Eastern District of Pennsylvania

PHILADELPHIA – Derrick Knight, 41, of Linden, New Jersey, pleaded guilty today to one count of manufacturing counterfeit currency, three counts of possessing counterfeit currency, and three counts of dealing in counterfeit currency.  U.S. District Judge C. Darnell Jones scheduled a sentencing hearing for June 13, 2016. 

 

Between August 2014 and August 2015, Knight manufactured over $125,000 in counterfeit United States currency, and thereafter sold and dealt thousands of dollars of counterfeit United States currency to buyers in exchange for legitimate United States currency. 

 

Knight faces a period of incarceration followed by up to three years of supervised release, a possible fine, and a special assessment of $700. 

 

The case was investigated by the Secret Service Philadelphia and Newark Field Offices and the Lehigh County Drug Enforcement Task Force.  It is being prosecuted by Assistant United States Attorney James Petkun.

PHILADELPHIA – Joseph O’Neill, 65, of Philadelphia, Pennsylvania, was charged today by indictment with making false statements to the FBI during an investigation of potential wrongdoing in the Philadelphia Municipal Court, announced United States Attorney Zane David Memeger. O’Neill is a judge on the Philadelphia Municipal Court.

 

According to the indictment, then-Municipal Court Judge Joseph Waters, charged elsewhere, called O’Neill about a civil small claims case that was scheduled for a hearing before O’Neill.  In an ex parte conversation, Waters told O’Neill that the defendant in the small claims case was a friend and asked O’Neill to “take a hard look at it.”  When the FBI later interviewed O’Neill about the ex parte conversation, O’Neill denied having been contacted by anyone in advance of the hearing on the small claims case to ask for a favor.  It is further alleged that in a follow-up interview, O’Neill denied that anyone had contacted him in advance of the hearing and told him the defendant in the small claims case was a friend of the caller.

 

If convicted, O’Neill faces a statutory maximum sentence of 10 years in prison, a possible fine, up to three years of supervised release, and a $200 special assessment.

 

The case was investigated by the FBI and is being prosecuted by Chief of the Public Corruption Unit Richard P. Barrett and Assistant United States Attorney Michelle L. Morgan.

An Indictment is an accusation.  A defendant is presumed innocent unless and until proven guilty.

 

PHILADELPHIA - Robert Joseph Whiteman, Jr., 38, of Levittown, Pennsylvania was sentenced today to 95 months in prison for committing bank fraud and aggravated identity theft while serving a prison sentence for a similar fraud scheme. In addition to the prison term, U.S. District Court Judge Gerald J. Pappert ordered five years of supervised release, restitution in the amount of $67,834.06, and a $500 special assessment. 

 

In 2006, Whiteman was sentenced to 10 years in prison for bank fraud. While serving that sentence, between 2010 and 2012, Whiteman obtained and attempted to obtain credit in his name and the names of others under false pretenses. Whiteman frequently did this by causing false credit card applications to be submitted in his name and the names of fellow inmates. Whiteman also caused female associates to be included as authorized users for these cards. After the cards were approved, Whiteman caused these female accomplices to use the credit cards to make charges and to take cash advances. When the conspirators reached the cards’ limit, Whiteman caused fraudulent payments to be made on the credit cards, temporarily and falsely increasing the cards’ available credit. Whiteman and his accomplices then resumed their fraud. Moreover, even after the banks and credit card companies stopped allowing Whiteman to make additional charges, he continued to defraud these financial institutions. Whiteman generally wrote fraudulent letters to the institutions falsely claiming that the charges were unauthorized in order to cause the institutions to forgive the charges. In addition, Whiteman submitted false tax returns and fictitious police reports to the financial institutions in order to advance his scheme. His fraud caused over $65,000 in actual losses to his victims and attempted to cause approximately $165,000 more. One of these victims was his own father.

 

Furthermore, while awaiting sentencing on the most recent charges, Whiteman, again, tried to continue his fraud from the Federal Detention Center in Philadelphia, Pennsylvania.

 

The case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Patrick J. Murray.

PHILADELPHIA – Mykhaylo Botsvynyuk, 38, and Yaroslav Churuk, 48, both of Ukraine, were each sentenced today to 20 years in prison for their roles in a human trafficking enterprise.  The brothers were convicted at trial, on February 24, 2015, of conspiracy to violate RICO, in relation to several predicate offenses in furtherance of the conspiracy, including: a) peonage; b) involuntary servitude; c) extortion and attempted extortion; d) and several immigration offenses, including bringing aliens into the United States at a place other than a designated port of entry, encouraging or inducing illegal entry of aliens, transporting aliens, and harboring illegal aliens for purposes of financial gain.  At the 2015 trial, the government presented the testimony of seven victims of trafficking and several family member victims from Ukraine who received extortionate threats of physical harm from other members of and associates of the enterprise.

 

From the Fall of 2000 through the Spring of 2007, members of the enterprise lured Ukrainian nationals into the United States with promises of good-paying jobs, room and board, and the opportunity to live and work in the United States to earn up to $500 per month and/or approximately $10,000 after three years’ work. The criminal organization provided the smuggled workers with all of the necessary travel documents and costs, including false travel documents, plane and/or bus tickets, hotel money, cash for travel expenses, visas to Mexico, and even provided attorneys to assist those detained by U.S. immigration authorities upon crossing the Mexico/U.S. border. Once in the United States, the smuggled workers were divided up and each assigned to work for defendant Mykhaylo Botsvynyuk, Omelyan Botsvynyuk, Yaroslav Churuk or Stepan Botsvynyuk.  Each brother had a “crew” of workers that were placed in various cities to do nighttime labor in large retail stores cleaning and waxing floors. The evidence at trial established that the Botsvynyuk brothers instituted a reign of terror and a climate of fear to maintain their workforce and prevent them from escaping. The defendant participated in the physical abuse and beatings of some of the workers.  The violence that enterprise members instituted against the victims included rape of female workers, beatings, kicks, slaps and punches against the male workers. The victims were not paid for their work and received a paltry stipend for food.

 

In addition to the prison terms, U.S. District Court Judge Paul S. Diamond ordered each to: serve three years of supervised release, pay joint and several restitution in the amount of $288,272, and pay a $100 special assessment.

 

Omelyan and Stepan Botsvynyuk were convicted in a separate trial and sentenced to life plus 20 years, and 20 years in prison, respectively. 

 

The case was investigated by the Joint FBI Organized Crime/ICE Human Trafficking Alien Smuggling Task Force.  Assistance was provided by Pennsylvania State Police, the Philadelphia Police Department, the Department of Labor Office of Inspector General, Toronto Police Department, German National Police, Berlin State Police, Ukraine Security Service, US National Central Bureau, the U.S. Department of Justice Office of International Affairs, and INTERPOL.  It is being prosecuted by Assistant U.S. Attorneys Daniel A. Velez and Michelle Morgan.

PHILADELPHIA – Thael Kuran, 24, of Philadelphia, PA, was sentenced today to 37 months in prison for a health care fraud scheme involving Brotherly Love Ambulance, Inc.  In addition to the prison term, U.S. District Court Judge Gerald J. Pappert ordered three years of supervised release, restitution in the amount of $2,015,712.52, and a $200 special assessment. 

Through Brotherly Love, Kuran transported patients who were able to walk and could travel safely by means other than ambulance and who, therefore, were not eligible for ambulance transportation under Medicare requirements.  Kuran and other conspirators falsified reports to make it appear that the patients needed to be transported by ambulance when he knew that the patients could be safely transported by other means and, in fact, many of them could walk.  In addition, Kuran and other conspirators paid kickbacks to patients to ensure that they would use Brotherly Love Ambulance for services which were not medically necessary.  The company also billed Medicare for ambulance services for patients who were not transported by ambulance, but whom Kuran and others transported in personal vehicles.  Kuran and others completed documentation of these transports that made it appear that the patients had been transported in an ambulance and that misrepresented the medical care provided to and safety precautions taken for these patients.  As a result of the fraudulent scheme at Brotherly Love, the Medicare program paid more than $2 million for fraudulent claims from Brotherly Love. 

The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General, the Federal Bureau of Investigation, and the U.S. Department of Labor Office of the Inspector General.  It is being prosecuted by Assistant United States Attorneys Mary E. Crawley and Paul W. Kaufman.

PHILADELPHIA - Michael Green, 33, of Philadelphia, PA, was sentenced today to 248 months in prison, including a 60-month mandatory minimum prison term, for the armed carjacking of three men on December 5, 2012.  In addition to the prison term, U.S. District Court Judge R. Barclay Surrick ordered five years of supervised release and a $200 special assessment. 

Judge Surrick ordered Green to serve this sentence partially consecutively to a 180-month federal sentence Green is already serving for his earlier conviction in a multi-year drug trafficking conspiracy. 

On the night of December 5, 2012, Green and an accomplice disguised themselves as police officers, with fake police clothing, badges and guns.  Using fake police lights, Green and his accomplice pulled over three men who were returning from a funeral in a Chevrolet Silverado pick-up truck, claimed to be police officers, and then carjacked the victims at gunpoint.  After handcuffing the three men and forcing them into the back seat of the truck, Green pistol-whipped the victims and threatened to kill them.  The three victims managed to escape by leaping from the moving vehicle, with one of them suffering serious injuries in the process.

Green was arrested after the victims located and identified the car Green and his accomplice had used to pull them over.  A search warrant revealed that Green had rented the car in his own name, and had left his wallet with his identification and credit cards as well as his cell phones inside the car.  On July 23, 2014, a federal jury found Green guilty of carjacking, and using a firearm during a crime of violence. 

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and Homeland Security Investigations and was prosecuted by Assistant United States Attorneys V. Paige Pratter and Mark S. Miller.

PHILADELPHIA - Calvin Johnson, 45, of Philadelphia, Pennsylvania, was charged by Information, filed yesterday, with one count of failing to appear as required by conditions of release, announced United States Attorney Zane David Memeger.

 

If convicted, Johnson faces a maximum possible sentence of 10 years in prison, up to  three years of supervised release, a fine, and a $100 special assessment.

 

The case was investigated by the United States Secret Service and is being prosecuted by Assistant United States Attorney Patrick J. Murray.

 

     An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Mark Haynes, 56, of West Chester, PA, was sentenced today to 240 months in prison for child sexual abuse and exploitation.  Haynes, a former parochial Vicar at Saint Simon and Jude’s Church in West Chester, pleaded guilty on June 8, 2015 to using the Internet to entice a minor to engage in sexual conduct, transfer of obscene material to a minor, distribution of child pornography, possession of child pornography, and destruction or concealment of evidence.  In addition to the prison term, U.S. District Court Judge R. Barclay Surrick ordered 10 years of supervised release, a fine of $15,000, and a $700 special assessment.

 

Around 2010, Haynes posed as a 15-year old girl named “Katie” on a teen pen pal site on Instagram.  As “Katie,” Haynes would meet young teenage girls online, engage in sexual chats, and send them child pornography photos and videos in an attempt to entice them to take and send sexually explicit pictures of themselves.  Haynes is also charged with distributing other images and videos of children being sexually assaulted over the Internet in 2014.  After his arrest by the Chester County Criminal Investigation Division, Haynes was released on bail.  While under court supervision, Haynes duped an 86-year old friend of his mother into retrieving his computer from his apartment at the rectory at Saint Simon and Jude’s.  Haynes then destroyed the computer, discarding the hard drive in a dumpster in New Jersey. At sentencing, Judge Surrick heard testimony from victims regarding Haynes’ sexual abuse of children from his parish at Saint Ann’s in Phoenixville as far back as 1985 through 1991. 

 

The case was investigated by the FBI in conjunction with the Delaware County Internet Crimes Against Children Task Force and the Chester County Criminal Investigative Division.  It was prosecuted by Assistant United States Attorney Michelle Rotella.

PHILADELPHIA - Martin W. Kennedy, 68, of Coatesville, PA, was arrested today on charges of preparing false tax returns and theft of government property, announced United States Attorney Zane David Memeger. 

 

According to an indictment filed February 9, 2016, Kennedy, an employee of the Department of Veterans Affairs’ Hospital located in Coatesville, PA, prepared approximately 176 federal income tax returns for other individuals, including his co-workers, during the years 2010 through 2013, which fraudulently sought tax refunds of approximately $610,526.  It is further alleged that the tax returns that Kennedy prepared contained false financial information regarding the filers’ Schedule C Business Expenses and the filers’ Schedule a Medical Expenses, Charitable Deductions and phantom losses from the sale of business property.  In addition to charging his co-workers a fee for preparing their tax returns, Kennedy allegedly stole a portion of the refunds that he generated for his clients by having a portion of the tax refunds deposited into his personal bank account.  To accomplish his alleged theft, Kennedy prepared, without the filers’ knowledge, IRS Form 8888 requesting that a portion of the refund be deposited into a bank account controlled by Kennedy with the remaining amount of the refund deposited into the filers’ account. 

 

If convicted of all counts, Kennedy faces a substantial period of incarceration, a possible fine, restitution to the IRS, a period of supervised release, and a $1,400 special assessment.

 

The case was investigated by the Office of Inspector General for Department of Veterans Affairs and IRS Criminal Investigations. It is being prosecuted by Assistant United States Attorney Floyd J. Miller.

Rumualdo Diaz-Ramirez, a/k/a “Ricardo Ochoa Guzman,” 42, of Lancaster, 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 January 14, 2016, Diaz-Ramirez, 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 April 30, 2003 and September 24, 2005.

 

If convicted the defendant faces a maximum possible sentence of two years.

 

The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Albert S. Glenn.

 

An Indictment, Information or Criminal Complaint is an accusation.  A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – George Kindle, 29, of Philadelphia, PA, was sentenced today to 48 months in prison for delivering contraband to an inmate at The House of Corrections (HOC), in Philadelphia, where he worked at the time.  On October 11, 2013, and then again on November 15, 2013, Kindle smuggled past prison security at the HOC a cellular telephone and 100 pills, represented to contain OxyContin, in exchange for $1,000.  Kindle pleaded guilty to two counts of attempted extortion under color of official right and two counts of attempted distribution of controlled substances on November 20, 2015.

 

In addition to the prison term, U.S. District Court Judge John R. Padova ordered a $2,000 fine, three years of supervised release, 100 hours of community service, a $2,000 forfeiture money judgment, and a $400 special assessment.

 

The case was investigated by the FBI with assistance from the Philadelphia Department of Corrections. It is being prosecuted by Assistant United States Attorney Kevin R. Brenner.

PHILADELPHIA – Rajat K. Verma, 66, of Quakertown, PA, was charged by information with conspiracy in a fraud scheme involving the USDOT Disadvantaged Business Program and work performed on the federally funded George C. Platt Memorial Bridge Project, announced United States Attorney Zane David Memeger.

 

Verma is the president and sole owner of Vertech, a corporation in Quakertown that is currently certified as a Disadvantaged Business.  In April 2011, PENNDOT awarded an approximately $42.7 million contract to perform structural steel painting and repairs on the George C. Platt Memorial Bridge in Philadelphia.  The contract was awarded to a joint venture - “DE JV” – which is composed of Company D and Company E, neither of which is a certified disadvantaged business.  During the bid process in March 2011, the DE JV submitted a commitment to PENNDOT to subcontract approximately $3.1 million in Disadvantaged Business work to Vertech to supply paint materials for that project.  The DE JV, Company D, and Company E negotiated contracts for and ordered materials for the Platt Bridge Project directly with suppliers that were not Disadvantaged Businesses, and without the knowledge or involvement of Vertech.  Vertech did not perform any commercially useful function, but allegedly acted as a mere pass-through or front, to give the appearance that disadvantaged business enterprise requirements had been met on the Platt Bridge Project.  PENNDOT awarded approximately $1.97M in Disadvantaged Business credit to the DE JV during the course of the Platt Bridge Project based on Disadvantaged Business work allegedly performed by Vertech.  It is alleged that DE JV paid Vertech 1.75% of the face value of the invoices processed by Vertech to act as a pass-through.

 

If convicted, Verma faces a statutory maximum sentence of 20 years in prison, a possible fine, supervised release and a $100 special assessment.

 

The case was investigated by the U.S. Department of Transportation Office of Inspector General, the FBI, the Department of Labor Office of Inspector General, the Environmental Protection Agency Criminal Investigation Division, Immigration and Customs Enforcement Homeland Security Investigations, and IRS Criminal Investigations. It is being prosecuted by Assistant United States Attorney Paul Shapiro.

 

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

PHILADELPHIA - Joyce Abrams, 75, of Willingboro, NJ, was charged by Information with conspiracy to commit wire fraud in a scheme involving the USDOT Disadvantaged Business Program and work performed on the federally funded Girard Point Bridge project and at the federally funded 30th Street Station, announced United States Attorney Zane David Memeger.

 

Abrams was the president and sole owner of Markias, a now-defunct certified Disadvantage Business.  The alleged scheme involved a joint venture, referred to in the charging information as the “AB JV,” composed of Company A and Company B, both of which are bridge painting contractors but neither of which are certified Disadvantaged Businesses in Pennsylvania.

 

In September 2009, PENNDOT awarded a contract for approximately $70.3M to a triventure that included the AB JV to perform structural steel painting and repairs, and concrete repairs, on the Girard Point Bridge in Philadelphia.  As part of that award, the triventure made a commitment to PENNDOT to subcontract approximately $4.7M in Disadvantaged Business work to Markias to supply materials to be used in performing the contract.  Under governing law, AB JV and the triventure were only entitled to Disadvantaged Business credit for worked performed by a Disadvantaged Business that was performing a commercially useful function.  Instead, according to the information, the AB JV and Employee No. 1 ordered materials needed for their work on the Girard Point Project directly from suppliers that were not Disadvantaged Businesses, and used Markias as a mere pass-through or front, to give the appearance that disadvantaged business enterprise requirements had been met on the Girard Point Project when those requirements had in fact not been met.  Markias did not perform a commercially useful function.  PENNDOT awarded approximately $3.26M in Disadvantaged Business credit to Company A, Company B, and Company C during the course of the Girard Point Project based on Disadvantaged Business work allegedly performed by Markias. 

 

In December 2010, PENNDOT awarded contract for approximately $50.8 million to a joint venture of Company C and Company F to perform structural steel painting and repairs and roadway reconstruction beneath and around AMTRAK’s 30th Street Train Station in Philadelphia.  Company C and Company F entered into a subcontract, for approximately $15 million, for the AB JV to perform the structural steel painting beneath 30th Street Station.  As part of the bid process, Company C and Company F committed to subcontract approximately $1.7M in Disadvantaged Business work to Markias to supply paint materials for the 30th Street Project.  Instead, according to the information, the AB JV and Employee No. 1 ordered materials needed for their work on the 30th Station Project directly from suppliers that were not Disadvantaged Businesses, and used Markias as a mere pass-through or front, to give the appearance that disadvantaged business enterprise requirements had been met on the 30th Station Project when those requirements had in fact not been met.  Markias did not perform a commercially useful function. 

 

In addition, the information alleges that the AB JV and Employees No. 1 No. 2 ordered materials to be delivered to and used on out-of-state projects while directing that the purchase invoices be sent to Markias in New Jersey.  Then, allegedly at the direction of AB JV and Employee No. 1, Joyce Abrams issued invoices that made it falsely appear that those supplies had been used on the 30th Street Project in Pennsylvania.  The AB JV allegedly caused Company C and Company F to falsely report to PENNDOT that the supplies delivered to and used on the out-of-state projects qualified for Disadvantaged Business credit in Pennsylvania when those purchases did not so qualify.  PENNDOT awarded approximately $1.275 million in Disadvantaged Business credit to Company C and Company F during the course of the 30th Street Station Project based on Disadvantaged Business work supposedly performed by disadvantaged business (Markias). AB JV paid Markias 2.25% of the face value of the invoices processed by Markias allegedly to act as a pass-through.

 

If convicted the defendant faces a statutory maximum sentence of 20 years in prison, a possible fine, supervised release, and a $100 special assessment.

 

The case was investigated by the U.S. Department of Transportation Office of Inspector General, the FBI, the Department of Labor Office of Inspector General, the Environmental Protection Agency Criminal Investigation Division, Immigration and Customs Enforcement Homeland Security Investigations, and IRS Criminal Investigations. It is being prosecuted by Assistant United States Attorney Paul Shapiro.

                                                                             

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

PHILADELPHIA - Michelle Ford, 61, of Philadelphia, Pennsylvania, was charged today by Information with one count of theft of government funds and one count of theft from an employee pension plan, announced United States Attorney Zane David Memeger.  According to the Information, the defendant received Social Security and pension benefits intended for her father, after her father’s death in February 2011 until her fraud was discovered in September 2013.  The defendant’s alleged actions resulted in a loss to the government of approximately $44,186.          

 

If convicted, the defendant faces a maximum sentence of 15 years in prison, up to three years of supervised release, restitution to the government of $44,186, a possible fine, and a $200 special assessment.

 

The case was investigated by the Social Security Administration Office of Inspector General, and the Department of Labor Office of Inspector General. It is being prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.

 

An Information is an accusation.  A defendant is presumed innocent unless and until proven guilty. 

A federal jury convicted a registered nurse who took part in a multimillion-dollar fraud on Medicare that involved hospice care, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania. 

Patricia McGill, 68, of Philadelphia, was found guilty yesterday of four counts of health care fraud.  U.S. District Court Judge Eduardo C. Robreno of the Eastern District of Pennsylvania set sentencing for May 24, 2016.

The evidence at trial showed that between 2005 and 2008, McGill was the director of professional services for Home Care Hospice (HCH), a for-profit business that provided hospice services for patients at nursing homes, hospitals and private residences.  McGill authorized and supervised the admission of inappropriate and ineligible patients for hospice services, which contributed to HCH submitting millions of dollars in fraudulent claims to Medicare. 

HCH billed Medicare for approximately $9,328,000 in hospice services that were allegedly provided by HCH nurses and health aides for patients at nursing homes, hospitals and private residences.  However, the government’s evidence established that many HCH patients did not meet the Medicare criteria for hospice care and that HCH billed Medicare for hospice care that was not provided to the patients. 

The FBI and the Department of Health and Human Services Office of Inspector General investigated the case.  Trial Attorney Marty Woelfle of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Frank Labor of the Eastern District of Pennsylvania are prosecuting the case.

PHILADELPHIA – A federal jury, yesterday, returned guilty verdicts against Patricia McGill, 68, of Philadelphia, a registered nurse who took part in a multi-million dollar fraud on Medicare that involved hospice care.  The jury found McGill guilty of four counts of health care fraud.  The jury acquitted the defendant of a conspiracy charge and nine counts of health care fraud.  U.S. District Court Judge Eduardo C. Robreno scheduled a sentencing hearing for May 24, 2016. McGill faces a potential advisory sentencing guideline range of 33 to 41 months in prison, a possible fine, and a $400 special assessment.

 

As the Director of Professional Services for Home Care Hospice (“HCH”), between 2005 and 2008, McGill authorized and supervised the admission of inappropriate and ineligible patients for hospice services, resulting in approximately $9.32 million in fraudulent claims.  HCH, co-owned by Matthew Kolodesh and Alex Pugman, who were convicted separately, was a for-profit business located at 1810 Grant Avenue, and later 2801 Grant Avenue, in Philadelphia.  HCH billed Medicare for hospice services allegedly provided by HCH nurses and health aides for patients at nursing homes, hospitals, and private residences.  However, the government’s evidence established that many HCH patients did not meet the Medicare criteria for hospice care, and that HCH billed Medicare for hospice care that was not provided to the patients.  

 

The case was investigated by the FBI and the Department of Health and Human Services Office of Inspector General.  It is being prosecuted by Assistant United States Attorney Frank Labor and Trial Attorney Marty Woelfle of the Organized Crime and Gang Section in the Justice Department's Criminal Division.

PHILADELPHIA - Salahudin Shaheed, 35, of Philadelphia, PA, was sentenced today to 365 months in prison for his role in an attempted robbery of a center city jewelry store, in which an employee of the store was kidnapped.  Shaheed pleaded guilty, October 7, 2015, to conspiracy, kidnapping, and attempted Hobbs Act robbery. In addition to the prison term, U.S. District Court Judge Harvey Bartle III ordered restitution in the amount of $9,983.97, five years of supervised release and a $300 special assessment.

 

Shaheed recruited defendants Khayree Gay and Basil Buie, a/k/a “Basil Tucker,” to rob National Watch and Diamond Exchange, at 101 S. 8th Street in Philadelphia to obtain luxury watches, jewelry, and money which Shaheed said could be found there.  The defendants conducted surveillance of National Watch and its employees from a parking lot at 733 Chestnut Street, to identify and then, in disguise, abduct an employee from whom they would forcibly obtain keys, security codes, and the code to the company’s safe from which the robbers would steal luxury watches, jewelry, and money.

 

On April 4, 2015, the defendants watched an employee that Shaheed had targeted.  When the employee entered the garage and approached her car, Shaheed and Buie, wearing masks, gloves, and sunglasses, confronted the victim, Shaheed assaulted her with a Taser, and she was forced into a van.  She was beaten over a several hour period, while the defendants drove to various locations.  Buie, was sentenced to 15 years in prison; Gay is awaiting sentencing.

 

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and is being prosecuted by Assistant United States Attorneys Jeanine Linehan and Maureen McCartney.

PHILADELPHIA – A federal jury today returned guilty verdicts against Kevino Graham, 34, and Raffael Robinson, 30, both of Philadelphia, PA, on the charge of sex trafficking by force.  Graham was convicted of two counts of sex trafficking by force and one count of attempted sex trafficking by force; Robinson was convicted of the single count against him.  U.S. District Court Judge C. Darnell Jones scheduled a sentencing hearing for May 26, 2016.  Co-defendants Brian Wright and Renato Teixera pleaded guilty and are awaiting sentencing.

 

Between May 2009 and August 2013, the defendants ran a striptease club and brothel, which they called “Passionate Touch,” at a property they leased in the Cathedral Park section of Philadelphia.  Graham advertised this business on a website he created for Passionate Touch, in advertisements on Backpage.com, and he had business cards handed out in local communities.  Graham engaged in sadistic acts of violence toward the victims personally, and at times directed his co-defendants to do so, to cause the victims to engage in commercial sex acts. Raffael Robinson worked for Graham, providing security at the business and running errands for the business Robinson benefitted financially and personally engaged in acts of violence toward one of the victims.  Graham ran the club while Wright collected the money and Teixeira helped to recruit females to work for the venture and posted prostitution advertisements for the females.  Between September 1, 2011 and January 31, 2012, all of the defendants engaged in acts of force, threats, fraud and coercion to cause young women to engage in prostitution.

 

Graham and Robinson each face a mandatory minimum term of 15 years in prison with a maximum possible sentence of life, a possible fine, at least five years of supervised release, and a $200 special assessment. 

 

The case was investigated by the Federal Bureau of Investigation with assistance from the Philadelphia Police Department Special Victims’ Unit and the Philadelphia District Attorney’s Office.  It is being prosecuted by Assistant United States Attorney Michelle Morgan.

PHILADELPHIA - Jean Baptiste Alvarez, a/k/a “Alex,” 43, of Aldan, PA, was charged yesterday by superseding indictment with conspiracy to defraud the United States with respect to claims, aggravated identity theft, misuse of Social Security number, and aiding or assisting in tax preparation of false federal income tax returns, announced United States Attorney Zane David Memeger.

 

According to the indictment, Alvarez and “PR,” charged elsewhere, engaged in a scheme to obtain payment of false, fictitious, and fraudulent claims through the preparation and filing of false U.S. Individual Income Tax Returns.  Alvarez allegedly stole and improperly obtained from a health care facility the personal identifying information, including names and SSNs of individuals, without the knowledge of those individuals.  It is further alleged that Alvarez sold and distributed the above-described stolen personal identifying information, including names and SSNs, to be used on tax returns for the purpose of obtaining payment of false claims through the filing of fraudulent tax returns in the names of the stolen identities.  Alvarez, “PR” and others allegedly obtained fraudulent tax refunds by using the stolen names and SSNs of those individuals.  

 

If convicted, the defendant faces a mandatory minimum sentence of two years in prison with a maximum possible sentence of 44 years in prison, up to three years of supervised release, a possible fine, and a $1,100 special assessment.

           

The case was investigated by IRS Criminal Investigations and the FBI.  It is being prosecuted by Assistant United States Attorney Terri A. Marinari.

                                                                             

An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA - An information was filed yesterday charging Marc Roy Ferry, 35, of Downingtown, Pennsylvania, with one count of wire fraud and two counts of money laundering, announced United States Attorney Zane David Memeger.  

 

According to the information, from at least about 2009 to about March 2014, defendant Marc Roy Ferry and Ari Tietolman, charged elsewhere, used Tietolman’s network of telemarketers in Canada to target American seniors citizens with deceptive telemarketing calls, selling worthless or non-existent services and then debiting seniors’ bank accounts without their informed consent.  Using the business names Fraud Watch, Patient Assistance Plus, Legal Eye and Trust One, the worthless or non-existent services these telemarketers sold included purported fraud protection and discounted legal services as well as a discount prescription card.

 

During these calls, Tietolman’s telemarketers made various false representations, such as they were calling on behalf of, or are affiliated with, the victim’s bank, or insurance company, or the United States government.  In addition to misrepresenting the value of the products being marketed, Tietolman’s telemarketers also misrepresented the cost of these products, sometimes telling consumers the products were free, or less expensive than the amount that was ultimately debited from the consumers’ bank accounts.  In other instances, Tietolman’s telemarketers assured consumers they would not debit the consumers’ bank accounts and then did just that after the consumer provided their bank account information.

 

Tietolman attempted to conceal his involvement in the scheme by employing defendant Marc Roy Ferry and others to run “front” companies, including First Consumers, LLC, and process the fraud money.  Tietolman paid Ferry and others to form corporations in the United States.  The sole purpose of these corporations was to process the fraud proceeds generated by the telemarketing scheme.  Tietolman instructed Ferry and others to open up numerous bank accounts in the United States in the names of the fraud companies that they had incorporated.  Ferry sent Tietolman online logins and passwords so Tietolman and others could control these United States bank accounts from Canada. 

 

Tietolman sent, or had others send, Ferry and others bank account information for the victims in the United States.  Using computer programs and printers provided by Tietolman, Ferry and others used the victims’ bank account information to print remotely created checks (“RCCs”), in the United States.  The RCCs were all made payable to the fraud companies and did not require a signature by the account holder.  Because these RCCs did not require the account holder’s consent each time a check was created and submitted to the bank for payment, the account holder-victim had no opportunity to object or prevent the debit from occurring.  Ferry and others deposited the RCCs in bank accounts held by the fraud companies, per Tietolman’s instructions.  Tietolman instructed Ferry and others to deposit the RCCs in batches of less than $10,000 to avoid federally-mandated reporting requirements.  After the checks were deposited, Tietolman instructed Ferry and others to wire the majority of the funds to accounts in Canada.

 

Tietolman and others operated this scheme since at least 2005.  Since May 2011, Tietolman, Ferry, and others have used this scheme to take more than $13 million from tens of thousands of senior citizens in the United States.   

 

If convicted, the defendant faces a maximum possible sentence of 70 years in prison, three years of supervised release, a $750,000 fine or up to double the amount involved in the money laundering, and a $300 special assessment.

 

The case was investigated by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigations, the U.S. Department of Homeland Security’s Homeland Security Investigations, the Federal Trade Commission, and the United States Postal Inspection Service, and is being prosecuted by Assistant United States Attorney Vineet Gauri.

 

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

PHILADELPHIA – Herbert Sudfeld, 64, of Doylestown, PA, was convicted today on charges of insider trading and making a false statement.  He faces a maximum possible sentence of 25 years in prison, a three-year period of supervised release, and a possible fine.

 

Sudfeld was a partner in a Pennsylvania law firm that represented Harleysville Group, Inc., in its merger with Nationwide Mutual Insurance Company.  According to court testimony, Sudfeld knew the merger was imminent and knew he had a fiduciary duty to keep it confidential.  On September 28, 2011, prior to the public announcement of the merger agreement, Sudfeld contacted his stock broker to purchase Harleysville stock.  On September 29, 2011, Harleysville and Nationwide publicly announced the merger and Harleysville stock rose by approximately 85 percent over the prior day’s trading.   Sudfeld then sold the shares he had bought a day earlier, netting personal profits of approximately $75,530. 

 

Sudfeld falsely told FBI agents, who were investigating insider trading, that he was not aware of the Harleysville stock transactions until several days to a week later.  Sudfeld also falsely told investigators that he had informed his broker that he could not be involved in trades of Harleysville stock due to his position at his law firm.  He further stated that he did not discuss Harleysville trades with his broker until after they were completed, which was also false.

 

The case was investigated by the Federal Bureau of Investigation and the Securities and Exchange Commission.  It is being prosecuted by Assistant United States Attorney Denise S. Wolf.

PHILADELPHIA - John Porter, 63, of Marple Township, Pennsylvania, was charged today by indictment with one count of receipt of child pornography and one count of possession of child pornography, announced United States Attorney Zane David Memeger. The indictment alleges that on July 24, 2014 and June 3, 2015, Porter received and possessed images of child pornography. 

 

If convicted the defendant faces a mandatory minimum sentence of five years in prison with a maximum possible sentence of 30 years in prison, supervised release, a $200 special assessment, and a possible fine.

 

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 Immigration and Customs Enforcement Homeland Security Investigations (“HSI”) and is being prosecuted by Special Assistant United States Attorney Josh A. Davison.

 

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

PHILADELPHIA – Blair Thomas, Jr., 30, of Lansdowne, PA, was sentenced today to 384 months in prison for robbing a bank, attempting to rob postal employees at two post offices, and with being a convicted felon in possession of a firearm.  A federal jury, on April 15, 2015, returned guilty verdicts in the case.  In addition to the prison term, U.S. District Court Judge Gerald A. McHugh ordered three years of supervised release, restitution in the amount of $1,891, and a $600 special assessment.

 

In each robbery and robbery attempt, Thomas wore a special effects, movie quality mask as a disguise, and in each robbery attempt, he armed himself with a .45-caliber Ruger semi-automatic handgun.  On January 22, 2014, Thomas entered United States Post offices in Yeadon, PA, and in Darby, PA, wearing the face mask and armed with the handgun, in one instance brandishing the gun, and demanded ten $1,000 money orders from postal clerks.  The following day, January 23, 2014, Thomas entered a Wells Fargo Bank in Springfield, PA wearing the special effects mask and displayed a note announcing a robbery.  Tellers at the bank gave Thomas approximately $1,890.  Surveillance video of the robberies was disseminated to local news outlets.  Law enforcement received a tip which led Postal Inspectors to the mask manufacturer who in turn led them to Blair Thomas.

 

On January 29, 2014, a search warrant was executed on Thomas’ home, and inspectors recovered the special effects face mask and the firearm used in the robberies.

 

The case was investigated by the United States Postal Inspection Service and the Springfield, Yeadon, and Darby Police Departments.  It was prosecuted by Assistant United States Attorney Jessica Natali.

PHILADELPHIA – A superseding indictment was filed today against Nakia Adams, 41, address unknown, adding four counts of possession of firearms by a convicted felon and four counts of aiding and abetting the making of a false statement in connection with the purchase of firearms from a federally licensed firearms dealer.  Adams was charged by indictment, unsealed in December of 2015, with conspiracy, making false statements to a federal firearms licensee, possession of firearms by a convicted felon, and aiding and abetting.

 

According to the superseding indictment, Adams used several individuals as “straw purchasers” to obtain firearms from federally licensed firearms dealers. Adams, who is a convicted felon, is prohibited from purchasing firearms himself.  

 

If convicted, the defendant faces a maximum possible statutory sentence of 135 years in prison, possible fines, a $2,000 special assessment, and three years of supervised release.

 

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives Reading Field Office and is being prosecuted by Assistant United States Attorney Eric Boden.

 

An Indictment or Information is an accusation.  A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Chaka Fattah, Jr., 33, of Philadelphia, PA, was sentenced today to 60 months in prison for 22 counts that included fraud and tax charges.  On November 5, 2015, a federal jury found Fattah, Jr., guilty of bank fraud; making false statements to banks to obtain loans; making false statements to banks and the Small Business Administration to settle loans for less than what was owed; filing false federal income tax returns for tax years 2005, 2006, and 2008; failing to pay federal income tax; wire fraud; and theft from a program receiving federal funds.  In addition to the prison term, U.S. District Court Judge Harvey Bartle III ordered restitution in the amount of $1,172,175, five years of supervised release, and a $2,125 special assessment.

 

 Fattah, Jr., obtained numerous business lines of credit through false and fraudulent statements to local banks and used the funds primarily for personal expenses, rather than business expenses as the loan terms required.  These false statements involved fictitious earnings information that Fattah, Jr., and an associate supplied for entrepreneurial companies which Fattah and the associate claimed they operated, including 259 Strategies, LLC (“259 Strategies”) and Chaka Fattah, Jr. & Associates.  

 

In 2011, Fattah, Jr., received a loan from United Bank for $50,000 intended for "working capital to support business operations."  Instead, he used the funds to make car payments, to pay down more than $40,000 in personal debt, including gambling debts.   

 

Fattah, Jr., defaulted on several lines of credit and provided false information to two banks, to the United States Small Business Administration, which had insured the bank loans, and to a Small Business Administration investigator, to attempt to settle the debts for less than what was owed.  Fattah, Jr., falsely claimed that 259 Strategies was out of business at the time he was attempting to settle his debts in 2010, and that he was earning only $2,500 per month.  In fact, during 2010, Fattah, Jr.’s 259 Strategies, LLC was intact and he was earning between $6,250 per month and approximately $37,500 per month.

 

Fattah, Jr. filed false federal income tax returns and failed to pay federal taxes for tax years 2005, 2006, and 2008, and failed to timely pay taxes owed on his 2010 earnings, for a total loss to the IRS of more than $92,000.

  

Fattah, Jr., also stole funds supplied by the federal government to the Philadelphia School District.  Fattah, while the Chief Operating Officer of Delaware Valley High School, a for-profit vendor which provided alternative educational services to the school district, provided false and fictitious expense information and inflated salary figures on budgets submitted to the school district.  The school district made payments to Delaware Valley consistent with the budgets, and thus were defrauded of approximately $940,000 during the 2010-2011 and 2011-2012 school years.  Some of those funds were paid through a false budget entry which concealed the true recipient of the payments, Fattah. 

 

The case was investigated by the FBI, IRS Criminal Investigations, and the U.S. Department of Education, with the cooperation of the Philadelphia School District’s Office of Inspector General.   It is being prosecuted by Assistant U.S. Attorney Paul L. Gray of the Eastern District of Pennsylvania and Trial Attorney Eric Gibson of the Criminal Division’s Public Integrity Section.

Chaka Fattah Jr., 33, of Philadelphia, was sentenced today to 60 months in prison for fraud and tax charges in connection with a scheme to defraud banks, the Internal Revenue Service (IRS) and the Philadelphia School District, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania. 

On Nov. 5, 2015, a federal jury found Fattah Jr. guilty of 22 counts, including bank fraud; making false statements to banks to obtain loans; making false statements to banks and the Small Business Administration (SBA) to settle loans for less than what was owed; filing false federal income tax returns for tax years 2005, 2006 and 2008; failing to pay federal income tax; wire fraud; and theft from a program receiving federal funds.  In addition to the prison term, U.S. District Court Judge Harvey Bartle III of the Eastern District of Pennsylvania ordered Fattah Jr. to pay $1,172,157 in restitution.

According to the evidence presented at trial, in 2005, Fattah Jr. and an associate supplied fictitious earnings for companies that they claimed to operate, including 259 Strategies LLC and Chaka Fattah Jr. & Associates, to local banks in order to obtain numerous business lines of credit.  Rather than using the lines for credit for business expenses as the loan terms required, however, Fattah Jr. used them primarily for personal expenses.  For example, in 2011, Fattah Jr. received a $50,000 loan from United Bank intended for “working capital to support business operations,” which he instead used to make car payments and to pay down more than $40,000 in personal debt, including gambling debts.  

The evidence further demonstrated that in 2010, Fattah Jr. had previously defaulted on several lines of credit and, in an attempt to settle the debts for less than what was owed, provided false information to two banks, to the SBA, which had insured the bank loans, and to an SBA investigator.  Fattah Jr. falsely claimed that 259 Strategies was out of business, which it was not, and that he was earning only $2,500 per month, when his real income was between $6,250 and approximately $37,500 per month.

Additionally, for tax years 2005, 2006 and 2008, trial evidence showed that Fattah Jr. filed false federal income tax returns, and in 2010, failed to pay on a timely basis federal income tax of approximately $51,141 on more than $150,000 in reported income. 

The evidence further demonstrated that in during the 2010 through 2011 and 2011 through 2012 school years, while Fattah Jr. was serving as the chief operating officer of Delaware Valley High School, a for-profit vendor which provided alternative educational services through contracts with the school district, he submitted false expense information and inflated salary figures resulting in approximately $940,000 of fraudulently obtained payments from the school district.  Some of the funds were paid through a false budget entry that concealed Fattah Jr. as the true recipient. 

The FBI, IRS-Criminal Investigation and the U.S. Department of Education investigated the case with the cooperation of the Philadelphia School District’s Office of Inspector General.  Assistant U.S. Attorney Paul L. Gray of the Eastern District of Pennsylvania and Trial Attorney Eric Gibson of the Criminal Division’s Public Integrity Section are prosecuting the case.

PHILADELPHIA - Francisco Acosta, 40, of Reading, PA, was sentenced today to 24 months in prison for accepting a bribe in order to repeal an ethics law.  At the time of the offense, Acosta was the President of Reading’s City Council.  He pleaded guilty on August 5, 2015 to conspiracy to commit the bribery offenses of honest services wire fraud and Travel Act bribery.   In addition to the prison term, U.S. District Court Judge Juan R. Sanchez ordered a fine of $1,800, three years of supervised release, 200 hours of community service, and a $100 special assessment.

 

In the spring of 2015, Acosta conspired with a person identified as “Public Official #1” to repeal these restrictions before the May 19, 2015 primary election through a bribery scheme, in violation of federal criminal law.  Public Official #1 was a Reading public official who had the power to sign into law ordinances that had been passed by City Council.  Public Official #1 was also a candidate in the Democratic Party’s primary election, scheduled for May 19, 2015.  Public Official #1 decided to offer Acosta an $1,800 “loan” to the campaign committee of Acosta’s ally ( “Public Official #2”), which would be “forgiven” upon Acosta successfully orchestrating a repeal of certain restrictions codified in Sections 1012 and 1006(H) of Reading’s Code of Ethics.  Acosta accepted the payment on April 10, 2015 and, three days later, introduced legislation to eliminate those restrictions in accordance with Public Official #1’s wishes (“the repeal bill”).  As agreed to by Public Official #1 and Acosta, the repeal bill would have repealed Section 1012 in its entirety, thereby eliminating the restrictions on campaign contributions and nullifying Section 1006(H)’s prohibition on awarding “no-bid contracts” to certain donors. When Acosta took possession of the bribe check, he agreed that neither he nor Public Official #2 would deposit the bribe check until a later date.

 

Acosta attempted to persuade other members of City Council to pass the repeal bill before the primary election by falsely asserting that he was motivated solely by the best financial interests of Reading and by concealing that he had received the bribe check.  Acosta then made materially false statements to FBI agents who were investigating the bribery scheme.  The next day, Acosta took affirmative steps to withdraw from the conspiracy, all without alerting other members of the conspiracy of the FBI’s inquiry into this matter. The repeal bill was unanimously defeated by Reading’s City Council.

 

This case is being investigated by the Federal Bureau of Investigation, IRS Criminal Investigations, and the Pennsylvania State Police.  It is being prosecuted by Assistant United States Attorneys Joe Khan and Nancy Beam Winter. 

PHILADELPHIA – An indictment was unsealed today charging Dr. Frederick Douglas Burton, 67, of Conshohocken, PA, with two counts of mail fraud and attempted mail fraud, announced United States Attorney Zane David Memeger.

 

According to the indictment, in November 2013, Dr. Burton met with Dr. Dennis Erik Fluck Von Kiel and agreed to sign and send letters to support what Von Kiel knew would be a fraudulent application for social security disability benefits.  The letters contained representations that Von Kiel was unable to work as a result of Post-Traumatic Stress Disorder.  Burton was not a psychiatrist, had no specialized mental health training, and did not diagnose Dr. Von Kiel with PTSD or receive a referral from another doctor who had diagnosed Dr. Von Kiel with PTSD.  In order to help Von Kiel file a fraudulent application for social security disability benefits, Burton allegedly signed and mailed two letters, containing false representations, to a law firm that specializes in social security benefit applications.  

 

If convicted, Dr. Buton faces a maximum possible sentence of 40 years in prison, followed by up to three years of supervised release, a possible fine, and a $200 special assessment.

 

The case was investigated by IRS Criminal Investigations and the FBI. It is being prosecuted by Assistant United States Attorney Mark B. Dubnoff.

                                                                             

An Indictment is an accusation.  A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Francisco Lopez, 37, a Mexican national formerly residing in Tuscon, Arizona, was sentenced today to 360 months in prison for drug trafficking.  Lopez was the leader of an international drug trafficking organization which brought thousands of kilograms of marijuana from Mexico and laundered millions of dollars of drug proceeds.  On May 14, 2015, a federal jury found Lopez guilty of conspiracy to distribute 1,000 kilograms or more of marijuana, conspiracy to commit money laundering, two counts of money laundering, distribution of 100 kilograms of marijuana, and illegal reentry after deportation.

 

Lopez had been operating his drug trafficking business since at least January 2010, overseeing the transport of drugs from Mexico in tractor-trailers or through Federal Express Freight to customers in the Philadelphia and New York City areas. At times, the organization was grossing an estimated $4 million a month in drug sales. The cash from these sales was returned to Mexico via cars, tractor trailers, and numerous bank deposits through countless bank accounts, and with the assistance of associates throughout the country.

 

In addition to the prison term, U.S. District Court Judge Paul S. Diamond ordered a $600 special assessment, five years of supervised release, and a forfeiture money judgment of $1,464,670.

 

As a result of the investigation, Lopez and 10 of his associates were federally prosecuted.  Of those, seven were convicted in the Eastern District of Pennsylvania; two were convicted by the Middle District of North Carolina; and one was convicted in the District of New Jersey.

 

The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) led Philadelphia/Camden High Intensity Drug Trafficking Area (PC HIDTA) Money Laundering and Drug Asset Forfeiture Task Force.  It was prosecuted by Assistant United States Attorney Maria M. Carrillo. 

PHILADELPHIA - Mahmoud Ramadan Moussa Ayoub Moussa, 25, of Alexandria, Egypt, was charged today by Information with possessing a U.S. visa procured by fraud, announced United States Attorney Zane David Memeger.

 

If convicted, the defendant faces a maximum possible sentence of 10 years in prison and a $250,000 fine.

 

The case was investigated by the FBI’s Joint Terrorism Task Force, including law enforcement officers and agents from Homeland Security Investigations, Pennsylvania State Police, and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorney Jennifer Arbittier Williams.

                                                                             

An Information is an accusation.  A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA - Jose Charriez, 35, of Pottstown, Pennsylvania, was charged today by indictment with possession of cocaine with the intent to distribute, possession of a firearm in furtherance of a drug trafficking crime, and possession of a firearm by a convicted felon, announced United States Attorney Zane David Memeger.  The indictment alleges that on or about March 18, 2015, Charriez was in possession of the cocaine and a loaded .45 caliber handgun in a home in Pottstown, Pennsylvania.

 

If convicted the defendant faces a maximum possible sentence of life in prison, a fine of up to $2.5 million, up to six years of supervised release, and $300 special assessment.

 

The case was investigated by the Federal Bureau of Investigation, the Montgomery County Detective Bureau, and the Pottstown Police Department  It is being prosecuted by Assistant United States Attorney Jason P. Bologna.

 

An Indictment is an accusation.  A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – An indictment was unsealed today charging Renee Tartaglione, 60, of Philadelphia, PA, with conspiracy, fraud, and theft involving a nonprofit clinic which provides mental health services to persons eligible under Medicaid.  According to the indictment, Tartaglione defrauded the Juniata Community Mental Health Clinic (JCMHC) by misappropriating funds of the clinic.  The charges were announced by United States Attorney Zane David Memeger, FBI Special Agent-in-Charge William F. Sweeney, Jr., IRS Criminal Investigations Special Agent-in-Charge Akeia Conner, and Philadelphia Inspector General Amy Kurland.

 

Specifically, it is alleged that between 2007 and 2015, Tartaglione, as President of JCMHC’s Board of Directors, defrauded and stole money from JCMHC through a series of actions designed to benefit Tartaglione at the expense of the clinic.  It is alleged that Tartaglione purchased the building on 3rd Street in Philadelphia which housed the clinic and then raised the rent, repeatedly, causing the clinic’s rent for the 3rd Street building to increase from $4,500 per month to $25,000 per month. 

 

It is further alleged that in July of 2010, a co-conspirator, known to the Grand Jury, made a deposit on the purchase of a building located on 5th Street in Philadelphia using a check signed by defendant Tartaglione.  In December 2011, the conspirators, through Tartaglione’s company, Norris Hancock LLC, purchased the building on 5th Street, and, in December 2012, leased it to JCMHC under a lease that called for rent of $35,000 per month for the first two years, and $75,000 per month for the next three years. The indictment alleges that the rent Tartaglione charged the nonprofit clinic was substantially in excess of the market rent.

 

The indictment alleges that neither the rent increases nor the lease agreements were approved by JCMHC’s Board of Directors and that Tartaglione and her co-conspirators created false and fictitious documents in an attempt to make the transactions appear legitimate.

 

The indictment also charges that Tartaglione defrauded and took money from JCMHC through kickbacks from persons who were issued checks drawn on JCMHC’s accounts, and by causing JCMHC to pay Norris Hancock more than 12 months of rent in some years. 

 

The indictment further alleges that Tartaglione falsified Federal income tax returns by underreporting her income for tax years 2008, 2009, 2010, and 2012.   

           

“Non-profit organizations, including those that deliver health care, hold a special place in our society, and the people who manage them are required to act in the best interests of the nonprofit,” said Memeger. “When instead, those trusted leaders decide to commit fraud, and line their pockets with the funds of the nonprofit, they appropriately face the severe consequences of a federal prosecution.”

 

“The IRS enforces the nation's tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belonged to others,” said Conner. “With both law enforcement and financial investigation expertise, our agents are uniquely qualified to assist federal law enforcement agencies with these types of cases by following the money.”

 

“We’re committed to holding nonprofits accountable because of what’s at stake: the well-being of some of our most vulnerable friends and neighbors,” said Kurland. “For those who depend on our nonprofits, the impact of fraud is real and direct. It’s the bed that’s no longer available at a local shelter. It’s the shuttered soup kitchen in a neighborhood that desperately needs one.”  

 

If convicted of all charges, the defendant faces a substantial prison term, restitution, possible fines, supervised release, and special assessments.

 

This case was investigated by the FBI, IRS Criminal Investigation, and the Philadelphia Office of the Inspector General.  It is being prosecuted by Assistant United States Attorney Bea Witzleben.

                                                                             

An Indictment is an accusation.  A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA - The Archdiocese of Philadelphia, Catholic Health Care Services has agreed to resolve allegations relating to resident care at St. Monica Center for Rehabilitation and Health Care and St. Monica Manor, announced United States Attorney Zane David Memeger.  The Archdiocese of Philadelphia has agreed to improve, or has already improved, care in the following areas:  physician orders; wound care and pressure ulcers; medication administration; documentation of care; and transfer and toileting of residents.  Pursuant to the agreement, the Archdiocese has also agreed to pay $80,000 in addition to implementing the care enhancements.  Although St. Monica Manor has been sold to Center Management Group (“CMG”), CMG has agreed to assume all duties in connection with the settlement agreement. 

 

The matter was analyzed by the Department of Health Office of the Inspector General and Human Services and Healthcare Analyst Consultant Raymond Uhlhorn of the U.S. Attorney’s Office.  The matter was handled by Assistant U.S. Attorney Veronica J. Finkelstein.

 

The settled civil claims are allegations only.  There has been no determination of civil liability, and St. Monica Manor denies any such liability. 

 

Individuals with information regarding fraud, waste, or abuse related to Medicare or other federal programs are encouraged to file a complaint with the United States Attorney’s Office by calling 215-861-8200.

PHILADELPHIA – An indictment was filed on January 21, 2016 charging three men with dealing in firearms without a license, announced United States Attorney Zane David Memeger.  Darien Montae Thompson, 22, Omar Tarik Davenport, 24, and Sekou Maliek Davenport, 21, all of Philadelphia, are charged with selling guns that were previously reported stolen from homes and vehicles. Thompson and Omar Davenport are also charged with conspiracy, interstate travel in furtherance of dealing in firearms without a license, and possession of a short-barreled rifle; Omar and Sekou Davenport are also charged with possession of a firearm by a convicted felon.

 

According to the indictment, the defendants illegally acquired firearms in the state of Georgia and transported the firearms to Pennsylvania for illegal sale.  Guns that the defendants allegedly sold had been reported stolen from homes in Georgia, Pennsylvania, and South Carolina.  Omar Davenport was on state parole, following a felony conviction, during the time of the alleged conspiracy. 

 

If convicted of all charges, Thompson faces a maximum statutory sentence of 30 years in prison and a $500 special assessment; Omar Davenport faces a maximum statutory sentence of 55 years in prison and a $700 special assessment; Sekou Davenport faces a maximum statutory sentence of 15 years in prison and a $200 special assessment.  Each defendant also faces supervised release and a possible fine.

 

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorney Mark Miller.

                                                                             

An Indictment is an accusation.  A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Big Brothers Big Sisters of America Corporation (Big Brothers) has agreed to pay the United States $1.6 million to resolve allegations of false claims for funds under Department of Justice grants awarded to help children at risk, announced United States Attorney Zane David Memeger and Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  Big Brothers is a not-for-profit organization that provides mentoring services to boys and girls throughout the United States.  The organization, originally based in Philadelphia, Pennsylvania, now is headquartered in Tampa, Florida.

 

Big Brothers is a national organization that acts through approximately 300 independent affiliate agencies across the United States.  Since 2004, Big Brothers has received millions of dollars in grants from the Justice Department to support initiatives on behalf of children at risk.  As a condition of those grants, Big Brothers was required to maintain sound accounting and financial management systems in accordance with federal regulations and guidelines designed to ensure that grant funds would be properly accounted for and used only for appropriate purposes.

 

The United States alleges that Big Brothers violated these regulations and guidelines with respect to three grants awarded by the Justice Department from 2009 to 2011, by commingling the grant funds with general operating funds, failing to segregate expenditures to ensure that the funds for each grant were used as intended, and failing to maintain internal financial controls to safeguard the proper use of grant funds.  These allegations were documented in a 2013 audit of the three grants performed by the Department of Justice Office of the Inspector General.  Since 2013, Big Brothers has replaced its management team and begun implementing policies aimed at correcting deficiencies in its management and accounting of federal grant funds.

 

“The US Attorney’s office is committed to protecting federal grants and ensuring that the funds are appropriately spent,” said Memeger. “Federal grant recipients must administer these grants with transparency and diligence, and the compliance measures implemented pursuant to this settlement agreement will help to achieve those goals.” 

 

“Organizations such as Big Brothers have an obligation to the populations they serve as well as to the taxpayer to ensure that government grant funds are used for their intended purpose,” said Mizer.  “The settlement announced today exemplifies the Department’s commitment to hold those who mishandle such funds accountable.”

 

“We appreciate the support of the U.S. Attorney for the Eastern District of Pennsylvania and the Civil Division in working with us on these kinds of cases,” said Department of Justice Inspector General Michael E. Horowitz.  “The OIG’s auditors and investigators will continue to work with each other closely to uncover misuses of grant funds, and with our law enforcement partners to ensure that justice is served.”

 

In addition to paying the United States $1.6 million, Big Brothers has agreed to institute a strict compliance program that requires the organization to engage in regular audits, both internally and by independent auditors; establish a compliance team, an employee code of conduct, whistleblower policies, and a disciplinary policy for employees who engage in or fail to disclose abuses of federal grant funds; provide regular employee training on these policies; and employ risk assessment tools to detect abuses that might otherwise go undetected.

 

The investigation was conducted by the Department of Justice Office of the Inspector General.  The settlement was handled by Assistant U.S. Attorneys Joel M. Sweet and Scott W. Reid in coordination with Trial Attorney David W. Tyler of the Justice Department’s Civil Division, Commercial Litigation Branch.

 

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

PHLADELPHIA - Carmen Basilis, 52, of Reading, Pennsylvania, pleaded guilty yesterday to tax fraud charges admitting that she had falsified miscellaneous deductions on her clients’ tax returns in order to obtain inflated tax refunds which her clients where not entitled to receive.  U.S. District Court Judge James Knoll Gardner scheduled a sentencing hearing for May 5, 2016.

 

In lieu of receiving United States Treasury Checks, Basilis’ clients applied for Refund Anticipation Loans which permitted them to receive a loan from a bank within several days following the filing of their returns. By executing IRS Form 8888, Basilis caused a portion of the filer’s refund to be deposited into her personal bank account, a fact not known by her clients.  After doing so, Basilis issued the Refund Anticipation Loan checks to her clients.  The IRS, in turn, sent the bank the refund that Basilis had requested from the United States Treasury, to pay off the loans that the filers had been issued.  In addition to taking a portion of the filer’s refund, Basilis also charged her clients a fee for preparing and electronically filing the returns with the Internal Revenue Service.    

 

The case was investigated by IRS Criminal Investigations and was prosecuted by Assistant United States Attorney Floyd J. Miller.

PHILADELPHIA – An indictment was filed today charging five people in an alleged scheme to steal biopharmaceutical trade secrets from pharmaceutical company GlaxoSmithKline (GSK), announced United States Attorney Zane David Memeger.  Charged in the conspiracy are: Yu Xue, 45, of Wayne, PA; Tao Li, 42, of Nanjing, China; Yan Mei, 36, of Nanjing, China; Tian Xue, 45, of Charlotte, NC; and Lucy Xi, 38, of West Lake Village, CA.  The indictment includes charges of conspiracy to steal trade secrets, conspiracy to commit wire fraud, conspiracy to commit money laundering, theft of trade secrets, and wire fraud.

 

Yu Xue and Lucy Xi were scientists working at GSK’s research facility in Upper Merion, PA.  According to the indictment, the defendants engaged in a scheme to steal trade secrets related to GSK research data, procedures, and manufacturing processes for biopharmaceutical products.  Many of the biopharmaceutical products targeted were designed to treat cancer or other serious diseases.  Yu Xue, Tao Li, and Yan Mei formed a corporation in China called Renopharma allegedly to market and sell the stolen trade secret information.  It is further alleged that in order to hide the proceeds of the crime, Yu Xue, Tao Li, and Yan Mei agreed to title the proceeds in the name of Yu Xue’s sister, Tian Xue, and other family members.

 

If convicted of all charges, each defendant faces a possible prison term, fines, restitution, special assessments, and a term of supervised release.

 

The case was investigated by the Federal Bureau of Investigation.  It is being prosecuted by Assistant United States Attorney Robert Livermore.

Istvan Merchenthaler, 45, of Downingtown, Pennsylvania, was sentenced today to 140 months in prison for wire fraud, aggravated identity theft, money laundering, filing false tax returns, interstate transportation of stolen property, possessing unregistered destructive devices, possessing firearms and ammunition as a fugitive and possessing an illegally manufactured firearm.  These charges stemmed from two indictments in this district and one indictment, each, in the Eastern District of North Carolina and the District of Maryland.  All of the cases were consolidated before U.S. District Judge Robert F. Kelly for the Eastern district of Pennsylvania who also ordered three years of supervised release, a $2,200 special assessment and more than $3.4 million in restitution.

Between May 2006 and February 2013, Merchenthaler claimed to be the founder of PhoneCard USA, a company that was purportedly a “premier distribution source” for prepaid phone cards, prepaid phones and prepaid “adult entertainment cards.”  Merchenthaler, who used a number of aliases, falsely claimed that PhoneCard USA had “lucrative contracts” with major retail chain stores including Walmart, 7-Eleven and BJ’s Wholesale Club.  In reality, Merchenthaler operated a “Ponzi” scheme, stealing over $3 million from over 250 investors and using much of these funds to buy expensive cars, jewelry and firearms and to perpetuate his scheme.  To line his pockets with these victims’ funds, Merchenthaler used stolen identities, impersonated corporate executives, forged signatures and fabricated bogus contracts.  Merchenthaler continued his scheme while he was on pretrial release in this district.  He also filed false tax returns, defrauding the United States of over $400,000. 

While on pretrial release, Merchenthaler also removed his electronic monitoring bracelet and fled as a fugitive.  In order to evade authorities, Merchenthaler stole two vehicles from car dealerships in Pennsylvania and North Carolina and fled from the scene of a traffic stop by the Pennsylvania State Police while driving one of the stolen vehicles.  The U.S. Marshals Service Fugitive Task Force and the Maryland State Police later apprehended Merchenthaler in Bel Air, Maryland.

Moreover, prior to and after jumping bail from this district, Merchenthaler amassed approximately 17 firearms and over approximately 11,580 rounds of ammunition, as well as approximately 634 improvised explosive devices (IEDs), which he stored in Pennsylvania, North Carolina and Maryland.  Approximately 67 of these IEDs were comprised of PVC pipe, almost all of which contained shrapnel in the form of nails, screws, or rocks.  The remaining approximately 567 IEDs were comprised of cardboard tubes in varying sizes and explosive power.  All of the IEDs – PVC and cardboard – were center primed with flash powder.  Merchenthaler drove these IEDs in his stolen vehicles to storage facilities in all three states.  During render safe procedures at a North Carolina storage facility, several of the IEDs exploded, resulting in damage to a bomb squad robot and the storage facility. 

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, the U.S. Marshals Service Fugitive Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Pennsylvania State Police, the Philadelphia Police Bomb Disposal Unit, the Montgomery County Bomb Squad, the Montgomery County Sheriff’s Office, the East Whiteland Police Department, the East Whiteland Fire Department, the Malvern Fire Department, the Maryland State Police, the North Carolina State Bureau of Investigation, the Downingtown Police Department and the Chester County District Attorney’s Office.  The case was prosecuted by Assistant U.S. Attorneys Vineet Gauri, Jason Kellhofer and Adam Ake in the U.S. Attorney’s Offices for the Eastern District of Pennsylvania, Eastern District of North Carolina and the District of Maryland.

PHILADELPHIA - Roger White, 58, and Audria White-Nunnally, 61, both of New Hope, Pennsylvania, were sentenced today for stealing the Social Security benefits of Roger White’s deceased relative. Roger White was sentenced to eight months in prison, his wife was sentenced to nine months in prison.  Each was also ordered to complete three years of supervised release and to pay $68,462 in restitution. 

 

The defendants pleaded guilty in October of 2015 to one count of conspiracy, three counts of wire fraud, and one count of theft of government funds.  In addition to these charges, Audria White-Nunnally was also charged with two counts of making false statements to federal agents.  The defendants admitted to stealing retirement benefits intended for a deceased relative of Roger White, after his relative’s death in December 1998.  The defendants’ actions resulted in a loss to the government of approximately $68,462. The defendants also admitted that during the investigation they placed an elderly relative in the attic of their New Hope, PA home in an attempt to convince Social Security Administration employees that she was Roger White’s deceased relative.             

 

The case was investigated by the Social Security Administration, Office of Inspector General, and was prosecuted by Special Assistant United States Attorney Christopher E. Parisi.

PHILADELPHIA - Basil Buie, 23, of Philadelphia, PA, was sentenced today to 15 years in prison for his role in a botched robbery and kidnapping that involved a jewelry store employee. Buie, a/k/a “Basil Tucker,” pleaded guilty on October 7, 2015 to conspiracy, kidnapping, and attempted Hobbs Act robbery. His two co-defendants - Khayree Gay and Salahudin Shaheed - also pleaded guilty.

Shaheed recruited Buie and Gay to rob National Watch and Diamond Exchange, at 101 S. 8th Street in Philadelphia to obtain luxury watches, jewelry, and money which Shaheed said could be found there. The defendants conducted surveillance of National Watch and its employees from a parking lot at 733 Chestnut Street, to identify and then, in disguise, abduct an employee from whom they would forcibly obtain keys, security codes, and the code to the company’s safe from which the robbers would steal luxury watches, jewelry, and money.

On April 4, 2015, the defendants watched an employee that Shaheed had targeted. When the employee entered the garage and approached her car, Shaheed and Buie, wearing masks, gloves, and sunglasses, confronted the victim, Shaheed assaulted her with a Taser, and they kidnapped her.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and is being prosecuted by Assistant United States Attorneys Jeanine Linehan and Maureen McCartney.

PHILADELPHIA – John Wesley Herder, 49, of Philadelphia, PA, formerly a correctional officer at Philadelphia’s Curran Fromhold Correctional Facility (CFCF), pleaded guilty today to attempted extortion under color of official right, attempted distribution of controlled substances, and making false statements within federal jurisdiction. These charges resulted from Herder’s agreement with a prison inmate to smuggle a cellular telephone and Oxycontin pills into the CFCF in exchange for a $1,000 cash payment, and Herder’s act of lying to the FBI when questioned about his contraband smuggling activities. U.S. District Court Judge Mark A. Kearney scheduled a sentencing hearing for May 16, 2016. Herder was working as a correctional officer at the CFCF in October 2013 when, in exchange for a $1,000 payment, he agreed to smuggle Oxycontin (oxycodone) pills and a cellular telephone into the prison and deliver it to Inmate #1. To obtain his payment and the contraband, Herder agreed to meet with Inmate #1’s associate (“Person #1”) outside the prison. On October 17, 2013, Herder met with Person #1 inside a car in the parking lot of a Walgreens Pharmacy in Philadelphia. During their meeting, Person #1 handed Herder 100 pills, represented to contain OxyContin (oxycodone), a Nokia cellular telephone, and $1,000.00 in cash. At the conclusion of their meeting, Herder told Person #1: “Just tell [Inmate #1] to sit tight and I got it coming to him, ok.” Herder also told Person #1 that he was willing to bring additional contraband into the prison. Between October 17, 2013 and October 29, 2013, Herder smuggled the 100 pills and cellular telephone past prison security and into the CFCF. On October 29, 2013, Herder provided Inmate #1 with all 100 pills and the cellular telephone. On June 18, 2015, federal law enforcement agents interviewed Herder and questioned him about his contraband smuggling activities, and Herder falsely stated that he did not bring contraband into CFCF. Herder faces a statutory maximum sentence of 45 years in prison, forfeiture, possible fines, supervised release, and special assessments. The case was investigated by the FBI with assistance from the Philadelphia Department of Corrections. It is being prosecuted by Assistant United States Attorney Kevin Brenner.

PHILADELPHIA - Istvan Merchenthaler, 45, formerly of Downingtown, Pennsylvania, was sentenced today to 140 months in prison for wire fraud, aggravated identity theft, money laundering, filing false tax returns, interstate transportation of stolen property, possessing unregistered destructive devices, possessing firearms and ammunition as a fugitive, and possessing an illegally manufactured firearm.  These charges stemmed from two indictments in this District, and one indictment, each, in the Eastern District of North Carolina and the District of Maryland.  All of the cases were consolidated before United States District Court Judge Robert F. Kelly who also ordered three years of supervised release, a $2,200 special assessment, and more than $3.4 million in restitution.

 

Between May 2006 and February 2013, Merchenthaler claimed to be the founder of PhoneCard USA, a company that was purportedly a “premier distribution source” for prepaid phone cards, prepaid phones, and prepaid “adult entertainment cards.”  Merchenthaler, who used a number of aliases, falsely claimed that PhoneCard USA had “lucrative contracts” with major retail chain stores including Walmart, 7-Eleven, and BJ’s Wholesale Club.  In reality, Merchenthaler operated a “Ponzi” scheme, stealing over $3 million from over 250 investors and using much of these funds to buy expensive cars, jewelry, and firearms and to perpetuate his scheme.  To line his pockets with these victims’ funds, Merchenthaler used stolen identities, impersonated corporate executives, forged signatures, and fabricated bogus contracts.  Merchenthaler continued his scheme while he was on pretrial release in this District.  He also filed false tax returns, defrauding the United States of over $400,000. 

 

While on pretrial release, Merchenthaler also removed his electronic monitoring bracelet and fled as a fugitive.  In order to evade authorities, Merchenthaler stole two (2) vehicles from car dealerships in Pennsylvania and North Carolina and fled from the scene of a traffic stop by the Pennsylvania State Police while driving one of the stolen vehicles.  The United States Marshals Service Fugitive Task Force and the Maryland State Police later apprehended Merchenthaler in Bel Air, Maryland.

 

Moreover, prior to and after jumping bail from this District, Merchenthaler amassed approximately 17 firearms and over approximately 11,580 rounds of ammunition, as well as approximately 634 improvised explosive devices (“IEDs”), which he stored in Pennsylvania, North Carolina, and Maryland.  Approximately 67 of these IEDs were comprised of PVC pipe, almost all of which contained shrapnel in the form of nails, screws, or rocks.  The remaining approximately 567 IEDs were comprised of cardboard tubes in varying sizes and explosive power.  All of the IEDs – PVC and cardboard – were center primed with flash powder.  Merchenthaler drove these IEDs in his stolen vehicles to storage facilities in all three states.  During render safe procedures at a North Carolina storage facility, several of the IEDs exploded, resulting in damage to a bomb squad robot and the storage facility.

 

The case was investigated by the Federal Bureau of Investigation; the Internal Revenue Service Criminal Investigations; the United States Marshals Service Fugitive Task Force; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Pennsylvania State Police; the Philadelphia Police Bomb Disposal Unit; the Montgomery County Bomb Squad; the Montgomery County Sheriff’s Office; the East Whiteland Police Department; the East Whiteland Fire Department; the Malvern Fire Department; the Maryland State Police; the North Carolina State Bureau of Investigation; the Downingtown Police Department; and the Chester County District Attorney’s Office.  The case was prosecuted by Assistant United States Attorneys Vineet Gauri, Jason Kellhofer, and Adam Ake in the United States Attorney’s Offices for the Eastern District of Pennsylvania, Eastern District of North Carolina, and the District of Maryland, respectively.

PHILADELPHIA - Samuel Robinson, 29, of Philadelphia, Pennsylvania, was charged by indictment with robbing two Metro PCS stores in Philadelphia, announced United States Attorney Zane David Memeger.  Robinson is charged with two counts of Hobbs Act robbery, using, carrying, and brandishing a firearm during a crime of violence, and possession of a firearm by a convicted felon.  According to the indictment, on October 28, 2015, Robinson robbed the Metro PCS store at 6443 Frankford Avenue and the store at 4229 N. Broad Street, in Philadelphia. 

 

If convicted the defendant faces a mandatory minimum term of 32 years in prison with a maximum possible sentence of life, a possible fine, restitution, a $500 special assessment and up to five years of supervised release.

 

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Yvonne Osirim.

 

An Indictment is an accusation.  A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA - Nathaniel Rodriguez, 40, of Philadelphia, PA was charged today by indictment with two counts of kidnapping, announced United States Attorney Zane David Memeger.  According to the indictment, on November 6, 2015, Rodriguez forced K.J. to accompany him to an ATM machine and use that machine to take money from K.J.’s account.  It is further alleged that on November 11, 2015, Rodriguez forced P.M.N.L. to drive him to an ATM machine and attempted to use that machine to take money from P.M.N.L.’s account.

 

If convicted the defendant faces a maximum possible sentence of life in prison.

 

The case was investigated by the Federal Bureau of Investigations and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorney Arlene Fisk.

 

An Indictment is an accusation.  A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA - John Pistilli, 50, of Philadelphia, PA, was charged today by indictment with bank robbery, announced United States Attorney Zane David Memeger.  According to the indictment, on December 23, 2015, Pistilli handed a robbery note to a teller at the TD Bank, at 2520 Grant Avenue in Philadelphia, that read “This is a robbery Put large bills in this envelope – No dye packs no transmitter we have a weapon”.   

 

If convicted the defendant faces a maximum possible sentence of 20 years in prison, a $250,000 fine, and a $100 special assessment.

 

The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department.  It is being prosecuted by Assistant United States Attorney Arlene Fisk.

 

An Indictment is an accusation.  A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Mary Ellen Koval, 64, of Allentown, PA, pleaded guilty today to conspiracy to commit honest services fraud.  During the guilty plea hearing, Koval admitted the following:

 

Koval and Public Official #3 were public officials who represented the City of Allentown through elective offices.  Until her resignation last week, Koval had been the City Controller since 2012.  She was re-elected to a second four-year term in November 2015. 

 

Public Official #3 directed other public officials to identify for him individuals and entities who had profited from their dealings with the City of Allentown or who sought favorable treatment from the City of Allentown (“the vendors”).  Public Official #3 made clear to certain vendors, including Ramzi Haddad, Donor #1 and Donor #2 that providing him with campaign contributions was a necessary condition for receiving certain favorable treatment from the City of Allentown.  Indeed, Public Official #3 caused, agreed to cause, and attempted to cause other public officials, including Koval, Finance Director Gary Strathearn, and Assistant City Solicitor Dale Wiles, to take official action favorable to certain actual and potential donors to Public Official #3’s political campaigns. 

 

Upon learning of these practices, Koval should have put a stop to them.  As City Controller, she had a duty to exercise independent financial oversight of all City finances, including all expenditures by Public Official #3, and as a public official she owed the public a duty of honest services.  But Koval relied on Public Official #3 for political support, including campaign contributions and appointments to boards, commissions, and authorities including Allentown Parking Authority’s Board of Directors, of which she became Chair in January 2015.  Rather, than root out, report, and counter Public Official #3’s criminal activity, she instead agreed to enable, aid, and participate in it. 

 

Knowing that each of them wanted favorable treatment from the City of Allentown in return, Public Official #3 asked vendors, including Donor #1, Donor #2 and Ramzi Haddad, to raise large amounts of campaign contributions for him, which they did.  Koval agreed to use her official authority to help each of these donors because Public Official #3 wanted to reward and/or incentivize their campaign contributions.  For example, Public Official #3 took numerous steps to attempt to award a “no bid” city contract to Donor #1’s company, despite the concerns and objections of numerous other public officials in Allentown.  Because of Public Official #3’s desire to reward and incentivize Donor #1’s contributions, Koval tried to help Donor #1 through her position as City Controller and also through her influence with the Parking Authority.  In furtherance of the conspiracy with Public Official #3, Koval also used her power and authority as City Controller to help Donor #2 and Haddad. After Koval asked that Donor #2 also reward her with a campaign contribution for her participation in the conspiracy, Donor #2 obliged with a donation for Koval’s re-election effort. 

 

Koval and other members of the conspiracy attempted to conceal the conspiracy by making materially false statements to FBI agents who were investigating the conspiracy.  But within a few days of her initial interview with the FBI, Koval met with the agents in order to confess her guilt and take responsibility for her wrongdoing.  She then announced her resignation from the position of Controller for “the best interests of the City of Allentown and its residents.”

 

After accepting the guilty plea, United States District Judge Juan R. Sanchez scheduled a sentencing hearing for April 19, 2016.  Strathearn, Wiles, and Haddad all previously pleaded guilty.  Strathearn and Haddad are scheduled to be sentenced on April 14, 2016.  Wiles is scheduled to be sentenced on March 2, 2016.  Koval, Strathearn, and Wiles each face a maximum possible sentence of 20 years in prison, a fine, three years of supervised release, and a $100 special assessment.  Haddad faces a maximum possible sentence of 5 years in prison, a fine, three years of supervised release, and a $100 special assessment. 

 

This case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the Pennsylvania State Police.  It is being prosecuted by Assistant United States Attorneys Joe Khan and Nancy Beam Winter. 

PHILADELPHIA – Joseph White, 46, of Newtown, PA, was charged today by Information with attempted evasion of payment of tax, announced United States Attorney Zane David Memeger.  According to the information, White willfully attempted to evade the full amount of income tax he owed for calendar years 2000 through 2011 by filing false information with the IRS and diverting money from his corporations for personal expenses.

 

If convicted, the defendant faces a statutory maximum sentence of five years in prison, a fine, a $100 special assessment, and up to two years of supervised release.

 

The case was investigated by IRS Criminal Investigations and is being prosecuted by Assistant United States Attorney Floyd Miller.

                                                                             

An Information is an accusation.  A defendant is presumed innocent unless and until proven guilty.

PHILADELPHIA – Mary Ellen Koval, 64, of Allentown, PA, was charged today by Information with conspiracy to commit honest services fraud, announced United States Attorney Zane David Memeger.

 

According to the information, between January 7, 2014 and at least December 8, 2015, Koval, in her position as Allentown City Controller, conspired with Public Official #3 and others to knowingly devise a scheme to defraud the City of Allentown and its citizens of the honest services of Public Official #3 and of Koval through bribery and kickbacks. Public Official #3 and Koval requested and received campaign contributions as incentives and rewards for past, continued, and future official actions that Public Official #3, Koval, and others took, attempted to take, agreed to take, and caused, attempted to cause, and agreed to cause the City of Allentown to take.

 

If convicted the defendant faces a statutory maximum sentence of 20 years in prison, a fine, three years of supervised release, and a $100 special assessment.

 

This case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the Pennsylvania State Police.  It is being prosecuted by Assistant United States Attorneys Joe Khan and Nancy Beam Winter. 

 

An Information is an accusation.  A defendant is presumed innocent unless and until proven guilty.

Yijia Zhang, a permanent resident of the United States, and a citizen of the People’s Republic of China, today was sentenced to 31 months in prison by the Hon. Legrome D. Davis, for a violation of the Computer Fraud and Abuse Act, announced United States Attorney Zane David Memeger. Zhang had worked for a financial services company and had stolen a large number of electronic documents from his employer. (The documents included some that would have told how to access the company’s computer network. The government found no evidence that the files had been passed to anyone else, nor did it find any evidence that any of the information had been used to harm the company. In addition, no customer information was taken.) To cover his tracks, in July 2010, Zhang deleted a large number of files from the server he had used to effectuate the theft, causing the server to stop working and its log files to be overwritten. The log files would have given evidence of his theft. Zhang pled guilty to the charge in October of 2015.

The sentence imposed by the Court was within the range recommended by the United States Sentencing Guidelines. In addition to the prison term, Judge Davis ordered the defendant to make restitution to his former employer of $100,000.

The case was investigated by the Federal Bureau of Investigation, and was prosecuted by Assistant United States Attorney Michael L. Levy.

PHILADELPHIA – Garret Strathearn, 68, of Sea Girt, NJ, pleaded guilty today to conspiracy to commit mail and wire fraud while serving as the Finance Director for the City of Allentown, PA. 

 

Strathearn admitted that he personally and directly interfered with the awarding of a city contract, at the behest of Public Official #3 who was receiving campaign contributions from the eventual contract awardee.  Strathearn and Assistant City Solicitor Dale Wiles, who previously pleaded guilty, corruptly manipulated the process for awarding the City of Allentown’s 2014 revenue collection contract with the approval of, and for the benefit of, Public Official #3.  Strathearn and Wiles both falsified certain paperwork in order to create public records which gave the false impression that the contract awardee had earned the revenue collection contract on the merits. Strathearn and Wiles also made statements to FBI agents which were materially false with respect to the revenue collection contract award process for 2014.

 

After accepting the guilty plea, United States District Judge Juan R. Sanchez scheduled a sentencing hearing for April 14, 2016.  Wiles in scheduled to be sentenced on March 2, 2016.  Strathearn and Wiles each face a maximum possible sentence of 20 years in prison, a fine, three years of supervised release, and a $100 special assessment. 

 

This case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the Pennsylvania State Police.  It is being prosecuted by Assistant United States Attorneys Joe Khan and Nancy Beam Winter.