Eastern District of Pennsylvania
Press releases recorded for this federal judicial district.
Second Former Judge Sentenced in Traffic Court CaseRead the Press Release
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
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Judge Sends 68-Year Old Child Predator to Prison for 15 YearsRead the Press Release
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
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525First Defendant Sentenced in Traffic Court Ticket Fixing SchemeRead the Press Release
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
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Manoa Fire Company to Pay $36,912.46 to Resolve False Claims Act Allegations Relating to CredentialingRead the Press Release
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
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Chester County Business Owner Admits to Immigration Fraud SchemeRead the Press Release
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
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Information Charges Florida Woman with Stealing Dead Mother's BenefitsRead the Press Release
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
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Trio Charged with Sex TraffickingRead the Press Release
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
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Indictment Charges New York Man in Fraud SchemeRead the Press Release
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
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Bucks County Bank Teller Charged in Fraud SchemeRead the Press Release
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
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Philadelphia Man Charged with Assaulting Federal OfficersRead the Press Release
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
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Guilty Plea in Immigration and Tax Fraud SchemeRead the Press Release
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
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Chester County Woman Charged in Fraud Scheme Involving Her EmployerRead the Press Release
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
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Norristown Man Charged in Child Exploitation CaseRead the Press Release
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, 215-861-8525New York Man Charged with Identity Theft and Tax SchemeRead the Press Release
PHILADELPHIA - Brandon Morrison, 25, of New York City, was arraigned today on an indictment charging him with five counts of wire fraud, five counts of making a false claim against the United States, and four counts of identity theft, announced United States Attorney Zane David Memeger. The indictment alleges that from January 2011 to May 2011, Morrison sold the stolen identities of a number of people for use in fraudulently prepared tax returns which directed that the tax refund checks be deposited to bank accounts opened and controlled by a co-conspirator.
If convicted the defendant faces a maximum possible sentence of 145 years of imprisonment, three years of supervised release, a $3,500,000 fine, and a special assessment of $1,400.
The case was investigated by the Internal Revenue Service and the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Laurie Magid.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Click here to read the indictment.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Native of El Salvador Charged with Illegal ReentryRead the Press Release
Carlos I. Cruz-Aguilar, a/k/a “Carlos I. Cruz,” 42, of Philadelphia, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about February 7, 2014, Cruz-Aguilar, an alien, and native and citizen of El Salvador, was found in the United States after having been deported from the United States on or about September 22, 2004.
If convicted the defendant faces a maximum possible sentence of 20 years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Terri Marinari.
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, 215-861-8525Child Care Center Owner Sentenced for FraudRead the Press Release
PHILADELPHIA –Tianna Edwards, 32, of Philadelphia, Pennsylvania, was sentenced today to 63 months in prison for wire fraud in connection with a scheme to defraud the Pennsylvania Department of Public Welfare. U.S. District Court Judge Juan R. Sanchez also ordered restitution in the amount of $1,459,470.25, three years of supervised release and a $500 special assessment.
In 2008, Edwards had a criminal record which would have prohibited her from obtaining a license to operate a child day care facility and receive state and federal child subsidy payments from the Department of Public Welfare (“DPW”). In order to circumvent the criminal history clearance requirements for a license and to become eligible for state and federal child care subsidy funds, in September 2008, defendant Tianna Edwards submitted the first of two separate applications to DPW containing the forged signatures of another individual, for licenses to operate facilities named “Tianna’s Terrific Tots.” Both applications were false because they listed a person who did not have a criminal record as the sole legal owner and operator of “Tianna’s Terrific Tots” when, in fact, defendant Tianna Edwards controlled and operated “Tianna’s Terrific Tots.” The facilities were located on Germantown Avenue and Rising Sun Avenue in Philadelphia. From December, 2008 through July 2012, Tianna Edwards received from DPW approximately $1,459,470.25 in fraudulent payments to Tianna’s Terrific Tots.
In addition to business expenses, bank records showed that from September 2008 to September 2012, Edwards spent over $135,000 in personal retail, travel and entertainment. Moreover, casino records showed that from January, 2011 through January, 2013, Tianna Edwards spent over 490 hours at Sugarhouse casino, gambling over $1.5 million with a net loss of over $206,000.
The case was investigated by the United States Department of Health and Human Services Office of Inspector General and is being prosecuted by Assistant United States Attorney Joan E. Burnes.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Abduction Suspect IndictedRead the Press Release
PHILADELPHIA - Delvin Barnes, 37, of Charles City, Virginia, was charged today by indictment with kidnapping, announced United States Attorney Zane David Memeger.
If convicted the defendant faces a maximum possible sentence of life imprisonment.
The case was investigated by the FBI, the Philadelphia Police Department, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the U.S. Marshal’s Service. It is being prosecuted by Assistant United States Attorney Jeanine Linehan.
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, 215-861-8525West Grove Resident Charged with Illegal ReentryRead the Press Release
Francisco Javier Rodriguez-Ortiz, a/k/a “Francisco Rodriguez,” a/k/a “Roberto Rodriguez,” a/k/a “Roberto Zavala-Ortiz,” 30, of West Grove, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about September 7, 2014, Rodriguez-Ortiz, an alien, and native and citizen of Mexico, was found in the United States after having been deported from the United States on or about January 9, 2008.
If convicted the defendant faces a maximum possible sentence of 20 years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Andrea Foulkes.
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, 215-861-8525Philadelphia Man Charged with Two Counts of Bank RobberyRead the Press Release
Leroy Townsend, 59, of Philadelphia, PA, was charged today by indictment with two counts of bank robbery, announced United States Attorney Zane David Memeger.
If convicted the defendant faces a maximum possible sentence of 40 years imprisonment, a $500,000 fine, not more than 3 years supervised release and a $200 special assessment.
The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorney Linwood C. Wright, Jr.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Click here to view indictment.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Medicare Beneficiaries Charged in Ambulance Health Care Fraud SchemeRead the Press Release
Two Brotherly Love Ambulance Employees and Four Four Medicare Beneficiaries Charged
PHILADELPHIA - Fritzroy Brown, 37, and Thael Kuran, 22, both of Philadelphia, PA, were charged today by indictment with conspiracy to commit health care fraud and making false statements in connection with health care matters, arising from their operation of Brotherly Love Ambulance, Inc., announced United States Attorney Zane David Memeger. Fritzroy Brown was also charged with theft of government funds and wire fraud for obtaining unemployment benefits while working full time at Brotherly Love Ambulance.
The indictment charges four other individuals with taking illegal kickbacks from Brotherly Love Ambulance and its employees. According to the indictment, Craig Brown, 46, Derrick Brown, 44, William Conner, 61, and Keisha Regusters, 37, all of Philadelphia, PA, received kickbacks from the company to induce them to ride with Brotherly Love Ambulance or to induce other Medicare beneficiaries to ride with Brotherly Love Ambulance. Craig Brown is also charged with making false statements in connection with health care matters; Derrick Brown and William Conner are charged with making false statements to federal agents.
The indictment alleges that the scheme involved more than $4 million in fraudulent claims submitted to Medicare. The defendants allegedly conspired to defraud Medicare by recruiting patients who were able to walk, and could travel safely by means other than ambulance, and who, therefore, were not eligible for ambulance transportation under Medicare requirements. The defendants, and others acting on their behalf, allegedly falsified reports to make it appear that the patients needed to be transported by ambulance when the defendants knew that the patients could be transported safely by other means and that many of them walked to the ambulance for transport, were driven in privately owned vehicles, or drove themselves to their destinations. According to the indictment, the defendants, themselves, or through others, paid illegal kickbacks to the patients as part of the scheme. The indictment charges that the defendants billed Medicare for these ambulance services as if those services were medically necessary and, as a result of the fraudulent billing, the Medicare program sustained losses of more than $2 million for this medically unnecessary method of transportation.
It is further alleged that Craig Brown, Derrick Brown, William Conner, and Keisha Regusters each received payments in the form of cash, checks, or other valuable items, in order to induce them to ride Brotherly Love ambulances or allow Brotherly Love to bill for ambulance services that were never provided, or to recruit other patients for the same purpose. The indictment also alleges that Craig Brown signed paperwork indicating that he had been provided with ambulance services that he did not actually receive, and that Derrick Brown and William Conner made false statements to federal investigators about receiving money from Brotherly Love to ride Brotherly Love ambulances.
The company’s president, Feda Kuran, and a manager, Neel Jackson, have pleaded guilty in connection with their conduct related to the company.
The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General, the Federal Bureau of Investigation, and the U.S. Department of Labor Office of the Inspector General. It is being prosecuted by Assistant United States Attorneys Matthew J.D. Hogan and Paul W. Kaufman.
An Indictment is an accusation. The defendants are presumed innocent unless and until proven guilty.
Click here to view indictment.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Dominican Republic Native Charged with Impersonating AnotherRead the Press Release
PHILADELPHIA - Jonathan Melendez, a/k/a “Malvin Vasquez-Valerio,” a/k/a “JELM,” 30, a native of the Dominican Republic, was charged in a five-count indictment with three counts of false personation of citizenship, aggravated identity theft and misuse of another person’s Social Security number, announced United States Attorney Zane David Memeger. According to the indictment, between December 26, 2012 and October 17, 2013, during the course of a drug case involving heroin distribution, Melendez, a citizen of the Dominican Republic, falsely claimed to be a United States citizen.
It is further alleged that Melendez falsely represented that a certain Social Security account number was assigned to him, when, in fact, such Social Security account number was not the number assigned to him. Melendez is further charged with having possessed and used a means of identification of another person, specifically the Social Security number and the birth certificate of “JELM,” in connection with the false personation of United States citizenship. Melendez was convicted in the heroin distribution case and sentenced to 36 months in prison.
If convicted of these charges, Melendez faces a maximum penalty of 16 years in prison, including a mandatory minimum term of two years for aggravated identity theft, three years of supervised release, a fine of $1.25 million and a special assessment of $500.
The case was investigated by the FBI’s Violent Gang Task Force, U.S. Immigration and Custom Enforcement’s Enforcement and Removal Division, and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorney Joseph T. Labrum, III.
An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Click here to view indictment.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Ambulance Company, Owners, and Manager Plead Guilty to Health Care Fraud and Kickback SchemeRead the Press Release
PHILADELPHIA – Life Support Corporation, formerly located in Feasterville-Trevose, PA, pleaded guilty today to one count of conspiracy to commit health care fraud. In separate hearings, the company owners, Nazariy Kmet, 35, of Jamison, PA, and Bogdan Kmet, 30, Warminster, PA and a company manager, Rostislav Kmet, 26, of Philadelphia, PA, also pleaded guilty to conspiracy to commit health care fraud and to violating the federal anti-kickback statute. Sentencing hearings are scheduled for all parties on February 11, 2015.
Defendant Life Support and its owners and a manager operated an ambulance company that transported patients who were able to walk and could travel safely by means other than ambulance and who therefore were not eligible for ambulance transportation under Medicare requirements. The defendants or others acting on their behalf falsified reports to make it appear that the patients needed to be transported by ambulance when the defendants and their employees knew that the patients could be transported safely by other means and that many of them were able to walk. Some patients were transported in personal vehicles rather than ambulances and those trips were billed to Medicare as if ambulance services had been provided. The defendants were also involved in paying kickbacks to patients so that the patients would continue to be transported by Life Support ambulances rather than switching to another fraudulent ambulance company. The defendants billed for the ambulance services as if those services were medically necessary and, as a result of the fraudulent scheme, the Medicare program paid more than $1.9 million for this inappropriate method of transportation.
Nazariy Kmet, Bogdan Kmet, and Rostislav Kmet each face substantial terms of imprisonment, three years of supervised release, a fine in excess of $3.8 million, mandatory restitution estimated at over $1.9 million, forfeiture of assets, and a special assessment. Life Support Corporation will also have restitution and forfeiture obligations. All defendants could be excluded from participating in federal health care programs.
The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Matthew J.D. Hogan.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Washington DC Political Consultant Pleads Guilty in Honest Services Wire Fraud SchemeRead the Press Release
PHILADELPHIA – Political consultant Thomas Lindenfeld, 59, of Washington D.C., pleaded guilty today to an information charging him with one count of conspiring to commit honest services wire fraud. U.S. District Court Judge Harvey Bartle III scheduled a sentencing hearing for March 25, 2015. Lindenfeld faces a maximum possible statutory sentence of 20 years in prison, a fine of up to $250,000, and up to five years of supervised release.
The charges were announced today by United States Attorney Zane David Memeger, Assistant Attorney General Leslie R. Caldwell of the Department of Justice’s Criminal Division, FBI Special Agent-in-Charge Edward J. Hanko, and IRS Criminal Investigation Acting Special Agent-in-Charge Richard Gross.
The charges stem from Lindenfeld’s participation in a wire fraud scheme initiated by his former employer, “Elected Official A,” which was disclosed in court proceedings today. According to the information, Lindenfeld, Elected Official A, and their associates, violated local campaign finance laws during Elected Official A’s 2007 race for Mayor of the City of Philadelphia by arranging for an illegal campaign contribution in the form of a $1 million loan from Person D. Lindenfeld and his confederates routed the money from Person D through Lindenfeld’s political consulting firm, LSG Strategies Services Corporation (“LSG”), which was working on Elected Official A’s campaign. LSG executed a promissory note with Person D and used the money - received via wire transfer - to pay various expenses of Elected Official A’s campaign. Of those funds, $400,000 went unspent and was returned to Person D by LSG.In late 2007, Person D experienced acute financial difficulty and contacted Lindenfeld at LSG to call in the $600,000 remaining debt. That debt was subsequently repaid with stolen charitable funds and federal grant money routed through several entities, including LSG, under the guise of sham contracts for services that were never rendered. To repay the debt, Elected Official A arranged for Nonprofit 1, an entity founded by Elected Official A, to route a total of $600,000 received from Sallie Mae’s charitable arm, as well as federal grant money, to Company 2, under the guise of a false contract for services. Company 2 was run by Person C, an ally of Elected Official A. Person C’s for-profit company executed a fake contract to disguise the movement of money from Nonprofit 1 to Company 2. Person C and Lindenfeld’s LSG also executed a fake contract to disguise the movement of money from Company 2 to LSG, after which Lindenfeld used the funds to repay Person D.
To resolve Elected Official A’s 2007 mayoral campaign debt to Lindenfeld and LSG, and to compensate them for participating in hiding the $1 million campaign contribution, Lindenfeld and Elected Official A and others agreed to use Elected Official A’s official position to steer federal funding to Lindenfeld’s proposed environmental advocacy group, “Blue Guardians,” which was created by Lindenfeld for the purpose of receiving federal funds. In 2009, during the appropriations process, Elected Official A asked for $15 million in federal funding for “Blue Guardians," which Elected Official A associated with a Philadelphia address belonging to Person C’s Company 1. In December of 2009, Elected Official A’s office notified Lindenfeld that “Blue Guardians” had received $500,000 (not the entire $15 million that had been requested) in federal funding as an earmark through the National Oceanic and Atmospheric Administration (“NOAA”). Approximately one month later, Elected Official A’s campaign began writing down the debt the campaign owed to LSG on its disclosure forms. Specifically, Elected Official A reduced the amount his campaign owed to LSG in the amount of $20,000, a transaction falsely labeled as a “contribution in kind.”
NOAA received no information regarding “Blue Guardians” until the earmark showed up in the final bill. NOAA learned that “Blue Guardians” did not have a website, and only identified a point of contact for “Blue Guardians” by calling Elected Official A’s office, which advised NOAA to contact Lindenfeld. NOAA learned that Lindenfeld was a political operative who had worked for Elected Official A. NOAA was suspicious that the earmark was a “political payoff,” and documented all of its interactions with Lindenfeld and informed its legal counsel of what it had learned. When NOAA reached Lindenfeld in approximately March 2010, it requested, among other things, the articles of incorporation for “Blue Guardians,” its physical address, its lists of Board of Directors or officers, and its tax status. Lindenfeld told NOAA that he would “speak with [Elected Official A] and get everything straightened out.” In fact, prior to April of 2010, “Blue Guardians” did not exist. Lindenfeld only obtained an email address, articles of incorporation, and a tax identification number for “Blue Guardians” in April 2010. Even after receiving those documents, Lindenfeld never forwarded them to NOAA. Eventually, Lindenfeld told NOAA that he “had spoken with [Elected Official A]” and that they decided the money could be better spent on the oil spill in the Gulf of Mexico. After Lindenfeld declined to accept the funding, NOAA never disbursed the $500,000 to Lindenfeld or his “Blue Guardians.”
Additional criminal activities undertaken during the schemes included (1) creating false contracts between the parties to justify the interstate transfer of the funds stolen to repay the illegal campaign loan, and (2) filing false campaign reports which concealed the illegal campaign debt, among other things.
The case is being investigated by the Federal Bureau of Investigation and Internal Revenue Service Criminal Investigations with assistance provided by the NASA Office of Inspector General and the Department of Commerce Office of Inspector General. It is being prosecuted by Assistant United States Attorney Paul L. Gray, and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Click here to read the information.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Judge Sentences Kaboni Savage Soldier to 40 Years in PrisonRead the Press Release
PHILADELPHIA – Lamont Lewis, 38, of Philadelphia, was sentenced today to 40 years in prison for his role in the Oct. 9, 2004 retaliatory firebombing that killed six members of a federal witness’s family, including four children. Lewis pleaded guilty in 2011 and testified against Kaboni Savage, who ordered the firebombing, and three others co-conspirators.
As part of his 2011 plea agreement, Lewis pleaded guilty to an additional five murders, and agreed to testify against Savage, Robert Merritt, who assisted Lewis in carrying out the firebombing murders, Steven Northington, and Savage’s sister, Kidada. The murder plot targeted the family of Eugene Coleman who was cooperating in the drug trafficking case against Savage. U.S. District Judge R. Barclay Surrick also ordered 10 years of supervised release and a $2,000 special assessment.
During his testimony at Savage’s trial, Lewis admitted that he spoke to Savage in the evening hours of October 8, 2004, at which time Savage told Lewis that Savage needed Lewis to carry out a favor for him. Savage told Lewis that his sister, Kidada Savage, would explain the plan after the phone call. Shortly after that, Kidada Savage advised Lewis of the plan to firebomb the Coleman residence and drove Lewis to the location to identify the Coleman house for Lewis. In the early morning hours of October 9, 2004, Lewis contacted Merritt and explained the plan to him. Lewis and Merritt filled up two gas cans while en route to the Coleman residence and, while Lewis gained entry and fired warning shots into the residence, Merritt threw a gas can with a lit cloth fuse, and then a second gas can, into the occupied Philadelphia row house in the predawn hours on Oct. 9, 2004. Six people, including four children ranging in age from 15 months to 15 years, were killed in the fire.
Kaboni Savage was sentenced to death for 12 counts of murder in aid of racketeering. Co-defendants Kidada Savage, Robert Merritt, and Steven Northington were all sentenced to life imprisonment.
The case was investigated by the FBI, the Philadelphia Police Department, the Philadelphia District Attorney’s Office, the Internal Revenue Service Criminal Investigations, and the Maple Shade, New Jersey Police Department. The United States Bureau of Prisons, the United States Marshals Service, and the Philadelphia / Camden High Intensity Drug Trafficking Area Task Force also assisted in the investigation. The case was prosecuted by Trial Attorney Steve Mellin of the Criminal Division’s Capital Case Section and Assistant U.S. Attorneys David E. Troyer and John M. Gallagher of the Eastern District of Pennsylvania.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Judge Sentences Ambulance Company Owner to More Than Five Years in PrisonRead the Press Release
PHILADELPHIA – Feda Kuran, 39, of Philadelphia, PA, was sentenced today to 64 months in prison for a healthcare fraud scheme involving Brotherly Love Ambulance, Inc. Kuran founded Brotherly Love Ambulance, Inc. and was its president. The defendant pleaded guilty April 17, 2014 to healthcare fraud and paying kickbacks in violation of the federal Anti-Kickback Act.
Through Brotherly Love, Kuran transported patients who were able to walk and could travel safely by means other than ambulance and who, therefore, were not eligible for ambulance transportation under Medicare requirements. Kuran, and others acting on her behalf, falsified reports to make it appear that the patients needed to be transported by ambulance when she knew that the patients could be transported safely by other means and, in fact, many of them could walk. The defendant billed Medicare for those ambulance services as if they were medically necessary when she knew that they were not. In addition, Kuran, and others acting at her direction, paid kickbacks to patients to ensure that they would use Brotherly Love Ambulance for services which were not medically necessary. Under Kuran’s direction, the company also submitted claims to Medicare for ambulance services for patients who were not transported by ambulance, but instead were transported in private vehicles or drove themselves to their destinations. After becoming aware of the investigation of her company, Kuran also sold patient lists to other ambulance companies so that those companies could continue the fraud. As a result of the fraudulent billing orchestrated by Kuran, the Medicare program paid more than $2 million for fraudulent claims from Brotherly Love.
In addition to the prison term, U.S. District Judge William H. Yohn, Jr. ordered Kuran to pay $2,015,712.52 in restitution to Medicare and a special assessment of $200. He also ordered three years of supervised release. The Court also entered a money judgment against the defendant for $2,015,712.52.
The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General, the Federal Bureau of Investigation, and the U.S. Department of Labor Office of the Inspector General. It is being prosecuted by Assistant United States Attorneys Matthew J.D. Hogan and Paul W. Kaufman.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Northampton County Woman Charged with Stealing Dead Mother's BenefitsRead the Press Release
Frances Riley, 78, of Bath, 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 February 1994 until the defendant’s fraud was discovered in 2011. The defendant’s alleged actions resulted in a loss to the government of approximately $152,600.90.
If convicted, the defendant faces a maximum possible sentence of 10 years imprisonment, a 3-year period of supervised release, restitution to the government of $152,600.90, 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.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Northampton County Woman Charged with Stealing Dead Mother's BenefitsRead the Press Release
Frances Riley, 78, of Bath, 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 February 1994 until the defendant’s fraud was discovered in 2011. The defendant’s alleged actions resulted in a loss to the government of approximately $152,600.90.
If convicted, the defendant faces a maximum possible sentence of 10 years imprisonment, a 3-year period of supervised release, restitution to the government of $152,600.90, 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 read the information.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525New Jersey Pair Charged with Production of Child PornographyRead the Press Release
PHILADELPHIA - Burton Gersh, 68, and Les Sidweber, 73, both of Cherry Hill, NJ, were charged today by indictment with two counts each of production of child pornography, announced United States Attorney Zane David Memeger.
According to court documents, Gersh and Sidweber transported two minors, ages 16 and 17, from the Philadelphia area, on multiple occasions, to their homes in Cherry Hill, where Sidweber photographed the juveniles engaging in sexually explicit conduct at Gersh's behest.
If convicted the defendants face a mandatory minimum term of 15 years in prison, with a maximum possible sentence of 60 years in prison, a $500,000 fine, a period of supervised release of five years to life, and a $200 special assessment.
The case was investigated by the Federal Bureau of Investigation with assistance from the Cherry Hill, New Jersey Police Department and is being prosecuted by Assistant United States Attorney Michelle Morgan.
An Indictment or an Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Click here to read the indictment.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Darby Man Charged in Several RobberiesRead the Press Release
PHILADELPHIA - Ishmael Shah, 20, of Darby, PA, was charged today by indictment with seven robberies which interfered with interstate commerce and related firearm charges, announced United States Attorney Zane David Memeger. According to the indictment, Shah committed the following armed robberies: on June 15, 2013, the Metro Self Storage at 2240 Island Avenue, Philadelphia; on June 17, 2013, Gulla’s Auto Tag & Insurance located at 6301 Buist Avenue, Philadelphia; on June 21, 2013, the Sunoco gas station located at 2500 Island Avenue, Philadelphia; on June 22, 2013, the Kerrs Building Materials, Inc. located at 1528 Washington Avenue, Philadelphia; the attempted armed robbery, on June 26, 2013, of the 7-Eleven located at 501 Church Lane, Yeadon, PA; the armed robbery, on June 28, 2013, of the 7-Eleven located at 1028 Garrett Road, Upper Darby, PA; and the attempted armed robbery, on July 11, 2013, of Kicks USA located at 1575 N. 52nd Street, Philadelphia.
If convicted of the charges,thedefendant faces a maximum sentence of life imprisonment and a mandatory minimum of 107 years imprisonment. He also faces a maximum period of supervised release of five years, a substantial fine, a special assessment, and restitution.This case was investigated by the Federal Bureau of Investigation, Philadelphia Police Department, Colwyn Police Department, Yeadon Police Department, Upper Darby Police Department, the Philadelphia District Attorney=s Office, and the Delaware County District Attorney’s Office, and is being prosecuted by Assistant United States Attorney Ewald Zittlau.
An Indictment or an Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Click here to read the indictment.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Airplane Repair Business Owner Sentenced for Fraud SchemeRead the Press Release
PHILADELPHIA – Jay Stout, 55, of Harrisburg, PA, was sentenced today to five years in prison for a fraud scheme that involved falsifying the inspection records of aircraft at his company, Flying Tigers, Inc. In April 2014, a jury found Stout guilty of conspiracy, fraud involving aircraft parts, mail fraud, and obstruction of justice. He was president of Flying Tigers, located in Marietta, PA. U.S. District Court Judge Harvey R. Bartle, III, also ordered Stout to pay restitution in the amount of $503,340, a special assessment of $800, and serve three years of supervised release. Stout must report to prison by December 29, 2014. The company was sentenced to one year of probation and a $5,600 special assessment.
Between October 2003 and January 2010, Stout conspired with others to commit fraud in aircraft parts, mail fraud, and wire fraud, by charging customers for the annual inspections of their aircraft, despite the absence of a certified mechanic with inspection authority, a certification given by the FAA. In order to conceal the absence of an authorized certification, Stout and Flying Tigers prepared fraudulent certifications of annual inspections for the airplane and engine log books or, on other occasions, failed to create the necessary certification at all. Some customers who brought their airplanes into Flying Tigers for annual inspections were charged for the inspection, but Flying Tigers never provided a signed certification in the airplane or engine log books recording the annual inspection. By this method, the absence of the valid signature of a certified mechanic was not evident to the Flying Tigers customers. Other annual inspections were certified in the log books by Stout, even though Stout was no longer authorized to certify annual inspections. In other annual inspections, the signatures of certified mechanics with inspection authority were forged in the log books. Such was the case with one former Flying Tigers employee who left Flying Tigers in late 2006/early 2007, but whose forged or fraudulent signatures appear on certified annual inspections, both before the period that the former employee had his certification, and through October 2007, long after he stopped working for Flying Tigers. In addition, the fraudulent signature of Gilbert Stout, Jay Stout’s father, appeared on annual inspections many years after Gilbert Stout stopped working on aircraft, and the forged and fraudulent signature of Joel Stout, a Flying Tiger, Inc. employee and Jay Stout’s son, appeared on annual inspections that Joel Stout did not perform. Many airframe and engine log books, containing these and other entries, were shown to the jury during the trial.
The case was investigated by the United States Department of Transportation Office of Inspector General and was prosecuted by Assistant United States Attorney Arlene Fisk.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Tax Return Preparer Pleads Guilty to Filing False Tax ReturnsRead the Press Release
PHILADELPHIA – Edward J. Rorie, 50, of Philadelphia, PA, a tax return preparer, pleaded guilty today to multiple counts of criminal tax fraud. For tax years 2009 through 2011, Rorie prepared 968 federal income tax returns which sought refunds of $3.85 million. The bogus refund claims were based on various tax credits which were part of the 2009 American Reinvestment Act, in addition to inflated and fictitious medical, dental and miscellaneous expenses. Rorie faces a maximum sentence of 75 years in prison, a $2,500 special assessment, and a fine of up to $6.25 million dollars. U.S. District Court Judge Anita B. Brody scheduled a sentencing hearing for February 11, 2015.
In preparing the fraudulent returns, Rorie variously claimed expense deductions and tax credits to which the filers not entitled to receive. The tax credits included the First Time Home Buyer Tax Credit, The Hope Tax Credit, The Earned Income Tax Credit, Education Credits, The Child Care Tax Credits and The Recovery Act’s Additional Child care Credit. The alleged loss to the Internal Revenue Service was at least $100,000.
The case was investigated by Internal Revenue Service Criminal Investigations and is being prosecuted by Assistant United States Attorney Floyd J. Miller.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Government Contractor, Its Owner, and Two Employees Charged in Multi-Million Dollar Fraud SchemeRead the Press Release
PHILADELPHIA – Devos Ltd., doing business as Guaranteed Returns (“Guaranteed Returns”), in Holbrook, NY, its Chief Executive Officer, Dean Volkes, and two others were charged by indictment, unsealed today, in a multi-million dollar scheme to defraud customers, including the government. Volkes, 51, of Port Jefferson, NY, Donna Fallon, 50, of Miller Place, NY, and Ronald Carlino, 66, of Deer Park, NY, are all charged in a conspiracy to obstruct justice and were arrested this morning, announced United States Attorney Zane David Memeger.
The indictment alleges that more than $116 million worth of drug products had been returned for refund and more than $14 million of those drugs belonged to federal government agencies, including the Department of Defense and the Veterans Administration. Other victims include numerous hospitals, pharmacies, and long-term care facilities.
Fallon serves as Chief Financial Officer for Guaranteed Returns and Carlino is an Information Technology employee. All four defendants are charged with conspiring to obstruct justice by concealing and destroying records involved in a Defense Department investigation, six counts of obstruction of justice, and three counts of lying to federal agents about those records. Volkes, Guaranteed Returns, and Fallon are also charged with money laundering conspiracy. Volkes and Guaranteed Returns are charged in 18 counts of wire fraud, 14 counts of mail fraud and one count of conversion of government property.
According to the indictment, Guaranteed Returns was in the business of managing the returns of pharmaceutical products for healthcare providers, including the Department of Defense (DoD) and the Veterans Administration. Manufacturers of pharmaceutical products frequently allow expired drugs to be returned for a refund. Guaranteed Returns handled this process for healthcare provider clients in exchange for a fee based on a percentage of the return value.
The indictment charges that Guaranteed Returns promised its clients that it would hold the clients’ “indate” (not yet expired) drug products until they expired, and then return them on the clients’ behalf, in exchange for a fee. Instead, according to the indictment, Guaranteed Returns, at the direction of CEO Dean Volkes, stole a significant portion of the “indate” drug products that it received from its clients; returned the drugs to the manufacturers; and kept the resulting refund money for itself and Dean Volkes.
The indictment further alleges that during the course of the scheme, a federal grand jury sitting in this district began investigating the diversion of funds under a contract with the DoD. During that investigation, an agent from the Defense Criminal Investigative Service met with Dean Volkes and served him with a grand jury subpoena requiring Guaranteed Returns to turn over records related to the DoD contract. Volkes and other Guaranteed Returns employees stated that they would comply with the subpoena. Instead, it is charged that with the help of Donna Fallon and Ronald Carlino, they destroyed some records and concealed others, and then lied to the investigating agents about why the records were not produced.
“The defendants in this case found a way to defraud the government, hospitals, pharmacies, and long-term care facilities by exploiting the system for returning expired drugs to pharmaceutical companies,” said Memeger. “My office will continue to aggressively prosecute and seek to recover illegal proceeds from those who use our precious health care dollars to enrich themselves at the expense of everyone else.”
“Fraud against the government amounts to stealing from American taxpayers, in service of pure greed,” said FBI Special Agent-in-Charge Edward J. Hanko said. “The FBI takes that very seriously, and we’re committed to tracking and shutting down financial fraud schemes.”
If convicted of all charges, defendant Guaranteed Returns faces a possible fine of over $200 million along with a $4,400 special assessment; Volkes faces a maximum possible statutory sentence of 810 years in prison, a fine of over $200 million, three years of supervised release, and a $4,400 special assessment; Fallon faces a maximum possible statutory sentence of 160 years in prison, a fine of over $200 million, three years of supervised release, and a $1,100 special assessment; and Carlino faces a maximum possible statutory sentence of 140 years in prison, a $2.5 million fine, three years of supervised release, and a $1,000 special assessment.This case was investigated by the Defense Criminal Investigative Service and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Nancy Rue and Paul Shapiro.
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, 215-861-8525Judge Sentences Defendants in West Philly Multi-milion Dollar Mortgage Fraud SchemeRead the Press Release
PHILADELPHIA – Defendants in a mortgage fraud conspiracy involving KREW Settlement Services were sentenced today by U.S. District Court Judge Berle M. Schiller for their roles in the multi-million dollar scheme involving more than 100 fraudulent mortgage loans. Eric Sijohn Brown, 46, of Philadelphia, was sentenced to 180 months in prison and was ordered to pay $10,849,873 in restitution to the lenders; Kevin Joseph Franklin, 51, of Albany, Georgia, was sentenced to 139 months in prison and was ordered to pay $9,454,607 in restitution to the lenders; Roderick L. Foxworth, Sr., 57, of Philadelphia, was sentenced to 84 months in prison and was ordered to pay $2,701,868 in restitution to the lenders. For false filing of tax returns, Brown was also ordered to pay restitution to the IRS in the amount of $209,777, plus interest and penalties; Franklin was ordered to pay restitution to the IRS in the amount of $51,622, plus interest and penalties; and Foxworth was ordered to pay restitution to the IRS in the amount of $140,305, plus interest and penalties. All three defendants pleaded guilty to conspiracy to commit loan fraud, wire fraud, and making false statements. Co-conspirators Walter Brown and Cynthia Brown were convicted at trial. The fraud scheme resulted in more than $20 million in fraudulent loan proceeds.
Eric Sijohn Brown - a general contractor - worked with other co-conspirators to identify distressed properties to purchase, typically in the West Philadelphia area. The scheme involved recruiting “straw buyers” whose credit history and personal information was used to purchase the properties, obtain mortgage loans, and take title to the properties, when, in reality, the properties were owned and controlled by the defendants. Mortgage loan applications were then prepared in the names of the straw buyers containing a host of false information, including false purchase prices, false employment and income information, and false statements about the straw buyers living in the properties. Mortgage brokers - including Roderick Foxworth and Walter Brown - submitted the fraudulent loan applications to lenders to secure the loans for the buyers, knowing that the information was false. Cynthia Evette Brown falsely verified that many of the straw buyers worked for her employer, Unicco Service Company, when they did not. Kevin Joseph Franklin, a title agent, falsely prepared two deeds and settlement statements (referred to as "Form HUD-1") – one for the seller that showed the actual agreed-upon purchase price and a false one for the lender that showed the grossly inflated purchase price. Franklin also created false title insurance policies for the lenders.
After the loans funded, the seller was paid the agreed-upon purchase price, and the difference between the actual purchase price and the false purchase price quoted to the lender was shared with and distributed by Franklin to Eric Brown, Foxworth, Walter Brown, and Cynthia Brown, and many of these payments were not reflected on the HUD-1 forms.
Eric Brown pleaded guilty on April 8, 2014; Franklin and Foxworth pleaded guilty on April 9, 2014.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation, and the Department of Housing and Urban Development’s Office of Inspector General. It is being prosecuted by Assistant United States Attorney Michael S. Lowe.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Judge Sends Chester Woman to Prison for 15 Years for the Sex Trafficking of FemalesRead the Press Release
PHILADELPHIA – Rashidah Brice, a/k/a “Camille,” a/k/a “Milly,” 25, of Chester, PA, was sentenced today to 185 months in prison for sex trafficking females for prostitution. Brice pleaded guilty on August 20, 2013, to sex trafficking of a minor by force and two counts of sex trafficking by force. She, along with co-defendant Christian Dior Womack, operated a prostitution venture in Philadelphia, Pennsylvania, and elsewhere, that recruited young females, one of whom was a minor, to work as prostitutes for them between May 25, 2012 through February 3, 2013. The defendants engaged in acts of physical violence and threats of physical harm to maintain the participation of females in their prostitution business.
As part of their venture, Womack and Brice also 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.
In addition to the prison term, U.S. District Court Judge Mitchell S. Goldberg ordered 10 years of supervised release, $35,700 in restitution, and a $300 special assessment. A sentencing hearing for Womack is scheduled for November 12, 2014.
The case was investigated by the FBI and the Philadelphia Police Department Special Victim’s Unit is being prosecuted by Assistant United States Attorney Michelle Morgan.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former City Dispatcher Sentenced to 14 Months for Bribery SchemeRead the Press Release
PHILADELPHIA – Dorian Parsley, 44, of Philadelphia, formerly a dispatcher with the Philadelphia Police Department (PPD), was sentenced today to 14 months in prison for conspiracy, solicitation of a bribe, and honest services fraud in connection with a scheme by which she gave an unfair advantage to certain tow truck operators in exchange for cash bribes. Parsley pleaded guilty to the charges on July 21, 2014. In addition to the prison term, U.S. District Court Judge Eduardo C. Robreno ordered a $1,000 fine, one year of supervised release, and a $300 special assessment.
Between February 2011 and December 2013, Parsley operated a bribery scheme through which she collected weekly payments totaling more than $35,000 from three tow truck operators, now her co-defendants, in exchange for providing them with certain confidential information, including accident and disabled vehicle locations, and the personal identifying information of accident victims. Parsley did this by secretly sending text messages from her personal cellphone, in a purposeful end-run around PPD policies and procedures. In this way, the defendant provided an unfair economic advantage to her bribers, at the expense of other tow truck operators who relied on the proper functioning of the PPD’s rotational towing program.
The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorneys Kevin Brenner and Jennifer Chun Barry.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Thermacore, Inc., Agrees to Pay $965,000 to Resolve False Claims Act AllegationsRead the Press Release
PHILADELPHIA - Thermacore, Inc. (“Thermacore”) has agreed to a $965,000.00 settlement to resolve allegations of fraud arising as part of the Federal government’s Small Business Innovation Research (“SBIR”) program. According to the United States, Thermacore is responsible for duplicate SBIR awards submissions. The United States contends that these submissions, and the attendant certifications, constituted false statements to the Federal government. The settlement was announced today by First Assistant United States Attorney Louis Lappen. Thermacore denies the allegations.
Thermacore acquired k Technology Corporation (“kTC”) on August 7, 2009. Through the SBIR program, kTC had submitted a project proposal to the National Aeronautics and Space Administration (“NASA”), on September 4, 2008, and submitted a duplicate proposal to the United States Air Force (“Air Force”) on September 24, 2008. Through the SBIR program, the agencies provide small businesses with incentives to profit from the commercialization of technology that would benefit the Federal government.
The SBIR program has requirements aimed to combat fraud, waste, and abuse. As part of these requirements, both NASA and the Air Force mandate that the same or essentially equivalent research may not be funded by more than one agency and that submissions under the SBIR Program must be certified as being non-duplicative. Under the SBIR Program, therefore, it is unlawful to receive funding for essentially equivalent work already funded under any government program or to falsely certify that work is non-duplicative.
The investigation was prompted by NASA’s proactive initiative to identify potential fraud in its SBIR contracts. “The proactive efforts of agencies like NASA are critical to identifying potential fraud and safeguarding limited government resources,” said Lappen.
Since its enactment in 1982, as part of the Small Business Innovation Development Act, SBIR has helped thousands of small businesses to compete for federal research and development awards which have enhanced the nation’s defense.
Under the parties’ settlement agreement, Thermacore will pay $500,000 to the United States. An additional $465,000.00 will be allocated and used for ongoing compliance efforts by Thermacore. Thermacore has already initiated an upgrade to its Ethics and Compliance Program which efforts are continuing.
The investigation was conducted by NASA, the Air Force, and the Department of Defense. The case is being handled by Assistant U.S. Attorney Veronica J. Finkelstein and auditor Lawrence M. Kutys.
Click here to view the settlement agreement.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Canadian Drug Trafficker Sentenced to 21 Years in PrisonRead the Press Release
PHILADELPHIA- Thinh Hung Le, 53, of Toronto Canada, was sentenced to 252 months in prison by the Honorable Juan R. Sanchez. On June 17, 2014, a jury found Le guilty of a variety of drug importation and distribution charges. The evidence at trial proved that Le smuggled large quantities of ecstasy pills and marijuana from Canada to Philadelphia in 2006. Le was subsequently indicted and extradited from Canada.
Specifically, investigators with the Department of Homeland Security (HSI) seized three shipments of drugs which Le sent to his customer in Philadelphia. On April 4, 2006, the HSI investigators seized approximately 105 pounds of marijuana. On July 30, 2006, the HSI investigators seized approximately 26,000 ecstasy pills containing both methamphetamine and MDMA. On October 23, 2006, the HSI investigators seized approximately 10,000 ecstasy pills. In order to determine Le’s identity, the HSI investigators requested assistance from the Toronto Police Service. Thereafter, two undercover Toronto police law enforcement officers met with Le pretending to be drug dealers from Philadelphia. Le explained to the undercover officers that he could supply them with 100,000 ecstasy pills within three days and provide a custom “brand” for the pill. Le further explained that he could manufacture the pills so that the high would last either 4 hours or 6 hours.
The case was investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigations in conjunction with the Toronto Police Service. Additional assistance was provided by the DEA, the Philadelphia Police Department, the Pennsylvania State Police, the Royal Canadian Mounted Police, and the York (Canada) Regional Police Department.
The case was prosecuted by Assistant United States Attorney Robert Livermore. Extradition assistance was provided by the United States Department of Justice, Office of International Affairs.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Computer Hacker Sentenced for Emailing Bomb Threat to Shopping MallRead the Press Release
PHILADELPHIA - David Barnhouse, 24, of Horsham, PA, was sentenced, on October 16, 2014, to 18 months in prison for hacking into his neighbor’s wireless router and using it to post a bomb threat on the website of the Willow Grove Park Mall. As a result of Barnhouse’s actions, the mall paid for increased security and the FBI, after tracing the threat to the neighbor’s router, executed a search warrant on the neighbor’s home. (The practice of making such false reports to bring police action against someone’s house is colloquially known as “swatting” – after the SWAT teams that law enforcement often uses to deal with such situations.)
On June 20, 2013, Barnhouse hacked into the Verizon FiOS router of his neighbor and, using their Internet service, posted the following message:
“We have planted an explosive device somewhere in the mall, and will detonate it unless all members of the Islamic faith imprisoned in the United States are freed by 7pm on June 23. Even if you search the mall for 72 consecutive hours, you will NEVER find it.”
In addition to the prison term, U.S. District Court Judge C. Darnell Jones, II ordered three years of supervised release and restitution to the mall for the costs of the increased security.
The case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorneys Jeanine Linehan and Michael L. Levy.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525West Chester Woman Charged in Real Estate Ponzi SchemeRead the Press Release
PHILADELPHIA – Marie Mikesche Bontigao, 43, of West Chester, PA, was charged by indictment, unsealed yesterday, in a fraud scheme involving more than $2 million, announced United States Attorney Zane David Memeger. She is charged with wire and mail fraud.
Bontigao was a licensed real estate broker who operated a franchise location of EXIT Realty in Philadelphia, New Jersey and Delaware and was the founder of the EXIT Realty “Tri-State Group: and “Tri-State Investment Holdings, Inc.” (T.R.I.H.I.). According to the indictment, between 2007 and 2013, Bontigao solicited individuals to invest in her real estate projects but, instead of investing the lenders’ money in real estate used the funds to operate her business and to pay personal expenses. Bontigao allegedly bilked these lenders out of more than $2 million.
If convicted, the defendant faces a maximum possible sentence of 80 years in prison, a three-year period of supervised release, and a $1 million fine.
The case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Denise S. Wolf.
An Indictment or Information 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, 215-861-8525Native of Mexico Charged with Illegal ReentryRead the Press Release
Felix Zeferino-Carranza, a/k/a “Felix Lopez Carranza,” 33, of Norristown, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about August 23, 2014, Zeferino-Carranza, an alien, and native and citizen of Mexico, was found in the United States after having been deported from the United States on or about April 18, 2009, July 3, 2009, and July 5, 2009.
If convicted the defendant faces a maximum possible sentence of two years imprisonment.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Frank R. Costello, Jr.
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, 215-861-8525Maryland Man Charged with Stealing Social Security NumberRead the Press Release
Aurelio Rafael Martinez, 38, of Essex, MD, was charged today by indictment with fraudulent use of a social security number and false statements in a matter within the jurisdiction of a federal agency announced United States Attorney Zane David Memeger. In particular, the indictment charges the defendant with using a social security number that did not belong to him, and falsely claiming United States citizenship on an I-9 Form in order to obtain and retain employment in connection with his work on the federally funded Girard Point bridge reconstruction project in Philadelphia between 2010 and 2012.
If convicted Martinez faces a maximum possible sentence of 10 years’ imprisonment.
The case was investigated by the United States Department of Labor, Office of Inspector General, the Office of Inspector General of the Department of Transportation; the Environmental Protection Agency Criminal Investigation Division, the Office of Inspector General of the Social Security Administration; Amtrak Office of Inspector General, Homeland Security Investigations, and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Paul G. Shapiro and Nancy E. Potts.
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
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Chester County Resident Charged with Illegal ReentryRead the Press Release
Baltazar Lopez-Zamudio, a/k/a “Baltazar Lopez,” a/k/a “Jorge Sanchez-Rodriguez,” 28, of Kennett Square, PA, was charged today by indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about September 17, 2014, Lopez-Zamudio, an alien, and native and citizen of Mexico, was found in the United States after having been deported from the United States on or about March 5, 2010.
If convicted the defendant faces a maximum possible sentence of 20 years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Terri Marinari.
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, 215-861-8525Attorney Charged in Scheme to Defraud Chester County CompanyRead the Press Release
PHILADELPHIA – Alexander Burke, 58, of Bristol, England, and formerly of Upper Montclair, New Jersey, was charged today by Indictment with conspiring to commit wire fraud and money laundering, and with substantive wire fraud and money laundering violations, announced United States Attorney Zane David Memeger.
The Indictment alleges that Burke and another attorney engaged in a scheme to defraud Company A, a company in Malvern, Pennsylvania, by billing the company for legal work not done and splitting the resulting payments from Company A. Burke was a patent attorney for Company A, and as part of his job he was permitted to hire outside counsel to draft patents, respond to patent office actions, and to write appeals in patent cases. Beginning in the summer of 2008, he and another attorney, an outside patent counsel, agreed that Burke would assign patent-related projects to the attorney, the attorney would do no work on the projects, and the attorney would bill Company A for the work assigned but not done. Burke himself, although he received salary from Company A to do patent work, did the patent work. When the outside attorney billed Company A, Burke approved the invoices for payment. Company A then paid the outside attorney and the outside attorney sent most of the money to Burke.
This fraudulent scheme continued until approximately June of 2013. Over the course of the scheme, Burke approved invoices from the outside attorney for work not done in the amount of approximately $2,481,020. Although Company A discovered the scheme and did not pay some of the final invoices, over the five years that Burke continued the scheme Company A paid out approximately $2,417,665 for work billed for, but not done, by the outside counsel in approximately 588 fraudulent invoices.
The indictment further alleges that Burke and the outside counsel conspired to commit money laundering by agreeing to send Burke’s share of the money from the counsel’s account, where Company A had paid it, to Burke’s account at NJM Bank in New Jersey which he had set up in the name of a company called Electrical Services & Networks. These transactions totaled $2,098,977. Burke further committed twelve acts of money laundering by causing wire transfers from this account to an additional bank account he had set up with another person at a Barclay’s Bank in the Isle of Man in the name of a different company. The charged transactions to the bank in the Isle of Man totaled $1,318,171.If convicted the defendant faces a maximum possible sentence of 340 years imprisonment, $6,000,000 fine or twice the amounts of gross gain and property involved in the counts, whichever is more, restitution, forfeiture, and a $2300 special assessment.
The case was investigated by the Federal Bureau of Investigation. This case is being prosecuted by Assistant United States Attorney Albert S. Glenn.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
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, 215-861-8525New Jersey Woman Sentenced to Prison for Defrauding Non-ProfitRead the Press Release
PHILADELPHIA – Rochelle Biesenthal, 64, of Brigantine, New Jersey, was sentenced today to 12 months and a day in prison. On May 28, 2014, Ms. Biesenthal pleaded guilty to one count of wire fraud and three counts of tax evasion.
As part of her wire fraud charge, Ms. Biesenthal engaged in a scheme to defraud the Jewish Heritage Programs (“JHP”). JHP is a non-profit organization in Philadelphia that provides opportunities for Jewish college students (at the University of Pennsylvania, Temple University and other universities), as well as young professionals, and other persons to engage with their Jewish heritage and reaffirm their Jewish identity. Ms. Biesenthal was carried out the scheme between 2002 and April 2009, while she was employed as a bookkeeper at JHP. She fraudulently prepared and issued checks drawn on JHP’s bank accounts and rather than use them for the non-profit’s mission, she made those unauthorized checks payable to her.
Ms. Biesenthal also fraudulently authorized electronic debits from JHP’s bank accounts to pay for her personal credit cards and her family’s personal credit cards. As part of the scheme, she defrauded JHP of a total of well over $400,000. In addition, she never reported her unauthorized income in her tax returns in tax years 2007 through 2009 and concealed the true sources of her income.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigations and was prosecuted by Assistant United States Attorney Sozi Pedro Tulante.
In addition to the prison term, Chief U.S. District Court Judge Petrese Tucker ordered Biesenthal to pay restitution in the amount of $171,187.04 to JHP and $61,637 to the Internal Revenue Service. The Court also imposed three years of supervised release, and a $400 special assessment.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Northampton County Doctor and Son Charged with Tax FraudRead the Press Release
PHILADELPHIA - Francis J. Cinelli, Sr., M.D., 87, and Francis J. Cinelli, Jr.,49, of Wind Gap, PA were each charged separately, by information, with one count of tax fraud stemming from false tax returns filed by Cinelli Jr., announced United States Attorney Zane David Memeger.
Cinelli Jr. is charged with filing a false tax return, stemming from his alleged filing of a 2007 false tax return with the IRS on which he failed to declare approximately $163,000 in income he had earned during that year.
Cinelli Sr. is charged with aiding and abetting Cinelli Jr.’s filing of a false tax return. According to the information, Cinelli Jr. filed a 2008 false tax return with the IRS on which Cinelli Jr. failed to declare approximately $109,000 in income that Cinelli Sr. had paid to Cinelli Jr. during that year.
Each of the defendants faces a maximum sentence of three years in prison, a one year term of supervised release, a $100,000 fine, and a $100 special assessment.
The cases were investigated by the Internal Revenue Service Criminal Investigation Division and the Federal Bureau of Investigation and are being prosecuted by Assistant United States Attorney Michael S. Lowe.
An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Click here to view the information for Cinelli, Sr.
Click here to view the information for Cinelli, Jr.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525New Jersey Man Charged with Health Care Fraud Scheme and Illegally Selling SteroidsRead the Press Release
PHILADELPHIA – An indictment was unsealed today in federal court charging Eric C. Opitz, 45, of Phillipsburg, New Jersey with health care fraud, mail fraud, and the illegal distribution human growth hormones (“HGH”) and anabolic steroids, announced United States Attorney Zane David Memeger.
The indictment alleges that the defendant used Medicare Part D benefits to obtain HGH and anabolic steroids, which he then sold by advertising on the internet. HGH and anabolic steroids are frequently used by athletes and body builders for unapproved purposes such as enhancing performance and building muscle mass. These drugs can present serious health risks when not properly administered under the supervision of a licensed physician. It is alleged that the defendant typically sold human growth hormone, for approximately $450 per 5 mg kit, to any interested buyer. The defendant was not a licensed physician, nor did he have any medical training.
If convicted, the defendant faces a substantial term of imprisonment and is subject to criminal forfeiture proceedings.
The case was investigated by Immigration and Customs Enforcement - Homeland Security Investigations, the FDA Office of Criminal Investigations, and the Department of Health and Human Services - Office of the Inspector General. It is being prosecuted by Assistant United States Attorney M. Beth Leahy.
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, 215-861-8525Key Player in Advance Pay Scheme Gets 16 Years for Stealing Millions from Hopeful EntrepreneursRead the Press Release
PHILADELPHIA – Matthew McManus, 46, of Glenside, Pennsylvania, was sentenced today to 16 years in prison for his role in an advance fee fraud scheme that defrauded hundreds of victims searching for commercial financing from Remington Financial Group. McManus was one of six people charged in the scheme. He was convicted at trial on February 19, 2014. His co-defendants all pleaded guilty. The scheme defrauded more than 1,900 victims out of more than $26 million. In addition to the prison term, U.S. District Court Judge William Yohn ordered restitution of $17,774,174, three years of supervised release, and an $800 special assessment.
Andrew Bogdanoff, of Scottsdale, Arizona, was the founder and chairman of Remington Financial Group (later renamed Remington Capital) and ran the company with McManus until 2008 in Arizona and Pennsylvania. After McManus left the company in 2008, defendant Shayne Fowler, also of Scottsdale, replaced McManus as Bogdanoff=s right-hand man. Defendant Joel Nathanson, of San Diego, California, was one of Remington=s most proficient employees and helped Remington defraud many victims. Defendant Frank Vogel, of Rochester Hills, Michigan, was a Michigan‑based broker who referred numerous victims to Remington in exchange for large kickbacks. Aaron Bogdanoff, also of Scottsdale, was also charged in the conspiracy.
Between 2005 and 2011, the defendants fraudulently induced hundreds of people to pay Remington fees in excess of $10,000 a piece, based on false representations that Remington had lenders and/or investors ready to provide financing for the victims= projects. To facilitate this fraud, the defendants issued each victim a Aletter of interest,@ commonly referred to as an LOI. Almost every LOI Remington issued stated that Remington had a lender or investor interested in financing the victim=s project. Remington issued an LOI to every victim even though no Remington employee had spoken to any funding source and Remington knew that it was unlikely to find funding for the project.
The LOI was written to fraudulently lead victims to believe that Remington either was an actual lender or had spoken to lenders that had already expressed interest in the customer's project. Neither was true. Additionally, the financing terms Remington included in the LOI were unrealistic and were used solely to induce customers to pay Remington's advance fees. In addition to the false representations in the LOI, the defendants and other Remington employees also told victims the following lies to further induce victims to pay Remington=s fees: a) Remington had five investors or lenders interested in their project; b) Remington was the actual lender for the project; c) Remington funded or Aclosed@ 80 percent of its deals; d) the victim would get funding for the project once the advance fee was paid and/or; e) Remington would provide funding through its funding source Northbridge. After a customer paid Remington=s fee, McManus and Andrew Bogdanoff instructed Remington employees to find problems with the projects so that Remington could blame its failure to provide financing on the victim. The defendants did this to help protect Remington from civil and criminal complaints.
After the FBI and IRS conducted search warrants in Arizona and Colorado in March 2011, defendant Matthew McManus attempted to distance himself from the fraudulent scheme by obstructing justice and lying to federal agents. He was convicted of these charges, as well.
Some of the defendants used sophisticated means to perpetuate the fraud. For instance, in 2010, defendants Fowler and Andrew Bogdanoff used Remington's website to advertise an anti‑fraud policy and stated falsely that Remington had recently provided information to the Federal Bureau of Investigation and local law enforcement authorities about a suspected email scam. Remington posted this information to ensure that if potential customers used an internet search engine to search for allegations about Remington's fraud, they would be directed to Remington's website rather than third‑party internet sources that contained negative information about Remington.
Andrew Bogdanoff is serving a 220 month prison sentence; Shane Fowler was sentenced to 21 months in prison; Joel Nathanson was sentenced to 12 months and one day in prison; Aaron Bogdanoff was sentenced to two years of probation; Frank Vogel will be sentenced in the Eastern District of Michigan on December 3, 2014.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigations with assistance from the Pennsylvania Securities Commission. It was prosecuted by Assistant United States Attorney David Axelrod.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Podiatrist Charged with Health Care Fraud and Identity TheftRead the Press Release
Aileen Gong, D.P.M., 55, of King of Prussia, Pennsylvania, was charged by indictment, on October 3, 2014, with health care fraud, wire fraud, and aggravated identity theft, announced United States Attorney Zane David Memeger. The indictment charges that between 2009 and February 2014, Gong, a podiatrist, submitted at least $480,000 in fraudulent claims to Medicare.
According to the indictment, Gong submitted claims for patient visits that never occurred -- including visits that she claimed took place while she was outside of the United States -- and submitted claims for procedures that she did not perform on patients who did visit her office in Philadelphia. It is further alleged that as part of the scheme she knowingly used, without lawful authority, a means of identification of another person, that is, the unique Medicare Beneficiary Number of patients.
If convicted the defendant faces a maximum possible sentence of 184 years in prison and a fine of $3.5 million.
The case was investigated by the Federal Bureau of Investigation and the U.S. Department of Health and Human Services – Office of Inspector General. It is being prosecuted by Assistant United States Attorney Laurie Magid.
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
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Chester County Man Admits to Explosives, Fraud, and Weapons OffensesRead the Press Release
PHILADELPHIA - Istvan Merchenthaler, 44, of Downingtown, Pennsylvania, pleaded guilty today to all counts in four pending indictments charging him with wire fraud, possession of destructive devices, and related offenses, announced United States Attorney Zane David Memeger. Merchenthaler has been in federal custody since February 16, 2013. All of the indictments have been consolidated before United States District Judge Robert F. Kelly. A sentencing hearing is expected to be scheduled for January 2015.
Merchenthaler pleaded guilty to four counts of wire fraud, two counts of aggravated identity theft, four counts of money laundering, two counts of filing false tax returns, and two counts of interstate transportation of stolen goods, as charged by the federal grand jury in this District. Specifically, from about May 2006 to February 2013, Merchenthaler claimed to be the founder of PhoneCard USA, a company that was purportedly a “premier distribution source” for prepaid phone cards and cell phones. In reality, Merchenthaler operated a “Ponzi” scheme, stealing over $2 million from over 200 investors and using much of these funds for his own benefit and to perpetuate his scheme. In his scheme, Merchenthaler falsely claimed that PhoneCard USA had “lucrative contracts” with major retail chain stores including Walmart, 7-Eleven, and BJ’s Wholesale Club. Further, Merchenthaler falsely claimed to have friendships with executives at Walmart and 7-Eleven and used their names in a fraudulent e-mail address and bogus contracts.
Merchenthaler also pleaded guilty to one count of possession of unregistered destructive devices and one count of being a fugitive in possession of a firearm and ammunition, as charged by the federal grand jury in this District. Specifically, while he was a fugitive from justice in this District, Merchenthaler possessed approximately 460 improvised explosive devices (“IEDs”), a firearm, and ammunition.
In addition, Merchenthaler also pleaded guilty to two counts of being a fugitive in possession of firearms and ammunition and one count of possession of an unregistered destructive device, as charged by the federal grand jury in the Eastern District of North Carolina. Specifically, while he was a fugitive from justice, Merchenthaler possessed approximately 39 IEDs, a firearm, and 580 rounds of ammunition in the Wilmington, North Carolina area.
Moreover, Merchenthaler pleaded guilty to one count of being a fugitive in possession of firearms and ammunition, one count of possession of an unregistered destructive device, and one count of possession of an illegally manufactured firearm, as charged by the federal grand jury in the District of Maryland. Specifically, while he was a fugitive from justice, Merchenthaler possessed approximately 135 IEDs, 15 firearms, and 11,000 rounds of ammunition in the Rising Sun, Maryland area.
At sentencing, Merchnthaler faces a mandatory minimum of two years in prison with a maximum possible statutory sentence of 230 years, a three year period of supervised release, a fine of up to $5.5 million fine, and a $2,200 special assessment. Restitution and forfeiture may also be ordered.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, the Philadelphia Police Bomb Disposal Unit, the Montgomery County Bomb Squad, the Montgomery County Sheriff’s Office, the East Whiteland Police Department, the East Whiteland Fire Department, the Malvern Fire Department, the Chester County District Attorney’s Office, the Maryland State Police, and the North Carolina State Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Vineet Gauri.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Delaware Man Convicted of Child Exploitation Involving Social MediaRead the Press Release
PHILADELPHIA – A federal jury, yesterday, returned guilty verdicts, on all three counts, against Christopher Steele, a/k/a/ “Mike Dozor,” 34, of Newark, DE, in a child exploitation case. Steele was indicted on March 6, 2014 for use of an interstate commerce facility to entice a minor to engage in sexual conduct, interstate travel with intent to engage in illicit sexual conduct with a minor, and receipt of child pornography. He faces a mandatory minimum of 10 years in prison with a maximum sentence of life. A sentencing date is not yet scheduled.
Steele found his victim, Minor #1, through a social networking cell phone application. He used that media to entice the victim into having sex. He then traveled from Delaware to Pennsylvania for the purpose of engaging in illicit sexual conduct with that minor. Steele also received a visual depiction showing a minor engaged in sexually explicit conduct and participated in a scheme to sexually exploit minor victims.
“Child sexual exploitation crimes are among HSI’s highest priorities,” said John P. Kelleghan, special agent in charge of HSI Philadelphia. “We will continue to relentlessly pursue predators who sexually abuse children, whether that abuse is physical in nature or if it's accomplished by exploiting their images.”
The case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), the Montgomery County District Attorney’s Office, and the Limerick Township Police Department. It is being prosecuted by Assistant United States Attorney Michelle Rotella.
The public is encouraged to report suspected child predators and any suspicious activity by calling 1-866-DHS-2-ICE. Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children, an Operation Predator partner, via its toll-free 24-hour hotline, 1-800-THE-LOST.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525