Eastern District of Pennsylvania

 

ALLENTOWN – Melvin Aviles, 34, of Allentown, PA, was sentenced today to 10 years in prison for running a cocaine trafficking operation.  Aviles pleaded guilty on April 8, 2014 to conspiracy to distribute 500 grams or more of cocaine, four counts of distributing and aiding and abetting the distribution of cocaine, one count of distributing and aiding and abetting the distribution of cocaine within 1,000 feet of a public school, five counts of distribution of cocaine, and one count of attempted possession with intent to distribute.

 

Between October 2012 and April 2013, Aviles operated a cocaine trafficking business, obtaining cocaine from sources in Puerto Rico and other locations for resale in the Allentown area.  Aviles arranged to have parcels shipped via the United States Postal Service from Puerto Rico to various addresses in Allentown.  Once the cocaine was delivered, Aviles would transport the cocaine to his Allentown residence, weigh it, and repackage it for further distribution in and around the Allentown area.  Some of the cocaine sales were conducted within 1,000 feet of schools.  

 

In addition to the prison term, U.S. District Court Judge James Knoll Gardner ordered 12 years of supervised release and a $1,100 special assessment.

 

“The successful result of this prosecution is due, in large part, to the outstanding collaboration of local, state, and federal law enforcement,” said Memeger. “The tireless efforts and diligent work of the officers and agents investigating this case, made it possible to get this drug trafficker off the streets of Allentown.”

 

“This case represents just the most recent success derived from the close working relationship that exists between the Pennsylvania State Police and our federal and local law enforcement partners,” said Pennsylvania State Police Captain Brian Tobin. “We will continue to put forth our combined resources in order to protect the citizens of this Commonwealth and ensure those who choose to commit crimes are brought to justice.”

 

The case was investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, and the Allentown Police Department with assistance by the Office of the Lehigh County District Attorney. It was prosecuted by Assistant United States Attorney Sherri A. Stephan.

 

PHILADELPHIA - Kim M. Costello, 55, of Harrisburg, PA, pleaded guilty on January 22, 2015, to one count of embezzlement of government funds, announced United States Attorney Zane David Memeger.  In September 2012, Costello was the impress funds manager for the Drug Enforcement Administration’s Harrisburg Resident Office when she embezzled $2,079 in government funds.

 

U.S. District Court Judge Sylvia H. Rambo will schedule a sentencing hearing at a future date.  Costello faces a maximum possible sentence of 10 years in prison, three years of supervised release, a $100 special assessment, and a fine of up to $250,000.

 

The case was investigated by the Department of Justice Office of Inspector General New Jersey Area Office, and is being prosecuted in the Middle District of Pennsylvania by Assistant United States Attorney Kishan Nair, from the Eastern District of Pennsylvania.

 

William J. Frio, 58, of Springfield Township, pleaded guilty today to his role in a tax evasion scheme involving the Nifty Fifty’s restaurant chain.  Frio pleaded guilty to conspiracy to commit tax evasion. Frio is the sixth defendant to plead guilty in the long-running scheme to avoid paying millions of dollars in personal and employment taxes, by failing to properly account for more than $15 million in gross receipts, thereby evading federal taxes of over $2.28 million. Frio also pleaded guilty to filing his own false tax returns, aggravated structuring of financial transactions, and loan fraud. U.S. District Court Judge Mary McLaughlin scheduled a sentencing hearing for April 29, 2015.

 

Frio, an accountant and income tax preparer who provided services to the Nifty Fifty’s organization since 1986, conspired with the owners and principals of Nifty Fifty’s.  The defendants skimmed cash to pay themselves, their employees, and people and businesses who supplied goods and services to the Nifty Fifty’s restaurants, providing those persons and businesses with the opportunity to evade the payment of their own taxes.

 

In 2008, Frio submitted a false loan application to Sovereign Bank for a $417,000 mortgage for his personal residence.  Frio submitted to the bank bogus federal income tax returns for 2006 and 2007, and bogus Forms W-2, falsely representing he had earned substantial income from Tanfasia, Inc.  The 2006 and 2007 tax returns that he had actually submitted to the IRS showed far less income than the false returns supplied to Sovereign Bank, and Frio had not been employed by Tanfasia, Inc. in 2006 or 2007.

 

Frio also used his position as the Nifty Fifty’s accountant to embezzle over $4 million of funds that belonged to the organization. As part of that scheme, between 2006 and 2009, Frio knowingly structured cash transactions totaling over $2.6 million out of Nifty Fifty’s accounts at Sovereign Bank.

 

Frio faces a maximum possible sentence of 57 years in prison, full restitution to the IRS, a fine of up to $2.75 million, and criminal forfeiture.

 

The case was investigated by the Internal Revenue Service Criminal Investigations and the Federal Bureau of Investigation.  It is being prosecuted by Assistant United States Attorneys Paul G. Shapiro and Nancy E. Potts.

Brandon Jones, 33, of Reading, Pennsylvania was charged today by indictment with one count of conspiracy, one count of wire fraud, and one count of bank fraud, announced United States Attorney Zane David Memeger.

            The indictment alleges that Jones participated into two related identify theft schemes.  According to the indictment, Jones and his co-conspirators created and used false identities to make fraudulent credit card purchases and to purchase vehicles with fraudulent bank loans.  The leader of the conspiracy, Damian Gasdaska, provided Jones and other co-conspirators with fraudulent credit cards, which Jones and the others used to purchase various items, including small, expensive electronic equipment.  After the purchases, Jones and the co-conspirators provided these items to Gasdaska, who then sold them and paid the co-conspirators for their illegal services.

            Among other things, the indictment also alleges that Jones, Gasdaska, and their co-conspirators used false identities to obtain fraudulent car loans in order to purchase vehicles.  Specifically, the indictment alleges that in August 2012, Jones, with Gasdaska’s help, obtained a fraudulent loan in the name of J.O. from a credit union and then used this loan to purchase a 2007 BMW in this false name.  As part of this fraudulent purchase, Jones used false personal identifying information in J.O.’s name, a false driver’s license with J.O.’s name and Jones’ photograph, and false employment information.

            Several of members of this conspiracy have previously pleaded guilty in connection with the identify theft schemes.  On April 28, 2014, John Cordero pleaded guilty to one count of conspiracy and one count of bank fraud.  On November 6, 2014, both Damian Gasdaska and Johnnie Rhines pleaded guilty.  Gasdaska pleaded guilty to one count of conspiracy, six counts of wire fraud, seven counts of bank fraud, and one count of aggravated identity theft.  Rhines pleaded guilty to one count of conspiracy and one count of bank fraud.                                                                  

INFORMATION REGARDING THE DEFENDANTS

 

                         NAME

 

           ADDRESS

 

     YEAR OF BIRTH

 

Brandon Jones

 

Reading, PA

 

1981

 

Damian Gasdaska

 

Phillipsburg, NJ

 

1976

 

John Cordero

 

Breiningsville, PA

 

1978

 

Johnnie Rhines

 

Lindenwold, NJ

 

1954

 

If convicted, Jones faces a maximum possible sentence of 55 years imprisonment, a five-year period of supervised release, a $1,500,000 fine, a $300 special assessment, and the imposition of full restitution.

The case was investigated by United States Secret Service, the United States Postal Inspection Service, Homeland Security Investigations, and the Lehigh County Auto Theft and Insurance Fraud Task Force and is being prosecuted by Assistant United States Attorney Patrick J. Murray.

PHILADELPHIA – Joseph C. Waters, Jr., 61, of Philadelphia, was sentenced today to 24 months in prison for using his judicial position to influence the outcome of two cases in the Philadelphia Municipal Court.  Waters, a former Philadelphia Municipal Court Judge, pleaded guilty on September 14, 2014 to mail fraud and honest services wire fraud.  In addition to the prison term, U.S. District Court Judge Juan R. Sanchez ordered 3 years of supervised release and ordered Waters to pay a fine of $5500, and a special assessment of $200.

 

According to documents filed in the case, on September 30, 2011, Waters was asked by Person #1 – a politically active business owner – to use his judicial office to achieve a favorable outcome in a small claims case filed in Philadelphia Municipal Court against Person #1’s real estate management company.  To that end, Waters called two other Municipal Court judges, assigned to the case on different dates, and asked them to rule in Person #1’s favor.  A Municipal Court Judge identified in the information as Judge #2 ultimately adjudicated the case in favor of Person #1 after Waters told Judge #2 “he’s a friend of mine.”  Judge #2’s ruling in favor of Person #1’s company prevented the plaintiff in the small claims case, Company B, from collecting $2733 in unpaid fees owed to it for security services it delivered to Person #1’s company.

 

Waters gave Person #1 a secret advantage through a series of secret ex parte communications with other Municipal Court judges scheduled to hear the small claims case and used his position to cause favorable rulings for Person #1.

 

In a second scheme, Waters used his position as a judge to facilitate a favorable outcome in a criminal firearms case.  In that matter, Person #1 urged a witness cooperating with the government, “CW#1,” to contribute money to help pay down debts Waters had incurred while campaigning for a position on the Municipal Court.  In January 2010, CW#1, gave Waters $1,000 in cash.  In accepting the money, Waters told CW#1 that he would help CW#1 with future problems that CW#1 or CW#1’s friends may encounter in the court system.  Between 2010 and 2012, CW#1 provided gifts and cash contributions to Waters that were not reported on Waters’ campaign finance reporting forms.

 

In May 2012, CW#1 asked Waters for his assistance with a firearms prosecution pending in the Municipal Court.  CW#1 introduced Waters to an undercover agent (“UC#1”) as a business associate.  CW#1 and UC#1 asked Waters to help UC #1’s “cousin” who had been arrested for felony possession of a firearm.  On July 23, 2012, Waters called Judge #1 alerting Judge #1 to the preliminary hearing of a “friend” for the firearms charge and asked Judge #1 to “help him.”  At a July 24, 2012 preliminary hearing, Judge #1, without proper legal basis, reduced the felony firearms charge to a misdemeanor.

 

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.

PHILADELPHIA - Andys O. Rodriguez, 26, of Allentown, PA, was sentenced today to 30 months imprisonment and 3 years supervised release.  U.S. District Court Judge Lawrence F. Stengel also ordered restitution of $2,904,783.64. Rodriguez admitted at his guilty plea that between August 17, 2010 and January 31, 2012, he knowingly filed false tax returns with the IRS claiming refunds in the names of other individuals.  The returns included W-2 forms falsely claiming that taxes were withheld by various employers.  The IRS identified more than 600 false returns that were associated with this scheme.  These returns, which were filed electronically, claimed refunds totaling $2,904,783.64.

            The case was investigated by the Internal Revenue Service Criminal Investigations and is being prosecuted by Assistant United States David J. Ignall.

 

PHILADELPHIA - Justin Williams, a/k/a ANew York Ice, a/k/a APimp Juice, 40, of New York, NY, was sentenced today to 30 years in prison for sex trafficking young women. A federal jury found Williams guilty in September 2013 of two counts of sex trafficking by force and one count of tampering with a witness.  In addition to the prison term, U.S. District Court Judge J. Curtis Joyner ordered 10 years of supervised release.

            Between November 2011 and January 2012, Williams recruited young females to work as prostitutes in his business who were advertised on the Internet for purchase, using locations such as “Backpage,” for purposes of prostitution. Williams engaged in acts of physical violence to force the victims to remain in his business. The advertisements featured pictures of the victims, scantily clad, the price, and a phone number to call to arrange a meeting with a female. Williams forced the victims to engage in sex acts with clients.

            Williams exploited at least three females, ranging in age from 18 to 27. He moved them between Philadelphia, New York, Atlantic City, NJ, and Washington, DC, for purposes of prostitution. He was convicted of two counts of sex trafficking by force and one count of witness tampering for writing a letter to victim #2 to retract her statement prior to trial.

            This case was investigated by the Federal Bureau of Investigation, Arlington County Police Department (Arlington, VA), with assistance from the Philadelphia First Judicial Court Warrant Unit, and the New York City Police Department. It was prosecuted by Assistant United States Attorney Michelle Morgan.

PHILADELPHIA – Joseph Dougherty, 73, of Philadelphia, former Secretary/Business Manager of Local 401, was found guilty today, by a federal jury, of racketeering conspiracy and other charges connected to a dozen members of Ironworkers Local 401.  The jury returned guilty verdicts on the counts of RICO conspiracy, malicious damage to property by means of fire, use of fire to commit a felony, attempted malicious damage to property by means of fire, and conspiracy to damage to property by means of fire. The 11 co-defendants in the case pleaded guilty.  U.S. District Court Judge Michael Baylson scheduled a sentencing hearing for April 29, 2015.

The indictment details incidents in which the defendants threatened or assaulted contractors or their employees, and damaged construction equipment and job sites as part of a concerted effort to force contractors to hire and pay Local 401 workers, even when those workers performed no function.

The defendants had a network of individuals, friendly to the Ironworkers Local 401, to help identify construction projects and job sites where work was being performed without using Local 401 members.  The business agents would approach construction foremen at those work sites and imply or explicitly threaten violence, destruction of property, or other criminal acts unless union members were hired.  The defendants relied on a reputation for violence and sabotage, which had been built up in the community over many years, in order to force contractors to hire union members.  The defendants created “goon” squads, composed of union members and associates, to commit assaults, arsons, and destruction of property.  One such squad referred to itself as the “The Helpful Union Guys,” “T.H.U.G’s.”

At sentencing, Dougherty faces a mandatory minimum term of 15 years in prison up to a statutory maximum of 110 years.

The case was investigated jointly by the Federal Bureau of Investigation and Department of Labor Office of Inspector General, with assistance provided by the Philadelphia Police Department Corruption Task Force, East Whiteland Township Police Department, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Employee Benefit Security Administration.  It is being prosecuted by Assistant United States Attorney Robert Livermore with legal assistance from Gerald Toner, Acting Deputy Chief for Labor-Management Racketeering, Organized Crime and Gang Section at the Department of Justice.

 

​PHILADELPHIA – Kenneth Narzikul, 60, of Media, PA, was sentenced today to 37 months in prison for committing major fraud against the United States, obstructing a federal audit, and making false claims to the government, in connection with defense contracts to manufacture components for military helicopters. U.S. District Court Judge L. Felipe Restrepo also ordered restitution in the amount of $1.2 million, a fine of $7,500, and three years of supervised release to follow the prison term.  

 

         The defendant was President and 85% owner of NP Precision, Inc. (NP), a machine tool business located in Folcroft, PA, which is now defunct.  NP contracted with Department of Defense component agencies to produce critical hardware components used in military helicopters and other aircraft.  At his guilty plea hearing on August 25, 2014, Narzikul admitted that he schemed to fraudulently divert and steal approximately $1.2 million in progress payments that the United States paid NP under two contracts to produce drive shaft couplings for a U.S. Army helicopter Model CH-47, commonly known as the Chinook helicopter.  Narzikul further admitted that he made false claims to the government so that NP could continue to receive progress payments on those contracts, when he knew that NP had not earned the progress payments.  In addition, Narzikul admitted that he tried to cover up his fraud by lying to government auditors and submitting false documents to them, and directing employees at NP to do the same. Narzikul admitted further that he used the diverted progress payments to pay outstanding obligations on other contracts and pay other personal and business expenses for himself and his family.

 

          The case was investigated by the Major Procurement Fraud Unit (MPFU) of the United States Army Criminal Investigative Command (Army CID), the Defense Criminal Investigative Service (DCIS), and the United States Air Force Office of Special Inspection (Air Force OSI).  It was prosecuted by Assistant United States Attorney Mary E. Crawley.

 

​​​            PHILADELPHIA - An indictment was unsealedFriday charging Brian Hartline, 50, of Collegeville, Pennsylvania, and Barry Bekkedam, 47, of Hobe Sound, Florida, in a fraud conspiracy involving NOVA Bank,where Hartline served as President and Chief Executive Officer and Bekkedam had served as Board Chairman.  The alleged scheme involved the Troubled Asset Relief Program (TARP) and was devised in an attempt to defraud the government of more than $13 million. The defendants are each charged with conspiracy to defraud the United States, TARP fraud, two counts of false statements to the federal government, and bank fraud. Bekkedam is additionally charged with two counts of wire fraud.

            The charges were announced today by United States Attorney Zane David Memeger, FBI Special Agent-in-Charge Edward J. Hanko, Special Inspector General for the Troubled Asset Relief Program Christy Romero, and Pennsylvania Department of Banking Secretary of Banking and Securities Glenn E. Moyer.

            Bekkedam and Hartline, with others, formed NOVA Bank in 2002. Bekkedam also owned and operated a financial advisory company, Ballamor Capital Management, and allegedly advised Ballamor clients to invest in NOVA.  But in 2008, NOVA faced risk of failure because of bad loans and investments.  Its investors were at risk of losing their investments.  In October 2008, NOVA Financial Holdings, Inc., of Berwyn, Penn., the parent company of NOVA Bank, applied for approximately $13.5 million in taxpayer bank bailout funds through the U.S. Department of the Treasury TARP.  In June 2009, NOVA Bank was approved to receive the TARP funds on the condition that the bank raise $15 million in additional, private capital.  The bank was ultimately unable to raiseprivate capital, did not receive TARP funds, and in October 2012, the bank failed and was closed by state and federal banking regulators.

            According to the indictment, Bekkedam and Hartline devised a scheme in which NOVA would loan money to G.L., a Florida businessman, for G.L. to transfer to NOVA’s parent company so it would appear as though the bank had new capital from an outside investor. On June 30, 2009, NOVA wired $5 million to G.L.’s bank account in Florida and, approximately two hours later, G.L. wired $5 million to an account used for investments in NOVA Financial Holdings, Inc.  It is further alleged that in October and December 2009, Bekkedam and Hartline convinced two others to make similar “investments” using loans from NOVA, in efforts to make NOVA appear more financially sound than it actually was. The defendants also allegedlytold and directed employees to tell the U.S. Department of Treasury that NOVA had raised new capital when it had not.  According to the indictment, the defendants concealed the true purpose of the loan to G.L. and falsely stated the purposes of the other two loans.

            If convicted, defendant Bekkedam faces a statutory maximum sentence of 115 years imprisonment, a $4,750,000 fine, five years supervised release, and a $700 special assessment. Hartline faces a statutory maximum sentence of 55 years imprisonment, a $2,750,000 fine, five years supervised release, and a $500 special assessment.

            The case was investigated by the Federal Bureau of Investigation, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Internal Revenue Service Criminal Inestigaton, the Federal Deposit Insurance Corporation Office of Inspector General, the Office of Inspector General of the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau.  It is being prosecuted by Assistant United States Attorney David Ignall.

            In October 2008, NOVA Financial Holdings, Inc., of Berwyn, Penn., the parent company of NOVA Bank, applied for approximately $13.5 million in taxpayer bank bailout funds through the U.S. Department of the Treasury Troubled Asset Relief Program (TARP).  In June 2009, NOVA Bank was approved to receive the TARP funds on the condition that the bank raise $15 million in additional, private capital.  The bank was ultimately unable to raise private capital, did not receive TARP funds, and in October 2012, the bank failed and was closed by state and federal banking regulators.

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

PHILADELPHIA - The United States Attorney's Office announced today that Bellante Properties, of Lehigh County, PA, and its owners Vincent Fantozzi and Bernard Fantozzi, will pay the government $19,120 to resolve allegations surrounding federally-funded rental assistance payments it received.  According to a civil complaint, Bellante Properties received rent subsidy payments from the Lehigh County Housing Authority while unlawfully requiring a tenant to pay supplemental rental payments disguised as trash removal fees.

 

            The lawsuit was filed by Karen Schware, in the United States District Court for the Eastern District of Pennsylvania, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens to bring civil actions on behalf of the United States and to share in any recovery.

 

            The Section 8 housing assistance program is designed to provide affordable housing to low-income families.  According to the government’s complaint, between July 2007 and September 2013, Bellante Properties received payments from the Lehigh County Housing Authority under the Section 8 rent assistance program.  In addition to receiving federally-funded Section 8 rent assistance payments, and approved rent payments from the tenant, the government alleges that Bellante Properties also unlawfully required the tenant to provide supplemental rent payments that had not been approved by the Lehigh County Housing Authority.  The unlawful supplemental payments were disguised as trash removal fees.  The parties have agreed to settle the dispute for a payment by the defendants of $19,120 to the United States.  Bellante Properties and its principals, Vincent Fantozzi and Bernard Fantozzi, are also barred for three years from participation in HUD’s Section 8 program.  As a whistleblower, Schware will receive a share of the settlement proceeds.  Bellante Properties will also pay Schware’s legal fees.

 

            The settlement was the result of a coordinated effort by the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Department of Housing and Urban Development Office of Inspector General.  The case was handled by Assistant U.S. Attorney Joel M. Sweet.

PHILADELPHIA – Michael Lowry, 59, of Philadelphia, PA, was sentenced today to 20 months in prison for lying to a grand jury in connection with a ticket fixing scheme at the former Philadelphia Traffic Court. Lowry was a sitting traffic court judge at the time. In addition to the prison term, U.S. District Court Judge Lawrence Stengel ordered one year of supervised release and ordered Lowry to perform 100 hours of community service.

 

            Lowry and co-defendants Robert Mulgrew and Thomasine Tynes were convicted at trial, on July 23, 2014, of committing perjury before a federal grand jury.

 

            This case was investigated by the Federal Bureau of Investigation.  It is being prosecuted by Assistant United States Attorneys Denise Wolf and Anthony Wzorek.

PHILADELPHIA - Crystal Graham, 42, of Philadelphia, PA, was sentenced today to 12 months in prison and was ordered to pay restitution of $266,243 to the IRS for filing false claims with the United States through federal income tax returns she prepared.  Graham pleaded guilty on September 22, 2014, to 11 counts of filing false claims.

 

Graham created bogus wage statements and other false financial information which she placed on tax returns that she prepared for individuals for the purpose of obtaining tax refunds in the names of the filers.  The fraudulent returns sought refunds of $354,000 based on bogus expense deductions and refundable credits, such as a filer=s entitlement to the First Time Home Buyer=s Credit and the Earned Income Tax Credit when the filer had little, if any, taxes withheld from income in that year.  Graham also had her clients sign statements giving her the authority to deposit the clients= refund checks into her savings account, or to have the refund checks placed on prepaid access devices.  This gave Graham the ability to take a substantial portion of the fraudulent refunds before giving her clients the remainder.

                                                                            

In addition to the prison term, U.S. District Court Judge Cynthia Rufe ordered Graham to pay a $1,100 special assessment.  She is also prohibited from preparing tax returns.  The case was investigated by the Internal Revenue Service Criminal Investigation.  It was prosecuted by Assistant United States Attorney Floyd J. Miller.

PHILADELPHIA - Dennis Erik Fluck Von Kiel, 58, of New Tripoli, PA, pleaded guilty today to 17 counts stemming from his schemes to: defraud the IRS and the Department of Health and Human Services out of hundreds of thousands of dollars, get financial aid grants for his four eldest children, file false claims for social security disability insurance, and lie at a bankruptcy proceeding. Von Kiel is the former medical director of Lehigh County Prison. He pleaded guilty to conspiracy to defraud the United States, five counts of attempting to defeat or evade a federal tax, one count of attempting to obstruct the due administration of the internal revenue code, five counts of failure to file tax returns, one count of wire fraud and aiding and abetting wire fraud, one count of perjury in a bankruptcy proceeding, one count of financial aid fraud and aiding and abetting financial aid fraud, and two counts of mail fraud and attempted mail fraud. The plea agreement recommends a 41-month prison term. U.S. District Court Judge Jeffrey L. Schmehl will make the final determination on sentencing at a hearing scheduled for April 20, 2015.

 

Since 2001, Von Kiel has engaged in a series of illegal schemes which were designed to help him evade creditors, including the Department of Health and Human Services to whom Von Kiel owed hundreds of thousands of dollars in outstanding medical school loans. He tried to defraud the IRS in order to avoid paying more than $200,000 in duly-owed personal income taxes.  Von Kiel also lied on applications to the Department of Education for financial student aid for four of his children, which enabled them to receive more than $36,000 in federal Pell Grants for their college educations.  Von Kiel tried to file a fraudulent claim for social security disability benefits by falsely claiming that he suffered from post-traumatic stress disorder. He also intentional made a false statement under oath in a bankruptcy proceeding.

 

Von Kiel is a doctor of osteopathy whose medical practice included treating inmates at LCP from approximately March 1989 until approximately August 2013. Most of Von Kiel’s schemes involved him pretending to become a minister of a “church” called the International Academy of Lymphology (which later changed its name to the International Academy of Life and then the Christian Forum Assembly), purporting to take a “vow of poverty,” and then claiming that he had no taxable income because his earnings belonged to “church.” Von Kiel convinced his employer that he was exempt from federal tax withholdings and directed his employer to deposit his bi-weekly paychecks into bank accounts for his “church.” Once the money arrived in those accounts, co-conspirators would transfer nearly the same amount of money into Pennsylvania bank accounts controlled by Von Kiel. Von Kiel then used the money to pay for all of his family’s day-to-day living expenses and to buy some luxury items.

 

Von Kiel has been held without bail at the Federal Detention Center since his arrest on February 28, 2014. Von Kiel also faces up to three years of supervised release, restitution to the IRS in the amount of $256,920, $262,303.11 to the Department of Health and Human Services and $36,314 to the Department of Education, forfeiture of $165,988.29, a fine of up to $2,895,000, and a $1,700 special assessment.

 

The case was investigated by the Internal Revenue Service Criminal Investigations, the FBI, and the Department of Education’s Office of Inspector General. It is being prosecuted by Assistant United States Attorney Mark B. Dubnoff.

PHILADELPHIA - Nathan Isen, 61, of Villanova, PA, was charged today by information with one count of money laundering, announced United States Attorney Zane David Memeger.  According to the information, Isen sold 12 pieces of art work in exchange for $20,000 in cash, for the purpose of laundering the $20,000 which he understood to be proceeds from the sale of marijuana.

 

If convicted the defendant faces a maximum possible sentence of 20 years imprisonment, three years of supervised release, a $250,000 fine and a $100 special assessment.

 

The case was investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigations (“HSI”), and is being prosecuted by Assistant United States Attorneys Andrew J. Schell and Judy Goldstein Smith.

 

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

PHILADELPHIA - Dmitrij Harder, 42, of Huntingdon Valley, PA, was charged today by indictment with violating the Foreign Corrupt Practices Act and money laundering.  Harder is the former owner and President of Chestnut Consulting Group, Inc. (“Chestnut”), a financial consulting firm that was located in Southampton, Pennsylvania.

 

            The charges were announced today by United States Attorney Zane David Memeger, FBI Special Agent-in-Charge Edward J. Hanko, and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.

 

            The indictment alleges that Harder participated in a scheme to pay bribes to a foreign government official and then laundered the proceeds of those crimes. Between 2007 and 2009, Harder allegedly paid approximately $3.5 million in bribes to corruptly influence a foreign official’s actions on applications submitted by clients of his and of the Chestnut Group, and to corruptly influence the foreign official to direct business to him, the Chestnut Group, and others.

 

            The European Bank for Reconstruction and Development (“EBRD”) was a multilateral development bank headquartered in London, England, and was owned by over 60 sovereign nations.  Among other things, the EBRD provided debt and equity financing for development projects in emerging economies, primarily in Eastern Europe.  According to the indictment, Harder knew a senior banker at the EBRD from prior business dealings.  The senior banker was responsible for leading the review of the applications for loans and equity investments, and also set the terms and conditions for that financing.  Harder allegedly paid bribes to the senior banker in order to gain a favorable outcome in the review of applications for financing submitted by his clients.  According to the indictment, the EBRD ultimately approved applications for financing from two of Chestnut’s corporate clients: an $85 million equity investment with a 90 million Euro loan; and a $40 million equity investment with a $60 million convertible loan.  Chestnut allegedly earned approximately $8 million in “success fees” as a result of the EBRD’s approval of these two applications.

 

            It is further alleged that the defendant made five payments, totaling more than $3.5 million, to the sister of the official at the EBRD in an effort to conceal the bribes.  These alleged payments were made purportedly for consulting and other services provided to Chestnut by the official’s sister, when, in fact, she did not provide such services.  According to the indictment, the defendant also participated in the creation of fake documents in an attempt to justify these payments to the official’s sister.

 

            “We will aggressively investigate and prosecute individuals in our district who use corrupt means like bribery to influence foreign officials,” said Memeger. “Our criminal statutes in this arena must be enforced to ensure fair dealing in a competitive global marketplace where foreign officials often hold significant decision-making authority. The alleged conduct here was particularly reprehensible because it undermined the legitimacy of a process designed to support businesses for the citizens of developing nations.”

 

            “This is a great example of the FBI’s ability to successfully coordinate with our international law enforcement partners to tackle corruption,” said Special Agent-in-Charge Hanko. “Bribery – foreign or domestic – cripples the notion of fair competition in the marketplace.”

 

            “We are committed to combating foreign corruption, across the globe and across all industries, through enforcement actions and prosecutions of companies and the individuals who run those companies,” said Assistant Attorney General Caldwell.  “As alleged, in this case, the owner and chief executive of a Pennsylvania financial consulting firm secured hundreds of millions of dollars in business by bribing a European banking official.  He now faces an indictment for corruption in federal court.  Bribery of foreign officials undermines the public trust in government and fair competition in business.  The charges returned today reflect the clear message that we will root out corruption and prosecute individuals who violate the Foreign Corrupt Practices Act.”

 

            Harder is charged with one count of conspiracy to violate the Foreign Corrupt Practices Act and Travel Act, five counts of violating the Foreign Corrupt Practices Act, five counts of violating the Travel Act, one count of conspiracy to commit international money laundering, and two counts of international money laundering. He faces a maximum possible statutory sentence of 190 years in prison, fines of up to $1.75 million, twice the value of the property involved in the transaction, or twice the value gained or lost.

 

            The case is being investigated by the FBI’s Philadelphia Division. Significant assistance was also provided by the Criminal Division’s Office of International Affairs. The case is being prosecuted by Assistant U.S. Attorney Michelle Morgan of the Eastern District of Pennsylvania and Assistant Chief Leo R. Tsao of the Criminal Division’s Fraud Section.

 

 

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

 

UNITED STATES ATTORNEY'S OFFICE             Contact: PATTY HARTMAN

EASTERN DIS­TRICT, PENN­­­­­­SYLVANIA                             Media Contact­

Suite 1250, 615 Chest­nut Street                                               215-861-8525

Philadelphia, PA  19106         

 

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(PHILADELPHIA) - U.S. Attorney Zane David Memeger announced today that the Eastern District of Pennsylvania collected $2,373,688,153 in criminal and civil actions in Fiscal Year (FY) 2014. 

           

            The Department of Justice collected $24.7 billion in civil and criminal actions in FY 2014.  The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.

 

            “Recouping federal funds that were misspent due to fraud, including substantial health care and mortgage insurance funds, is a critical part of our mission,” said Memeger. “Our nation’s taxpayers deserve our most aggressive efforts to recover their hard-earned tax dollars that have been misappropriated.  During fiscal year 2014, we continued to honor this mission with these tremendous resolutions and collections.”

 

            The recoveries in the Eastern District of Pennsylvania include more than $1.6 billion in civil and criminal penalties paid by healthcare giant Johnson & Johnson (J&J) to resolve misbranding and unapproved use allegations.  J&J paid a $1.273 billion civil settlement to resolve allegations of off-label marketing for Risperdal and Invega, as well as the alleged payment of kickbacks to physicians involving Risperdal.  Janssen Pharmaceuticals, Inc. (Janssen), a subsidiary of J&J, paid $400 million in a criminal fine and forfeiture for promoting Risperdal to health care providers for unapproved uses.

 

            The collections also include: a $56.5 million civil settlement with Shire Pharmaceuticals LLC to resolve False Claims Act allegations; a $150 million civil settlement with Amedisys Inc. and its affiliates to resolve False Claims Act allegations; a $7.3 million civil settlement with  pharmaceutical company Astellas Pharma US, Inc., to resolve False Claims Act allegations; and a $172.9 million civil settlement with specialty pharmaceuticals company Endo Health Solutions, Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo), to resolve allegations of off-label marketing.

 

            Additionally, the U.S. Attorney’s office in the Eastern District of Pennsylvania, working with partner agencies and divisions, collected approximately $15 billion in asset forfeiture actions in FY 2014, which includes a $13 billion settlement with JP Morgan - the largest settlement with a single entity in American history - to resolve federal and state civil claims arising out of the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS).

 

            The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

 

            The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud and other misconduct and collected fines imposed on individuals and corporations for violations of federal health, safety, civil rights, and environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration, and Department of Education.

 

            Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

PHILADELPHIA - Joseph N. Reilly, 69, of Philadelphia, PA, was sentenced today to 26 months in prison for with mail fraud in connection with a million dollar fraud scheme.  According to the information, Reilly, who owned Joseph N. Reilly Real Estate, Inc., diverted more than $1 million in client funds to himself, between January 2009 and April 2011, defrauding approximately 50 clients.  He pleaded guilty on May 29, 2014.

 

Reilly, through his company, acted as a property manager for his clients, collecting rent and utilities payments for owners.  He also paid utility and real estate tax bills. Reilly mailed monthly statements to tenants and property owners.  Reilly sent at least one statement to a property owner indicating that the balance in the owner’s account was $490,565.58 when, in fact, the balance was $86.80.

 

 In addition to the prison term, U.S. District Court Judge L. Felipe Restrepo ordered restitution of $668,856, two years of supervised release, and a $100 special assessment.

 

The case was investigated by the U.S. Postal Inspection Service and is being prosecuted by Assistant United States Attorney Judy G. Smith.

PHILADELPHIA - Northampton Hospital Company, LLC and Northampton Hospital Corporation, doing business as Easton Hospital (“Easton Hospital”), have agreed to a $662,000 settlement with the government to resolve allegations of health care fraud arising under the False Claims Act.  The United States contends Easton Hospital billed Medicare for procedures performed by Dr. Thomas Walden, including extracorporeal shock wave lithotripsy, cystometrogram, green light laser, and transurethral resection of the prostate.  According to the United States, some of these procedures were not performed, were only partially completed, or were medically unnecessary.  The settlement was announced today by United States Attorney Zane David Memeger.  Easton Hospital denies the allegations.

 

Easton Hospital provides inpatient and outpatient healthcare services in Easton, Pennsylvania.  The hospital’s services include cardiovascular, orthopedic, oncology, maternal, child health, pediatric, physical therapy rehabilitation, and mental health services.  In addition, it offers surgical care, emergency care, occupational and speech therapy, wound healing management, imaging, radiology, home health, hospice, and laboratory services.  While employed at Easton Hospital, two former employees discovered a Medicare fraud scheme perpetrated at Easton Hospital.  In specific, these employees observed urologic procedures and tests performed by Dr. Walden for which the government should not have been billed by Easton Hospital.

 

The two employees filed a complaint in the Eastern District of Pennsylvania captioned U.S. ex rel. David Kasprzak and David Heaton v. Defendant Northampton Hospital Company LLC d/b/a Easton Hospital and Northampton Hospital Corporation d/b/a Easton Hospital, Civil Action Number 10-6264.  This complaint was filed under the qui tam, or whistleblower, provisions of the False Claims Act.  The qui tam provisions permit private citizens to bring civil actions on behalf of the United States.

 

“The United States Attorney’s Office for the Eastern District of Pennsylvania places a high priority on criminal and civil enforcement in cases involving health care fraud,” said Memeger.  “Health care fraud wastes tax dollars, harms patients, and drives up medical costs for everyone.  We encourage our citizens to report potential health care fraud so that we can effectively investigate and prosecute this type of wrongdoing.”

 

Under the parties’ settlement agreement, Easton Hospital will pay $662,000 to the United States.  The two whistleblowing employees will receive a share of the settlement payment.

 

The case was investigated by the United States Attorney’s Office for the Eastern District of Pennsylvania, the United States Department of Health and Human Services- Office of Inspector General, and the United States Office of Personnel Management-Office of Inspector General.  Within the United States Attorney’s Office, the case was handled by Assistant U.S. Attorneys Veronica J. Finkelstein and Joel M. Sweet.

 

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.

 

 

 

UNITED STATES ATTORNEY'S OFFICE        Contact:  PATTY HARTMAN

EASTERN DISTRICT, PENNSYLVANIA            Media Contact

Suite 1250, 615 Chestnut Street                                           215-861-8525

Philadelphia, PA  19106        

A second superseding indictment was returned today against nine people charged in a bank fraud conspiracy that also stole the identifying information of at least two people, announced United States Attorney Zane David Memeger and Burlington County (NJ) Prosecutor Robert D. Bernardi.  The defendants allegedly obtained or attempted to obtain  $279,875.93 through fraudulent means.  Charged in the superseding indictment are: Adolphus William Cato, 33, Michael Ross, 49, both of Sicklerville, NJ; Jared Hayes, 37, Quanda Anthony, 43, both of Willingboro, NJ; Sean Finn, 31, of Mount Holly, NJ; Rushawn Woodall, 38, of Trenton, NJ; Leonard Herrington, 41, Zabrina Jobe, 39, both of Philadelphia, PA; and Warren Moore, 41, of Bordentown, NJ.

 

According to the indictment, the defendants defrauded and attempted to defraud Third Fed Bank, TD Bank, Santander Bank, PNC Bank, M&T Bank, and Andrews Credit Union.  Cato allegedly manufactured and obtained fraudulent drivers licenses utilizing the personal identifying information of victims without their knowledge or consent. Hayes allegedly obtained valid checks from businesses and personal bank accounts from individuals known and unknown to the grand jury then used the information to produce counterfeit checks.  The victims’ personal identifying information was used in applying for loans online, to obtain money from various financial institutions by cashing counterfeit checks, and to obtain the proceeds of fraudulent loans using counterfeit identifications and checks.  Defendants Woodall and Moore also allegedly used unauthorized and counterfeit access devices and fraudulent identification, allegedly provided by defendants Cato and Hayes, to obtain automobiles from car rental businesses and hotel lodging.

 

If convicted, the defendants face the following statutory maximum possible sentences: Cato, 157 years in prison; Hayes, 127 years in prison; Ross, 125 years in prison; Anthony, 95 years in prison; Moore, 87 years in prison; Jobe, 67 years in prison; Woodall, 57 years in prison; Herrington, 37 years in prison; and Finn, 35 years in prison, plus possible fines and restitution.

 

This case was investigated by Immigration and Customs Enforcement Homeland Security Investigations (HSI), the United States Secret Service, the Burlington County (NJ) Prosecutor’s Office, the Bucks County District Attorney’s Office, the Bordentown Township (NJ) Police Department, the Burlington City (NJ) Police Department, the Burlington County (NJ) Sheriff’s Department, the Camden County (NJ) Prosecutor’s Office High Tech Crimes Unit, the Camden County (NJ) Sheriff’s Department, the Cherry Hill (NJ) Police Department, the Lehigh County Auto Theft Task Force, the Mount Holly (NJ) Police Department, the Pennsauken Township (NJ) Police Department, the Plumstead Township Police Department, Willingboro Township (NJ) Police Department, and the Winslow Township (NJ) Police Department.  It is being prosecuted by Assistant United States Attorney Melanie Babb Wilmoth.

PHILADELPHIA – Christian Dior Womack, a/k/a “Gucci Prada,” 30, of Chester, PA, was sentenced today to life in prison for sex trafficking females, including a minor, for prostitution.  Womack pleaded guilty, on July 23, 2014, during jury selection for his federal trial.  He operated a prostitution venture, in Philadelphia and elsewhere, recruiting young females, one of whom was a minor, to work as prostitutes. He also engaged in acts of physical violence, coercion, and threats of physical harm to maintain the participation of the females.

U.S. District Court Judge Mitchell Goldberg sentenced Womack to life for sex trafficking of a minor, and for sex trafficking by force.

Charged with Womack was Rashidah Brice, a/k/a “Camille,” a/k/a “Milly,” 24, also of Chester, PA.  As part of their venture, Womack and Brice allegedly created internet advertisements in which they advertised these females as available for purchase for purposes of prostitution.  The advertisements featured pictures of the females scantily clad, and provided a phone number to call to arrange a meeting with the females. Brice previously pleaded guilty.  She was sentenced in October to 185 months in prison.                              

The case was investigated by the FBI, the Philadelphia Police Department Special Victims Unit, and the Tinicum Township Police Department.  It was prosecuted by Assistant United States Attorneys Michelle Morgan and Melanie Babb Wilmoth.

Peter Fields, also known as Charles Smith, 48, of Philadelphia, PA, was charged today by indictment with mail fraud, bank fraud, access device fraud and aggravated identity theft, announced United States Attorney Zane David Memeger.  Fields obtained the personal and financial information of victims and used that information to obtain credit accounts in the victims’ names, add himself as an authorized user to victims’ credit accounts, manufacture fraudulent checks using victims’ account numbers, and fraudulently obtain utility services in the names of victims for others.

If convicted, Peter Fields faces a maximum possible sentence of 73 years in prison and a fine of $2 million.

The case was investigated by United States Postal Inspection Service, with the assistance of the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney K.T. Newton.

Robert Durandis, 24, Donald Charles, 25, Gilbert Pierre-Charles, 22 and Manuel Reyes-Gonzalez, 21, all of Philadelphia, Pennsylvania were charged today by superseding indictment with conspiracy, access device fraud and aggravated identity theft, announced United States Attorney Zane David Memeger.  The defendants traveled throughout Pennsylvania and other locations and used counterfeit credit, debit and gift cards, encoded with stolen account numbers, to purchase numerous cartons of cigarettes, gift cards and other items.

If convicted, Robert Durandis faces a maximum possible sentence of 84 years in prison and a fine of $3.25 million; Donald Charles faces a maximum possible sentence of 42 years in prison and a fine of $2.25 million; Gilbert Pierre-Charles faces a maximum possible sentence of 69 years in prison and a fine of $3.25 million; and Manuel Reyes-Gonzalez faces a maximum possible sentence of 67 years in prison and a fine of $3 million.

The case was investigated by United States Secret Service and is being prosecuted by Assistant United States Attorney K.T. Newton

PHILADELPHIA – Derrick Godfrey, 45, of Philadelphia, was sentenced today to 509 months in prison, for an armed robbery spree over two days in June 2012, involving three communities.  Godfrey was convicted June 27, 2014 of three counts of Hobbs Act Robbery and one count of brandishing a handgun during the second robbery.  In addition to the prison term, U.S. District Court Judge J. Curtis Joyner ordered five years of supervised release, a $500 special assessment and restitution of $860.

On June 1, 2012, shortly before 5:00 p.m., Godfrey robbed the Pennsylvania Wine & Spirits Shoppe, at 7146 Ridge Ave, in Philadelphia.  He ordered the employees to turn over the cash contained in the store’s three registers.  He stole $1,074 from the store which he placed in a multi-colored bag he was carrying.  The next day, shortly before noon, Godfrey robbed the Pennsylvania Wine & Spirits Store at 504 West Marshall Street, Norristown, Pennsylvania.  The store manager reported that the robber, wearing a black hooded sweatshirt and brandishing a gun, entered the office area of the store and ordered the store clerk to empty the contents of the store safe into a multi-colored bag that he was carrying.  That robbery netted Godfrey approximately $400 from the safe and another $200 from the cash registers.  About 20 minutes later, Godfrey robbed the Dunkin’ Donuts store at 1941 West Main Street, West Norriton, Pennsylvania.  He walked into the store and ordered employees to empty contents of the cash registers into a multi-colored bag that he was carrying.  Godfrey stole approximately $318 in that robbery.  

A short time later, East Norriton Township Police officers stopped the getaway car several miles from the Dunkin’ Donuts.  Eyewitnesses identified Godfrey as the gunman and the car in which he was a passenger as the getaway car.  Police searched the car and found the handgun which bore Godfrey’s DNA, several changes of clothing, a multi-colored shopping bag as described by the victims of the three armed robberies, and a black plastic bag with more cash.

The case was investigated by the FBI, the East Norriton Township Police Department, the Norristown Police Department, the Philadelphia Police Department, the West Norriton Township Police Department, the Montgomery County District Attorney’s Office, and the Montgomery County Detective Bureau.  It was prosecuted by Special Assistant United States Attorneys Rebecca Strubel and Matthew Quigg.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA - Richard Ritchie, 45, of Philadelphia, William O’Donnell, 62, of Cherry Hill, NJ, and Christopher Prophet, 43, of Richboro, PA, pleaded guilty today to RICO conspiracy and other charges in connection with an extortion case in which Ironworkers Local 401 used violence and intimidation to get union members assigned to jobs on non-union worksites.  In addition to the RICO conspiracy count, Ritchie and Prophet each pleaded guilty to attempted extortion which interferes with interstate commerce; and Ritchie also pleaded guilty to violent crime in aid of racketeering.  United States District Court Judge Michael Baylson scheduled sentencing hearings as follows: Ritchie, April 28, 2015; O’Donnell, April 27, 2015; Prophet, April 17, 2015. The defendants are among 12 defendants charged in the case. All but one have pleaded guilty. Trial for the remaining defendant, Joseph Dougherty, is scheduled to begin January 5, 2015.

The 12 defendants charged had a network of individuals, friendly to the Ironworkers Local 401, to help identify construction projects and job sites where work was being performed without using Local 401 members.  The business agents for the union would approach contractors at those work sites and imply or explicitly threaten violence, destruction of property, or other criminal acts unless union members were hired.  The defendants relied on a reputation for violence and sabotage, which had been built up in the community over many years, in order to force contractors to hire union members.  The defendants created “goon” squads, composed of union members and associates, to commit assaults, arsons, and destruction of property.  One such squad referred to itself as the “The Helpful Union Guys,” “T.H.U.G’s.”

Ritchie faces a statutory maximum 60 years in prison; Prophet faces a statutory maximum sentence of 40 years in prison; and O’Donnell faces a statutory maximum sentence of 20 years in prison.

The case was investigated jointly by the Federal Bureau of Investigation and Department of Labor Office of Inspector General, with assistance provided by the Philadelphia Police Department Corruption Task Force, East Whiteland Township Police Department, the Upper Merion Police Department, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Employee Benefit Security Administration.  It is being prosecuted by Assistant United States Attorney Robert Livermore with legal assistance provided by Gerald Toner, Acting Deputy Chief for Labor-Management Racketeering, Organized Crime and Gang Section at the Department of Justice.

 

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Vincent Craven, Jr., 48, of Malvern, Pennsylvania was charged today by Information with one count of bank fraud, announced United States Attorney Zane David Memeger.  According to the Information, Craven submitted false mortgage applications to Washington Mutual Bank and Wachovia Bank (now Wells Fargo) and defrauded Washington Mutual of approximately $490,391 and Wells Fargo of approximately $103,651.

If convicted the defendant faces a maximum possible sentence of 20 years in prison, three years of supervised release, a $1 million fine, a $100 special assessment, and restitution.

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Terri A. Marinari.

Click here to view the information.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA - Robert Coppack, 41, of LaVerne, California, was ordered today to spend five months in community confinement and to pay $53, 354 in restitution for interfering with a flight crew.  On May 13, 2014, Coppack intimidated and assaulted flight crew members and flight attendants on a US Airways flight traveling from Philadelphia to London, and interfered with their duties and performance.  He pleaded guilty September 17, 2014.  In addition to the confinement, U.S. District Court Judge John R. Padova ordered the defendant to refrain from alcohol and illegal controlled substances, submit to testing for alcohol and drug testing, and participate in alcohol and mental health treatment while on supervised release.

The case was investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigations, the Federal Bureau of Investigation, and the Joint Terrorism Task Force, and is being prosecuted by Assistant United States Attorney Sarah L. Grieb.

PHILADELPHIA - Andrew B. Zelenkofske, 54, an accountant, of Chagrin Falls, Ohio, was sentenced today to 36 months in prison for defrauding former clients of over $1 million.  Between January 2009 and May 2012, he defrauded three of his victims by soliciting funds from them to invest in a start-up biotechnology company. Instead of investing the victims’ money as he represented, Zelenkofske used the funds to pay his own business expenses in connection with a failing restaurant he owned.

Between April 2011 and July 2012, Zelenkofske defrauded another victim, also a former client, of $237,000 by falsely representing that she owed income taxes when she did not and soliciting from her a loan amount which he knew he could not repay. He also spent this victim’s money to pay expenses related to his restaurant. In 2010 and 2011, Zelenkofske defrauded a group of business associates of at least $137,254 by concealing the payment of a dividend and using the funds belonging to these investors to pay his own business expenditures.

Finally, in November 2013, Zelenkofske attempted to obstruct the administration of the internal revenue laws by falsifying a Release of Levy form which he transmitted to the IRS in connection with the representation of a client.

In addition to the prison term, U.S. District Court Judge Stewart Dalzell ordered $987,050 in restitution, three years of supervised release and a $500 special assessment.

The case was investigated by the Federal Bureau of Investigations, the Internal Revenue Service Criminal Investigations and the Treasury Inspector General for Tax Administration. It was prosecuted by Assistant United States Attorney Terri A. Marinari.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA – William Hird, 69, of Philadelphia, PA, was sentenced today to 24 months in prison for his role in a fraud scheme involving judges at the former Philadelphia Traffic Court. Hird, who was Director of Records at the time, pleaded guilty in January to 18 counts, including conspiracy, wire fraud, mail fraud and lying to the FBI when questioned about ticket fixing at Traffic Court. Hird is the third defendant sentenced in the fraud conspiracy that involved frequent and pervasive “ticket-fixing” at the Philadelphia Traffic Court.  In addition to the prison term, U.S. District Court Judge Robert F. Kelly ordered Hird to pay a $5,000 fine and ordered one year of supervised release.

Former traffic court judge Fortunato Perri, Sr., who pleaded guilty on March 13, 2013, would receive traffic citation numbers, the names of offenders, or the actual citations to arrange "fixing" the ticket and would convey the information to William Hird. Hird, in turn, allegedly conveyed the request to the assigned judge or the judge’s staff. Hird was extremely loyal to Perri given that Perri helped Hird move up the ladder to a high-level administrator at Traffic Court. Recorded conversations demonstrate that Hird acceded to Perri's requests to "fix" certain tickets. Given Hird's position at Traffic Court and access to the judges, Hird was able to facilitate requests for ticket fixing for Perri.     

As part of the scheme, tickets were "fixed" by either being dismissed, finding the ticket holder "not guilty," or finding the ticket holder guilty of a lesser offense. In many cases, the ticket holder did not even appear in Traffic Court, yet their ticket was "fixed." As a result, the ticketholders paid lesser or no fines and costs, and evaded the assessment of "points" on their driving record.

The case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Denise S. Wolf and Anthony J. Wzorek.

 

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA – A federal jury today returned guilty verdicts against four defendants charged in a loan sharking and illegal gambling ring that was run out of several Philadelphia businesses.  Ylli Gjeli, 49, Fatimir Mustafaraj, 42, Gezim Asllani, 35, Rezart Rahmi Telushi, 41, all of Philadelphia, were found guilty of racketeering conspiracy, racketeering collection of unlawful debt, and collections of extensions of credit by extortionate means.  Gjeli, Mustafaraj, and Asllani were also convicted of making extortionate extensions of credit; and Gjeli and  Mustafaraj were also convicted of operating an illegal gambling business.  U.S. District Court Judge William Yohn scheduled sentencing hearings as follows: Gjeli, March 18, 2015; Mustafaraj, March 19, 2015; Asllani, March 25, 2015; and Telushi, March 26, 2015.

Gjeli was a leader and “boss” of the organization; Mustafaraj, a/k/a “Tony,” was a leader and “muscle.”  Both directed other members in the loan sharking activities and illegal gambling business, approved loans, used intimidation and threats of violence against customers, collected weekly loan payments, physically assaulted subordinate members and associates, supervised the illegal gambling business, provided cash to pay customer’s gambling wins and otherwise financed the gambling business, collected gambling debts, and made loans to customers whose debts were incurred through the illegal gambling business.  Defendants Asllani, a/k/a “Sam,” and Telushi, a/k/a “Luigi,” were “collectors” who assisted Gjeli and Mustafaraj in making loans and regularly collected weekly loan payments from customers.  The defendants generated money by making and collecting on loans with usurious rates of interest; using intimidation, threats, and violence to make and collect on loans; and making loans to betting customers whose debts were incurred through the enterprise’s illegal gambling business.  The enterprise used businesses in Philadelphia - including the Lion Bar & Grill, Blackbird Café, “Ylli’s 2 Brothers,” and First England Pizza - to conduct the criminal activities. 

Members and associates of the enterprise cultivated their reputation for violence by threatening customers with dangerous weapons such as a firearm and hatchet; using implied threats and intimidation; telling customers that if they did not pay their debts someone would kill them, “break your legs,” or physically harm them or their family members in some other way; and physically assaulting subordinate members and associates.

The defendants attempted to conceal the existence and operations of the enterprise from law enforcement by: limiting their discussions of criminal activities when on the phone using cryptic and coded language to describe criminal activities; conducting pat-downs and body searches of customers to check for weapons and recording devices; and conducting the enterprise’s transactions primarily in cash.

Defendant Gjeli faces a maximum possible sentence of 185 years in prison; Mustafaraj faces a maximum possible sentence of 205 years in prison; Asllani faces a maximum possible sentence of 140 years in prison; Telushi faces a maximum possible sentence of 80 years in prison.

The case was investigated by the Federal Bureau of Investigation, Internal Revenue Service Criminal Investigations, Pennsylvania State Police, Montgomery County Detectives, and the New Jersey State Police.  It is being prosecuted by Assistant United States Attorney Salvatore L. Astolfi and Trial Attorney Margaret Vierbuchen from the Department of Justice Organized Crime & Gang Section.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA – Victor Thach, 47, of Philadelphia, was sentenced today to 46 months in prison and ordered to pay $1,337,000 in restitution to the IRS, arising out of his scheme to evade payroll and other taxes. Between 2007 and 2009, Thach operated a 250-person labor leasing agency that supplied temporary workers (including many illegal aliens) to local mail-sorting facilities.  During this time period Thach’s clients paid him more than $9.8 million for the labor he provided. Thach, in turn, paid his employees in cash and “under the table,” that is, without issuing IRS Forms W-2 or deducting any payroll taxes.  Despite having a multi-million dollar payroll, and despite that two accountants separately counseled him about his tax and reporting obligations during the years in question, Thach did not file a single tax return (corporate or individual). 

Thach pleaded guilty to 16 tax-related offenses, including conspiracy to defraud the United States and failure to collect, account for, and pay over taxes.

By withholding federal income taxes and Social Security and Medicare taxes from the “under the table” wages, Thach caused a tax loss of at least $1,049,763.  Thach also never accounted for or paid over to the IRS his employers’ matching share of the Social Security and Medicare taxes, totaling $454,996.  Instead of paying the government, Thach spent tens of thousands of dollars gambling at high-end casinos in Atlantic City (including losing $100,460 at the Borgata Casino in 2007), purchased a $59,000 Mercedes Benz SUV, made regular payments toward a $60,000 Hummer, traveled repeatedly to Cambodia, and wired more than $180,000 to accounts he controlled in Cambodia. 

In addition to the prison term and restitution, U.S. District Court Judge Anita Brody ordered three years of supervised release and a $1,600 special assessment.

The case was investigated by the Internal Revenue Service Criminal Investigations and the Department of Labor Office of Inspector General.  It is being prosecuted by Assistant United States Attorney Kevin Brenner.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Alex DelValle, 37, Justelyn Lopez, 32, and Johnny Solivan, 18, all of Philadelphia, PA, were charged today by indictment with conspiracy to possess with intent to distribute, and attempt to possess with intent to distribute, approximately one kilogram of cocaine, announced United States Attorney Zane David Memeger.

If convicted, each defendant faces a mandatory minimum sentence of five years in prison with a maximum sentence of 40 years, at least four years of supervised release up to a lifetime of supervised release, and a fine of not more than $10 million. 

The case was investigated by the United States Postal Inspection Service and is being prosecuted by Assistant United States Attorney Karen L. Grigsby.

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

Click here to view the indictment.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA - Airmatic, Inc., a company located at 284 Three Tun Road, Malvern, PA, was sentenced today to three years of probation and a $350,000 fine for a mail fraud scheme involving a city contract.  In addition, U.S. District Court Judge Paul S. Diamond ordered the company to pay $556,633.03 in restitution to the City of Philadelphia.  As part of its plea agreement, Airmatic agreed to a debarment by the City of Philadelphia for three years, and all of its contracts with the City were cancelled effective October 31, 2014.

The company pleaded guilty on July 22, 2014 to one count of mail fraud.  Between January 2007 and August 2012, Airmatic supplied unapproved, off-contract products to various City departments in violation of its agreements with the City.  The company submitted false and fraudulent invoices to the City’s accounts payable department in order to conceal that it was providing off-contract products.  Instead of reflecting the unapproved, off-contract products that were actually being provided, the invoices billed for items that were approved pursuant to the City’s agreements with defendant Airmatic.  Airmatic inflated the cost of the unapproved, off-contract items and products it provided to the City by an average of approximately 87% and profited from this scheme in the amount of approximately $556,633.03.  For example, in one instance Airmatic falsely invoiced the City for a bearing assembly (an expensive industrial product and approved contract item), when, in fact, Airmatic delivered 12 asphalt rakes, items for which the defendant had no contract.  To disguise the transaction, Airmatic manipulated the invoice and billed the City for the price of the bearing assembly, which the City never received, resulting in an extravagant profit margin on the sale of the rakes.  Hundreds of similar transactions took place.   

The case was investigated by the City of Philadelphia Office of Inspector General and the FBI.  It was prosecuted by Assistant United States Attorney Jennifer Chun Barry.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

PHILADELPHIA - Corderro Cody, 27, of Allentown, Pennsylvania, was charged by indictment, unsealed today, with conspiracy to commit sex trafficking by force, fraud, or coercion, four counts of sex trafficking by force, fraud, or coercion, and conspiracy to transport individuals both intrastate and interstate for the purpose of prostitution, announced United States Attorney Zane David Memeger.

 

The indictment alleges that Cody recruited women to work as prostitutes, referred to his prostitution business as the “program,” and advertised the women on Backpage.com.  The women were sometimes driven to other states and forced to perform sexual acts.  Cody recovered and kept most, if not all, of the money generated by the sexual acts, and used physical force in the form of beatings when the women did not adhere to the “program,” and to maintain the women performing commercial sexual acts.  In one instance, the indictment alleges that Cody physically assaulted one of the women when she requested permission to go home to see her children for the Thanksgiving holiday.

 

If convicted the defendant faces a maximum possible sentence of lifetime imprisonment, a mandatory minimum 15 years in prison, a $1.5 million fine, a mandatory minimum five years of supervised release up to lifetime supervised release, and a $600 special assessment.

 

The case was investigated by Department of Homeland Security, Homeland Security Investigations and the Allentown Police Department, and is being prosecuted by Assistant United States Attorney Sherri A. Stephan.

 

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

PHILADELPHIA - Kareem Cameron, a/k/a “Shareef Ali,” 49, and Alecia Susan Brown, 38, both of Wyncote, PA, were charged by indictment, unsealed today, in an internet scam involving an online auction site.  The defendants, who were arrested today, are each charged with conspiracy to commit mail and wire fraud, one count of mail fraud, and four counts of wire fraud, announced United States Attorney Zane David Memeger.

The indictment alleges that Cameron and Brown conspired to operate an internet scam in which Cameron, through various eBay user names and aliases, offered luxury items, including BMWs and Rolex watches, for sale on the internet auction site.  It is further alleged that Cameron did not possess or did not intend to deliver the goods he offered for sale, or the goods were not in the condition he advertised.  According to the indictment, Cameron instructed victim buyers to send a payment, via wire transfer, to his bank account or to the account of co-defendant Alecia Brown.  After Cameron received payment, he either shipped goods that did not match the description or were inferior in quality to those he advertised for sale, or he shipped nothing at all. The indictment charges that the pair defrauded their victims of approximately $186,439.   

If convicted of all charges, the defendants each face a maximum possible sentence of 125 years in prison, a fine of up to $1.75 million, three years of supervised release, and a $700 special assessment.

The case was investigated by the U.S. Postal Inspection Service and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Karen M. Klotz.

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

Click here to view the indictment.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PHILADELPHIA – A federal jury, today, found Sherelle Pratt, 41, of Philadelphia, PA, guilty of filing false tax returns, aiding and assisting other individuals in preparing and filing false tax returns, theft of government property.  Pratt was an IRS employee at the time of her crimes.  She prepared federal income tax returns for a number of individuals during tax years through 2006 through 2008.  She caused the refunds, and stimulus payments that the filers were supposed to receive, to be deposited into her personal bank account.  In some cases, Pratt gave the filers a portion of the refunds and stimulus payments.  In other instances, she kept the refund and stimulus payments.

Pratt faces a maximum possible sentence of 28 years in prison, a fine of up to $1.75 million dollars, a special assessment of $700, and two years of supervised release.  U.S. District Court Judge Cynthia Rufe will schedule a sentencing hearing at a later date.

The case was investigated by the Treasury Inspector General for Tax Administration, Philadelphia Field Office and the Internal Revenue Service’s Criminal Investigations and is being prosecuted by Assistant United States Attorney Floyd J. Miller.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Supreme Foodservice Agrees To Pay $389 Million In Fines, Damages and Penalties

            PHILADELPHIA – The United States announced today the resolution of criminal fraud and civil False Claims Act cases against Supreme Foodservice GmbH, a privately-held Swiss company, and Supreme Foodservice FZE, a privately-held United Arab Emirates (“UAE”) company, in connection with a contract to provide food and water to the U.S. troops serving in Afghanistan.  The companies pleaded guilty to major fraud against the United States and paid $288.36 million in the criminal case, a sum which includes the maximum criminal fines allowed.  In addition, Supreme Group B.V., a privately held Dutch corporation, and its subsidiaries, Supreme Foodservice GmbH and Supreme Foodservice FZE, have agreed to pay $101 million to resolve allegations in a whistleblower lawsuit that Supreme violated the False Claims Act. The plea and settlement were announced by United States Attorney Zane David Memeger.

The Criminal Fraud

            In 2005, Supreme Foodservice AG (which is now called Supreme Foodservice GmbH) entered into a contract with the Defense Supply Center of Philadelphia (“DSCP,” now called Defense Logistics Agency – Troop Support), to provide food and water for the U.S. forces serving in Afghanistan.  According to court documents, between July 2005 and April 2009, Supreme Foodservice AG together with Supreme Foodservice KG (which is now called Supreme Foodservice FZE) devised and implemented a scheme to overcharge the United States in order to make profits over and above those provided in the $8.8 billion Subsistence Prime Vendor Contract (“the SPV contract”).  The companies fraudulently inflated the price charged for Local Market Ready goods (or LMR) and bottled water sold to the United States under the SPV contract.   Supreme did this by using a UAE company it controlled, called Jamal Ahli Foods Co., LLC (“JAFCO”), as a middleman to mark up prices for fresh fruits and vegetables and other locally-produced products sold to the U.S. government, and to obscure the inflated price Supreme was charging for bottled water.  The fraud resulted in a loss to the government of $48 million. In addition, as a result of the criminal investigation, Supreme paid $38.3 million directly to the DSCP as a refund for separate overpayments on bottled water. 

            Supreme AG, Supreme FZE, and Supreme’s owners (referred to in court documents as Supreme Owners #1 and #2) made concerted efforts to conceal Supreme’s true relationship with JAFCO, and to make JAFCO appear to be an independent company.  They also took steps to make JAFCO’s mark-up on LMR look legitimate, and persisted in the fraudulent mark-ups even in the face of questions from DSCP about the pricing of LMR.

            Even though the SPV contract stated that Supreme should charge the government the supplier’s price for the goods, emails between executives at Supreme (referred to as Supreme Executive #1, #2, etc) reveal Supreme’s deliberate decision to inflate the prices.  For example, on or about August 22, 2005, a Supreme Executive sent an email to Supreme Owner#1 saying that the prices he proposed for certain items already included margins of “approximately 57-60%” over the price from the supplier.  Another Supreme Executive sent a reply email recommending that Supreme not raise the prices further because “we would like to stay credible with the customer,” and would not want to invite a “challenge” from the DSCP.  In September of 2005, Supreme Owner#1 specifically instructed other top management within Supreme that he would personally “review the LMR mark-up before [JAFCO] makes its first shipment.”  Among other things, Supreme Owner#1 increased the markup that JAFCO would impose on non-alcoholic beer from 25 percent to 125 percent.  On or about February 16, 2006, during a discussion about supplying a new product to the U.S. government, one Supreme Executive wrote to another: “I am very sure the best option is to buy it from Germany and Mark up via [JAFCO], like [non-alcoholic] beer.”

            On or about March 18, 2006, in discussing whether they could inflate the price for ice cubes to be sold to the DSCP, a Supreme Executive wrote to Supreme Owner#1, among others:  “I don’t think we can mark up through [JAFCO] since DSCP knows price from [the supplier].”  That same day, Supreme Owner#1 forwarded that March 18, 2006 email to Supreme Owner#2, commenting “There are dozens of emails like that one.”

            In early March 2006, after a DSCP contracting officer told Supreme that she wanted to see a manufacturer’s invoice for specific frozen products, Supreme lowered its prices for those products to prices that did not include a JAFCO mark-up.  On March 14, 2006, instead of disclosing that the initial pricing had included a mark-up, a Supreme Executive misled the DSCP representative by explaining the change in pricing as follows:  “Based on more realistic quantities, we have been able to negotiate a better price.”

            In June 2006, when a DSCP contracting officer raised questions about pricing, focusing on four specific items, Supreme Executives again misled the DSCP, claiming that the high prices were for a high quality of product, and offering to sell lower quality products for lower prices.  Supreme did this even after analyzing its JAFCO margin on the four items in question and finding its profit margins were between 41 and 56 percent.

            In September 2007, after a fired Supreme Executive threatened to tell the DSCP about the fraud, Supreme entered into negotiation of a “Separation Agreement” with that executive to induce that executive not to disclose the ways in which Supreme was overcharging the DSCP.  That agreement stated that the executive would receive, among other things, a payment of EUR 400,000 in September of 2010, provided that the executive did not cause: a deterioration in the economic situation linked to the SPV Contract; the termination of the SPV Contract; or a decrease in the price levels for products, specifically including both LMR and bottled water provided to the U.S. government.                          

             Supreme’s overcharging was exposed in early March 2009, when a former Supreme employee notified the DSCP that Supreme owned and controlled JAFCO, and that JAFCO was adding a mark-up to the Delivered Price of goods.  The DSCP contacted Supreme and ordered the mark-ups stopped.  The mark-ups ceased as of April 1, 2009.

Defendant Supreme GmbH pleaded guilty to Major Fraud Against the United States, Conspiracy to Commit Major Fraud, and Wire Fraud.  Defendant Supreme FZE, which owns JAFCO, pleaded guilty to Major Fraud Against the United States.  The Supreme companies agreed to jointly pay $48 million in restitution, and $10 million in criminal forfeiture.  Each company also agreed to pay $96 million in criminal fines. In addition, U.S. District Court Judge Gene E.K. Pratter ordered Supreme AG, as a condition of the five years’ probation she imposed, to hold an annual service event to honor or assist veterans and/or the families of veteran.

The Civil Settlement

            In a separate civil settlement agreement, Supreme agreed to pay another $101 million to settle a whistleblower lawsuit filed in the U.S. District Court for the Eastern District of Pennsylvania, before U.S. District Court Judge Mary McLaughlin. The suit was filed by a former executive alleging that Supreme violated the False Claims Act by knowingly overcharging for supplying food and water under the SPV contract.  The payment also resolves claims that, from June 2005 to December 2010, Supreme failed to disclose and pass through to the government rebates and discounts it obtained from its suppliers, as required by its SPV contract with the United States.

            “These companies chose to commit their fraud in connection with a contract to supply food and water to our Nation’s fighting men and women serving in the desert,” said Memeger.  “That kind of conduct is repugnant, and we will use every available resource to punish such illegal war profiteering.”

            “These cases demonstrate the continued commitment of the Defense Criminal Investigative Service (DCIS) and our partner agencies to protect the integrity of the Department of Defense's acquisition process from personal and corporate greed,” said Craig W. Rupert, Special Agent in Charge, DCIS Northeast Field Office.  “Each dollar lost to fraud is a taxpayer dollar unavailable to protect our warfighters.  Ensuring the proper use of U.S. taxpayers' dollars and preventing contract fraud is in our nations' security interest and remains a DCIS priority.”

            “We are very pleased with this resolution, and are gratified that the public can now see what we've been aggressively investigating,” said Frank Robey, the Director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit.  “Companies that do business with the government must comply with all of their obligations, and if they overcharge for supplying our men and women in uniform who are bravely serving this nation, they must be held accountable for their actions.”

            The criminal and civil matters were the result of a coordinated effort by the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the Civil Division of the United States Department of Justice, the Department of Defense Office of Inspector General’s Defense Criminal Investigative Service, U.S. Army’s Criminal Investigative Command’s Major Procurement Fraud Unit, and the Federal Bureau of Investigation.

              The criminal matter is being handled by Assistant United States Attorney Bea L. Witzleben.  The civil matter is being handled by Assistant United States Attorneys Colin M. Cherico and Joel Sweet, along with Art Coulter, Trial Attorney for the Civil Frauds Section of the Department of Justice.

The company's owners and assets are outside the reach of the United States.

Click here to view the information.

Click here to view the settlement agreement.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PHILADELPHIA – Thomasine Tynes, 71, of Philadelphia, PA, was sentenced today to 24 months in prison for lying about ticket fixing at Philadelphia’s former Traffic Court.  A federal jury, on July 23, 2014, found Tynes, a former traffic court judge, guilty of two counts of committing perjury before the federal grand jury investigating the case. 

In fashioning the sentence, U.S. District Court Judge Lawrence Stengel agreed with the government that Tynes attempted to obstruct justice during the trial by contacting, and attempting to influence, a key prosecution witness. Tynes contacted the witness multiple times during the trial, commenting on what witnesses were saying from the witness stand and on specific issues arising at trial. This contact included a personal visit to the witness’ home as well as numerous text messages to the witness. Tynes did this in violation of a United States Magistrate Judge’s bail conditions which forbade contact with witnesses in the case.
In addition to the prison term, U.S. District Court Judge Lawrence Stengel ordered a fine of $5,000, a $200 special assessment, and supervised release.

This case was investigated by the Federal Bureau of Investigation.  It is being prosecuted by Assistant United States Attorneys Denise S. Wolf and Anthony J. Wzorek.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PHILADELPHIA - Thomas Rafferty, 68, of Levittown, PA, was sentenced today to 15 years in prison for taking sexually explicit pictures of young girls. The investigation began when one of the victims reported the abuse nine years after the events. Agents of Immigration and Customs Enforcement Homeland Security Investigations were able to resurrect the “cold case” and obtain a search warrant for the defendant’s residence. In a computer, the agents found the images that the victim had described. Three victims testified at today’s sentencing about the impact of Rafferty’s action on their lives.  Rafferty pleaded guilty July 15, 2014.

In addition to the prison term, U.S. District Court Judge Paul S. Diamond ordered three years of supervised release and a $100 special assessment.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov. 

The case was investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigations, with assistance from the Naval Criminal Investigative Service and was prosecuted by Assistant United States Attorney Michael L. Levy.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PHILADELPHIA – Robert Mulgrew, 57, of Philadelphia, PA, was sentenced today to 18 months in prison for lying about ticket fixing at Philadelphia’s former Traffic Court.  A federal jury, on July 23, 2014, found Mulgrew, a former traffic court judge, guilty of committing perjury before the federal grand jury investigating the case.  

Mulgrew was already serving a 30 month prison sentence for defrauding the Pennsylvania Department of Community and Economic Development (“DCED”).  Mulgrew pleaded guilty in that case on September 19, 2013 to filing a false tax return, mail fraud and conspiracy to commit mail fraud and was sentenced August 6, 2014.  U.S. District Court Judge Lawrence Stengel ordered today’s sentence to run consecutive to the previous prison term.

This case was investigated by the Federal Bureau of Investigation.  It is being prosecuted by Assistant United States Attorneys Denise S. Wolf and Anthony J. Wzorek.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PHILADELPHIA - Local ambulance service provider Manoa Fire Company (MFC), of Haverford Township, PA, will pay $36,912.46 to resolve allegations that it violated the False Claims Act as a result of ambulance services that it provided to Medicare and Medicaid patients, announced United States Attorney Zane David Memeger.  The civil settlement resolves allegations that, between July 23, 2007 and September 30, 2013, on some of the Basic Life Support runs MFC provided, the ambulance attendant had not timely completed an advanced first aid class or that the attendant’s advanced first aid certification had lapsed. 

During the time in question, Pennsylvania and federal rules required that an ambulance providing Basic Life Support services have at least two individuals present: a licensed emergency medical technician (“EMT”) and an “ambulance attendant” who had completed an emergency vehicles operation course and who had current certifications in both cardiopulmonary resuscitation (CPR) and advanced first aid class.  The latter required the completion of a class of 40 or more hours approved by Pennsylvania’s Department of Health. 

“Every ambulance service provider is responsible for ensuring that its employees have satisfied all of their legal requirements, including retraining requirements, before they are allowed to serve on ambulances,” said Memeger.  “We are pleased that the company has accepted responsibility for those errors and has put in place measures to ensure that in the future, all of its ambulance service providers will have the training and experience necessary to render emergency first aid.”

This case was handled by Assistant United States Attorney Paul W. Kaufman and the Department of Health and Human Services Office of the Inspector General. The claims resolved by the settlement are allegations only; there has been no determination of liability.

Click here to view the settlement agreement.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Sudhakar Majety, 46, of Spring City, PA, pleaded guilty today to four counts of visa fraud in connection with a scheme to illegally bring more than 50 workers to the United States on H-1B visas to work as IT consultants for his company Upani Consultants.  Majety created a series of shell corporations and sham contracts to pretend that Upani Consultants needed the additional workers.  When the workers arrived in the United States, they learned that there were no jobs for them at Upani and they were forced to search for jobs elsewhere.  Some workers who could not find employment had to pay Majety additional money to keep their visas active.  Majety  typically charged each worker $4,000 for the visa and kept 20% of any of their earnings in the United States. 

U.S. District Court Judge John R. Padova scheduled a sentencing is scheduled for February 26, 2015.  Majety faces a maximum possible sentence of 40 years in prison and a $1 million fine.

The case was investigated by the U.S. Department of Labor Office of the Inspector General, the U.S. Department of State Diplomatic Security Service, and U.S. Immigration and Customs Enforcement Homeland Security Investigations and Citizenship and Immigration Services.  It is being prosecuted by Assistant United States Attorney Robert J. Livermore.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Elena DiMaggio, 71, of Key Largo, Florida, and formerly of Drexel Hill, Pennsylvania, was charged by Information with one count of theft of government funds, announced United States Attorney Zane David Memeger.  According to the information, the defendant received retirement benefits intended for her mother, after her mother’s death in January 1998 until the defendant’s fraud was discovered in the summer of 2012.  The defendant’s alleged actions resulted in a loss to the government of approximately $174,366.          

If convicted, the defendant faces a maximum possible sentence of 10 years in prison, a three year period of supervised release, restitution to the government of $174,366, a $250,000 fine, and a $100 special assessment.

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

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

Click here to view the information.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Kevino Graham, 33, Brian Wright, 38, and Renato Teixeira, 24, of Philadelphia, PA were charged by indictment, unsealed today, with two counts of sex trafficking by force, announced United States Attorney Zane David Memeger.

According to court documents, 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.  It is alleged that 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. It is further alleged that between on or about September 1, 2011, through on or about January 31, 2012, the defendants engaged in acts of force, threats, fraud and coercion to cause young women to engage in prostitution.

If convicted, each defendant faces a mandatory minimum term of 15 years in prison with a maximum possible sentence of life, a fine of up to $500,000, 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.

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

Click here to view the indictment.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Jade Grander, 29, of Brooklyn, NY, was charged today by indictment with one count of bank fraud and two counts of access device fraud.  The charges arise from the defendant=s alleged participation in a scheme to obtain cash advances at TD Bank using other individuals’ deactivated credit cards by convincing bank tellers to override their Cash Advance Machines in order to process the transaction.

If convicted the defendant faces a maximum possible sentence of 30 years in prison.

The case was investigated by the United States Secret Service, and is being prosecuted by Assistant United States Attorney Joel D. Goldstein.

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

Click here to view the indictment.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Tamyra Frazier, 30, of Willow Grove, PA, was charged today by indictment in a conspiracy to defraud the bank where she was employed through an identity theft scheme, announced United States Attorney Zane David Memeger. Frazier is charged with conspiracy, bank fraud and four counts of aggravated identity theft.

Between December 1, 2010 and December 28, 2010, Frazier, an employee of a Beneficial Bank branch, allegedly used her position to improperly access personal and bank account information of bank customers.  According to the indictment, she provided that information to Co-Conspirator 1 who used it to create false photographic identifications in the victims’ names using the picture Timothy Garfield, charged separately.  Garfield fraudulently acquired approximately $41,519.56 from Beneficial Bank using the phony identifications with checks and withdrawal slips in the names of the bank customers.

If convicted, Frazier faces a maximum possible statutory sentence of 43 years in prison, two years of which is mandatory, a fine of up to $1 million, full restitution, and a $600 special assessment.

The case was investigated by the U.S. Postal Inspection Service, the FBI, and the Secret Service.  It is being prosecuted by Assistant United States Attorney K.T. Newton.

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

Click here to view the indictment.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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John L. Williams, 61, of New York, NY, was charged today by information with one count of conspiracy and one count of bank fraud, announced United States Attorney Zane David Memeger.  The information alleges that from August 2013 to February 2014, Williams used fraudulent identification cards, including driver’s licenses, containing stolen personal information of account holders at Wells Fargo Bank to impersonate the account holders and withdraw money from the accounts.  Williams and his co-conspirators stole at least $83,000 using forged withdrawal slips.

If convicted the defendant faces a maximum possible sentence of 35 years of imprisonment, five of supervised release, a $1,250,000 fine, and a special assessment of $200.

The case was investigated by the Secret Service and U.S. Immigration and Customs Enforcement Homeland Security Investigations.  It is being prosecuted by Assistant United States Attorney Laurie Magid.

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

Click here to view the information.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PHILADELPHIA - Kim Meas, 60, a native of Cambodia, pleaded guilty to charges stemming from schemes to defraud the United States. Meas was the managing director of LS Services Corporation (“LS”), an employee leasing company in South Philadelphia. He pleaded guilty to two counts of conspiracy to commit an offense against the United States, two counts of transporting illegal aliens and two counts of failure to collect and pay federal income and employment taxes. United States District Court Judge Jan E. Dubois scheduled a sentencing hearing for February 18, 2015. Meas faces a maximum possible statutory sentence of 30 years in prison, a fine of up to $1.5 million, a $600 special assessment, and three years of supervised release.

As the principal corporate officer at LS, Meas negotiated labor leasing contracts with various companies throughout the greater Delaware Valley that leased temporary workers from LS. Meas also established approximately 14 shell companies to create the illusion that the workers that LS leased to other companies were employees of the shell corporations. As such, the shell corporations, and not LS, would be responsible for collecting and paying employment and income taxes for the employees. Meas attempted make it impossible for the IRS to determine the identity of the employer of the illegal aliens, as well as the amount of employment and income taxes that the employer of the illegal aliens was required to pay to the federal treasury. LS also transported the illegal aliens, free of charge, to various work locations in company vehicles. The companies, that leased employees from LS, did not withhold federal income taxes on the wages paid to the employees, nor did these companies collect and pay to the Internal Revenue Service, employment taxes on the income earned by the workers. Meas had two co-conspirators, Ken Sem and Vivi Fnu, who previously pleaded guilty.

This case was investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigations and Internal Revenue Service Criminal Investigations. It is being prosecuted by Assistant United States Attorney Floyd J. Miller.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Tracey McShane, 40, of East Fallowfield, PA,was charged by indictment with two counts of wire fraud, in and six counts of filing false individual income tax returns, announced United States Attorney Zane David Memeger.

The indictment alleges that McShane, the former Director of Financial Operations for Paoli-based Pacer Financial, Inc., defrauded her employer in two separate wire fraud schemes. According to the indictment, defendant McShane stole approximately $650,194 from her employers’ personal bank account to pay her personal credit card bills between December 2007 and February 2014. McShane used the stolen money to cover charges to high-end clothing retailers, including Bergdorf Goodman, a vacation to Mexico, hotel stays at the Four Seasons in Philadelphia and the Waldorf Astoria in New York, and $40,000 in wedding expenses. McShane also is charged with filing false income tax returns for the years 2008 through 2013 based on her failure to report as income the money she stole from her employer to pay her personal credit card expenses, and $11,000 in bonuses.

In addition, McShane is charged with a fraud scheme involving payroll at Pacer. According to the indictment, McShane began to wrongfully increasing her gross pay in July 2010 in amounts ranging from $500 to approximately $6,450, during a given pay period. Between 2010 and February 2014, the indictment contends that McShane stole an additional $98,765 from Pacer through her payroll scheme.
If convicted the defendant faces the following maximum possible sentence: 58 years’ imprisonment, three years of supervised release, a $1.1 million fine, and an $800 special assessment.

The case was investigated by the FBI and the Internal Revenue Service Criminal Investigations. It is being prosecuted by Assistant United States Attorney Karen M. Klotz.

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

Click here to view the indictment.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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Robert Wendell Landis, 29, of Norristown, Pennsylvania was charged by superseding indictment, unsealed today, with one count of possession of child pornography and one count of receipt of child pornography, announced United States Attorney Zane David Memeger.

If convicted, the defendant faces a maximum possible sentence of 30 years in prison.

The case was investigated by Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Roberta Benjamin.

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

 

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525