Eastern District of Tennessee
Press releases recorded for this federal judicial district.
Truck Driver Sentenced to 25 Years in Prison for Sexually Assaulting Minors During A Cross-Country TripRead the Press Release
KNOXVILLE, Tenn. – Jason Leonard Valdivia, 28, of Sweetwater, Tennessee, was sentenced today by visiting U.S. District Judge Laurie J. Michelson, in the Eastern District of Tennessee at Knoxville, to serve 300 months in federal prison for transporting a minor in interstate commerce for the purpose of engaging in criminal sexual activity with the minor.
Following his imprisonment, Valdivia will be supervised by the U.S. Probation Office for 15 years and will be required to register with the state sex offender registry in any state in which he lives, works, or attends school.
The investigation began in August 2018 after a minor reported that Valdivia had sexually assaulted the minor during a cross-country trip during the summer of 2018. When confronted, Valdivia admitted that he had engaged in sexual acts with two minors during the trip. Subsequent investigation revealed that Valdivia sexually assaulted the minors in his truck in June 2018 during a trip from Tennessee to Nevada and back.
The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Matthew T. Morris represented the United States in court.
This case was brought as part of Project Safe Childhood (PSC), 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 U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, PSC 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 PSC, please visit https://www.justice.gov/psc.
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Members of Drug Trafficking Organization Indicted for Conspiracy to Distribute FentanylRead the Press Release
A federal grand jury in Chattanooga, Tennessee returned a two-count indictment on November 24, 2020 against James J. Martin, Lee Antonio Clements Jr., and Ricky Harper, all of Chattanooga, for conspiracy to distribute fentanyl.
The indictment alleges that from May to October 2020, in the Eastern District of Tennessee, the defendants, James J. Martin, aka “Fat Deuce”; Lee Antonio Clements Jr., aka “Tone G,” aka “Tone G Da Boss,” aka “Tone”; Ricky Harper; and others known and unknown to the grand jury, conspired to distribute 400 grams or more of a mixture and substance containing fentanyl, in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(A). Fentanyl is a powerful synthetic opioid that is highly addictive.
Martin is also charged with being a felon in possession of a firearm, in violation of Title 18 United States Code, Section 922(g)(1).
If convicted of the drug conspiracy charge, Martin, Clements, and Harper each face a term of 10 years to life in prison, supervised release for five years, and a fine of up to $10,000,000. Additionally, Martin faces a term of imprisonment of up to 10 years in prison, supervised release for three years, and a fine of up to $250,000 if he is convicted of the firearms charge.
This indictment is the result of an investigation by the United States Drug Enforcement Administration Chattanooga Resident Office, United States Postal Inspection Service, Tennessee Bureau of Investigation, Chattanooga Police Department, Hamilton County Sheriff’s Office, and Bradley County Sheriff’s Office. Numerous agencies from the Appalachia High Intensity Drug Trafficking Area (HIDTA) Task Force assisted in the investigation.
Special Assistant United States Attorney Kevin T. Brown will represent the United States. Brown is employed by the City of Chattanooga and assigned to the United States Attorney’s Office to prosecute gang-related crime in federal court.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until his/her guilt has been proven beyond a reasonable doubt.
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Joseph Bryan Robertson Sentenced to 27 Years for Distribution of MethamphetamineRead the Press Release
GREENEVILLE, Tenn. – On November 24, 2020, Joseph Bryan Robertson, aka “Chief,” 52, of Elizabethton, Tennessee was sentenced to 324 months imprisonment by the Honorable Clifton L. Corker, in the United States District Court for the Eastern District of Tennessee at Greeneville.
Robertson pleaded guilty to an indictment charging him with conspiracy to distribute 50 grams or more of methamphetamine. Robertson was sentenced to serve 324 months (27 years) in prison, followed by five years’ supervised release.
A joint investigation of the Carter County Sheriff’s Office, Washington County Sheriff’s Office, Drug Enforcement Administration (DEA), Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and Federal Bureau of Investigation (FBI), uncovered a large group of individuals, led by Robertson, who were obtaining large quantities of crystal methamphetamine from sources in Atlanta and Knoxville and distributing it in northeast Tennessee. Robertson ruled the group through fear and violence. Robertson directed multiple kidnappings and violent assaults of individuals that owed drug debts to the organization. Multiple individuals were held captive at gunpoint, tied up, kicked, and beaten with fists and clubs, resulting in serious injuries.
Robertson was previously sentenced, in 2006, to serve a 78-month sentence in federal prison, also for the distribution of methamphetamine.
This case is part of an Organized Crime Drug Enforcement Task Force was a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations.
Assistant U.S. Attorney J. Gregory Bowman represented the United States.
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Florida and Tennessee Pain Clinic Owner Extradited from Italy to the United States to Face RICO ChargesRead the Press Release
A dual U.S.-Italian national was extradited from Italy to the United States on Nov. 20. The U.S. Marshals Service effectuated the transportation of the defendant from Lamezia Terme, Calabria to Knoxville, Tennessee.
Luigi Palma, 54, is a co-defendant of Sylvia Hofstetter, who, along with three medical providers, was convicted of numerous charges related to “pill mill” operations in Florida and Tennessee following a four-month trial earlier this year in Knoxville. Palma contested his extradition from Italy for approximately two years. The charges against Palma are varied, and reflect his alleged role in owning and operating pain clinics in South Florida and the Knoxville area over the course of several years. Included in those charges are a Racketeer Influenced and Corrupt Organization (RICO) conspiracy and a conspiracy to distribute oxycodone, oxymorphone, and morphine outside the scope of professional practice and not for a legitimate medical purpose.
Palma appeared before U.S. Magistrate Judge Debra C. Poplin in the Eastern District of Tennessee earlier today and entered a not-guilty plea to all charges. Palma waived his immediate right to a detention hearing and remains in the custody of the U.S. Marshals Service. Trial has been set for March 30, 2021, before U.S. District Judge Thomas A. Varlan.
This sweeping prosecution, which has resulted in approximately 140 convictions so far, is the result of an investigation by the U.S. Attorney’s Office for the Eastern District of Tennessee, the Criminal Division’s Organized Crime and Gang Section, and the FBI High Intensity Drug Trafficking Area, comprised of investigators assigned to the task force by the Loudon County Sheriff’s Office, Knoxville Police Department, Blount County Sheriff’s Office, Roane County Sheriff’s Office, Harriman Police Department, and Clinton Police Department.
Other agencies provided invaluable assistance, including the Rome Attaché of the Justice Department’s Office of International Affairs; FBI’s liaison in Rome; FBI’s Miami Field Office; the Hollywood, Florida, Police Department; the U.S. Department of Health and Human Services; the Tennessee Department of Health; and the U.S. Drug Enforcement Administration’s Knoxville Diversion Group. The Justice Department’s Office of International Affairs and FBI’s liaison in Rome were particularly instrumental in effectuating Palma’s extradition, as were Italian law enforcement agencies and prosecutors, including the Italian Ministry of Justice, Carabinieri Raggruppamento Operativo Speciale (ROS), and Interpol-Rome. The United States is particularly appreciative of their assistance.
The extradition of Palma was made possible by provisions of a treaty between the United States and Italy. The United States is grateful to the Italian authorities for their robust cooperation in this matter.
An indictment is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Assistant U.S. Attorney Tracy L. Stone and Deputy Chief Attorney Kelly Pearson and Trial Attorney Damare Theriot of the Criminal Division’s Organized Crime and Gang Section represent the United States in the prosecution of this case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Florida and Tennessee Pain Clinic Owner Extradited from Italy to the United States to Face RICO ChargesRead the Press Release
KNOXVILLE, Tenn. – A dual U.S.-Italian national was extradited from Italy to the United States on November 20. The U.S. Marshals Service effectuated the transportation of Luigi Palma from Lamezia Terme, Calabria to Knoxville, Tennessee.
Luigi Palma, 54, a co-defendant of Sylvia Hofstetter, who, along with three medical providers, were convicted of numerous charges related to “pill mill” operations in Florida and Tennessee following a four-month trial earlier this year in Knoxville. Palma contested his extradition from Italy for approximately two years. The charges against Palma are varied and reflect his alleged role in owning and operating pain clinics in South Florida and the Knoxville area over the course of several years. Included in those charges are a Racketeer Influenced and Corrupt Organization (RICO) conspiracy and a conspiracy to distribute oxycodone, oxymorphone, and morphine outside the scope of professional practice and not for a legitimate medical purpose.
On November 23, 2020, Palma appeared before the U.S. Magistrate Judge Debra C. Poplin in the Eastern District of Tennessee and entered not-guilty pleas to all charges. Palma waived his immediate right to a detention hearing and remains in the custody of the U.S. Marshals. Trial has been set for March 30, 2021, before U.S. District Judge Thomas A. Varlan.
This sweeping prosecution, which has resulted in approximately 140 convictions so far, results from an investigation by the U.S. Attorney’s Office for the Eastern District of Tennessee, the Criminal Division’s Organized Crime and Gang Section, and the FBI’s High Intensity Drug Trafficking Area, comprised of investigators assigned to the task force by the Loudon County Sheriff’s Office, Knoxville Police Department, Blount County Sheriff’s Office, Roane County Sheriff’s Office, Harriman Police Department, and Clinton Police Department.
The investigation that led to this prosecution, as described above, falls under the auspices of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Other agencies provided invaluable assistance, including the Rome Attaché of the Justice Department’s Office of Internal Affairs, FBI’s liaison in Rome, FBI’s Miami Field Office, the Hollywood Florida Police Department, U.S. Department of Health and Human Services, the Tennessee Department of Health, and the U.S. Drug Enforcement Administration’s Knoxville Diversion Group. The Justice Department’s Office of International Affairs and FBI’s liaison in Rome were particularly instrumental in effectuating Palma’s extradition, as were Italian law enforcement agencies and prosecutors, including the Italian Ministry of Justice, Carabinieri Raggruppamento Operativo Speciale (ROS), and Interpol-Rome. The United States is particularly appreciative of their assistance.
The extradition of Palma was made possible by provisions of a treaty between the United States and Italy. The United States is grateful to the Italian authorities for their robust cooperation in this matter.
An indictment is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Assistant U.S. Attorney Tracy L. Stone, Deputy Chief Attorney Kelly Pearson, and Trial Attorney Damare Theriot of the Criminal Division’s Organized Crime and Gang Section, U.S. Department of Justice, represented the United States in the prosecution of this case.
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Two Detroit-Area Men Sentenced for Crack Cocaine TraffickingRead the Press Release
GREENEVILLE, Tenn. – Quincy George, 36, of Detroit, Michigan, was sentenced on November 16, 2020, in the United States District Court for the Eastern District of Tennessee at Greeneville to 18 years in federal prison by the Honorable J. Ronnie Greer. This sentence follows George’s conviction on July 29, 2020, for his participation in a conspiracy to distribute more than 280 grams of cocaine base or crack. Once released from prison, George will be on supervised release for a 5-year period.
A co-defendant, Larry Walker, 22, of Harrison Charter Township, Michigan, entered a plea on June 10, 2020, to conspiracy to distribute more than 280 grams of cocaine base or crack. On November 12, 2020, Walker was sentenced to 87 months in prison. Walker will also be on supervised release for 5 years following his release.
The investigation began in April 2019, when the Kingsport Police Department (KPD) and an agent from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) identified George and Walker as sources of crack cocaine in Sullivan County, Tennessee. Law enforcement made several controlled purchases of narcotics from George and Walker. In August 2020, during a traffic stop by the Tennessee Highway Patrol, in which George was the driver of the car, KPD, ATF, the Vice and Narcotics Unit of the Sullivan County Sheriff's Office, and the DEA recovered nearly 90 grams of fentanyl-laced heroin, approximately 372 grams of powder cocaine, 374 oxycodone pills, and a small amount of marijuana, in a vacuum sealed container, hidden in a compartment of the dashboard.
“We have seen a large increase in the flow of dangerous narcotics out of Detroit into all parts of the Eastern District of Tennessee. The United States Attorney’s Office will continue its efforts to shut down this pipeline by vigorously prosecuting narcotics traffickers such as George and Walker,” said U.S. Attorney J. Douglas Overbey. “The message is simple, wherever you’re from, you won’t be returning home until you’ve served a long stint in a federal prison.”
ATF Acting Special Agent in Charge, Toby Taylor stated, “The partnerships with the public safety departments and the U.S. Attorney’s office were crucial in reducing the potential for violent crime in this case.”
“The Kingsport Police Department appreciates the collaborative team effort that went into this investigation that resulted in these charges. Our department will continue to take drugs off our streets, especially individuals involved in large-scale drug distributions,” said Chief David Quillin, Kingsport Police Department.
The case was investigated by the Kingsport Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Drug Enforcement Administration (DEA), Sullivan County Sheriff’s Office, and the Tennessee Highway Patrol.
Assistant U.S. Attorney Todd Martin represented the United States in court.
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Former Chattanooga-Area Public Claims Adjuster Pleads Guilty to Mail Fraud SchemeRead the Press Release
CHATTANOOGA, Tenn. – On November 10, 2020, Benjamin Reichel, 54, formerly of Ringgold, Georgia, entered a guilty plea to one count of mail fraud before United States Magistrate Judge Susan K. Lee in the United States District Court for the Eastern District of Tennessee at Chattanooga.
Reichel admitted to engaging in a scheme to defraud through his business, Loss Recovery Specialists (“LRS”), which held itself out to be a public claims adjuster licensed through the Tennessee Department of Commerce and Insurance. Through LRS, Reichel identified homeowners and businesses who had suffered property damage and were seeking reimbursement through their insurance policies. Reichel then solicited payments for repairs and other services, misusing his victims’ funds for personal and private gains, and improper professional expenses. Reichel agreed that the United States could present proof of losses totaling between $550,000 and $1,500,000.
The charges resulted from an investigation conducted by the Federal Bureau of Investigation, the United States Postal Inspection Service, the Cleveland Police Department, and other local law enforcement agencies. In connection with his plea agreement, the defendant agreed to forfeit certain funds and accounts to the United States, including a home in Ringgold.
Sentencing is set for April 7, 2021, at 2:00 p.m., in United States District Court in Chattanooga. The defendant faces a term of up to 20 years in prison, potential fines of up to $250,000, and the obligation of paying restitution to his victims. Individuals and businesses who believe they may be victims of this scheme or entitled to restitution are encouraged to contact the FBI via e-mail at [email protected].
Assistant U.S. Attorney Kyle J. Wilson represented the United States.
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Assistant U.S. Attorney Francis M. Hamilton, III Receives Attorney General AwardRead the Press Release
KNOXVILLE, Tenn. – United States Attorney J. Douglas Overbey is pleased to announce that Assistant United States Attorney Francis M. Hamilton, III, has received the Claudia J. Flynn Award for Professional Responsibility. This award is one of several honors recently announced by Attorney General William P. Barr. Assistant U.S. Attorney Hamilton joins other recipients of the 68th Annual Attorney General’s Awards, recognizing Department of Justice employees and partners for extraordinary contributions to the enforcement of our nation’s laws.
In announcing the awards, Attorney General Barr said, “I am honored to recognize the recipients of this year’s Attorney General’s Awards, whose tireless work and steadfast dedication have proven critical to enforcing the rule of law and protecting all Americans. Those honored today have demonstrated exceptional efforts and made tremendous personal sacrifices throughout their time working at the Department of Justice, and for that, I am truly thankful.”
U.S. Attorney Overbey added, “We are delighted a member of our team has been recognized by Attorney General Barr for his contributions to the rule of law and the highest standards of ethics and professionalism. Assistant U.S. Attorney Hamilton is most deserving of this award.”
The Claudia J. Flynn Award for Professional Responsibility recognizes Justice Department attorneys who have made significant contributions in the area of professional responsibility by successfully handling a sensitive and challenging professional responsibility issue in an exemplary fashion and/or leading efforts to ensure that department attorneys carry out their duties in accordance with the rules of professional conduct.This year’s Claudia J. Flynn Award was presented to Senior Legal Advisor Patrice M. Mulkern, Professional Responsibility Advisory Office; Assistant U.S. Attorney Francis M. Hamilton III, U.S. Attorney’s Office for the Eastern District of Tennessee; Assistant U.S. Attorney Cecil VanDevender, U.S. Attorney’s Office for the Middle District of Tennessee, and; Assistant U.S. Attorney Tony R. Arvin, U.S. Attorney’s Office for the Western District of Tennessee.
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U.S. Attorney Overbey Announces $92,740 in Justice Grants to the County of FranklinRead the Press Release
KNOXVILLE, Tenn.– U.S. Attorney J. Douglas Overbey announced today $92,740 in Department of Justice grants to the County of Franklin for adult drug and veteran treatment courts in the Eastern District of Tennessee. The Department of Justice’s Office of Justice Programs have awarded more than $96 million to fund specialized treatment courts. These courts provide treatment instead of detention for nonviolent juveniles, veterans and adults who have been criminally charged and who have a substance use disorder. The awards are part of more than $340 million in OJP grants awarded in October to fight America’s addiction crisis.
“My years interacting with drug-involved offenders as a state judge gave personal validation to the findings of researchers – drug courts have enormous potential to reduce crime, curb abuse and change lives,” said OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan. “I’m so proud to make these important investments in strategies that have been shown to improve public safety and deliver badly-needed treatment resources to those, like our nation’s veterans, who have been caught up in a cycle of crime and addiction.”
“With the expansion of drug courts throughout the United States, individuals charged with offenses related to substance abuse have a chance through treatment to avoid custodial sentences. These federal funds may help struggling individuals in Franklin County return to their communities as productive members of society,” said U.S. Attorney J. Douglas Overbey.
The first American drug court system began in 1989 in Miami-Dade, Florida, in response to the crack cocaine epidemic. Drug courts there and elsewhere have demonstrated that they reduce recidivism and substance abuse among high-risk, high-need participants and increase their likelihood of successful rehabilitation. There are now more than 4,000 drug courts throughout the United States. In addition, more than 350 veteran treatment courts now serve over 15,000 American veterans.
OJP has funded several fiscal year 2020 drug court programs, including the Adult Drug Court and Veterans Treatment Court Discretionary Grant Program administered by OJP’s Bureau of Justice Assistance. More than $57 million is being distributed under this program, which provides financial assistance to states, state courts, local courts, units of local government and tribal governments to develop, implement and enhance drug courts. BJA also awarded more than $12 million for related training and technical assistance. BJA awarded $2.6 million to fund the National Community Courts Site-based and Training and Technical Assistance Initiative, which supports community court grantees and practitioners in developing effective responses to low-level and non-violent offenses and address substance abuse, including opioid use.
OJP’s Office of Juvenile Justice and Delinquency Prevention funded the Family Drug Court Program with more than $19 million to build the capacity of states, state and local courts, units of local government and federally recognized tribal governments to sustain existing family drug courts or establish new ones. These courts serve parents who require treatment for a substance abuse disorder and who are involved with the child welfare system as a result of child abuse or neglect.
The Family Drug Court awards will fund two areas. The first area will expand treatment services for parents in existing family drug courts, which include screening, assessment, case management, recovery support and program coordination. The second area will enhance or expand family drug court treatment at the state and county levels to more effectively serve families affected by opioid, stimulant and other substance use disorders.
More than $5 million from OJJDP funded the Juvenile Drug Treatment Court Program to provide resources to state, local and tribal governments to create and enhance juvenile drug treatment court programs for youth in the justice system who are substance abusers, with a specific focus on opioid abuse. The Category 1 grants will be used for jurisdictions where no juvenile drug court currently exists or has been operational for less than a year. Category 2 grants will support jurisdictions with a fully operational juvenile drug treatment court.
For a complete list of individual grant programs, award amounts and jurisdictions that will receive funding to support drug and veterans treatment courts and other programs to fight America’s addiction crisis, click here.
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Investment Professional and Author Is Sentenced for Defrauding National Women's SororityRead the Press Release
KNOXVILLE, Tenn. A Florida woman was sentenced to 24 months in prison for her role in an investment management scheme.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney James Douglas Overbey of the U.S. Attorney’s Office for the Eastern District of Tennessee, and Assistant Director in Charge Steven D’Antuono of the FBI’s Washington Field Office made the announcement.
Cheryl Broussard, 63, of Miami, Florida, was sentenced on November 5, 2020 in the U.S. District Court for the Eastern District of Tennessee by Chief Judge Gregory N. Stivers of the Western District of Kentucky. Judge Stivers also ordered the defendant to pay $106,000 in restitution and $106,000 in forfeiture. Broussard pleaded guilty on Aug. 14, 2019, to one count of wire fraud.
Broussard, the author of multiple books on women and finance, advertised herself as a financial professional with over two decades of experience in investment management and fiscal independence for women. As part of her plea, Broussard admitted to entering into an investment agreement with a professional women’s sorority pursuant to which she would manage $100,000 of the sorority’s funds in February 2015. Beginning in June 2015, Broussard sent regular investment portfolio reports to the sorority purporting to detail investments in securities. Unbeknownst to the sorority, Broussard had used its funds for personal expenses, and the periodic reports were fake. Broussard admitted that, when the sorority noticed inconsistencies in the periodic reports and sought to terminate the agreement, she fabricated a termination penalty that appeared to be part of the original agreement to prevent the sorority from going forward with the termination. When the sorority eventually terminated the agreement, Broussard failed to remit any funds to the sorority.
This case was investigated by the Federal Bureau of Investigation. Trial Attorney Michelle Pascucci of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Frank M. Dale are prosecuting the case.
The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
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Podiatrist Indicted for Health Care FraudRead the Press Release
KNOXVILLE, Tenn.- A federal grand jury in Knoxville returned a forty-count indictment on November 3, 2020 against Andrew Lynn, D.P.M., 63, of Knoxville, Tennessee, charging him with health care fraud. Lynn appeared in court on November 5, 2020, before Chief U.S. Magistrate Judge H. Bruce Guyton and entered a plea of not guilty to the charges in the indictment. Lynn was released pending trial, which has been set for January 12, 2021 in front of United States District Judge Thomas A. Varlan, in Knoxville, Tennessee.
The indictment alleges that Lynn, a Doctor of Podiatric Medicine, engaged in a scheme to defraud when he billed Medicare for services not rendered. As part of this scheme to defraud, the indictment alleges that Lynn preformed routine foot care and then billed Medicare for unperformed surgical procedures. The indictment alleges that as a result of this scheme, Medicare was billed in excess of $1.1 million and paid out in excess of $850,000.
If convicted, Lynn faces a term of up to ten years in prison, up to three years supervised of release, up to a $250,000.00 fine and mandatory restitution.
This indictment is the result of an investigation by HHS-OIG and FBI. Assistant U.S. Attorney Cynthia F. Davidson will represent the United States.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until his/her guilt has been proven beyond a reasonable doubt.
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Leader of Drug Trafficking Organization and Money Launderer SentencedRead the Press Release
KNOXVILLE, Tenn. – On November 4, 2020, Brooke Hensley, was sentenced to 126 months in prison for her role in leading a methamphetamine and heroin drug trafficking organization that distributed kilograms of methamphetamine and heroin throughout the Eastern District of Tennessee and elsewhere. Hensley was also sentenced to 126 months in prison for her role in laundering nearly $1 million in dirty money generated by a phony loan fraud scheme, to be run concurrently with her drug trafficking sentence.
Hensley, 26, of Knoxville, Tennessee, was sentenced by the Honorable Thomas A. Varlan, U.S. District Judge for the Eastern District of Tennessee at Knoxville. The defendant was also ordered to forfeit real property and to pay a $200,000 money judgment.
The extensive investigation revealed that Hensley and others distributed kilo-levels of methamphetamine and heroin throughout east Tennessee. Hensley was the leader of the conspiracy and obtained the methamphetamine and heroin from a co-conspirator in Atlanta, Georgia. The conspiracy involved eight other co-defendants, all of whom have been sentenced in federal court.
Hensley also was sentenced for her role in a money laundering and bank fraud conspiracy in which two others have been charged. Hensley and others received monies from fraudulent loans by making false representations to financial institutions as to income and employment. The defendant and others altered documents to support the loan requests, including providing false income tax return information to support fictitious income. Hensley conspired to launder the proceeds of these fraudulently-obtained loans by opening bank accounts in the names of nominees and transferring the loan proceeds to other conspirators. Hensley laundered over $800,000 of fraudulent loan proceeds.
“Drug traffickers sometimes engage in multiple schemes to illegally make money and ‘wash’ it. Brooke Hensley is one of those such traffickers, and she did so in running this fraudulent loan scam while she was peddling deadly poison in the Knoxville area.,” said U. S. Attorney J. Douglas Overbey. “Thanks to DEA and IRS-CI, she has many years ahead of her to think about the consequences of her conduct and the lives she ruined.”
“The fines and prison term handed down in this significant sentencing reflect the seriousness of the charges and the wide scope of criminal activity in which the defendant was engaged, including drug trafficking, money laundering and other financial schemes,” said Special Agent in Charge Matthew D. Line. “IRS Criminal Investigation will continue to work with our law enforcement partners to ensure that those who profit from illegal activity are brought to justice.”
This drug, money laundering and fraud prosecution, which has led to nine convictions so far, results from an investigation by IRS-CI, DEA, Knoxville Police Department, Knox County Sheriff’s Office, Blount County Sheriff’s Office, Oak Ridge Police Department, Anderson County Sheriff’s Office, Tennessee Department of Safety, and Metropolitan Knoxville Airport Authority Police.
The investigation that led to this prosecution, as described above, falls under the auspices of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Assistant U.S. Attorney Anne-Marie Svolto represented the United States in the prosecution of this case.
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Investment Professional and Author is Sentenced for Defrauding National Women’s SororityRead the Press Release
A Florida woman was sentenced to 24 months in prison today for her role in an investment management scheme.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney James Douglas Overbey for the Eastern District of Tennessee, and Assistant Director in Charge Steven D’Antuono of the FBI’s Washington Field Office made the announcement.
Cheryl Broussard, 63, of Miami, Florida, was sentenced in the U.S. District Court for the Eastern District of Tennessee by Chief Judge Gregory N. Stivers of the Western District of Kentucky. Judge Stivers also ordered the defendant to pay $106,000 in restitution and $106,000 in forfeiture. Broussard pleaded guilty on Aug. 14, 2019, to one count of wire fraud.
Broussard, the author of multiple books on women and finance, advertised herself as a financial professional with over two decades of experience in investment management and fiscal independence for women. As part of her plea, Broussard admitted to entering into an investment agreement with a professional women’s sorority pursuant to which she would manage $100,000 of the sorority’s funds in February 2015. Beginning in June 2015, Broussard sent regular investment portfolio reports to the sorority purporting to detail investments in securities. Unbeknownst to the sorority, Broussard had used its funds for personal expenses, and the periodic reports were fake. Broussard admitted that, when the sorority noticed inconsistencies in the periodic reports and sought to terminate the agreement, she fabricated a termination penalty that appeared to be part of the original agreement to prevent the sorority from going forward with the termination. When the sorority eventually terminated the agreement, Broussard failed to remit any funds to the sorority.
This case was investigated by the FBI. Trial Attorney Michelle Pascucci of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Frank M. Dale are prosecuting the case.
The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Crossville Man Sentenced to over 17 Years on Methamphetamine Trafficking ChargesRead the Press Release
KNOXVILLE, Tenn. – On November 2, 2020, Jason L Howard, 36, of Crossville, was sentenced to 210 months in a federal prison, by the Honorable Thomas W. Phillips, U.S. District Court Judge for the Eastern District of Tennessee at Knoxville. Howard was caught transporting nearly a kilogram of methamphetamine and a firearm. Howard pleaded guilty to possession with the intent to distribute 50 grams or more of methamphetamine.
On February 26, 2019, Howard was stopped by Tennessee Highway Patrol officers for a routine traffic stop as he was traveling westbound on Highway 68 in Tennessee. A lawful search of Howard’s vehicle led to the discovery of a plastic bag containing approximately 938 grams of methamphetamine and a loaded 9mm handgun. Howard was earlier surveilled by law enforcement in Georgia meeting with another known methamphetamine trafficker.
“Traffickers move large amounts of narcotics up and down the highways and interstates of East Tennessee every day, and it is a serious challenge to law enforcement to intercept them. We are grateful the Tennessee Highway Patrol’s vigilance in this case led to this arrest and what will hopefully be a message that Howard’s sentence delivers,” said U.S. Attorney J. Douglas Overbey.
“Methamphetamine destroys lives. HSI will continue to work with our federal and state and local law enforcement partners to help remove illegal drugs and arrest those who traffic these dangerous substances. We owe it to the communities and people we serve,” said HSI Nashville Special Agent in Charge Jerry C. Templet, Jr.
This prosecution resulted from a joint investigation by the HSI, TBI, 9th Judicial Drug Task Force, Cumberland County Sheriff’s Office, Middle Tennessee HIDTA Task Force, and the Tennessee Highway Patrol.
Assistant U.S. Attorney Kevin Quencer represented the United States.
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U.S. Attorney Overbey Announces $700,000 in Justice Grants to Combat Violent Crime CrisisRead the Press Release
Awards Are Part of More than $458 Million in Justice Department Funding Announced by Attorney General Barr
KNOXVILLE, Tenn.– U.S. Attorney J. Douglas Overbey announced $700,000 in Department of Justice grants to the City of Chattanooga to fight and prevent violent crime in the Eastern District of Tennessee. The grants, awarded by the Department’s Office of Justice Programs, are part of more than $458 million in funding to support state and local law enforcement efforts to combat violent crime in jurisdictions across the United States.
“One of the fundamental missions of government is to protect its citizens and safeguard the rule of law,” said Attorney General William P. Barr. “The Department of Justice will continue to meet this critical responsibility by doing everything within its power to help our state, local and tribal law enforcement and criminal justice partners fight crime and deliver justice on behalf of all Americans.”
The funding announced today continues the Trump Administration’s commitment to reducing crime and improving public safety. In the two years before President Trump took office, America had experienced a precipitous rise in crime, particularly in serious violent crime. The President elevated community safety to the top of his domestic agenda and crime rates have fallen steadily since. Recent data from the FBI and the Bureau of Justice Statistics for 2019 show a drop in crime and serious victimization for the third year in a row. However, a number of cities are experiencing conspicuous countertrends. Today’s grants will bolster crime-fighting efforts in those communities and in jurisdictions throughout the United States.
“Violence has become a tragic reality in too many of America’s communities,” said OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan. “Working with officials across the Trump Administration and with thousands of states, local and tribal crime-fighters across the country, the Department of Justice is leading the response to this urgent challenge. OJP is pleased to make these resources available to support innovative, tested and diverse solutions to violent crime.”
“Our office has been a leader in fighting to reduce violent crime in Chattanooga for many years, and in fact, our office works daily with a city-funded Special Assistant U.S. Attorney assigned to us for the sole purpose of charging Chattanooga’s most violent offenders federally,” said U. S. Attorney Overbey. “This grant will certainly enhance the Chattanooga Police Department’s efforts as we move forward in this battle.”
Of the more than $458 million awarded nationwide, OJP’s Bureau of Justice Assistance made 1,094 grants totaling more than $369 million to support a broad range of initiatives, including efforts in enforcement, prosecution, adjudication, detention and rehabilitation. OJP’s office of Juvenile Justice and Delinquency Prevention awarded more than $10 million across 24 jurisdictions to intervene in and suppress youth gang activity as well as $1 million to the Institute for Intergovernmental Research to continue operating the National Gang Center. OJP’s National Institute of Justice awarded $7.8 million to fund research and evaluation on the prevention and reduction of violent crime. OJP’s Bureau of Justice Statistics provided more than $69 million to strengthen the quality and accessibility of records within the National Instant Criminal Background Check System.
For a complete list of individual grant programs, award amounts, and jurisdictions that will receive funding, click here. More information about OJP and its components can be found at www.ojp.gov.
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DEA Prepares for Prescription Drug Take Back DayRead the Press Release
KNOXVILLE, Tenn. On Saturday, Oct. 24, from 10 a.m. to 2 p.m., the U.S. Drug Enforcement Administration will provide the public the opportunity to prevent pill abuse and theft by ridding their homes of potentially dangerous expired, unused and unwanted prescription drugs. Location information is available from the DEA. These sites cannot accept liquids, needles or sharps, only pills or patches, and this service is free and anonymous, no questions asked.
This October’s event is DEA’s 19th nationwide event since its inception 10 years ago. Last fall, Americans turned in nearly 883,000 pounds of prescription drugs at nearly 6,200 sites operated by the DEA and almost 5,000 from its state and local law enforcement partners. DEA and its partners have collected nearly 6,350 tons of expired, unused, and unwanted prescription medications since the inception of the National Prescription Drug Take Back Initiative in 2010.
To keep everyone safe, collection sites will follow local COVID-19 guidelines and regulations.
“The abuse of opioids and prescription drugs is at an all-time high in our country. Help us by working together with our law enforcement partners by cleaning out cabinets and disposing of unwanted medicines year round,” said U.S. Attorney J. Douglas Overbey.
“With America in the grips of the COVID-19 Pandemic, we’re seeing an alarming rise in overdose deaths,” said Special Agent in Charge Todd Scott, head of DEA’s Louisville Division. “There’s never been a more important time to rid our homes of medicines we’re not using and keep them away from those who might abuse or misuse them.”
This initiative addresses a vital public safety and public health issue. Medicines that languish in home cabinets are highly susceptible to diversion, misuse, and abuse. Rates of prescription drug abuse in the United States are alarmingly high, as are the number of accidental poisonings and overdoses because of these drugs.
In addition to DEA’s National Prescription Drug Take Back Day, there are many other ways to dispose of unwanted prescription drugs every day, including the 11,000 authorized collectors that are available all year long. For more information, visit DEA’s year-round collection site locator.
The FDA also provides information on how to properly dispose of prescription drugs. More information is available here: https://www.fda.gov/consumers/consumer-updates/where-and-how-dispose-unused-medicines.
For more information about the disposal of prescription drugs or about the October 24 Take Back Day event, go to www.DEATakeBack.com.
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Pain Clinic Owner Sentenced for Role in Operating Pill Mills in Tennessee and FloridaRead the Press Release
A pain clinic owner was sentenced today to over 33 years in prison for her role in operating several pill mills in Knoxville, Tennessee, and Hollywood, Florida.
Sylvia Hofstetter, 56, of Miami, Florida, was sentenced by U.S. District Judge Thomas A. Varlan. Judge Varlan also ordered the defendant to forfeit $3.6 million. Hofstetter was found guilty by a jury on Feb. 13, 2020, of Racketeer Influenced and Corrupt Organization (RICO) conspiracy, two counts of drug conspiracy, money laundering offenses, and maintaining drug-involved premises.
“This defendant reaped millions of dollars in personal profits by operating destructive opioid pill mills in multiple states, inflicting lasting harm on multiple communities,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “This prosecution demonstrates the Department of Justice’s steadfast commitment to combatting the opioid crisis and holding responsible the unscrupulous individuals who seek to profit from it.”
“The Eastern District of Tennessee remains at the forefront in the battle against illegal pain clinics and the mass-prescribing of opioids,” said U.S. Attorney J. Douglas Overbey for the Eastern District of Tennessee. “Through the cooperation and hard work of our local, state, and federal agencies, we continue to pursue and prosecute those who seek to endanger our communities by illegally distributing prescription pain killers. Let this sentencing serve as a deterrent for those who seek to profit from fueling a tragic cycle of addiction and pain killer abuse.”
“The nation remains in the midst of a drug crisis that is often fueled by pill mills. Drug addiction destroys lives and devastates families,” said Special Agent in Charge Joseph Carrico of the FBI’s Knoxville Field Office. “The FBI will work tirelessly with our federal, state and local law enforcement partners to investigate, arrest and hold accountable those who use illegal means and criminal behavior to take advantage of others.”
The evidence at trial proved that the pill mills owned and operated by Hofstetter and her co-defendants distributed over 11 million tablets of oxycodone, oxymorphone, and morphine that generated over $21 million in revenue, with a corresponding street value of $360 million. The conspiracy involved four separate clinics in Tennessee, each of which the jury determined were drug-involved premises, i.e., pill mills. Before coming to Tennessee, Hofstetter worked at a pill mill in Hollywood, Florida, owned by three of her co-defendants. The evidence at trial demonstrated that, as law enforcement shut down hundreds of pill mills in South Florida during that time-period, Hofstetter and her co-defendants planned the move to East Tennessee where a large percentage of these clinics’ opioid-addicted customers lived.
Hofstetter’s role in Tennessee was to run the pill mills and ensure that patient volume remained high, thus guaranteeing enormous profits for Hofstetter and her co-defendants. Once in Tennessee, however, Hofstetter opened her own pill mills in secret from her Florida employers and went into competition against them. Hofstetter personally reaped over $4 million from her role in these offenses.
This sweeping prosecution, which has resulted in approximately 140 convictions so far, is the result of an investigation by the U.S. Attorney’s Office for the Eastern District of Tennessee, the Criminal Division’s Organized Crime and Gang Section (OCGS), and the FBI High Intensity Drug Trafficking Area (HIDTA), comprised of investigators assigned to the task force by the Loudon County Sheriff’s Office, Knoxville Police Department, Blount County Sheriff’s Office, Roane County Sheriff’s Office, Harriman Police Department, and Clinton Police Department. Other agencies provided invaluable assistance, including the Rome Attaché of the Justice Department’s Office of International Affairs, FBI’s liaison in Rome, FBI’s Miami Field Office, the Hollywood, Florida, Police Department, the U.S. Department of Health and Human Services, the Tennessee Department of Health, and the Drug Enforcement Administration’s Knoxville Diversion Group.
The investigation that led to this prosecution, as described above, fall under the auspices of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Assistant U.S. Attorney Tracy L. Stone and Deputy Chief Attorney Kelly Pearson and Trial Attorney Damare Theriot of OCGS are prosecuting the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Pain Clinic Owner Sentenced for Role in Operating Pill Mills in Tennessee and FloridaRead the Press Release
KNOXVILLE, Tenn. – On October 21, 2020, defendant Sylvia Hofstetter, was sentenced today to 400 months in prison for her role in operating several pill mills in Knoxville, Tennessee and Hollywood, Florida.
Acting Assistant Attorney General Brian C. Rabbit of the Justice Department’s Criminal Division, U.S. Attorney J. Douglas Overbey of the Eastern District of Tennessee, and Special Agent in Charge Joseph Carrico of the FBI’s Knoxville Field office made the announcement.
Sylvia Hofstetter, 56, of Miami, Florida, was sentenced by United States District Judge Thomas A. Varlan. Judge Varlan also ordered the defendant to pay $3.6 million in forfeiture. Hofstetter was found guilty by a jury on February 13, 2020, of Racketeer Influenced and Corrupt Organization (RICO) conspiracy, two counts of drug conspiracy, money laundering offenses, and maintaining drug-involved premises.
The evidence at trial proved that the pill mills owned and operated by Hofstetter and her co-defendants distributed over 11 million tablets of oxycodone, oxymorphone, and morphine that generated over $21 million in revenue, with a corresponding street value of $360 million. The conspiracy involved four separate clinics in Tennessee, each of which the jury determined were drug-involved premises, i.e., pill mills. Before coming to Tennessee, Hofstetter worked at a pill mill in Hollywood, Florida owned by three of her co-defendants. The evidence at trial demonstrated that, as law enforcement shut down hundreds of pill mills in South Florida during that time-period, Hofstetter and her co-codefendants planned the move to East Tennessee where many of these clinics’ opioid-addicted customers lived.
Hofstetter’s role in Tennessee was to run the pill mills and ensure that patient volume remained high, thus guaranteeing enormous profits for Hofstetter and her co-defendants. Once in Tennessee, however, Hofstetter opened her own pill mills in secret from her Florida employers and went into competition against them. Hofstetter personally reaped over $4 million dollars from her role in these offenses.
“This defendant reaped millions of dollars in personal profits by operating destructive opioid pill mills in multiple states, inflicting lasting harm on multiple communities,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “This prosecution demonstrates the Department of Justice’s steadfast commitment to combatting the opioid crisis and holding responsible the unscrupulous individuals who seek to profit from it.”
"The Eastern District of Tennessee remains at the forefront in the battle against illegal pain clinics and the mass-prescribing of opioids," said U.S. Attorney Overbey. "Through the cooperation and hard work of our local, state, and federal agencies, we continue to pursue and prosecute those who seek to endanger our communities by illegally distributing prescription pain killers. Let this sentencing serve as a deterrent for those who seek to profit from fueling a tragic cycle of addiction and pain killer abuse."
"The nation remains in the midst of a drug crisis that is often fueled by pill mills. Drug addiction destroys lives and devastates families. The FBI will work tirelessly with our federal, state and local law enforcement partners to investigate, arrest and hold accountable those who use illegal means and criminal behavior to take advantage of others," said FBI Special Agent in Charge, Joseph Carrico.
This sweeping prosecution, which has resulted in approximately 140 convictions so far, results from an investigation by the United States Attorney’s Office for the Eastern District of Tennessee, the Organized Crime and Gang Section, U.S. Department of Justice, and the FBI High Intensity Drug Trafficking Area (HIDTA), comprised of investigators assigned to the task force by the Loudon County Sheriff’s Office, Knoxville Police Department, Blount County Sheriff’s Office, Roane County Sheriff’s Office, Harriman Police Department, and Clinton Police Department. Other agencies provided invaluable assistance, including the Rome attaché of the Office of International Affairs, U.S. Department of Justice, FBI’s liaison in Rome, FBI’s Miami Field Office, the Hollywood, Florida, Police Department, the United States Department of Health and Human Services, the Tennessee Department of Health, and the Drug Enforcement Administration’s Knoxville Diversion Group.
The investigation that led to this prosecution, as described above, fall under the auspices of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Assistant U.S. Attorney Tracy L. Stone, Deputy Chief Attorney Kelly Pearson, and Trial Attorney Damare Theriot, Organized Crime and Gang Section, U.S. Department of Justice, represented the United States in the prosecution of this case.
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U.S. Attorney Overbey Announces $899,488 in Justice Grants to Combat Addiction CrisisRead the Press Release
KNOXVILLE, Tenn.– U.S. Attorney J. Douglas Overbey announced today $899,488 in Department of Justice grants to Cocke County to fight drug abuse and addiction in the Eastern District of Tennessee. The grants were awarded by the Department’s Office of Justice Programs (OJP) and are part of more than $341 million going to communities nationwide.
"The addiction crisis has taken an enormous toll on America’s families and communities, eroding public health, threatening public safety and claiming tens of thousands of lives year after year," said Attorney General William P. Barr. "Through comprehensive measures taken by this administration, we have been able to curtail the opioid epidemic, but new and powerful drugs are presenting exceptional challenges that we must be prepared to meet. The Justice Department’s substantial investments in enforcement, response, and treatment will help us overcome these challenges and work towards freeing Americans from abuse and addiction."
Illegal drugs and illicit drug use have claimed the lives of nearly 400,000 Americans since the turn of the century. Powerful synthetic opioids like fentanyl are exacting an enormous toll on families and communities, and an emergence in the use of methamphetamines and other psychostimulants is drawing drug traffickers and driving up overdose rates. Three years ago, President Trump declared a Public Health Emergency and initiated a whole-of-government approach dedicated to ending this national tragedy. The Department of Justice has invested unprecedented levels of funding in combating the addiction crisis. The awards announced today build on those earlier investments.
"If we hope to defeat an enemy as powerful, persistent and adaptable as illicit drugs, we must be at least as determined and versatile, focusing our ingenuity and resources on curbing abuse and fighting addiction," said OJP’s Principal Deputy Assistant Attorney General Katharine T. Sullivan. "These grants will enable criminal justice officials and substance abuse, mental health and other medical professionals to pool their assets and bring the full weight of our public safety and treatment systems down on this epidemic that has already caused so much harm."
"Many of our rural communities in the Eastern District of Tennessee are confronted daily with the challenges of dealing with drug abuse and addiction. While there is no one-size-fits-all solution for communities struggling to address the drug epidemic, these federal funds will help provide treatment-related resources and support services through the Tennessee Recovery Oriented Compliance Strategy (TN-ROCS)," said U.S. Attorney Overbey. "TN-ROCS has proved its effectiveness, and I’m pleased OJP has made this award to such a worthy project."
The TN ROCS project serves Tennessee’s 4th Judicial District, which includes Cocke, Sevier, Jefferson, and Grainger Counties, and its purpose is to increase the capacity of this innovative court-based intervention program to link individuals at high risk of overdose to appropriate, evidence based behavioral health treatment and recovery support services.
Funding is made available through OJP’s Bureau of Justice Assistance, National Institute of Justice, Office for Victims of Crime and Office of Juvenile Justice and Delinquency Prevention.
For a complete list of individual grant programs, amounts to be awarded and the jurisdictions that will receive funding, visit here and here.
More information about OJP and its components can be found at www.ojp.gov.
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Department of Justice and United States Attorney's Office to Oversee November 2020 ElectionsRead the Press Release
KNOXVILLE, Tenn. – U.S. Attorney J. Douglas Overbey announced today that Assistant U.S. Attorney Perry H. Piper will lead the efforts of his office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 3, 2020, general elections. AUSA Piper has been appointed to serve as the District Election Officer (DEO) for the Eastern District of Tennessee and, in that capacity, is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
“Every United States citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. Aggressive and prompt action will be taken by the Department of Justice to protect the integrity of the election process. While the COVID-19 pandemic may alter the way we vote this November, we nonetheless must ensure that voter integrity is maintained, and the votes counted as cast by the citizens. The United States Attorney’s Office for the Eastern District of Tennessee will act promptly and aggressively to protect the integrity of the election process,” said U.S. Attorney J. Douglas Overbey.
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on Election Day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters, and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to make their own ballot or to be assisted by a person of their choice.
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 3, 2020, and to ensure that such complaints are directed to the appropriate authorities, U.S. Attorney Overbey stated that AUSA/DEO Piper will be on duty in this district while the polls are open. AUSA Piper can be reached at (423) 385-1332.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public at (865) 544-0751.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-(855) 856-1247 or (202) 514 -3847, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
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DOJ Charges More Than 14,200 Defendants with Firearms-Related Crimes in FY20Read the Press Release
The Department of Justice announced it has charged more than 14,200 defendants with firearms-related crimes during Fiscal Year (FY) 2020, despite the challenges of COVID 19 and its impact on the criminal justice process. These cases have been a Department priority since November 2019 when Attorney General William P. Barr announced his commitment to investigating, prosecuting, and combatting gun crimes as a critical part of the Department’s anti-violent crime strategy. These firearms-related charges result from the critical law enforcement partnership between United States Attorneys’ Offices and the Bureau of Alcohol, Tobacco, Firearms and Explosives, led by Acting Director Regina Lombardo, who has made firearms-related investigations a priority.
“The number one priority of government is to keep its citizens safe,” said Attorney General Barr. “By preventing firearms from falling into the hands of individuals who are prohibited from having them, we can stop violent crime before it happens. Violating federal firearms laws is a serious crime and offenders face serious consequences. The Department of Justice is committed to investigating and prosecuting individuals who illegally buy, sell, use, or possess firearms. Reducing gun violence requires a coordinated effort, and we could not have charged more than 14,000 individuals with firearms-related crimes without the hard work of the dedicated law enforcement professionals at the ATF, our U.S. Attorneys’ Offices across the country, and especially all of our state and local law enforcement partners.”
“Protecting the public from violent crime involving firearms is at the core of ATF’s mission,” commented ATF Acting Director Regina Lombardo. “Every day the men and women of ATF pursue and investigate those who use firearms to commit violent crimes in our communities, many of whom are prohibited from possessing firearms from previous convictions. ATF, in collaboration with the U.S. Attorneys’ Offices across the nation, is committed to bringing these offenders to justice for their egregious and violent criminal acts.”
“Gun violence is a top priority for the Department and here in the Eastern District of Tennessee. Our office values the hard work of our partners, and we are proud of our work in protecting the public from violent crime involving firearms. Our office will vigorously pursue and prosecute those who use firearms to commit violent crimes within our communities,” said U.S. Attorney J. Douglas Overbey.
Under federal law, it is illegal to possess a firearm if one falls into one of nine prohibited categories, including being a felon, illegal alien, or unlawful user of a controlled substance. Further, it is unlawful to possess a firearm in furtherance of a drug trafficking offense or violent crime. It is also illegal to purchase – or even to attempt to illegally purchase - firearms if the buyer is a prohibited person or illegally purchasing a firearm on behalf of others. Lying on ATF Form 4473, which is used to lawfully purchase a firearm, is also a federal offense. The Department is committed to prosecuting these firearms offenses, and using all modern technologies available to law enforcement such as the National Integrated Ballistic Information Network, known as NIBIN, to promote gun crime intelligence. Keeping illegal firearms out of the hands of violent criminals will continue to be a priority of the Department of Justice and we will use all appropriate, available means to keep the law-abiding people of this country safe from gun crime.
For examples of convictions of firearms related crimes within the Eastern District of Tennessee, please see the following press releases: Small and Johnson and Charles Edward Mason.
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U.S. Attorney Overbey Announces $600,000 to Support Mentoring Services for Children in Eastern District of TennesseeRead the Press Release
KNOXVILLE, Tenn.– U.S. Attorney J. Douglas Overbey announced an award of $600,000 in Department of Justice grants to the Knoxville Leadership Foundation to support mentoring services for youth to protect children from abuse, exploitation and threats such as sex trafficking. The awards were made by the Office of Juvenile Justice and Delinquency Prevention and the Office for Victims of Crime, part of the Justice Department’s Office of Justice Programs.
“Young people in America face an array of challenges, from social and academic pressures to dangerous predators and lethal drugs. They are better equipped to meet those challenges with a model of care and compassion to guide them along,” said Katharine T. Sullivan, Principal Deputy Assistant Attorney General for the Office of Justice Programs. “These awards will support outstanding youth-serving organizations like the Cal Ripken Sr. Foundation, Big Brothers Big Sisters, Boys and Girls Clubs and their local affiliates across the country as they help youth discover their talents, find their purpose and realize their full potential. We are incredibly grateful to our mentorship programs, both nationally and locally. Badges in Blue and Badges for Baseball are great examples of successful community partnerships through law enforcement and mentoring.”
“Knoxville Leadership Foundation has been a pillar in our community for 26 years. These funds will help KLF with initiatives like the AMACHI mentoring program. This initiative helps youth remove barriers and provide the skills necessary to cope with the challenge of an incarcerated parent. Putting funding back into our communities and our youth creates a stronger connection within our communities and benefits everyone,” said U.S. Attorney J. Douglas Overbey
“KLF is so honored to partner with the Department of Justice. These funds will mean so much to children of promise in the Knoxville area. The power of a child having healthy adults in their life is proven and our collaborative works hard every day to ensure that thousands of children have these opportunities for a healthy start said,” Chris Martin, President, Knoxville Leadership Foundation.
Today’s award to KLF in the Eastern District of Tennessee is part of more than $261 million going to organizations and agencies across the country. Grants from OJP’s Office of Juvenile Justice and Delinquency Prevention will allow national, state and local organizations to provide mentoring to youth who are at risk of juvenile delinquency, victimization and juvenile justice system involvement. Mentoring programs supported by OJJDP help youth make connections with leaders and respected members of their communities, including law enforcement officers. Police and sheriffs’ departments have formed close and lasting bonds with young citizens, leading to greater trust and respect between law enforcement professionals and community members. Grants also address the impact of the addiction crisis on children and teens. Funds support mentoring in rural and other underserved communities hit hard by the opioid epidemic.
In addition, more than 100 sites are receiving grants from OJJDP and OVC to help find missing children, investigate and prosecute child exploitation cases, serve abused and neglected children, and assist minor victims of human trafficking.
For a complete list of individual grant programs, amounts to be awarded and the jurisdictions that will receive funding, visit here.
Additional information about Fiscal Year 2020 grant awards made by the Office of Justice Programs can be found online at the OJP Awards Data webpage.
More information about OJP and its components can be found at www.ojp.gov.
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DOJ Charges 500+ Domestic Violence-Related Firearm Case in FY20Read the Press Release
KNOXVILLE, Tenn. – Today, the Department of Justice announced it has charged more than 500 domestic violence cases involving firearms during Fiscal Year (FY) 2020. A Department priority since 2019 when Attorney General William P. Barr created the Department of Justice’s first ever-Domestic Violence Working Group, these charges are the result of the critical law enforcement partnership between United States Attorneys’ Offices and the Bureau of Alcohol, Tobacco, Firearms and Explosives, led by Acting Director Regina Lombardo, who has made domestic violence firearms-related investigations a priority.
“Keeping firearms out of the hands of dangerous criminal offenders is one of the Department of Justice’s top priorities,” said Attorney General Barr. “This is especially important when it comes to individuals with prior domestic violence convictions. The statistics are clear that when domestic violence offenders have access to guns, their partners and their families are at much greater risk of falling victim to gun violence. In fact, in some communities across America, roughly half of the homicides are related to domestic violence. The Department of Justice is committed to keeping guns out of the hands of those who are prohibited from having them, and we will continue investigating and prosecuting all domestic violence firearms related crimes.”
“According to the CDC, data suggests that about one in six homicide victims are killed by an intimate partner,” said ATF Acting Director Lombardo. “Nearly half of female homicide victims in the U.S. are killed by a current or former male intimate partner. ATF is committed to aggressively pursuing prohibited possession of firearms due to domestic violence convictions and certain protective orders. It is another way we prevent violent gun crime within our communities.”
“The U.S. Attorney’s office for the Eastern Tennessee is a staunch advocate of national domestic violence awareness month. Domestic violence consists of depraved persons forcing their victims, under threat of pain, suffering, or death, to commit unthinkable acts. Talking about what happened to them and how they suffered can be one of the most difficult things for the victims of domestic violence, and those who care for and support them, to talk about. Nonetheless, we encourage everyone to find their voice and speak up against domestic violence. We must work together to break the silence and end the violence,” said U. S. Attorney J. Douglas Overbey.
Under federal law, individuals with domestic violence misdemeanor and felony convictions, as well as individuals subject to domestic violence protective orders, are prohibited from possessing firearms. The data shows that offenders with domestic violence in their past pose a high risk of homicide. In fact, domestic violence abusers with a gun in the home are five times more likely to kill their partners.
The Working Group, chaired by U.S. Attorney Erin Nealy Cox, of the Northern District of Texas, disseminates legal guidance on keeping guns out of the hands of domestic violence abusers using three federal statutes:
- 18 USC § 922 (g)(1), felon in possession of a firearm
- 18 USC § 922 (g)(9), possession of a firearm by a prohibited person (misdemeanor crime of domestic violence)
- 18 USC § 922 (g)(8), possession of a firearm while subject to a domestic violence protective order
Based on the Working Group’s guidance, in FY 2020, U.S. Attorneys’ Offices nationwide brought 337 domestic violence felon-in-possession charges, 54 possession while subject to a protective order charges, and 142 possession by a prohibited person charges.
For more information on domestic violence or to get help, visit the National Domestic Violence Hotline website or call 1-800-799-SAFE (7233).
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Kingsport Man Sentenced to 20 Years on Firearm and Methamphetamine ChargesRead the Press Release
GREENEVILLE, Tenn. – Following the conviction on October 2, 2020, Larry W. Hutchins, 37, of Kingsport, was sentenced to 20 years in federal prison by the Honorable Clifton L. Corker, in the United States District Court for the Eastern District of Tennessee at Greeneville, for his participation in the distribution of methamphetamine and the possession of firearms.
On March 28, 2018, Kingsport Police Officers encountered the defendant at Model City Apartments. The defendant, an armed career criminal, was in possession of two loaded firearms. On June 10, 2018, Sullivan County Sheriff’s deputy responded to a call for service by a citizen. Upon arrival, the deputy found the defendant standing in the roadway near the house. The deputy was aware that the defendant had an outstanding warrant for his arrest. During a search of the defendant, the deputy located more than 10 grams of methamphetamine, which was packaged individually for resale.
“Prosecuting those who violate federal gun laws is one of our top priorities. Our office is committed to working side by side with the community and law enforcement partners to rid these neighborhoods of violent offenders and reduce crime in our communities,” said U.S. Attorney Overbey.
ATF Acting Special Agent in Charge, Toby Taylor remarked, “ATF’s Crime Gun Intelligence partnerships as part of Project Guardian focuses on the devastating impact of firearms violence and works with the entire community to provide a safe environment.”
Hutchins entered a plea of guilty to possession of a firearm by a felon, and to possession of over five grams of methamphetamine with the intent to distribute. Hutchins received 240 months in prison, followed by five years’ of supervised release. Hutchins’s related cases in Sullivan County were dismissed upon his sentencing.
The criminal indictment resulted from investigations of the Kingsport Police Department (KPD), Sullivan County Sheriff’s Office (SCSO), and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Assistant U.S. Attorney Todd Martin represented the United States in court.
This case was brought as part of Project Safe Neighborhoods (PSN), a comprehensive national strategy that creates local partnerships with law enforcement agencies to enforce existing gun laws. It provides more options to prosecutors, allowing them to use local, state, and federal laws to ensure that criminals who commit gun crime face tough sentences. PSN gives each federal district the flexibility it needs to focus on individual challenges that a specific community faces.
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U.S. Attorney J. Douglas Overbey Announces Award of $2.2 Million in Grant Support for Offenders Returning to Communities in East TennesseeRead the Press Release
KNOXVILLE, Tenn. – U.S. Attorney J. Douglas Overbey today announced $2.2 million in Department of Justice grants to the Hamilton County Sheriff’s Office to reduce recidivism among adults and juvenile offenders returning to their communities in the Eastern District of Tennessee after confinement. The grants, awarded by the Department’s Office of Justice Programs, are part of more than $92 million in funding to support reentry efforts throughout the United States.
“Former offenders are ultimately responsible for their own successes and failures, but our criminal and juvenile justice systems have an important role to play in preparing them for the obstacles that lay before them,” said OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan. “I’m very pleased to make these resources available to help them get back on their feet and contribute to the prosperity of their communities and the betterment of our nation.”
The reentry and recidivism reduction grants awarded will help communities develop and implement comprehensive strategies to address the challenges posed by reentry and recidivism; support reentry services for detained juveniles and incarcerated parents with children under the age of 18; and support research and evaluation programs to advance understanding about re-offending.
“Our office’s main function is the prosecution of serious and violent offenders,” said U.S. Attorney Overbey. “Prosecutions alone will not ensure public safety over the long term. Our office has increased its involvement in community-based crime prevention through our Project Safe Neighborhoods strategies. Lowering recidivism is a complex matter and involves a variety of factors like treating addiction, mental health and providing access to employment. Our office will continue to increase our capacity to assist in prevention and reentry of East Tennesseans.”
For a complete list of grant award amounts, and jurisdictions that will receive funding, visit: https://www.ojp.gov/sites/g/files/xyckuh241/files/media/document/reentryfactsheet.pdf. More information about OJP and its components can be found at www.ojp.gov.
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Virginia Man Sentenced to 180 Months in Prison for Attempted Production of Child Pornography and Traveling in Interstate Commerce for Illicit Sexual ConductRead the Press Release
Knoxville, Tenn. - Gregory Lynn McKnight, Jr., 28, of Clintwood, Virginia, was sentenced on September 29, 2020, by the Honorable R. Leon Jordan, Senior U.S. District Judge, to serve 180 months in federal prison for attempting to coerce a minor to engage in sexually explicit conduct for the purpose of producing child pornography and traveling in interstate commerce for the purpose of engaging in illicit sexual conduct with a minor. Following his imprisonment, McKnight will be supervised by the U.S. Probation Office for 15 years and will be required to register with the state sex offender registry in any state in which he lives, works, or attends school.
The investigation began after the parents of a minor female informed local a law enforcement agency that McKnight had contacted their daughter on social media and began sending messages of a sexual nature to her. During the undercover investigation, McKnight attempted to get the minor to send him sexually explicit depictions of her and to meet for sex. McKnight drove from Virginia to Tennessee for the purpose of having sex with the girl.
“This prosecution represents part of our efforts to work with law enforcement agencies to protect children from persons who try to groom children online for child pornography and other illicit purposes,” said J. Douglas Overbey, U.S. Attorney for the Eastern District of Tennessee. U.S. Attorney Overbey encourages parents to be vigilant concerning the online activities of their children. “These predators operate from the shadows of the internet, pretend to befriend young people, and then prey upon the minors’ vulnerability to induce them to send sexual images and videos, unbeknownst to their parents.”
The case was investigated by the Federal Bureau of Investigation, with assistance from Claiborne County Sheriff’s Office. Assistant U.S. Attorneys Matthew T. Morris and Jennifer Kolman represented the United States in Court.
This case was brought as part of Project Safe Childhood (PSC), 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 U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, PSC 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 PSC, please visit https://www.justice.gov/psc.
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Joseph C. Gonzales Sentenced for Conspiracy to Distribute Methamphetamine and Possession of A FirearmRead the Press Release
KNOXVILLE, Tenn. – On September 23, 2020, Joseph C. Gonzales, 40, currently of Tazewell, was sentenced to 16 years in prison for participation in a drug dealing conspiracy by the Honorable Thomas A. Varlan, in the United States District Court for the Eastern District of Tennessee at Knoxville.
Gonzales pleaded guilty to an indictment charging him with one count of conspiracy to distribute 50 grams or more of methamphetamine in violation of 21 U.S.C. § 846 and 841(a)(1); and one count of possession of a firearm in furtherance of a drug trafficking crime, in violation of 18 U.S.C. 924(c). Gonzales was sentenced to 192 months in prison to be followed by 5 years’ supervised release.
Gonzales was part of a large-scale drug trafficking organization operating primarily in Claiborne and Knox counties. The investigation determined that individuals were obtaining kilogram quantities of methamphetamine from unknown individuals and then redistributing that methamphetamine in the Knox and Claiborne counties of Tennessee. Gonzales admitted to obtaining approximately 6 kilograms of methamphetamine and to purchasing a firearm to protect those drugs in the summer of 2018. A co-conspirator, an inmate incarcerated in the Tennessee Department of Corrections, using a contraband cell phone, coordinated the delivery of the 6 kilograms of methamphetamine recovered from Gonzales. In total, 21 individuals were indicted in connection with this investigation, and all have now entered guilty pleas and been sentenced. The investigation, which began in July 2017, resulted in the seizure of more than 6.5 kilograms of actual methamphetamine, numerous firearms, and U.S. currency.
The criminal indictment resulted from an investigation by the Tennessee Bureau of Investigation, the Claiborne County Sheriff’s Office, the 8th Judicial District Drug Task Force, the Knoxville Police Department, the Tazewell Police Department, the Tennessee Highway Patrol, and the Drug Enforcement Administration.
Assistant United States Attorney Caryn L. Hebets represented the United States.
The investigation is a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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U.S. Attorney J. Douglas Overbey Announces $142,139 in Department of Justice Grant Awards for Project Safe Neighborhoods in East TennesseeRead the Press Release
KNOXVILLE, Tenn. – United States Attorney J. Douglas Overbey of the Eastern District of Tennessee announced today that $142,139 was awarded in Department of Justice grants to Project Safe Neighborhoods in East Tennessee.
The goal of this funding is to implement effective programs and strategies that enable PSN task forces to prevent, respond to, and reduce violent crime; effectively use intelligence and data to identify high-crime areas and prolific violent offenders; foster collaboration with affected communities; and create and maintain ongoing coordination among federal, state, local, and tribal law enforcement officials.
“The Eastern District of Tennessee is committed to the PSN program and its proven results. Our district has a strong track record of working with our federal, state and local partners to prosecute cases aimed at reducing violent crime in our communities. This funding will only enhance our current PSN program and will serve as a larger anti-crime strategy platform,” said U.S. Attorney Overbey.
Project Safe Neighborhoods (PSN) is designed to create and foster safer neighborhoods through a sustained reduction in violent crime. The program's effectiveness depends upon the ongoing coordination, cooperation, and partnerships of local, state, tribal, and federal law enforcement agencies working together with the communities they serve. Agencies have the ability to apply for remaining allocations through this consolidated block grant.
- Elizabethton Police Department - $41,880
- Knoxville Police Department - $69,000
- Hancock Co. Sheriff’s Department - $23,586
- Chattanooga Police Department - $7,673
There are five core components to the PSN strategy: strategic planning, partnerships, training, outreach and accountability. Initially, PSN increased partnerships among federal, state, and local law enforcement agencies through the formation of a local gun crime enforcement task force. Additional partnerships were established with local governments, social service providers, and community groups to increase resources for prevention efforts, and to increase the legitimacy of law enforcement interventions.
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Two Knoxville Residents Charged in Federal Complaint with Conspiracy to Distribute Fentanyl, Heroin, and MethamphetamineRead the Press Release
Knoxville, Tenn. – On September 24, 2020, the United States Attorney’s Office filed a federal complaint charging two individuals, Michael Allen Hill, 45, and Heavyn Breanne Thomas, 23, both from Knoxville, TN, with conspiracy to distribute 400 grams or more of a mixture and substance containing a detectable amount of fentanyl, a Schedule II controlled substance, one kilogram or more of a mixture and substance containing a detectable amount of heroin, a Schedule I controlled substance, and 50 grams or more of methamphetamine, a Schedule II controlled substance. A trial date has not been set.
If convicted of this drug trafficking conspiracy, the defendants face mandatory minimum terms of imprisonment of 10 years and up to life, at least five years of supervised release, a fine of up to $10,000,000, any applicable forfeiture, and a $100 special assessment.
The investigation was conducted by the Knox County Sheriff’s Office Narcotics Unit and the Organized Retail Crime Unit, HIDTA’s Drug Related Death Task Force, and the Knox County Regional Forensics Center. On September 23, 2020, during the execution of a search warrant, officers, assisted by the Knox County Sheriff’s Office SWAT team, seized approximately 972 grams of a brown powdery substance of suspected heroin, 603 grams of a white powdery block-like substance suspected to be a heroin-fentanyl mixture, 865 grams of suspected crystal methamphetamine, multiple firearms, drug paraphernalia, and $51,950 in U.S. currency. Assistant U.S. Attorney Brent N. Jones will represent the United States.
Today, the United States continues to face an unprecedented drug epidemic. The Centers for Disease Control (CDC) estimates that more than 67,000 Americans died of drug overdoses in 2018. Many of these deaths are attributed to the increased abuse of potent and dangerous synthetic opioids like fentanyl. These charges are the result of investigations supported by the Organized Crime Drug Enforcement Task Forces (OCDETF) under the Attorney General-led Synthetic Opioid Surge (SOS)/Special Operations Division (SOD) Project Clean Sweep. This initiative seeks to reduce the supply of synthetic opioids in "hot spot" areas previously identified by the Attorney General of the United States, thereby reducing drug overdoses and drug overdose deaths, and identify wholesale distribution networks and sources of supply operating nationally and internationally.
Members of the public are reminded that the complaint in this case only constitutes a charge against these two individuals and that every person is presumed innocent until his or her guilt has been proven beyond a reasonable doubt.
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Addiction Recovery Physician Pays $530,000 to Resolve False Claims Act Allegations of Billing for Psychotherapy Rendered by Unlicensed or Unsupervised Providers and Other Improper BillingsRead the Press Release
KNOXVILLE, Tenn. – Addiction Recovery physician Dr. Chambless Johnston and his practice, East Tennessee Recovery, have paid $530,000 to resolve several allegations that they violated the False Claims Act. The allegations include billing for individual and group psychotherapy provided by unlicensed or unsupervised providers; upcoding Evaluation and Management office visits; and providing case management services not covered in the practice’s contract or improperly rendered in a group setting. The allegations challenged billings submitted to Medicare, and to Medicaid Programs -- TennCare and Virginia Medicaid, from 2017 through 2019.
Medicare, TennCare, and Virginia Medicaid only reimburse for services rendered and billed in compliance with their respective program requirements. The programs require that providers be properly licensed and, in some circumstances, supervised to conduct group and individual psychotherapy for patients. They reimburse for Evaluation and Management office visits when the services provided are coded at a level commensurate with the complexity of the visit and the severity of the patient’s presenting problems. TennCare only reimburses for case management services allowed under applicable contracts with managed care organizations and when provided in an individual, not a group, setting. The United States, the State of Tennessee, and the Commonwealth of Virginia alleged that Dr. Johnston and East Tennessee Recovery failed to comply with these requirements.
Under the False Claims Act, any person who presents false claims for payment to the United States is liable for three times the damages the government incurs as a result of the false claims and penalties ranging from $11,665 to $23,331 per violation.
“Many people in our district and throughout the country suffer from opioid addiction. Medicare covers important addiction recovery services,” said U.S. Attorney J. Douglas Overbey. “This settlement helps ensure that mandatory requirements for coverage and payment by government health care programs are appropriately followed.”
“With the need for addiction treatment services so great, our government health programs cannot afford to have these desperately needed funds used improperly,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “With our state and federal partners, we will relentlessly pursue those who misuse funds intended for these vital programs.”
“Defrauding our healthcare systems like Medicaid and Medicare waste millions of taxpayer dollars and individuals who do so must be held accountable,” said Virginia Attorney General Mark Herring. “I want to thank our local, state, and federal partners for their help in this case and I want to thank my Medicaid Fraud Control Unit for all of their hard work.”
This investigation was a coordinated effort by the U.S. Attorney’s Office for the Eastern District of Tennessee; the Tennessee Attorney General’s Office; the Virginia Attorney General’s Office; the U.S. Department of Health and Human Services, Office of Inspector General; and the Tennessee Bureau of Investigation, Medicaid Fraud Control Division. It was prompted by a lawsuit filed by a former nurse practitioner at the practice, under the qui tam or “whistleblower” provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The relators share of the recovery in this case is $95,400.
The case is captioned United States, the State of Tennessee and the Commonwealth of Virginia ex rel. Jennifer Stuart Miller v. East Tennessee Recovery, PLLC, Chambless Rand Johnston, and Emmalea Johnston, Case No. 2:18cv171 (E.D. Tenn.).
L. Margaret Harker and Robert C. McConkey, Assistant United States Attorneys, represented the United States.
The claims settled by this agreement are allegations only; there has been no determination of liability.
###U.S. Attorney J. Douglas Overbey Announces Results in Fight Against the Opioid Crisis Two Years After Launch of Operation S.O.S.Read the Press Release
In Knox County, Tennessee, one S.O.S. investigation resulted in the indictment of 29 defendants in a drug trafficking conspiracy involving the seizure of over 5.5 kilograms of heroin and fentanyl and 11 firearms.
KNOXVILLE, Tenn. – In July 2018, the Department of Justice announced the launch of Operation Synthetic Opioid Surge (S.O.S), a program aimed at reducing the supply of synthetic opioids in 10 high impact areas, including the Eastern District of Tennessee, and identifying wholesale distribution networks and international and domestic suppliers.
Under Operation SOS, the United States Attorneys in 10 districts with some of the highest drug overdose death rates in the country each designated a county where they would focus on prosecuting every readily available case involving fentanyl, fentanyl analogues, and other synthetic opioids, regardless of the drug quantity.
“The Justice Department’s commitment to fighting the opioids epidemic is stronger than ever, and we are using every tool in our arsenal to disrupt the supply of these drugs on our streets,” said Deputy Attorney General Jeffrey A. Rosen. “Operation SOS has had a significant positive impact on the communities where it is being employed. The Department will continue to build on these successes and work to stop the drug traffickers who so callously wreck lives.”
“The mortality rate for opioid related deaths continues to grow. This epidemic destroys families and communities and shatters far too many lives. Law enforcement remains dedicated to disrupting the networks engaging in the trafficking of these synthetic drugs. It requires collaboration and the promotion of effective prevention strategies to meet the challenges posed by illicit opioids. These cases serve as a reminder to those who seek to disrupt and harm our communities by perpetuating opioid abuse will be brought to justice,” said U.S. Attorney Overbey.
In the Eastern District of Tennessee, the United States Attorney’s Office is currently prosecuting 74 S.O.S. defendants and 10 overdose deaths, including multiple cases arising out of a single investigation involving a drug trafficking organization responsible for trafficking heroin and fentanyl from Michigan to various communities in the Eastern District of Tennessee. 29 defendants have been indicted on various charges, including drug trafficking conspiracy, overdose death enhancements, money-laundering conspiracy, and various firearms offenses. More than 5.5 kilograms of heroin and/or fentanyl and 11 firearms were seized during the investigation.
Nationally, since 2018, Operation SOS has resulted in approximately 750 defendants being charged in federal court, with 384 of those defendants charged thus far in FY 20. Most importantly, the districts participating in the program have seen a decline in opioid overdoses. From 2017 to 2019, most SOS counties reported a decline of 14% to 24%. One notable success was in the Western District of Pennsylvania, where the opioid overdose rates declined by nearly 45%.
The nine other participating districts and some of their successes are listed below:
- The Eastern District of California has reported 60 active Operation S.O.S. investigations. Recently, the USAO charged one sentence-enhanced “death resulting” prosecution. In February 2020, another investigation resulted in the seizure of over 20,000 fentanyl-laced counterfeit oxycodone pills.
- The Eastern District of Kentucky reported that an SOS investigation led to a residential search warrant and seizure of more than 1,300 grams of fentanyl, more than 500 grams of methamphetamine, $15,000 cash, two firearms, and paraphernalia used to traffic narcotics including a device for pressing fentanyl into a brick-like shape.
- The District of Maine reported a July 2020 arrest of a defendant on charges of distributing counterfeit fentanyl pills marked as Percocet, in connection with a fatal fentanyl overdose that occurred in May 2020. In addition, a Maine man was sentenced in February 2020 to five years in prison for two counts of possession with intent to distribute fentanyl, in connection with an incident where the defendant was found in possession of fentanyl less than 24 hours after he was released on a state summons for possession of fentanyl.
- The District of New Hampshire reported the October 2019 arrest of a man on a warrant for distributing fentanyl. Manchester Police Detectives executed a search warrant on a local drug-house, where they located approximately 850 grams of methamphetamine and 56 grams of fentanyl, several assault-style rifles, a handgun, ammunition, scales, safes, cash, and cellphones.
- The Northern District of Ohio reported a 10-defendant wire case involving a drug trafficking organization (DTO) operating out of Elyria and Sandusky, Ohio. The DTO purchased kilogram quantities of cocaine and oxycodone pills. Co-conspirators would later cook the cocaine and sell it as crack to local dealers in Elyria. During the conspiracy, agents seized approximately ½ kilo of cocaine, 100 grams of crack, oxycodone pills, and five firearms.
- The Southern District of Ohio reported the arrest of an individual who had previously served a nine-year state prison sentence for drug trafficking. On October 22, 2019, after law enforcement observed activity consistent with drug transactions, including the delivery of what appeared to be a kilogram of narcotics by a courier, members of the FBI Safe Streets Task Force executed a search warrant at a residence in Dayton, Ohio, where they located three firearms, 1,205 grams of methamphetamine, 1,716 grams of fentanyl, 305 grams of heroin, drug processing equipment, and 12 cellular telephones. One of the recovered cellular telephones contained photographs of multiple kilograms of fentanyl and communications with a narcotics supplier. Through subsequent investigation, law enforcement recovered an additional 19.5 kilograms of fentanyl/carfentanil.
- The Western District of Pennsylvania prosecuted 98 SOS cases thus far in FY 2020. Particularly noteworthy among them is the prosecution of Lynell Guyton. Guyton was convicted by a jury of conspiracy to distribute 100 grams or more of cyclopropyl fentanyl and other charges, including firearms and money laundering violations. Guyton, who had been receiving shipments of fentanyl analogues from China, is both a Career Offender and an Armed Career Criminal. The case gained media attention when, during the execution of a search warrant in connection with the charges, the conspirators tipped over a table, sending cyclopropyl fentanyl into the air, sickening several law enforcement officers on the scene.
- The Northern District of West Virginia reported a July 21, 2020, forty-four count indictment against 12 defendants. During the nearly yearlong investigation, law enforcement officers seized more than 280 grams of cocaine base and more than 40 grams of fentanyl from one of the defendant’s residences in Harpers Ferry, West Virginia. Throughout the investigation, officers seized more than 280 grams of fentanyl, acetyl fentanyl, and heroin; more than 350 grams of cocaine base; more than one kilogram of liquid PCP; various amounts of cocaine; five firearms; and over $28,000.
- The Southern District of West Virginia reported that after a three-day trial, a jury in the convicted Steven McCallister of distribution of fentanyl, possession intending to distribute fentanyl, being a felon in possession of a firearm, and possession of a firearm in furtherance of drug trafficking. Officers conducted a 50-gram purchase of heroin from McCallister, which then led to the execution of a search warrant at McCallister’s home. Officers seized over one kilogram of fentanyl and a firearm.
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U.S. Attorney J. Douglas Overbey Announces $150,000 in Department of Justice Grant Award to the County of FranklinRead the Press Release
KNOXVILLE, Tenn. – United States Attorney J. Douglas Overbey of the Eastern District of Tennessee announced today that $150,000 was awarded in Department of Justice grant to address reducing injury and death of missing individuals with dementia and developmental disabilities in the County of Franklin, Tennessee.
The Reducing Injury and Death of Missing Individuals with Dementia and Developmental Disabilities program supports local jurisdictions’ efforts to reduce the number of deaths and injuries of individuals with forms of dementia, such as Alzheimer’s disease or developmental disabilities, such as autism who, due to their condition, wander from safe environments.
“At most stages of dementia, a person can become disoriented or confused of where they are. Dementia impairs judgment and problem-solving skills, and many caregivers struggle to manage how to best care for their loved ones. This funding will help provide much needed search tools to help agencies to locate vulnerable individuals who have wandered away from their communities,” said U.S. Attorney Overbey.
Kevin and Avonte’s Law, enacted in 2018, authorized BJA to support local efforts to address this public safety challenge by providing grants to health care agencies, law enforcement, and other public safety agencies, and, additionally for Category 1, nonprofit organizations that (1) implement locative technologies to track missing individuals, and/or (2) develop or operate programs to prevent wandering, increase individuals’ safety, and facilitate rescue.
The Partnership for Franklin County Prevention Coalition and its collaborative partners, the Department of Mental Health and Substance Abuse Services, Coffee County Circuit Courts; Coffee County District Attorney’s Office; Manchester Police Department; Franklin County Senior Citizen Center; and Franklin County Sheriff’s Office; and the Legal Aid of East Tennessee – Erlanger Health Law Partnership, will use this grant to fund law enforcement and public safety agencies to implement locative technologies to track missing individuals; and to such agencies and partnering nonprofit organizations to develop or operate programs to prevent wandering, increase individuals’ safety, and facilitate rescues.
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Imposter Nurse Sentenced for Wire Fraud, Health Care Fraud and Identity TheftRead the Press Release
GREENEVILLE, Tenn. – Misty Dawn Bacon, 44, of Morristown, was sentenced by the Honorable Clifton L. Corker in the United States District Court for the Eastern District of Tennessee at Greeneville.
In December 2019, Bacon plead guilty to wire fraud, healthcare fraud, and using another person’s identity to commit federal and state offenses, including practicing a profession without a license. Bacon was sentenced to 51 months, followed by three years of supervised release.
Bacon, a convicted felon, began working in East Tennessee as a registered nurse sometime before September 2012, even though she had no nursing degree, held no nursing license from the Tennessee Department of Health, and had no legitimate nursing experience. To accomplish her fraud, Bacon obtained the license numbers of real nurses with similar first names. Bacon then created phony aliases and used the real nurses’ license numbers to pose as an actual nurse and apply for nursing employment. In the process of submitting applications, Bacon falsely claimed that she held nursing degrees from Walters State College and Carson Newman University. Through her scheme, Bacon obtained employment with at least eight (8) healthcare providers between September 2012 and November 2018. During the six-year period, she worked in a variety of nursing settings, to include nursing homes, rehabilitation and assisted living facilities, a doctor’s office, and home health agencies.
Her imposter status gave her access to real patients, and Bacon rendered actual medical care to numerous patients, including dispensing medications, obtaining invasive access to patient’s bodies, and becoming privy to patients’ sensitive, private medical information. Due to her lack of qualifications, Bacon created a serious risk of injury, and even death, to patients she was treating. The risk manifested itself by Bacon performing procedures she was unqualified to perform, not performing needed procedures she recognized she was not qualified to perform, and failing to chart and document patient care in an appropriate fashion. According to the written plea agreement, at least one patient required re-admittance and a three-day hospital stay due to Bacon’s inept care.
The criminal information resulted from an investigation by the Tennessee Bureau of Investigation, the Tennessee Department of Health, and the Jefferson City Police Department.
Mac D. Heavener, III, Assistant United States Attorney, represented the United States.
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U.S. Attorney J. Douglas Overbey Announces $749,718 in Department of Justice Grant Award to WillowBend Farms, Inc.Read the Press Release
KNOXVILLE, Tenn. – United States Attorney J. Douglas Overbey of the Eastern District of Tennessee announced today that $749,718 was awarded to WillowBend Farms, Inc. of Cleveland, Tennessee, in Department of Justice grant funding to combat human trafficking.
The Services for Victims of Human Trafficking Program awards more than $23.6 million to 43 organizations to support services specific to victims of human trafficking. The Office for Victims of Crime awarded over $97.4 million to state, local and tribal jurisdictions, service providers and task forces all over the country, while OJP’s National Institute of Justice awarded the remaining $3.5 million to support research and evaluation on human trafficking.
"Human trafficking takes the depravity of everyone involved and exploits minors and adults for profit. Millions of people worldwide are affected by this type of forced labor and human trafficking. Our office will remain persistent by bringing perpetrators to justice and assisting victims rescued from a cycle of abuse," said U.S. Attorney Overbey.
WillowBend Farms is a faith based non-profit organization who focuses on the restoration of minor and adult survivors of human trafficking. WillowBend Farms also develops a collaborative environment of change that addresses the entire supply and demand of human trafficking.
If you suspect human trafficking report it to the police immediately. Warning signs include when the person: Appears to be controlled or intimidated by someone else, stops talking to friends or family members. For the Tennessee Human Trafficking Hotline, contact 1-855-55-TNHTH or for immediate assistance text "are you awake" to (423) 226-1302.
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U.S. Attorney J. Douglas Overbey Announces $406,092 in Department of Justice Grant Awards to East TennesseeRead the Press Release
KNOXVILLE, Tenn. – United States Attorney J. Douglas Overbey of the Eastern District of Tennessee announced today that $406,092 was awarded in Department of Justice grants for the Byrne Memorial Justice Assistance grant (JAG) program.
The JAG program is the leading source of federal justice funding to state and local jurisdictions. The JAG Program provides states, and local governments with critical funding necessary to support a range of program areas including law enforcement, prosecution, indigent defense, courts, crime prevention and education, corrections and community corrections.
FY20 EDWARD BYRNE MEMORIAL ASSISTANCE GRANT (JAG) PROGRAM
• Blount County - $23,615
• City of Chattanooga - $127,295
• City of Cleveland - $35,670
• City of Johnson City - $15,895
• City of Kingsport - $22,847
• City of Knoxville (to share with Knox County) - $138,069
• Hamblen County - $12,999
• Sullivan County - $18,751
• Washington County - $10,951
"These grants will help address crime at various levels, and provide resources to protect and serve the citizens of East Tennessee more effectively. State and local law enforcement agencies can leverage these funds to purchase much needed equipment and hire more personnel, ultimately helping departments prepare for and respond to the community’s needs," said U.S. Attorney Overbey.
The Edward Byrne Memorial Justice Assistance Grant (JAG) Program allows states and units of local government, including tribes, to support a broad range of activities to prevent and control crime based on their own state and local needs and conditions. Grant funds can be used for state and local initiatives, technical assistance, training, personnel, equipment, supplies, contractual support, and information systems for criminal justice, including for anyone or more of the following program areas: 1) law enforcement programs; 2) prosecution and court programs; 3) prevention and education programs; 4) corrections and community corrections programs; 5) drug treatment and enforcement programs; 6) planning, evaluation, and technology improvement programs; and 7) crime victim and witness programs (other than compensation) and 8) mental health programs and related law enforcement and corrections programs.
This JAG award will be used to support criminal justice initiatives that fall under one or more of the allowable program areas above. Funded programs or initiatives may include multi-jurisdictional drug and gang task forces, crime prevention and domestic violence programs, courts, corrections, treatment, justice information sharing initiatives, or other programs aimed at reducing crime and/or enhancing public/officer safety.
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U.S. Attorney J. Douglas Overbey Announces $79,180 Department of Justice Grant Award to Tennessee Bureau of InvestigationRead the Press Release
KNOXVILLE, Tenn. – United States Attorney J. Douglas Overbey of the Eastern District of Tennessee announced today that Tennessee Bureau of Investigation has been awarded $79,180 in Department of Justice grants for State Justice Statistics Program for Statistical Analysis Centers.
The State Justice Statistics (SJS) Program is designed to maintain and enhance each state's capacity to address criminal justice issues through collection and analysis of data. The SJS Program provides support to each state to coordinate and conduct statistical activities within the state Office of Justice Programs.
“Successful strategies to target, reduce and prevent crime through statistical data are extremely resource intensive. Crime statistics can be a tool in helping criminal justice professionals anticipate increased risk of crime. This grant will help address crime at various levels. The responsibility for fighting crime and violence belongs to agencies at every level, and statistical analysis, when properly and professionally done, enhances our ability to deploy our collective resources wisely and effectively,” said U.S. Attorney Overbey.
The Tennessee Statistical Analysis Center (SAC) located within the Tennessee Bureau of Investigation (TBI), was established by Executive Order and mandated by legislation to act as a clearinghouse for statewide criminal justice statistics and to operate the statewide Uniform Crime Reporting Program. The broad goals of the SAC are: 1) act as a central coordination point for federal support, with technical assistance available to help criminal justice agencies in the statistical analysis process; 2) coordinate the flow and exchange of information statistics for all criminal justice agencies in the state; 3) locate, utilize, and coordinate resource personnel to provide expertise to criminal justice agencies on developments in criminal justice statistics and to assist these agencies in the development of public policy; and, 4) continue to design, create, and coordinate the development and management of databases for statistical information for both state and local criminal justice agencies and policymakers to improve the decision making process. The SAC continues to operate under the supervision of a Director with assistance from eight support specialists from TBI’s Criminal Justice Information Services (CJIS) Support Center.
Under this award, the Tennessee Statistical Analysis Center (SAC) will conduct activities under the following Core Capacity area: Increasing access to statistical data. The SAC is proposing an 18-month project to improve the quality and timeliness of reports, improve.
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U.S. Attorney J. Douglas Overbey Announces $350,000 Award to Address Children and Youth Experiencing Domestic and Sexual Assault in TennesseeRead the Press Release
KNOXVILLE, Tenn. – United States Attorney J. Douglas Overbey of the Eastern District of Tennessee announced today that YWCA Knoxville and the Tennessee Valley received $350,000 in Department of Justice grants to address and assist children and youth experiencing domestic and dating violence, sexual assault, and/or stalking.
This consolidated grant program supports projects that create education programming and community organization through encouragement of men and boys to work as allies with women and girls to prevent domestic violence and sexual assault within our communities. The grant is available and awarded by the Office on Violence Against Women.
"Raising awareness and promoting a culture of respect and nonviolence among children and youth at an early age are important steps in preventing future violent behavior. Violence prevention and awareness programs work toward providing our community the ability to access resources and services available to meet this challenge. As we continue to respond to the Coronavirus, and in the wake of economic insecurity, it is vital to increase access to services across all ages for the benefit of our community’s future. Our office is committed to fostering the development of safer societies for all our citizens," said U.S. Attorney Overbey.
The Consolidated Grant Program to address children and youth experiencing domestic violence and sexual assault collaborates with its partners, Knox County Circuit Courts; Knox County District Attorney’s Office; Knoxville Police Department; Knoxville Family Justice Center; and Knox County Sheriff’s Office and Legal Aid of East Tennessee. Through this supplemental award, the project will: 1) develop and implement programming to recruit and train men and boys to serve as role models and/or mentors to address and prevent domestic violence, dating violence, sexual assault, stalking, and sex trafficking; 2) establish a multi-disciplinary team (MDT) to oversee and guide project activities; 3) complete a community needs assessment and develop a strategic plan that outlines the implementation phase of the project; 4) provide crisis intervention at all events to respond to disclosures of victimization and make appropriate referrals; and 5) cross train project staff, partner organizations/programs, and MDT members to expand their knowledge and skills to better understand each other’s role.
The Consolidated Grant Program provides opportunities for communities to create coordinated responses to increase collaboration among nonprofit victim service providers, community service organizations. This program focuses on schools, and local government agencies to enhance prevention, intervention, and response efforts in addressing children, youth and young adults impacted by sexual assault, domestic and dating violence, stalking and sex trafficking.
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U.S. Attorney J. Douglas Overbey Announces $1,391,296 Million Award to Address School Violence Prevention in East TennesseeRead the Press Release
KNOXVILLE, Tenn. – United States Attorney J. Douglas Overbey of the Eastern District of Tennessee announced today, the City of Knoxville, Bradley County School District, and Monroe County Schools received $1,391,296 from the Department of Justice’s Office of Community Oriented Policing Services (COPS Office) School Violence Prevention Program (SVPP). Nationally, the COPS Office SVPP awarded nearly $50 million in school safety funding. SVPP provides up to 75% funding for school safety measures in and around primary and secondary schools and school grounds.
“As schools reopen for in-person and on-line, it is imperative we adjust to meet the unique needs and circumstances of our communities. These funds will provide essential resources to help mitigate the impact of on-line learning and provide necessary protection in keeping all students safe. Additionally, these grant funds will help provide vital services to ensure a safe and productive school year for everyone,” said U.S. Attorney Overbey.
“With the new school year underway, the safety of our nation’s students remains paramount,” said COPS Office Director Phil Keith. “Although this school year may look different at the start, now is the ideal time to make preparations to enhance school safety for when all of our children are back in the classroom.”
The Students, Teachers, and Officers Preventing School Violence Act of 2018 (STOP School Violence Act of 2018) gave the COPS Office authority to provide awards directly to states, units of local government, Indian tribes, and public agencies (such as school districts and law enforcement agencies) to improve security at schools and on school grounds in the jurisdiction of the grantee through evidence-based school safety programs. The three awards announced today can be used for coordination with law enforcement; training for local law enforcement officers to prevent student violence; metal detectors, locks, lighting, and other deterrent measures; technology for expedited notification of local law enforcement during an emergency; and other measures that provide a significant improvement in security. The full list of SVPP awards can be found here: https://cops.usdoj.gov/pdf/2020AwardDocs/svpp/Award_List.pdf.
In addition to the school safety grants announced today, the COPS Office School Safety Working Group, which is composed of representatives from eight national law enforcement organizations, has identified 10 essential actions that can be taken by schools, school districts, and law enforcement agencies to help prevent critical incidents involving the loss of life or injuries in our nation's schools and to respond rapidly and effectively when incidents do occur. The Ten Essential Actions to Improve School Safety are applicable to school shootings as well as to other areas of school safety, including natural disasters and traumatic events such as student suicide. Adopting policies and practices based on the recommendations in this publication can help make school communities safer and save lives.
The COPS Office is the federal component of the Department of Justice responsible for advancing community policing nationwide. Since 1994, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 134,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance.
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Man Who Shot at SWAT Officers Sentenced to over 24 Years in Federal PrisonRead the Press Release
KNOXVILLE, Tenn. – On September 9, 2020, Samuel Weaver, 62, of Chattanooga, was sentenced by the Honorable Curtis Collier, in the United States District Court for the Eastern District of Tennessee at Chattanooga.
Weaver was sentenced to 295 months in federal prison for a multitude of drug and firearms related offenses. Weaver fired upon members of the Chattanooga Police Department’s SWAT team when they attempted to serve a search warrant at his residence, which contributed to his lengthy sentence.
Officers received information that Weaver was a large-scale drug dealer who was storing drugs in his residence on Noah Street in Chattanooga. A search warrant was issued for Weaver’s home and the SWAT officers were called to assist the Drug Enforcement Administration with the search of the residence.
On February 7, 2019, at least 20 SWAT officers arrived to serve the search warrant at daybreak. The Chattanooga SWAT unit Commander testified that multiple sirens were activated for “at least 10 – 12 seconds,” and announcements were made over a PA system notifying the occupants of the residence that police were present to serve the warrant.
After law enforcement took steps to notify anyone in the home of the police presence and intentions, officers approached the front door. Weaver then fired a shot from within the home in the direction of the front door. Fortunately, the bullet lodged in the door frame and did not break through and strike any officers. Weaver then attempted to flee out the back of the residence but was apprehended by SWAT officers.
Distribution quantities of heroin, fentanyl, pure methamphetamine, and crack cocaine, and over $27,000.00 in cash were found in Weaver’s bedroom, along with various items used for the manufacturing and distribution of narcotics. A loaded rifle and handgun were also located inside the residence, and a loaded handgun was recovered in Weaver’s parked vehicle. This was not Weaver’s first encounter with the criminal justice system. Weaver was released from federal prison in 2015 after being caught with nearly a kilogram of cocaine in his trunk and being sentenced to serve 60 months. Weaver also had multiple burglary convictions from Hamilton County.
United States Attorney J. Douglas Overbey praised the hard work of the prosecution and law enforcement teams involved in this case, saying, “Our office’s immediate concern was for the safety of the police officers involved. These officers put their lives on the line every day to protect our community from those who seek to perpetuate drug use and abuse. Drawing a hard line sends a message to all drug dealers that those who attempt violence against our police officers will not get a slap on the wrist,” said U.S. Attorney Overbey.
Assistant U.S. Attorneys Frank Clark and Luke A. McLaurin represented the United States.
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Prisoner Sentenced for A Conspiracy to Distribute Methamphetamine Inside A PrisonRead the Press Release
KNOXVILLE, Tenn. – On September 3, 2020, William E. Echols, 36, of Rockford, was sentenced by the Honorable Thomas A. Varlan, in the United States District Court for the Eastern District of Tennessee at Knoxville.
After a trial, the defendant was convicted by a jury of both a conspiracy to possess with the intent to distribute methamphetamine, and possession with the intent to distribute methamphetamine. Echols was sentenced to 238 months in prison, followed by five years of supervised release.
On October 29, 2018, Echols was one of five prisoners on a work detail from the Jefferson County, Tennessee, Detention Center, that conspired to smuggle a large amount of methamphetamine back into the prison. While working on a roadside detail outside of the detention center walls, the prisoners found multiple kilograms of methamphetamine in a box on the roadside. The source of that methamphetamine is unknown. Echols and four others tried the methamphetamine, discovered that it was real, and then hatched a plan to bring the methamphetamine back into the prison. The prisoners divided a portion of the methamphetamine among themselves, and several prisoners were able to smuggle the methamphetamine back into the prison, where it was distributed to other prisoners. After an investigation, law enforcement was able to seize approximately two kilograms of pure methamphetamine.
In addition to his convictions for conspiring to possess with the intent to distribute methamphetamine, and possession with the intent to distribute methamphetamine, Echols was classified as a Career Offender under the Federal Sentencing Guidelines due to his extensive criminal history, including two previous robbery convictions, and numerous other criminal offenses.
This prosecution resulted from a joint investigation by the Federal Bureau Investigation (FBI) Johnson City, the 4th Judicial District of Tennessee Drug and Violent Crime Task Force, the Jefferson County Sheriff’s Department, the Tennessee Highway Patrol, and the Drug Enforcement Administration (DEA) Knoxville.
Assistant U.S. Attorneys Kevin Quencer and LaToyia Carpenter represented the United States.
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U.S. Attorney J. Douglas Overbey Announces $549,179 Award to Address Violence Against Women in TennesseeRead the Press Release
KNOXVILLE, Tenn. – United States Attorney J. Douglas Overbey of the Eastern District of Tennessee today announced that Partnership for Families, Children and Adults, Incorporated, Chattanooga, TN, received $549,179 in Department of Justice grants to respond to safety challenges posed by violence against women.
These grants are designed to develop the nation's capacity to reduce domestic violence, dating violence, sexual assault, and stalking by strengthening services to victims and holding offenders accountable. The grant is available under the Justice for Families Program and was awarded by the Office on Violence Against Women.
“We are thrilled this grant has been made to the Partnership for Families, Children and Adults. Domestic violence and violence directed toward women are particularly egregious crimes and will not be tolerated. Our office remains committed to deterring, investigating, and prosecuting those who commit domestic violence and other crimes against women,” said U.S. Attorney Overbey.
The Partnership for Families, Children and Adults and its collaborative partners, Hamilton County Circuit Courts; Hamilton County District Attorney’s Office; Chattanooga Police Department; Chattanooga Family Justice Center; and Hamilton County Sheriff’s Office; and Legal Aid of East Tennessee, will use the grant to: 1) provide supervised visits and safe exchanges to victims of domestic violence, dating violence, sexual assault and stalking; 2) conduct education surrounding domestic violence issues and best practices to partners and the community; 3) provide civil legal assistance to domestic violence victims, especially to rural victims; and 4) improve training and education of judges, judicial personnel, attorneys, child welfare workers and court advocates in civil justice system.
The Justice for Families Program was authorized in the Violence Against Women Reauthorization Act of 2013 to improve the response of the civil and criminal justice system to families with a history of domestic violence, dating violence, sexual assault, and stalking or in cases involving allegations of child sexual abuse.
###Troy J. McRath Sentenced for Conspiracy to Distribute 50 Grams or More of MethamphetamineRead the Press Release
GREENEVILLE, Tenn. – On August 31, 2020, Troy J. McRath, 43, of Elizabethton, was sentenced by the Honorable J. Ronnie Greer, in the United States District Court for the Eastern District of Tennessee at Greeneville.
On July 17, 2019, McRath was found guilty at trial of conspiracy to distribute 50 grams or more of methamphetamine. McRath is sentenced to serve 240 months in prison for his role in a conspiracy to distribute methamphetamine in the Eastern District of Tennessee.
In the spring of 2017, multiple local and federal agencies worked together to develop suspects in a methamphetamine distribution conspiracy in Elizabethton, Tennessee. Through the investigation, McRath was determined to be involved in the drug conspiracy. McRath purchased methamphetamine and then redistributed the methamphetamine to drug users in Elizabethton.
This investigation was the product of a partnership between the DHS-HSI, DEA, and Elizabethton and Carter County Joint Drug Task Force. Assistant U.S. Attorneys Meghan L. Gomez and Andrew C. Parker represented the United States in court proceedings.
The investigation resulted from the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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Former Chattanooga Police Officer Sentenced to 20 Years in Prison for Sexual AssaultRead the Press Release
Desmond Logan, 35, a former officer with the Chattanooga Police Department (CPD), was sentenced by the Honorable Curtis L. Collier, U.S. District Court Judge in the Eastern District of Tennessee at Chattanooga.
Logan will serve 20 years in prison with three years of supervised release for crimes involving sexual misconduct while on duty. Logan previously pleaded guilty to two civil rights offenses on Sept. 12, 2019.
“The Department of Justice will vigorously prosecute officers who commit sexual assault,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “This case is a reminder that sexual assault allegations involving law enforcement officers should be fully investigated. The department will continue to take such allegations seriously and work to vindicate the Constitutional rights of those who are victimized by officers acting under color of law.”
“The actions of Desmond Logan jeopardized public safety and violated the trust of the citizens of Chattanooga he swore to protect. This case exhibits our continued efforts to prosecute those who would use their power to commit acts of violence and injustice against members of our community,” said U.S. Attorney J. Douglas Overbey of the Eastern District of Tennessee. “Our office will continue to stand by and protect the victims of such crimes.”
"Civil Rights violations, particularly when they involve a member of law enforcement, are of tremendous concern,” said Special Agent in Charge Joe Carrico of the FBI’s Knoxville Field Office. “The entire law enforcement profession is tarnished when an officer betrays the oath to protect and serve. The FBI will vigorously investigate any officer or agent of the law who is breaking the rules that he or she is sworn to uphold or is violating the civil rights of others."
According to court documents filed in connection with the defendant’s guilty plea, the first offense occurred during the early morning hours of June 12, 2018. The defendant, while on duty as a CPD police officer, handcuffed and arrested K.B.V. Rather than transporting K.B.V. directly to the Hamilton County Jail, the defendant drove K.B.V. in his squad car to an empty and isolated parking lot. There, the defendant sexually assaulted K.B.V.
The second offense occurred on the evening of Jan. 2, 2016. The defendant, while working a security detail at the University of Tennessee in Chattanooga, entered the passenger seat of D.H.'s car and asked for a ride to his own car, which he claimed was parked in a different parking lot. The defendant then directed D.H. to an empty and isolated parking lot. He took out his taser and put it against D.H.'s leg, causing D.H. to fear that he would cause her further physical harm. When D.H. tried to escape, Logan prevented her from getting out of the car.
In addition to these two offenses, the defendant admitted as part of his guilty plea that he sexually assaulted two other women. In each instance, one on July 31, 2015, and the other on May 30, 2016, the defendant arrested each victim, and instead of transporting her to jail, drove her to a deserted area where he sexually assaulted her.
This case was investigated by the Knoxville Division of the FBI, with the support of the Hamilton County Sheriff's Office. Assistant U.S. Attorney James Brooks of the Eastern District of Tennessee and Special Litigation Counsel Fara Gold and Trial Attorney Olimpia Michel of the Criminal Section of the Civil Rights Division of the U.S. Department of Justice prosecuted the case.
Former Chattanooga Police Officer Sentenced to 20 Years in Prison for Sexual AssaultRead the Press Release
CHATTANOOGA, Tenn. – Desmond Logan, 35, a former officer with the Chattanooga Police Department (CPD), was sentenced by the Honorable Curtis L. Collier, U.S. District Court Judge in the Eastern District of Tennessee at Chattanooga.
Logan will serve 20 years in prison, the maximum sentenced permitted under the law, followed by three years of supervised release, for crimes involving sexual misconduct while on duty. Logan previously pleaded guilty to two civil rights offenses on September 12, 2019. Logan will be required to register with the sex offender registry in any state in which he resides, works, or attends school, and comply with special sex offender conditions during the supervised release.
According to court documents filed in connection with the defendant’s guilty plea, the first offense occurred during the early morning hours of June 12, 2018. The defendant, while on duty as a CPD police officer, handcuffed and arrested K.B.V. Rather than transporting K.B.V. directly to the Hamilton County Jail, the defendant drove K.B.V. in his squad car to an empty and isolated parking lot. There, the defendant sexually assaulted K.B.V.
The second offense occurred on the evening of January 2, 2016. The defendant, while working a security detail at the University of Tennessee in Chattanooga, entered the passenger seat of D.H.'s car and asked for a ride to his own car, which he claimed was parked in a different parking lot. The defendant then directed D.H. to an empty and isolated parking lot. Logan took out his taser and put it against D.H.'s leg, causing D.H. to fear that he would cause her further physical harm. When D.H. tried to escape, Logan prevented her from getting out of the car.
In addition to these two offenses, the defendant admitted as part of his guilty plea that he sexually assaulted two other women. In each instance, one on July 31, 2015 and the other on May 30, 2016, the defendant arrested each victim, and instead of transporting her to jail, drove her to a deserted area where he sexually assaulted her.
“The Department of Justice will vigorously prosecute officers who commit sexual assault,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “This case is a reminder that sexual assault allegations involving law enforcement officers should be fully investigated. The Department will continue to take such allegations seriously and work to vindicate the Constitutional rights of those who are victimized by officers acting under color of law.”
“The actions of Desmond Logan jeopardized public safety and violated the trust of the citizens of Chattanooga he swore to protect. This case exhibits our continued efforts to prosecute those who would abuse their authority to commit acts of violence and injustice against members of our community,” said U.S. Attorney J. Douglas Overbey of the Eastern District of Tennessee. “Our office will continue to stand by and protect the victims of such crimes.”
"Civil Rights violations, particularly when they involve a member of law enforcement, are of tremendous concern,” said Special Agent in Charge Joe Carrico of the FBI’s Knoxville Field Office. “The entire law enforcement profession is tarnished when an officer betrays the oath to protect and serve. The FBI will vigorously investigate any officer or agent of the law who is breaking the rules that he or she is sworn to uphold or is violating the civil rights of others."
This case was investigated by the Knoxville Division of the FBI, with the support of the Hamilton County Sheriff's Office. Assistant United States Attorney James Brooks of the Eastern District of Tennessee and Special Litigation Counsel Fara Gold and Trial Attorney Olimpia Michel of the Criminal Section of the Civil Rights Division of the U.S. Department of Justice prosecuted the case.
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Elizabethton Man Sentenced for Distribution of Child PornographyRead the Press Release
GREENEVILLE, Tenn. – On August 14, 2020, Anthony Layton Moody, 27, of Elizabethton, was sentenced by the Honorable Clifton L. Corker, in the United States District Court for the Eastern District of Tennessee at Greeneville.
Moody plead guilty to one count of an indictment charging him with distribution of child pornography. Moody was sentenced to 168 months in prison, followed by 20 years’ supervised release. Moody was ordered to pay $15,000 in restitution to the victims. Moody will be required to register with the sex offender registry in any state in which he resides, works, or attends school, and comply with special sex offender conditions during the supervised release.
In November 2019, a federal search warrant was executed at Moody’s home after information was provided to the Carter County Sheriff’s Office and Homeland Security Investigations from the National Center for Missing and Exploited Children (NCMEC) about child pornography images and videos being downloaded at the residence. During the search, over 1,500 images of child pornography were found on Moody’s computer and cellular phone. Many of the images depicted the sexual victimization of infants and toddlers. During questioning, Moody admitted to possessing child pornography and stated that he had been downloading and viewing child pornography for some time. Moody also admitted to distributing and trading child pornography to hundreds of individuals over the course of a year.
The criminal indictment resulted from investigation by the Carter County Sheriff’s Office and Homeland Security Investigations. This investigation was led by HSI Special Agent Travis Carrier.
Assistant United States Attorney Andrew C. Parker represented the United States.
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 U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, 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.
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Two Men Sentenced for Identity Theft SchemeRead the Press Release
GREENEVILLE, Tenn. – On August 7, 2020, United States District Judge Clifton L. Corker, Eastern District of Tennessee at Greeneville, sentenced Rancu Ionut a/k/a Ambroz Bojan, 35, and Andrei Razvan Pusculau a/k/a Victor Frana, 30, both from Romania, to federal prison terms for conducting a bank fraud and identity theft scheme.
Both defendants had plead guilty to one count of bank fraud and one count of aggravated identity theft earlier this year. Pusculau was sentenced to 45 months in prison, followed by three years’ supervised release, and Iounut was sentenced to 42 months in prison, followed by three years’ supervised release. Both men will be required to make restitution of $5,700 to victim banks and forfeit $8,234.74 seized from them when arrested.
In June 2019, both men traveled from Atlanta to various locations in East Tennessee in a vehicle that Pusculau rented. The pair had covered up the vehicle tag in an effort to avoid detection. The sole purpose of their trip was to steal money by using counterfeit access devices (magnetic striped cards) linked to individual bank accounts at various financial institutions around the country. They used the fraudulent access devices at ATMs and point of sale terminals to obtain cash proceeds. On July 5, 2019, a Bristol police officer observed the pair at a local bank and detained them after they had attempted to make a cash withdrawal from ATMs. Both men initially provided false names to the officer, and Pusculau provided a false identification. The men were arrested, and a search of their rental vehicle turned up a secret compartment containing 150 counterfeit access devices linked to consumer accounts at multiple banking institutions. The search also revealed $8,234.74 in U.S. currency the men admitted were proceeds from their thefts.
The criminal indictment resulted from an investigation by the Bristol Tennessee Police Department and the United States Secret Service.
Assistant U.S. Attorney Mac D. Heavener, III represented the United States.
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Ginseng Dealer Pleads Guilty to Falsifying RecordsRead the Press Release
KNOXVILLE, Tenn. – On August 11, 2020, Randall F. Henry, 49, of Sunbright, Tennessee, plead guilty before Magistrate Judge C. Clifford Shirley, Jr., to a felony count for falsifying records to conceal his illegal purchases of ginseng prior to the legal harvest season in 2015, violating the Lacey Act, a federal law enacted to combat the illegal trafficking of plants and wildlife.
The plea agreement will require Henry to pay restitution to the State of Tennessee and perform 100 hours of community service. Sentencing is set for December 8, 2020, before the Honorable Pamela L. Reeves, Chief U.S. District Court Judge. Henry faces a maximum term of imprisonment of up to five years.
American Ginseng (Panax quinquefolius) is a slow-growing perennial species of plant found throughout the Northeast, Midwest, and Appalachian regions of the United States. Wild American Ginseng has substantial commercial value because there is a national and international market for its use as an ingredient in food, drinks, and traditional medicines. American Ginseng is protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora of 1973 (CITES) and the Endangered Species Act (ESA). The purpose of CITES is to monitor, control, and restrict, as necessary, the international trade of certain wild plant and animal species in an effort to prevent adverse impacts and ensure continued existence of those species in their natural habitat.
In Tennessee, the Tennessee Department of Environmental Conservation (TDEC) has responsibilities—under CITES, the ESA, and state law—to regulate and monitor the commercial harvest of wild American Ginseng and to ensure that populations are not imperiled. Accordingly, American Ginseng dealers are required to routinely submit paperwork to TDEC to document their ginseng purchases. Henry admitted to falsifying such documents in 2015 after purchasing American Ginseng before the opening of the established season. The USFWS investigates illegal ginseng trafficking associated with the international and interstate trade under the Lacey Act.
“The collaborative efforts of USFWS and the Department of Justice work to deter individuals from violating the laws and regulations designed to protect our natural ginseng resources, and from engaging in these types of illegal practices that threaten this resource. We will pursue any companies or persons who engage in similar unlawful conduct,” said J. Douglas Overbey, United States Attorney for the Eastern District of Tennessee.
“Breaking up international and domestic smuggling rings that specifically exploit native plants and animals is a very important part of the U.S. Fish and Wildlife Service Office of law Enforcement’s work,” said FWS Acting Special Agent in Charge Stephen Clark.
This plea is the result of “Operation Green Gold,” a multi-jurisdiction investigation conducted by the U.S. Fish and Wildlife Service (USFWS) into the illegal harvesting, trafficking, and smuggling of American Ginseng.
The USFWS conducted the investigation in this case. The United States is represented in Court by Assistant United States Attorney Matthew T. Morris and Environmental Crimes Section Senior Trial Attorney Todd Gleason.
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Man and Woman Sentenced to A Combined 15 Years for Sex Trafficking CrimesRead the Press Release
CHATTANOOGA, Tenn. – On August 5, 2020, Savannah Grissum, 22, of Douglasville, Georgia, and Alonzo Dean Westmoreland, 31, of Kennesaw, Georgia, were sentenced by the Honorable Curtis L. Collier in the United States District Court for the Eastern District of Tennessee at Chattanooga.
Both plead guilty in September 2019 to transporting in commerce an underage victim for the purpose of engaging in prostitution. As part of the plea agreement, Grissum and Westmoreland admitted to bringing the underage victim from Georgia to Tennessee for the purpose of prostitution. Grissum was sentenced to 78 months in prison, followed by six years’ supervised release; Westmoreland received 108 months in prison and six years’ supervised release. Both will be required to register with the sex offender registry in any state in which they reside, work, or attend school, and comply with special sex offender conditions during the supervised release.
In June 2018, Cobb County Police Department received a report of a runaway juvenile. The FBI from the Atlanta and Chattanooga divisions, were informed that the juvenile was located in Chattanooga. Deputies from the Hamilton County Sheriff’s Office and the FBI responded to a local motel, where they recovered the underage victim who had been prostituted in Chattanooga for approximately four days. Grissum and Westmoreland used the proceeds from that illegal activity to pay for their hotel room and other expenses.
The prosecution was the result of a joint investigation led by FBI Special Agents Terrilynn James and Terri L. Green of the Chattanooga Division, and Nathan Whiteman of the Atlanta Division, Detective Robert Rush of the Hamilton County Sheriff’s Office, with assistance from Detectives Hunter Llewellyn and Ray Drew with the Cobb County Police Department.
Assistant U.S. Attorney Jay Woods represented the United States in court proceedings.
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Five Members of "Cream Scheme" Sentenced to Federal PrisonRead the Press Release
CHATTANOOGA, Tenn. – Over the course of five days, Jerry Wayne Wilkerson, 39, Michael Chatfield, 30, Kasey Nicholson, 34, Billy Hindmon, 38, and Jayson Montgomery, 39, were sentenced by the Honorable Harry S. Mattice, Jr., in United States District Court for the Eastern District of Tennessee at Chattanooga, to prison terms for their roles in a scheme to defraud the federal government and insurance companies.
All five defendants were convicted on multiple counts of fraud and have been sentenced to serve time in federal prison. The sentences varied in length, with the largest sentence being reserved for Jerry Wayne Wilkerson, who will spend over 13 years in custody. Other sentences include: Michael Chatfield – nine years, Billy Hindmon – four years and three months, Kasey Nicholson – two and a half years, and Jayson Montgomery – two years.
The scheme involved dispensing bogus “pain cream” prescriptions to defraud the government and private insurance programs totaling more than $30 million dollars. The trial began last September, with testimony lasting nearly two months. The defendants were given the opportunity to submit legal arguments in writing. Following a bench trial, District Judge Mattice issued the verdict in March 2020, finding all five guilty of multiple counts of fraud.
“The U.S. Attorney’s Office takes pride in working with our law enforcement partners. Each day these partners work tirelessly to detect and combat healthcare schemes such as this one. This office will not relent in our efforts to dismantle scams that take advantage of vulnerable citizens and taxpayers,” said J. Douglas Overbey, U.S. Attorney for the Eastern District of Tennessee.
The sentences were the culmination of a five year investigation by Special Agent Brian Kriplean with the Food and Drug Administration’s Office of Criminal Investigations and Special Agent Erik Srock with the Department of Defense’s Office of Inspector General.
Throughout the course of the proceedings, AUSAs Franklin P. Clark and Perry H. Piper represented the United States.
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Former Smartbank Vice President of Loan Operations Sentenced for Embezzlement SchemeRead the Press Release
KNOXVILLE, Tenn. – On July 22, 2020, Connie S. Clabo, 54, of Sevierville, was sentenced by the Honorable Thomas A. Varlan, in the United States District Court for the Eastern District of Tennessee at Knoxville.
As part of her plea agreement, Clabo pleaded guilty to an information in November 2019. The information charged Clabo with one count of embezzlement and one count of filing a false tax return. Clabo was sentenced to 15 months in prison, followed by four years of supervised release. Clabo was also ordered to pay restitution of $516,630.06.
From 2013 through February 2018, SmartBank employed defendant as its vice president of loan operations. During that time, Clabo abused her position of private trust with SmartBank by misusing her general-ledger and loan-operations oversight authority to steal, embezzle, misapply, and conceal the theft, embezzlement, and misapplication of more than $600,000 of Smartbank’s money, funds, and credits. Clabo’s conduct was not isolated, but reflected a pattern of repeated deceptive conduct over many years. Clabo abused her managerial position at SmartBank and used her knowledge of SmartBank’s internal controls for personal advantage intending to defraud SmartBank.
In addition to embezzling and the misapplication of funds from SmartBank, Clabo filed false tax returns for 2014 through 2017 that failed to include as income the money she embezzled from her employer, resulting in additional income tax owed of over $89,000.
This prosecution was the result of a joint investigation by the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau, the Office of Inspector General for the Federal Housing Finance Agency, Federal Bureau of Investigation, and IRS Criminal Investigations.
Assistant U.S. Attorney Trey Hamilton represented the United States.
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