as a stock broker or otherwise associating with a firm that sold securities to the public. Boyle also admitted that he failed to disclosing to his clients that he had been barred and his licenses suspended, and also that he defrauded clients, most of whom were elderly, out of over $400,000, convincing them to invest with him and utilize his services as a financial adviser and promising to invest their money in stocks, Pennsylvania municipal bonds, interest bearing investments, and real estate, while in reality Boyle spent almost all of their money on himself, including giving client money to his wife and ex-wife, paying his children’s Catholic school tuition, and purchasing, renovating, and operating a bar called “The Blarney South Bar and Grille,” located on South Street in Philadelphia (which Boyle renamed “The Boyler Room,” after himself).
At the sentencing hearing, several of Boyle’s victims spoke about the economic and emotional harm they suffered as a result of Boyle’s fraud.
The case was investigated by the Department of Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Michael S. Lowe.
Bala Cynwyd Man Charged with Damaging Protected ComputersRead the Press Release
Adam Flanagan, of Bala Cynwyd was charged on November 22, 2016, by Indictment[1] with twelve counts of damaging protected computers announced United States Attorney Zane David Memeger.
If convicted the defendant faces a maximum possible sentence of 90 years’ imprisonment, up to 3 years of supervised release after release from prison, a $3,000,000 dollar fine, and a $1200 special assessment.
Flanagan is charged with accessing computers that remotely read water meters installed by his previous employer and changing passwords and radio transmission frequencies, rendering the computers inoperable.
The case was investigated by Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Michael L. Levy.
[1]An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
U.S. Attorney Zane David Memeger Announces His ResignationRead the Press Release
PHILADELPHIA – Zane David Memeger, United States Attorney for the Eastern District of Pennsylvania (EDPA), has announced his resignation effective midnight on December 23rd. U.S. Attorney Memeger has served as the U.S. Attorney for the Eastern District of Pennsylvania since May 6, 2010.
“It has been the highest honor and most fulfilling duty of my legal career to have served as the United States Attorney for the Eastern District of Pennsylvania,” said U.S. Attorney Memeger. “Having served in this challenging and demanding job for the last six and a half years, the time has come for me to step away to focus on my family and explore new opportunities in the private sector.”
During his tenure as United States Attorney, Mr. Memeger expanded the office’s core enforcement mission by implementing novel youth crime prevention and prisoner reentry programs as part of a three-part strategy to combat violent crime in Philadelphia. Those efforts included a partnership with Strawberry Mansion High School, the implementation of restorative justice “youth courts” in schools to deal with minor disciplinary infractions, and the development of the reentry film “Pull of Gravity.” Additionally, Mr. Memeger served for three-years (2014-16) on the Attorney General’s Advisory Committee (AGAC), a national committee established in 1973 to serve as the voice of the United States Attorneys and advise the Attorney General on legal and policy issues that impact U.S. Attorneys’ Offices nationwide. In that capacity, he also chaired the AGAC’s Health Care Fraud Working Group.
With a focus on prosecuting cases involving national security, public corruption, healthcare and financial fraud, civil rights, large scale dangerous drug dealing, violent crime, child exploitation, and offenses against other vulnerable victims, some of the signature achievements during his tenure include:
- Secured guilty pleas from Colleen Larose, a/k/a “Jihad Jane,” Mohamed Hassan Khalid, and Jamie Paulin Ramirez for conspiring to provide material support to terrorist groups in South Asia and Europe by soliciting funds for terrorists, soliciting passports and travel documents for terrorists, and recruiting men and women in an effort to wage violent jihad.
- Secured a guilty plea and a 15-year sentence for Siarhei Baltuski, an international arms smuggler for violating the Arms Export Control Act by organizing a network of buyers in the United States to obtain and illegally export to Belarus high-tech military hardware such as Scorpion Thermal Weapon Sights and other night vision targeting devices.
- Secured a guilty verdict against then U.S. Congressman Chaka Fattah, Sr. and four criminal associates for RICO conspiracy and related public corruption offenses involving the misuse of campaign and grant funds, bribery, and money laundering.
- Secured convictions and prison sentences against several municipal court and traffic court judges who fixed cases and obstructed justice by lying to federal agents and the grand jury.
- Secured convictions and prison sentences against more than 25 police and law enforcement officers who abused their authority by engaging in acts of theft, extortion, drug trafficking, and obstruction of justice.
- Secured convictions of Joseph Dougherty, a high-level union official with Ironworkers Local 401, and 10 union members and associates who were sentenced to significant prison terms for engaging in a RICO conspiracy involving a systematic pattern of extortion, arson, and assault to force non-union companies to hire union workers.
- Secured convictions and prison sentences against Anthony DeMarco and his co-conspirators who operated a multi-million dollar mortgage fraud scheme that victimized homeowners facing eviction. Also obtained a civil injunction stopping the foreclosures.
- Secured convictions in multiple identity theft rings, including Miguel Bell, sentenced to 15 years in prison, who along with ten bank employees, a car dealership employee, and eight check runners and other recruiters, attempted to steal more than $2 million dollars from his victims’ bank accounts.
- Resolved off-label marketing allegations for Risperdal against Johnson & Johnson (J&J) and its subsidiary Janssen Pharmaceuticals, Inc. through a misdemeanor guilty plea and a False Claims Act (FCA) settlement, contributing $1.6 billion to a Department-wide global settlement of $2.2 billion against J&J. The EDPA’s Risperdal resolution was the largest single drug settlement to date.
- Secured a $38 million dollar settlement with Extendicare Health Services Inc. to resolve FCA allegations related to deficiencies in the operation of its skilled nursing homes.
- Secured misdemeanor guilty pleas and prison sentences for four corporate executives at Synthes Inc. who violated federal drug laws by failing to stop illegal clinical trials of Norian XR bone cement, resulting in three patient deaths.
- Secured the conviction of the Botsvynyuk Brothers who were sentenced to prison terms of 20 years to life imprisonment for operating a human trafficking organization that smuggled young Ukranian immigrants into the United States and used physical force, threats of force, sexual assault, and debt bondage to keep the victims in involuntary solitude.
- Secured a life sentence for Linda Weston who pled guilty to running a criminal enterprise that held disabled adults in dungeon like conditions in order to steal their social security benefits, two of whom died while in her captivity.
- Obtained a consent decree with the School District of Philadelphia requiring that the school district take affirmative steps to address and prevent anti-Asian immigrant violence at South Philadelphia High School.
- Conducted a review of 25 of the most popular restaurants in Philadelphia to determine and ensure compliance with the Americans with Disabilities Act (ADA).
- Secured a 25-year sentence for Dr. Norman Werther who was convicted by a jury of running a multi-million dollar pill mill operation that illegally distributed more than 700,000 pills containing oxycodone, and was also convicted of causing the death of a patient through his illegal distribution of oxycodone.
- Secured convictions and prison sentences ranging from 15 years to life imprisonment for more than a hundred armed career criminals and violent criminals who sold drugs and committed violent robberies with guns.
- Secured a death penalty sentence for Kaboni Savage who was convicted by a jury of killing 12 people, including killing the family of a cooperating witness by firebombing their home.
As of December 24th, Louis D. Lappen will assume leadership of the office as Acting U.S. Attorney. Mr. Lappen is currently the First Assistant U.S. Attorney and has served in the Department of Justice since 1997. He is a graduate of the University of Pennsylvania and the Duke University School of Law.
- Secured guilty pleas from Colleen Larose, a/k/a “Jihad Jane,” Mohamed Hassan Khalid, and Jamie Paulin Ramirez for conspiring to provide material support to terrorist groups in South Asia and Europe by soliciting funds for terrorists, soliciting passports and travel documents for terrorists, and recruiting men and women in an effort to wage violent jihad.