Middle District of Tennessee
Press releases recorded for this federal judicial district.
Former CEO of Tennessee-Based Telemarketing Company Pleads Guilty to Misrepresenting Health Insurance PlansRead the Press Release
The former owner and chief executive officer of a Nashville, Tennessee-based telemarketing company pleaded guilty this morning to overseeing a fraudulent scheme in which limited-benefit health plans were sold to consumers as traditional health insurance, and to violating a federal court order that in 2010 froze his assets and shut down the company, announced Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Don Cochran of the Middle District of Tennessee.
Timothy Thomas, 55, of Brentwood, Tennessee, pleaded guilty to one count of mail fraud and one count of contempt before U.S. District Judge David Lawson, sitting by designation in the Middle District of Tennessee. He is scheduled to be sentenced by Judge Lawson on June 25. Thomas was charged in a 15-count indictment filed in October 2014.
According to admissions made as part of his plea, Thomas operated and controlled United Benefits of America (UBA) LLC, which was known at various times as United States Benefits (USB) and Health Care America. From at least 2007 to 2010, Thomas hired salespeople to sell over the phone so-called “association memberships” created by third-party companies such as International Association of Benefits and Consumer Driven Benefits of America. These memberships included bundled benefits, such as limited benefit health plans, prescription drug discount cards, accidental death and dismemberment benefits and lifestyle benefits, such as rental car discounts. Thomas targeted his sales to customers who had been denied traditional health insurance because of preexisting conditions, he admitted. The sales script used by Thomas attempted to portray the memberships as equal in quality to traditional health insurance, omitting the fact that limited benefit health plans left customers with the vast majority of the financial risk.
Thomas admitted that salespeople working for him made even more flagrant misrepresentations and omissions and used terms such as “deductibles” and “copays” to make customers believe they were buying traditional health insurance. Customer service employees and the Better Business Bureau routinely notified Thomas about customers complaining that they had been deceived into believing the plans were similar to traditional health insurance. Thomas oversaw a lax compliance program that was understaffed, with usually one employee monitoring up to 60 or 70 salespeople, and levied only occasional fines to salespersons who misrepresented or omitted key details of the plans. Despite knowing of the rampant misrepresentations and omissions, Thomas rarely fired salespeople for lying to customers, but routinely fired salespeople for low sales numbers, he admitted. When in 2009 a local news station, WSMV, ran a critical story on UBA featuring undercover footage of salespeople discussing misleading sales tactics, Thomas did not institute any meaningful changes in business practices. He merely changed the name of his company from UBA to USB and instructed a subordinate to sign a letter to the Better Business Bureau falsely claiming that the companies had nothing to do with each other.
When the Federal Trade Commission (FTC) filed a lawsuit against Thomas and his company in August 2010, a federal judge in the Middle District of Tennessee issued an order freezing Thomas’s assets and placing his company into receivership. Immediately after being informed of the court’s order, Thomas violated it by withdrawing more than $100,000 from a brokerage account and convincing a friend to deposit checks totaling $528,647, constituting proceeds of the scheme, into the friend’s bank account, he admitted.
As part of his plea agreement, Thomas agreed to forfeit $1.5 million, representing the amount he personally gained through the fraudulent scheme.
The case was investigated by the FBI, the U.S. Postal Inspection Service, the Department of Labor’s Office of Inspector General and the Department of Labor’s Employee Benefits Security Administration. The FTC and Tennessee Division of Insurance provided substantial assistance. Trial Attorney William E. Johnston of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Cecil VanDevender of the Middle District of Tennessee are prosecuting the case.
Woodbury Man Sentenced to Prison for Stealing Identities and Filing False Tax ReturnsRead the Press Release
George Ronzell Fyke, 40, of Woodbury, Tenn., was sentenced yesterday to 57 months in prison for stealing the identities of others and using them to file false income tax returns, announced U.S. Attorney Don Cochran of the Middle District of Tennessee.
According to documents filed with the court, Fyke stole the names and social security numbers of deceased relatives and from fellow inmates at the Montgomery County, Tenn. Jail and used them to file false income tax returns. Fyke had the tax refund checks sent to addresses under his control and after being released from jail, he forged the signatures of the stolen identities and deposited the refund checks into his bank accounts. Fyke caused the Department of Treasury to issue over $56,000 in unlawful tax refunds.The case was investigated by the IRS – Criminal Investigation. Assistant United States Attorney Ryan R. Raybould prosecuted the case on behalf of the United States.
Former President of Houston-Based Drug Company Convicted in $50 Million Drug Diversion SchemeRead the Press Release
Jerrod Nichols Smith, 48, of Houston, Texas, the former president of Houston-based pharmaceutical company, Cumberland Distribution, Inc. (“Cumberland”), was convicted yesterday by a federal jury in Nashville of conspiracy, 15 counts of mail fraud and one count of making false statements to the U.S. Food and Drug Administration (FDA), announced Donald Q. Cochran, U.S. Attorney for the Middle District of Tennessee.
The charges stemmed from an indictment in January 2013, alleging a 32-month, $50-million-dollar drug diversion scheme. The convictions came after a five-day trial before visiting United States District Judge Billy Wilson. Smith’s co-defendants, Charles Jeffrey Edwards, 56, and Brenda Elise Edwards, 47, both of Houston, previously pleaded guilty to related charges and will be sentenced at a later date.
The evidence at trial established that, from December 2006 through August 2009, Smith and Jeff Edwards purchased millions of dollars of prescription drugs from unlicensed suppliers who had previously purchased the drugs from patients in and around New York and Miami. In most instances, Smith had these drugs shipped to Cumberland’s Nashville warehouse where they were cleaned, sorted, re-packaged, and shipped to independent pharmacies around the country. Generally, the diverted drugs included drugs used to combat HIV/AIDS; antipsychotic medications; anti-depressants; blood pressure medications; diabetes medications and others.
Smith and Jeff Edwards also had drugs shipped from their unlicensed suppliers to shell companies in Louisiana and Arkansas. Although these companies were licensed to sell drugs, Smith and Jeff Edwards used them as pass-through companies to create the appearance that Cumberland was purchasing drugs from licensed suppliers, when, in fact, Cumberland was purchasing diverted drugs from un-licensed suppliers in New York and Miami. The drugs arriving at Smith’s shell companies were forwarded to Cumberland’s Nashville warehouse and re-sold to independent pharmacies.
In order to conceal the drugs’ true origins, Smith and his co-conspirators provided false documentation to Cumberland’s pharmacy customers.
Numerous pharmacies reported problems with drugs they purchased from Cumberland, including prescription drug bottles containing the wrong medicine; the wrong dosage information; and foreign objects inside. At trial, several witnesses testified that at least one bottle of prescription drugs sold by Cumberland contained tic tacs instead of medicine.
On May 14, 2009, the FDA executed a federal search warrant at Cumberland’s Nashville warehouse. Thereafter, in order to evade authorities, Smith and his co-conspirators rented another warehouse, utilized freight forwarding companies to receive drug shipments, set up private email accounts, purchased burner phones and hired a private pilot to fly drugs to Nashville. Their scheme resulted in gross proceeds of over $50 million.
Smith faces up to 20 years in prison and a $250,000 fine for each count of mail fraud. He also faces up to five years in prison and a $250,000 fine for his conspiracy and false statements convictions when he is sentenced later this year.
This case was investigated by the United States Food and Drug Administration Office of Criminal Investigation. It is being prosecuted by Assistant United States Attorneys Henry C. Leventis and Stephanie N. Toussaint.
Nashville Kingpin Pleads Guilty to Illegally Importing and Distributing More Than 100 Kilograms of Molly from ChinaRead the Press Release
Terrence Deon Reames, aka Santos, 40, of Nashville, Tenn., formerly of Riverdale, Georgia, pleaded guilty yesterday in U.S. District Court, to charges of operating a continuing criminal enterprise (also known as the Kingpin statute) and money laundering conspiracy relating to the illegal importation and distribution of methylone and ethylone (Molly), announced Don Cochran, U.S. Attorney for the Middle District of Tennessee.
Reames was indicted by a federal grand jury on May 24, 2017.
According to court documents, Reames operated the criminal enterprise from May 2011 through August 2014, during which time he obtained more than 100 kilograms of Molly from a source in China and conspired with and supervised at least five other persons while distributing the drugs in the Nashville area. Prior to this time, Molly was a relatively unknown drug in the Nashville area but became widely available after Reames began distributing substantial amounts of the drug.
Court documents also outline the methods used by Reames to recruit distributors and to communicate with the source in China, including using encrypted communications, when discussing price, quantity, quality of the controlled substance and shipment and payment methods. Reames provided the source with the names, including the name of a dead relative and addresses to ship to through the U.S. Postal Service and international shipping companies. The controlled substances were subsequently shipped to addresses in and around Nashville, Tenn. and Riverdale, Georgia. Reames also arranged for the transfer of funds by others, totaling approximately $300,000 to Chinese bank accounts and wire transfers to individuals in China. He also provided cash to these persons to use for the transactions.
Reames used his Georgia residence to re-package the Molly for distribution. There, he and his subordinates would breakdown kilograms of Molly and package it into capsules for distribution. Each kilogram of Molly produced approximately 1,000 capsules. Reames also possessed multiple firearms at his residence, including AR-Style rifles, handguns and a sawed off shotgun, which he kept to protect his drug-related assets and defend against drug-related robberies.
According to the plea agreement, Reames agrees to face a 20-year prison sentence and a $1 million forfeiture judgement when he is sentenced on June 8, 2018.
This case was investigated by the Bureau of Alcohol, Tobacco Firearms & Explosives; the IRS-Criminal Investigation; the U.S. Postal Inspection Service; the DEA; Homeland Security Investigations; and the Metropolitan Nashville Police Department. Assistant U.S. Attorneys Sunny A.M. Koshy and Ahmed Safeeullah are prosecuting the case.
Middle District of Tennessee Persists in Fight Against Elder Fraud and AbuseRead the Press Release
Attorney General Jeff Sessions and law enforcement partners emphasized today the importance of the fight against elder fraud and abuse as the Department of Justice announced the largest coordinated sweep of elder fraud cases in history. Joined by representatives of the FBI, FTC, Postal Inspection Service, National Association of Attorneys General, and Senior Corps, among others, the Attorney General discussed the filing of more than 80 federal elder fraud cases against over 250 defendants. The cases include criminal, civil, and forfeiture actions in more than 50 federal districts. In each case, offenders engaged in financial schemes that targeted or largely affected seniors. The charged schemes caused over half a billion dollars of loss to more than one million victims. One of these cases is one of several elder fraud and abuse cases and investigations currently pending in the Middle District of Tennessee.
“The Justice Department and its partners are taking unprecedented, coordinated action to protect elderly Americans from financial threats, both foreign and domestic,” said Attorney General Sessions. “Today’s actions send a clear message: we will hold perpetrators of elder fraud schemes accountable wherever they are. When criminals steal the hard-earned life savings of older Americans, we will respond with all the tools at the Department’s disposal – criminal prosecutions to punish offenders, civil injunctions to shut the schemes down, and asset forfeiture to take back ill-gotten gains. Today is only the beginning. I have directed Department prosecutors to coordinate with both domestic law enforcement partners and foreign counterparts to stop these criminals from exploiting our seniors.”
“Many senior citizens experience circumstances that make them particularly vulnerable to fraud and abuse,” said U.S. Attorney Don Cochran. “This Office has been honored to participate in the Department of Justice’s Elder Justice Initiative, and to be home to one of its 10 regional Elder Justice Task Forces. We will continue to vigorously pursue and prosecute those who take advantage of seniors and the federal programs that serve them, and to coordinate with our state and local partners to fight elder fraud and abuse throughout our region.”
Over the last four years, this Office has obtained judgments, settlements, or indictments in over a dozen elder fraud and abuse cases. On March 30, 2016, the Department of Justice announced the formation of 10 regional Elder Justice Task Forces, including one in the Middle District of Tennessee. These teams have worked to bring together federal, state, and local prosecutors, law enforcement, and oversight agencies to provide community outreach and law enforcement training relating to elder fraud and abuse issues.
Since its formation, the Middle District of Tennessee’s Elder Justice Task Force has met regularly to discuss issues facing senior citizens. The Task Force includes representatives from, among others, the FBI, HHS, TBI, Tennessee Commission on Aging and Disability, and the Tennessee Department of Health. In light of the recently enacted Elder Abuse Prevention & Prosecution Act, the Task Force will be redoubling its law enforcement training and community outreach efforts in the coming months.
As part of this work, the Middle District of Tennessee has launched an Elder Justice Task Force page on its website. The page contains an overview of the Department of Justice’s Elder Justice Initiative, links to elder justice resources provided by our State partners in Tennessee, resources for victims seeking legal assistance, and a list of recent elder fraud and abuse matters resolved in the Middle District of Tennessee.
Anyone wishing to report elder fraud and abuse should complete the Elder Justice Complaint Form on the Elder Justice Task Force webpage, and submit the completed form to [email protected], or mail it to our Nashville Office, Attn: Elder Justice Coordinator.
Nashville Man Sentenced to Nine Years in Prison for Federal Firearms ViolationRead the Press Release
Antonio Eugene Boyd, aka Tony T, 37, of Nashville, Tennessee, was sentenced last week to nine years in prison for being a felon in possession of a firearm, announced U.S. Attorney Don Cochran of the Middle District of Tennessee.
“The reckless actions of this defendant placed the lives of many school aged children in great peril,” said United States Attorney Don Cochran. “Armed felons have no place in our communities and we are aggressively increasing our efforts along with our law enforcement partners to remove those who pose such a grave danger to our law abiding citizens.”
According to court records, Boyd pleaded guilty in May 2017 to being a convicted felon in possession of a firearm. This followed an incident on September 15, 2016, in the Cayce Homes Public Housing Development, where Boyd fired approximately seven times from a 9mm pistol, at a vehicle occupied by two adults and a young child. Although no one was hit by the gunfire, at the time of the incident there were other young children in the area and a school bus picking up children for school.
The subsequent investigation determined that the pistol Boyd used had previously been stolen from a vehicle by another person, and Boyd obtained that pistol by trading cocaine for it. Boyd had previously been convicted in state court of robbery, two drug felonies, and being a felon in possession of a firearm.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Metropolitan Nashville Police Department. The case was prosecuted by Assistant United States Attorney Sunny A.M. Koshy.
Nashville Man Facing Federal Firearms Charges After Six-Hour Standoff with PoliceRead the Press Release
Justin Jerome Jones, 29, of Nashville, Tennessee, was charged in a federal criminal complaint this afternoon with three counts of being a convicted felon in possession of a firearm, announced U.S. Attorney Don Cochran of the Middle District of Tennessee.
The complaint was filed in response to yesterday’s incident where Jones is alleged to have fired several rounds from a pistol, after which he barricaded himself inside an apartment in the Tony Sudekum public housing development and continued firing at responding Metro Nashville police officers.
According to the charging document, Jones had become upset with his 11-year old daughter and took her outside the apartment and begin firing rounds into the ground. MNPD officers arrived and observed Jones inside an apartment. Jones slammed the door and subsequently fired at responding officers on several occasions, including SWAT officers. One round struck an MNPD officer. After several hours, Jones exited the apartment and was taken into custody.
A search warrant was obtained shortly thereafter and officers recovered from inside the apartment, several spent shell casings, a cocked .357 caliber revolver; a .38 caliber revolver; and parts from a 9mm pistol. Additional firearms parts and boxes of ammunition were recovered from the apartment today.
The complaint also alleges that Jones had been convicted of aggravated robbery in Davidson County, Tenn., in 2007 and also convicted of aggravated robbery in Hamilton County Ohio in 2009, relating to armed bank robbery. Jones was released from custody in Ohio in December 2016 and paroled to the State of Mississippi.
If convicted, Jones faces up to 10 years in prison on each count.
U.S. Attorney Cochran praised the efforts of the Metropolitan Nashville Police Department and the ATF in the resolution of this incident and the subsequent investigation. Assistant U.S. Attorney Sunny A.M. Koshy is prosecuting the case.
A criminal complaint is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
Nashville Man Sentenced to Federal Prison for Sending Internet Threat Targeting Law Enforcement OfficersRead the Press Release
Robert Ellis Waddey, 23, of Nashville, Tennessee, was sentenced today to serve five months in prison for communicating a threat by interstate commerce, announced U.S. Attorney Don Cochran of the Middle District of Tennessee. Chief U.S. District Judge Waverly Crenshaw, Jr. also ordered that at the conclusion on the prison sentence, Waddey be placed on two years’ supervised release, the first six months of which will be spent in a halfway house. Chief Judge Crenshaw also fined Waddey $6,600.
“We will review every threat and act of violence against our law enforcement officers,” said U.S. Attorney Cochran. “If a federal nexus exists, we will aggressively pursue those responsible and bring the appropriate federal charges when warranted.”
Waddey was indicted in February 2017 and pleaded guilty in July 2017.
According to court documents, in September 2015, Waddey posted a photograph on Instagram which depicted a handgun pointed at a Tennessee State Trooper vehicle. The posting was captioned, “F*** them non attentive hoes” and a comment read, “Gona die lookin at his computer.” Photographs subsequently found on Waddey’s phone also depicted a uniformed police officer bleeding heavily from the head and captioned “only a dead cop is a good cop.” Another photograph depicts a uniformed police officer who appears to have been shot multiple times in the back and laying in the street, while yet another photograph depicts a screen shot of a video showing another uniformed police officer who appears to have been shot and laying on the ground bleeding. This photo is captioned, “ON TAPE: OFFICER SHOT IN THE HEAD D….”
Waddey admitted during his plea hearing that on September 13, 2015, while sitting in his vehicle at a traffic light in South Nashville, he took a photograph of a Glock pistol in his hand, positioned in such a way where the pistol would be viewed in the same frame as a police car on a traffic stop in the distance with the blue lights activated. Waddey posted with the photograph a slang threat to law enforcement. Various text messages sent by Waddey also conveyed threats toward law enforcement and indicate the pleasure he took in the number of targeted cop killings.
Waddey also admitted during the plea hearing that his subjective intent in making the communications was to threaten law enforcement.
This case was investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Metropolitan Nashville Police Department. Assistant U. S. Attorneys Brent Hannafan and Courtney L. Coker prosecuted the case.
"Freedom Fighter Bandit" Arrested and Charged with Bank RobberyRead the Press Release
Nilsa Marie Urena, 25, of Philadelphia, Pennsylvania, was charged with bank robbery yesterday, after being arrested near the Greyhound Bus Terminal in Nashville on Saturday, following an earlier robbery of the Upper Cumberland Credit Union in Crossville, Tennessee.
According to allegations in the criminal complaint, on Saturday, February 3, 2018, a woman entered the Upper Cumberland Federal Credit Union and handed a teller a note which read, “Bomb [;] 20 minutes [;] no cops [;] Allah.” The robber was given $1,000 in $100 bills, after which she left the bank and walked toward a nearby apartment complex, where another bank employee observed her to be changing clothes.
During the immediate investigation by responding officers from the Crossville Police Department and the Cumberland County Sheriff’s Department, officers determined that a suspect matching the description of the robber was seen entering a vehicle at a nearby grocery store. The investigation led officers to an address where the vehicle was registered, where they learned that the vehicle’s owner operated a car service and was currently transporting a client to Nashville.
Officers called the owner of the vehicle and surreptitiously alerted him to the possibility that he was transporting a bank robbery suspect. It was determined that the rider’s destination was the Greyhound Bus Terminal in Nashville and the driver continued to send text message updates to the officers, updating them with the destination and estimated time of arrival.
The complaint alleges that after the suspect was dropped off at the Greyhound Terminal, she was taken into custody at a market across the street by officers from the Nashville Metropolitan Police Department and the Tennessee Highway Patrol.
The complaint also alleges that Urena was being sought by the FBI for her involvement in multiple bank robberies in Georgia and had been dubbed by the media as the “Freedom Fighter Bandit.” There was also an active warrant for Urena charging her with one of those robberies in Douglas County, Georgia.
If convicted, Urena faces up to 20 years in prison and a $250,000 fine.
U.S. Attorney Cochran commended the outstanding response and investigation by the Crossville Police Department; the Cumberland County Sheriff’s Department; the FBI; the Metropolitan Nashville Police Department; and the Tennessee Highway Patrol. U.S. Attorney Cochran also commended the actions of the witnesses and the driver of the vehicle who provided invaluable assistance to law enforcement. Assistant U.S. Attorney Thomas J. Jaworski is prosecuting the case.
A criminal complaint is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
Former Controller at Portland Industrial Facility Indicted for EmbezzlementRead the Press Release
David G. King, 51, of Gallatin, Tennessee, was indicted yesterday by a federal grand jury and charged with four counts of wire fraud, announced United States Attorney Don Cochran of the Middle District of Tennessee.
The indictment alleges that King, while employed at a Portland, Tennessee company as a controller, embezzled approximately $235,000 over a 23-month period, beginning in June 2014. King allegedly concealed the fraud by creating fictitious vendor accounts in the company’s accounts payable system and then issued checks made payable to himself and linked to the fake vendors.
If convicted, King faces up to 20 years in prison and up to a $1million fine.
This case is being investigated by the FBI and Assistant U.S. Attorney Stephanie N. Toussaint is prosecuting the case.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty in a court of law.
Tennessee Woman Sentenced to Six Years in Prison for Stolen ID Refund FraudRead the Press Release
An Antioch, Tennessee, woman was sentenced to six years in prison for wire fraud and aggravated identity theft, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Donald Q. Cochran for the Middle District of Tennessee.
Monique Ellis was convicted following a jury trial in October 2017 of wire fraud and aggravated identity theft. According to documents filed with the court and evidence presented at trial, in January and February 2012, Monique Ellis used stolen IDs, including those of prisoners held by the Alabama Department of Corrections, to file tax returns with the Internal Revenue Service (IRS) seeking fraudulent refunds. Ellis directed the fraudulently obtained refunds to bank accounts that she controlled, causing a tax loss of $700,933.20.
In addition to the term of imprisonment, U.S. District Court Judge Gershwin A. Drain ordered Ellis to serve three years of supervised release. Restitution will be determined at a later date.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Cochran thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Henry Leventis and Trial Attorney Lauren Castaldi of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Antioch, Tennessee Woman Sentenced to Six Years in Prison for Stolen ID Refund FraudRead the Press Release
An Antioch, Tennessee, woman was sentenced today to six years in prison for wire fraud and aggravated identity theft, announced U.S. Attorney Don Cochran for the Middle District of Tennessee and Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
Monique Ellis was convicted following a jury trial in October 2017 of wire fraud and aggravated identity theft. According to documents filed with the court and evidence presented at trial, in January and February 2012, Monique Ellis used stolen IDs, including those of prisoners held by the Alabama Department of Corrections, to file tax returns with the IRS seeking fraudulent refunds. Ellis directed the fraudulently obtained refunds to bank accounts that she controlled, causing a tax loss of $700,933.20.
In addition to the term of imprisonment, U.S. District Court Judge Gershwin A. Drain ordered Ellis to serve three years of supervised release. Restitution will be determined at a later date.
This investigation was conducted by the IRS Criminal Investigation. Assistant U.S. Attorney Henry Leventis and Trial Attorney Lauren Castaldi of the Tax Division prosecuted the case.
Tennessee Chiropractor Pays More Than $1.45 Million to Resolve False Claims Act AllegationsRead the Press Release
A Lenior City, Tennessee, chiropractor has paid $1.45 million, plus interest, to resolve False Claims Act violations, announced U.S. Attorney General Jeff Sessions and U.S. Attorney Don Cochran of the Middle District of Tennessee. The settlement also calls for a Cookeville, Tennessee, pain clinic nurse practitioner to pay $32,000 and surrender her DEA registration to settle allegations that she violated the Controlled Substances Act.
Matthew Anderson and his management company, PMC LLC, managed four pain clinics in Tennessee, most recently known as; Cookeville Center for Pain Management; Spinal Pain Solutions in Harriman; Preferred Pain Center of Grundy County in Gruetli Laager; and McMinnville Pain Relief Center. All of these clinics are now closed.
“More Americans are dying because of drugs today than ever before—a trend that is being driven by opioids,” said Attorney General Jeff Sessions. “If we’re going to end this unprecedented drug crisis, which is claiming the lives of 64,000 Americans each year, doctors must stop overprescribing opioids and law enforcement must aggressively pursue those medical professionals who act in their own financial interests, at the expense of their patients’ best interests. Today’s settlement is a positive step that will help save lives, as well as protect taxpayers’ money, in Tennessee and across the United States.”
“As evidenced here, we will use all available resources, including civil remedies, to pursue those whose actions continue to fuel the opioid epidemic plaguing our nation,” said U.S. Attorney Cochran. “In this case, a concerned whistleblower brought a civil suit which has ultimately held those responsible for the illicit prescribing of opioids and at the same time cheating the taxpayers by causing federal healthcare programs to pay for such highly addictive drugs. We will continue to give the highest priority to fighting opioid abuse on all fronts.”
The settlement with Anderson and PMC resolves the governments’ claims that from 2011 through 2014, they caused pharmacies to submit requests for Medicare and TennCare payments for pain killers, including opioids, which were dispensed based upon prescriptions written at the Cookeville Center for Pain Management and which had no legitimate medical purpose. The United States also contended that Anderson caused all four clinics to bill Medicare for upcoded claims for office visits that were not reimbursable at the levels sought. In addition, the United States claimed that Anderson and PMC caused the submission of Medicare claims by the Cookeville and Harriman clinics for services provided by two nurse practitioners who were not collaborating with a physician as required by Tennessee law during parts of 2011 and 2012.
Under the settlement agreement, Anderson and PMC paid a total of $1,450,000, plus interest. Of that amount, the United States will receive $1,040,275, and the State of Tennessee will receive $163,225. Anderson and PMC also agreed to be excluded from billing federal health care programs for five years. Three of the clinics will also forfeit $53,840, which the United States seized from the clinics’ bank accounts.
The settlement agreement also calls for Cindy Scott, a nurse practitioner from Nashville, to pay $32,000 and to surrender her DEA registration until October 2021. Scott is prohibited from prescribing medications until her DEA registration is renewed.
“The opioid epidemic has had a crushing effect on patients and families across middle Tennessee,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. “Pill mills like these billed medically unnecessary services to Medicare and TennCare and contributed to problems of opioid abuse and addiction.”
The United States and Tennessee initiated this investigation after a former office manager for the Cookeville Center for Pain Management filed a qui tam lawsuit against Anderson, Scott, three pain clinics, and others. The qui tam, or whistleblower, provisions of the False Claims Act allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery. The whistleblower will receive $246,500 under the settlement with Anderson and lesser amounts under the settlements with Scott and the three pain clinics.
The case was handled by the United States Attorney’s Office for the Middle District of Tennessee and the Tennessee Attorney General’s Office and investigated by the Department of Health and Human Services - Office of Inspector General and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit. Assistant U.S. Attorney Ellen Bowden McIntyre represented the United States, and Assistant Attorney General Philip Bangle represented the State of Tennessee.
The case is docketed as United States ex rel. Norris v. Anderson, No. 3:12-cv-00035 (M.D. Tenn.). The claims in the complaint are allegations only, and there has been no determination of liability.
Tennessee Chiropractor Pays More Than $1.45 Million to Resolve False Claims Act AllegationsRead the Press Release
A Lenior City, Tennessee, chiropractor has paid $1.45 million, plus interest, to resolve False Claims Act violations, announced U.S. Attorney General Jeff Sessions and U.S. Attorney Don Cochran of the Middle District of Tennessee. The settlement also calls for a Cookeville, Tennessee, pain clinic nurse practitioner to pay $32,000 and surrender her DEA registration to settle allegations that she violated the Controlled Substances Act.
Matthew Anderson and his management company, PMC LLC, managed four pain clinics in Tennessee, most recently known as; Cookeville Center for Pain Management; Spinal Pain Solutions in Harriman; Preferred Pain Center of Grundy County in Gruetli Laager; and McMinnville Pain Relief Center. All of these clinics are now closed.
“More Americans are dying because of drugs today than ever before—a trend that is being driven by opioids,” said Attorney General Jeff Sessions. “If we’re going to end this unprecedented drug crisis, which is claiming the lives of 64,000 Americans each year, doctors must stop overprescribing opioids and law enforcement must aggressively pursue those medical professionals who act in their own financial interests, at the expense of their patients’ best interests. Today’s settlement is a positive step that will help save lives, as well as protect taxpayers’ money, in Tennessee and across the United States.”
“As evidenced here, we will use all available resources, including civil remedies, to pursue those whose actions continue to fuel the opioid epidemic plaguing our nation,” said U.S. Attorney Cochran. “In this case, a concerned whistleblower brought a civil suit which has ultimately held those responsible for the illicit prescribing of opioids and at the same time cheating the taxpayers by causing federal healthcare programs to pay for such highly addictive drugs. We will continue to give the highest priority to fighting opioid abuse on all fronts.”
The settlement with Anderson and PMC resolves the governments’ claims that from 2011 through 2014, they caused pharmacies to submit requests for Medicare and TennCare payments for pain killers, including opioids, which were dispensed based upon prescriptions written at the Cookeville Center for Pain Management and which had no legitimate medical purpose. The United States also contended that Anderson caused all four clinics to bill Medicare for upcoded claims for office visits that were not reimbursable at the levels sought. In addition, the United States claimed that Anderson and PMC caused the submission of Medicare claims by the Cookeville and Harriman clinics for services provided by two nurse practitioners who were not collaborating with a physician as required by Tennessee law during parts of 2011 and 2012.
Under the settlement agreement, Anderson and PMC paid a total of $1,450,000, plus interest. Of that amount, the United States will receive $1,040,275, and the State of Tennessee will receive $163,225. Anderson and PMC also agreed to be excluded from billing federal health care programs for five years. Three of the clinics will also forfeit $53,840, which the United States seized from the clinics’ bank accounts.
The settlement agreement also calls for Cindy Scott, a nurse practitioner from Nashville, to pay $32,000 and to surrender her DEA registration until October 2021. Scott is prohibited from prescribing medications until her DEA registration is renewed.
“The opioid epidemic has had a crushing effect on patients and families across middle Tennessee,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. “Pill mills like these billed medically unnecessary services to Medicare and TennCare and contributed to problems of opioid abuse and addiction.”
The United States and Tennessee initiated this investigation after a former office manager for the Cookeville Center for Pain Management filed a qui tam lawsuit against Anderson, Scott, three pain clinics, and others. The qui tam, or whistleblower, provisions of the False Claims Act allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery. The whistleblower will receive $246,500 under the settlement with Anderson and lesser amounts under the settlements with Scott and the three pain clinics.
The case was handled by the United States Attorney’s Office for the Middle District of Tennessee and the Tennessee Attorney General’s Office and investigated by the Department of Health and Human Services - Office of Inspector General and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit. Assistant U.S. Attorney Ellen Bowden McIntyre represented the United States, and Assistant Attorney General Philip Bangle represented the State of Tennessee.
The case is docketed as United States ex rel. Norris v. Anderson, No. 3:12-cv-00035 (M.D. Tenn.). The claims in the complaint are allegations only, and there has been no determination of liability.
54-Count Federal Indictment Charges 12 Members and Associates of Mongols Motorcycle Gang with Racketeering Conspiracy and Three Others with Various Federal Crimes Including Large Scale Drug TraffickingRead the Press Release
A 54-count superseding indictment was unsealed today, charging 12 members and associates of the Mongols Motorcycle Gang (Mongols) with racketeering conspiracy, announced Attorney General Jeff Sessions, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Don Cochran of the Middle District of Tennessee. Three other individuals were charged with other federal crimes including large-scale drug trafficking allegedly from California to Tennessee and Kentucky, and crimes related to the Hobbs Act.
Joining U.S. Attorney Cochran in announcing these charges at a morning news conference were Assistant Special Agent in Charge Jack Webb of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ Nashville Division; Assistant Director Dewayne Johnson of the Tennessee Bureau of Investigation; and Clarksville Police Chief Al Ansley.
According to the indictment, members and associates of the Clarksville Chapter of the Mongols, engaged in a host of violent criminal activities, including murder, attempted murder, assault, kidnapping, robbery, extortion, witness tampering, money laundering, interstate travel in aid of racketeering, and large scale drug trafficking.
As stated in the indictment, the Mongols Motorcycle Gang identifies itself as an “outlaw” motorcycle gang, and is a nationwide and international organization with chapters located in different geographical areas. Most of the chapters are in California, but chapters have been established in other parts of the United States and in other countries, including Arizona, Arkansas, Colorado, Florida, Idaho, Indiana, Maryland, Missouri, Montana, Nevada, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Tennessee, Utah, Virginia, Washington, Australia, Canada, Denmark, Germany, Indonesia, Malaysia, Mexico, Singapore, Switzerland and Thailand.
This morning, local, state and federal law enforcement officers began arresting those charged in the indictment and all but one are in custody.
“Gangs that conspire to spread illegal drugs like methamphetamine and lethal opioids, extort legitimate businesses, and wage violence on our fellow Americans will be held accountable by the Department of Justice,” said Attorney General Sessions. “Last year, we secured the convictions of more than 1,200 gang members, and, as this case makes clear, we are not slowing down. I want to thank the ATF and all of our incredible state, county, and local law enforcement partners who helped make today's indictment possible, including the Clarksville and Owensboro Police Departments, the Tennessee Bureau of Investigation, and four county sheriff’s offices. Today’s indictment is the next step in our efforts to dismantle gangs and stop the spread of deadly drugs and violent crime.”
“Attorney General Sessions has made it clear that prosecuting violent offenders and reducing violent crime is a top priority of the Department of Justice,” said U.S. Attorney Cochran. “Today’s indictment and arrests have resulted in the removal of many dangerous individuals from neighborhoods in and around middle Tennessee and we intend to vigorously prosecute these individuals and hold them accountable for their actions. I commend the many law enforcement officers and prosecutors who have dedicated enormous amounts of time and effort in bringing these charges.”
The indictment details allegations of violent, criminal activity and drug trafficking in and around the Clarksville area beginning in or about March 2015, by certain Mongols members or associates and continuing until the return of the indictment. The 12 individuals charged in the racketeering conspiracy are:
- James Wesley Frazier aka “Slo-Mo” and “Special,” 30, of Clarksville;
- Aelix Santiago aka “Goon,” “Big O,” and “Big Offit,” 29, of Clarksville;
- Kyle Heade, 30, formerly of Fort Campbell, Kentucky;
- Joel Aldridge aka “Sleezy” and “Spoon,” 36, of Clarksville;
- James Hines aka “Fester,” 42, of Clarksville;
- Michael Forrester, Jr. aka “Stix,” 29, of Clarksville;
- Jamie Hern aka “J-Roc,” 38, of Clarksville;
- Robert Humiston aka “Bric” aka “Brichands,” 25, of Dover, Tennessee;
- Michael Myers aka “Yea Yea,” 33, of Oak Grove, Kentucky;
- Michael Levi West aka “Smurf,” aka “Blue,” 35, of Clarksville; and
- Adrianna Frazier aka “Adrianna Miles,” 32, of Owensboro, Kentucky.
Charged with large-scale drug trafficking is:
- Derek Leighton Stanley, 43, of Owensboro, Kentucky.
Charged with offenses related to Hobbs Act Robbery are:
- Timothy Grant, 31, of Clarksville; and
- Dustin McCracken aka “D,” 28, of Clarksville.
Stephen Cole aka “Lurch,” 36, of Clarksville remains at large and his whereabouts are unknown.
Allegations of criminal conduct contained in the indictment include:
Holding weekly meetings of the Mongols Clarksville Chapter at various residences and businesses in Clarksville for the purpose of discussing club business and to pay dues to support the criminal activities of the club;
Kidnapping and assaulting an individual, using a firearm and a Taser, at a motel in Clarksville on April 20, 2015;
Setting fire to and destroying the Sin City Motorcycle Clubhouse in Clarksville on May 17, 2015;
Kidnapping two individuals at gunpoint in the Clarksville area on May 22, 2015, and transporting them to a cemetery in Bumpus Mills, Tennessee, where one individual was murdered by shooting the victim at least eight times, including once in the head;
Robbing two individuals at gunpoint in the parking lot of a Clarksville apartment complex on July 3, 2015;
Breaking into a home in Hopkinsville, Kentucky on July 4, 2015, and pistol whipping the resident and stealing the resident’s belongings while holding the victim at knifepoint;
On numerous occasions, travelling to California and transporting an aggregate total of at least 50 pounds of methamphetamine back to Tennessee for distribution in Tennessee and Kentucky;
Delivering an aggregate total of at least $300,000 in cash, the proceeds of methamphetamine sales, to a co-conspirator member of the Mongols California Harbor Chapter.
On Jan. 9, 2016, in Clarksville, purchasing 80 to 90 pills containing Oxymorphone, a schedule II substance, in exchange for $3,000 to $3,500;
On Jan. 16, 2016, in Clarksville, attempting to purchase 90 pills containing Oxymorphone, in exchange for $5,400; during this deal, Kyle Heade shot and wounded another individual, using a 9mm handgun;
Kidnapping two individuals at a residence in Clarksville and holding them at gunpoint while they interrogated one of the victims and searched the residence for drug proceeds on Jan. 17, 2016;
On April 24, 2016, three of the individuals charged were travelling from Oak Grove, Kentucky to Boone County, Missouri, where they were stopped by law enforcement for travelling in a stolen vehicle and found in possession of a Glock 9mm pistol with an extra 30 round magazine and a .40 caliber handgun; 113 grams of 100 percent pure methamphetamine; and varying amounts of other illegal controlled substances;
On May 11, 2016, one of the individuals charged sold approximately three grams of 96 percent pure methamphetamine to another individual;
Attempting to murder an individual on July 14, 2016, by shooting the victim multiple times for wearing clothing identifying himself as a member of another motorcycle club;
From Oct. 26, 2016, through on or about Nov. 9, 2016, kidnapping a woman from a hotel in Nashville, and physically assaulting her and threatening her while interrogating her about the death of a co-conspirator member of the Mongols California Harbor Chapter.
This case was investigated by the ATF; the Tennessee Bureau of Investigation; the Clarksville Police Department; and the Owensboro, Kentucky Police Department; with assistance from the Montgomery County, Tenn. Sheriff’s Department; the Stewart County Sheriff’s Department; the Christian County, Kentucky Sheriff’s Department; the Davies County, Kentucky Sheriff’s Department; and the Fort Campbell Army Criminal Investigation. Assistant U.S. Attorney Katy Risinger of the Middle District of Tennessee and Trial Attorney Robert Tully of the Criminal Division’s Organized Crime and Gang Section are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty in a court of law.
54-Count Federal Indictment Charges 12 Members and Associates of Mongols Motorcycle Gang with Racketeering Conspiracy and Three Others with Various Federal Crimes Including Large Scale Drug TraffickingRead the Press Release
A 54-count superseding indictment was unsealed today, charging 12 members and associates of the Mongols Motorcycle Gang (Mongols) with racketeering conspiracy, announced Attorney General Jeff Sessions, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Don Cochran of the Middle District of Tennessee. Three other individuals were charged with other federal crimes including large scale drug trafficking and crimes related to the Hobbs Act.
Joining U.S. Attorney Cochran in announcing these charges at a Noon news conference were Jack Webb, Assistant Special Agent in Charge of the ATF Nashville Division; Tennessee Bureau of Investigation Assistant Director Dewayne Johnson; and Clarksville Police Chief Al Ansley.
According to the indictment, members and associates of the Clarksville Chapter of the Mongols, engaged in a host of violent criminal activities, including murder, attempted murder, assault, kidnapping, robbery, extortion, witness tampering, money laundering, interstate travel in aid of racketeering and large scale drug trafficking.
As stated in the indictment, the Mongols Motorcycle Gang identifies itself as an “outlaw” motorcycle gang and is a nationwide and international organization with chapters located in different geographical areas. Most of the chapters are in California, but chapters have been established in other parts of the United States and in other countries, including Tennessee.
This morning, local, state and federal law enforcement officers began arresting those charged in the indictment and all but one are in custody.
“Gangs that conspire to spread illegal drugs like methamphetamine and lethal opioids, extort legitimate businesses, and wage violence on our fellow Americans will be held accountable by the Department of Justice,” said Attorney General Jeff Sessions. “Last year, we secured the convictions of more than 1,200 gang members, and, as this case makes clear, we are not slowing down. I want to thank the ATF and all of our incredible state, county, and local law enforcement partners who helped make today's indictment possible, including the Clarksville and Owensboro Police Departments, the Tennessee Bureau of Investigation, and four county sheriff’s offices. Today’s indictment is the next step in our efforts to dismantle gangs and stop the spread of deadly drugs and violent crime.”
“Attorney General Sessions has made it clear that prosecuting violent offenders and reducing violent crime is a top priority of the Department of Justice,” said U.S. Attorney Don Cochran. “Today’s indictment and arrests have resulted in the removal of many dangerous individuals from neighborhoods in and around middle Tennessee and we intend to vigorously prosecute these individuals and hold them accountable for their actions. I commend the many law enforcement officers and prosecutors who have dedicated enormous amounts of time and effort in bringing these charges.”
The indictment details allegations of violent, criminal activity and drug trafficking in and around the Clarksville, Tenn. area beginning in or about March 2015, by certain Mongols members or associates and continuing until the return of the indictment. The 12 individuals charged in the Racketeering conspiracy are:
- James Wesley Frazier, a/k/a “Slo-Mo,” a/k/a “Special,” 30, of Clarksville;
- Aelix Santiago, a/k/a “Goon,” a/k/a “Big O,” a/k/a “Big Offit,” 29, of Clarksville;
- Kyle Heade, 30, formerly of Fort Campbell, Kentucky;
- Joel Aldridge, a/k/a “Sleezy,” a/k/a “Spoon,” 36, of Clarksville;
- James Hines, a/k/a “Fester,” 42, of Clarksville;
- Michael Forrester, Jr., a/k/a “Stix,” 29, of Clarksville;
- Stephen Cole, a/k/a “Lurch,” 36, of Clarksville;
- Jamie Hern, a/k/a “J-Roc,” 38, of Clarksville;
- Robert Humiston, a/k/a “Bric,” a/k/a “Brichands,” 25, of Dover, Tennessee;
- Michael Myers, a/k/a “Yea Yea,” 33, of Oak Grove, Kentucky;
- Michael Levi West, a/k/a “Smurf,” a/k/a “Blue,” 35, of Clarksville; and
- Adrianna Frazier, a/k/a “Adrianna Miles,” 32, of Owensboro, Kentucky.
Charged with large scale drug trafficking:
- Derek Leighton Stanley, 43, of Owensboro, Kentucky.
Charged with offenses related to Hobbs Act Robbery:
- Timothy Grant, 31, of Clarksville, Tennessee;
- Dustin McCracken, a/k/a “D,” 28, of Clarksville.
Steven Cole remains at large and his whereabouts are unknown.
Allegations of criminal conduct contained in the indictment include:
Holding weekly meetings of the Mongols Clarksville Chapter at various residences and businesses in Clarksville, for the purpose of discussing club business and paying dues to support the criminal activities of the club;
Kidnapping and assaulting an individual, using a firearm and a Taser, at a motel in Clarksville on April 20, 2015;
Setting fire to and destroying the Sin City Motorcycle Clubhouse in Clarksville on May 17, 2015;
Kidnapping two individuals at gunpoint in the Clarksville area on May 22, 2015, and transporting them to a cemetery in Bumpus Mills, Tenn., where one individual was murdered by shooting the victim at least 8 times, including once in the head;
Robbing two individuals at gunpoint in the parking lot of an apartment complex in Clarksville on July 3, 2015;
Breaking into a home in Hopkinsville, Kentucky on July 4, 2015, and pistol whipping the resident and stealing the resident’s belongings while holding the victim at knifepoint;
On numerous occasions, travelling to California and transporting an aggregate total of at least 50 pounds of methamphetamine and bringing it back to Tennessee for distribution in Tennessee and Kentucky;
Delivering an aggregate total of at least $300,000 in cash, the proceeds of methamphetamine sales, to a co-conspirator member of the Mongols California Harbor Chapter;
On January 9, 2016, in Clarksville, purchasing 80-90 pills containing Oxymorphone, a schedule II substance, in exchange for $3,000-$3,500;
On January 16, 2016, in Clarksville, attempting to purchase 90 pills containing Oxymorphone, in exchange for $5,400; during this deal, Kyle Heade shot and wounded another individual, using a 9mm handgun;
Kidnapping two individuals at a residence in Clarksville and holding them at gunpoint while they interrogated one of the victims and searched the residence for drug proceeds on January 17, 2016;
On April 24, 2016, three of the individuals charged were travelling from Oak Grove, Kentucky to Boone County, Missouri, where they were stopped by law enforcement for travelling in a stolen vehicle and found in possession of a Glock 9mm pistol with an extra 30 round magazine and a .40 caliber handgun; 113 grams of 100 percent pure methamphetamine; and varying amounts of other illegal controlled substances;
On May 11, 2016, one of the individuals charged sold approximately 3 grams of 96 percent pure methamphetamine to another individual;
Attempting to murder an individual on July 14, 2016, by shooting the victim multiple times for wearing clothing identifying himself as a member of another motorcycle club;
From Oct. 26, 2016, through on or about Nov. 9, 2016, kidnapping a woman from a hotel in Nashville, and physically assaulting her and threatening her while interrogating her about the death of a co-conspirator member of the Mongols Harbor Chapter in California.
Other criminal acts are alleged in the indictment.
If convicted, Timothy Grant and Dustin McCracken face up to 20 years in prison. All other defendants face up to life in prison.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Tennessee Bureau of Investigation; the Clarksville Police Department; and the Owensboro, Kentucky Police Department; with assistance from the Montgomery County, Tenn. Sheriff’s Department; the Stewart County Tenn. Sheriff’s Dept; the Christian County, Kentucky Sheriff’s Dept; the Davies County, Kentucky Sheriff’s Dept; and the Fort Campbell Army Criminal Investigation. Assistant U.S. Attorney Katy Risinger of the Middle District of Tennessee and Trial Attorney Robert Tully of the DOJ Organized Crime and Gang Section are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent unless and until proven guilty in a court of law.
Former Owner of Springfield, Tennessee-Based Smart Data Solutions, LLC Pleads Guilty to Multi-Million Dollar Healthcare Benefits SchemeRead the Press Release
Bart Sidney Posey, Sr., 50, a Springfield, Tenn. resident and former owner of the Springfield-based companies American Trade Association (ATA) and Smart Data Solutions (SDS), pleaded guilty yesterday before United States District Judge Aleta A. Trauger, to leading a multi-million dollar insurance fraud scheme that harmed thousands of victims across the country, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
According to court documents, from January 2008 through March 2010, Posey and his co-conspirators engaged in a widespread fraud designed to defraud consumers looking for health insurance. Through ATA and SDS, Posey sold and caused others to sell bogus health insurance products to unsuspecting consumers. Posey admitted that he duped consumers by denying legitimate health insurance claims, selling an insurance product that was not backed by a legitimate underwriter, and embezzling millions of dollars of insurance premiums paid to his company by victims. Posey used those premium payments to buy, among other things, a Harley Davidson motorcycle, a sports car, college football tickets, and to pay off a $500,000 personal mortgage.
Posey operated his companies much like a Ponzi scheme – paying off some insurance claims with new premiums to create the appearance of a legitimate insurance carrier and to keep the scheme going. Posey admitted that some of his victims had pre-existing conditions and were stuck with thousands of dollars of unpaid medical bills due to his fraud.
As part of his plea agreement, Posey pleaded guilty to mail fraud and to embezzling health care fraud premium payments. He faces up to twenty years in prison on the mail fraud conviction and up to ten years for the embezzlement conviction. Posey also agreed to forfeit over $6 million. He will be sentenced on April 30, 2018.
This case was investigated by the FBI; the United States Postal Inspection Service; the United States Department of Labor Employee Benefits Security Administration and Office of Inspector General; the United States Secret Service; and the IRS-Criminal Investigation. Assistant United States Attorneys Ryan R. Raybould, Henry C. Leventis and Thomas J. Jaworski are prosecuting the case.
Final Four Defendants Sentenced in Fort Campbell Army Equipment Theft and ConspiracyRead the Press Release
The remaining four defendants charged in a conspiracy to steal and sell U.S. Army equipment from the Fort Campbell Army Installation were sentenced in U.S. District Court this week, announced U.S. Attorney Don Cochran of the Middle District of Tennessee. Eight persons were initially charged in this case, seven of whom pleaded guilty. John Roberts was convicted after a jury trial in August 2017 and later sentenced to 15 years in prison.
Cory Wilson, 42, of Clarksville, Tenn., was sentenced yesterday by visiting U.S. District Judge Hugh Lawson, from the Middle District of Georgia, to serve 44 months in prison. Wilson pleaded guilty to conspiracy to steal U.S. Army property and selling that stolen property, two counts of wire fraud, and violating the Arms Export Control Act. Judge Lawson also ordered Wilson to pay $500,000 in restitution to the U.S. Army.
Kyle Heade, 30, of Fort Campbell, Kentucky, previously pleaded guilty to conspiracy to steal and sell U.S. Army property. Heade was sentenced yesterday to 30 months in prison and was ordered to pay $10,000 restitution to the U.S. Army.
Michael Barlow, 30, of Clarksville, Tenn., previously pleaded guilty to conspiracy to steal and sell U.S. Army property and theft of government property and was sentenced yesterday to five years’ probation and was ordered to pay $5,000 restitution to the U.S. Army.
Jonathan Wolford, 29, Clarksville, Tenn., previously pleaded guilty to conspiracy to steal and sell U.S. Army property. Wolford was sentenced today to three years’ probation and was ordered to pay $2,000 restitution to the U.S. Army.
This case was investigated by the Department of Homeland Security and U.S. Army Criminal Investigation Command. Assistant United States Attorneys Thomas J. Jaworski and Courtney L. Coker prosecuted the case.
Final Defendant Sentenced in Tax Fraud SchemeRead the Press Release
The final defendant charged in a conspiracy to file fraudulent, federal income tax returns, claiming millions of dollars in bogus refunds, was sentenced yesterday in U.S. District Court, announced Don Cochran, U.S. Attorney for the Middle District of Tennessee. Victor Oliva, 40, of Hendersonville, Tenn., was sentenced by U.S. District Judge Aleta A. Trauger to 18 months in prison, followed by three years of supervised release. Judge Trauger also ordered Oliva to pay restitution in the amount of $1,308,422 to the IRS, for his role in the multi-million dollar tax refund scheme.
In April 2015, 10 federal search warrants were executed at various residences and tax return businesses throughout middle Tennessee, including Soto’s Income Tax Service in Madison; Soto’s Services 2 in Hermitage; Soto’s Income Tax in Springfield; Soto Services 1 in Gallatin; and S’ Income Tax Services in Nashville. As a result of this investigation, agents subsequently determined that part of the tax fraud scheme dated back to 2011 and 46 persons were ultimately charged and convicted of federal offenses. During the investigation, agents seized more than $1 million in cash; several late model, luxury automobiles; and 11 Nashville-area residential properties owned by one of the defendants. Many of those individuals charged were in the U.S. illegally and have since been convicted and deported.
Victor Oliva was the sole owner and operator of one of the tax return preparation business known as S Income Tax Preparation located on Charlotte Pike in Nashville. On December 8, 2016, Oliva pleaded guilty to his role in the scheme and admitted to preparing and filing 166 false, federal income tax returns with the IRS claiming fraudulent refunds of $1,308,422.
Other defendants who played a significant role in the scheme include:
Byron Fernandez-Virula, Jr., 25, of Madison, Tenn., pleaded guilty on April 26, 2017, admitting that he prepared and filed 236 false, federal income tax returns claiming fraudulent refunds of at least $1,444,957. He also admitted to cashing at least $351,000 in fraudulently obtained tax refund checks at a check cashing business located in Shelbyville, Tennessee. In July 2017 he was sentenced to 24 months in prison followed by 2 years of supervised release, and was ordered to pay restitution in the amount of $1,444,957 to the IRS.
Byron Fernandez-Virula, Sr., 45, of Madison, Tenn., pleaded guilty on June 12, 2017, admitting that he prepared and filed at least 1,064 false, federal income tax returns claiming fraudulent refunds of at least $5,894,827. He also admitted to cashing at least $817,000 in fraudulently obtained tax refund checks at a check cashing business located in Shelbyville, Tennessee. He was sentenced in September 2017 to 37 months in prison, followed by 3 years of supervised release and was ordered to pay restitution in the amount of $1,444,957 to the IRS.
Wilmar Soto-Virula, 35, of Madison, Tenn., pleaded guilty on July 7, 2017, admitting that he prepared and filed at least 170 false, federal income tax returns claiming fraudulent refunds of at least $730,707. He was sentenced in September 2017 to 28 months in prison followed by 2 years of supervised release, and was ordered to pay restitution in the amount of $730,707 to the IRS.
Julio Soto, 30, of Goodlettsville, Tenn., pleaded guilty on July 13, 2017, admitting that he prepared and filed at least 130 false, federal income tax returns claiming fraudulent refunds of at least $737,788. He was sentenced in November 2017 to 36 months in prison followed by 3 years of supervised release, and was ordered to pay restitution of $737,531 to the IRS.
This case was investigated by IRS-Criminal Investigation and Homeland Security Investigations. Assistant U.S. Attorneys Thomas J. Jaworski and Byron M. Jones represented the government.
Attorney General Jeff Sessions Selects Middle District of Tennessee to Receive New United States Attorney Positions to Combat Violent CrimeRead the Press Release
Attorney General Jeff Sessions has selected the Middle District of Tennessee to receive additional resources for the fight against violent crime. The district will receive two additional Assistant U.S. Attorneys to focus exclusively on violent crime, two of 40 new federal prosecutors in 27 selected locations throughout the United States.
“Led by our 94 United States Attorney’s Offices, Project Safe Neighborhoods (PSN) task forces are hitting the streets across America to apprehend and bring violent criminals to justice. I have asked Congress for additional PSN funding next year because I believe nothing will be more effective at reducing violent crime,” said Attorney General Sessions. "Under this program, I am asking a great deal of our United States Attorneys. I am both empowering them and holding them accountable for results. To put them in the best position to impact and reduce violent crime, it is my privilege to announce today that through a re-allocation of resources, we will be enlisting and deploying 40 additional violent crime prosecutors across the United States."
“Two additional federal prosecutors will substantially increase our ability to identify and remove the most dangerous and violent offenders from our communities,” said U.S. Attorney Don Cochran. “In the coming weeks, I will be meeting with local law enforcement leaders and District Attorneys General to formulate a strategy aimed at vigorously pursuing those violent offenders whose criminal behavior disrupts the peace and harmony of our neighborhoods and endangers the lives of innocent citizens.”
U.S. Attorney Don Cochran recently re-organized the structure of the U.S. Attorney’s Office and with the addition of these two positions, eight federal prosecutors will now be dedicated to prosecuting violent crime. Those charged with violent crimes in the federal system generally receive a lengthier sentence and there is no parole in the federal system.
Romanian Man Sentenced for Role in International Fraud Scheme Involving Online Marketplace WebsitesRead the Press Release
A Romanian man was sentenced today to 29 months in prison for his participation in an international scheme involving fraudulent advertisements on online marketplaces that induced victims to send over $870,000 to conspirators for the purchase of various items that were not actually available for purchase.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Don Cochran of the Middle District of Tennessee made the announcement.
Vlad Diaconu, 37, originally of Bucharest, Romania, was sentenced by Senior U.S. District Judge Marvin E. Aspen of the Northern District of Illinois, who sits in the Middle District of Tennessee by designation. Diaconu pleaded guilty to conspiracy to commit bank and wire fraud on March 28. In addition to his prison term, Judge Aspen ordered Diaconu to pay $834,841.75 in restitution.
As part of his guilty plea, Diaconu admitted that co-conspirators fraudulently listed vehicles for sale at online marketplaces such as eBay. When victims expressed interest in purchasing the vehicles, co-conspirators responded with emails directing the victims to wire payments to specified bank accounts, which the victims believed were going to serve as escrow accounts until the victims received the vehicle they wished to purchase. In reality, these bank accounts were opened by Diaconu and his co-conspirators, who used false identities and fraudulent documents, including counterfeit passports, when opening the accounts. Twelve victims sent approximately $185,000 to accounts opened by Diaconu. Another 35 victims sent approximately $688,000 to accounts opened by Diaconu’s co-conspirators. Diaconu and his co-conspirators subsequently sent the bulk of the money to co-conspirators located overseas. The victims never received the vehicles they intended to purchase.
The case was investigated by the FBI and the Tennessee Bureau of Investigation. The case was prosecuted by Senior Counsel Mysti Degani of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Byron M. Jones of the Middle District of Tennessee. The Criminal Division’s Office of International Affairs also provided substantial assistance.
Nashville Gang Member Pleads Guilty to Federal Crimes After Shooting at Metro Police OfficersRead the Press Release
Antonio L. Bender,19, of Nashville, Tenn., pleaded guilty today in U.S. District Court to federal firearms charges and obstruction of justice, announced U.S. Attorney Don Cochran of the Middle District of Tennessee. These charges resulted from an incident on March 27, 2017, where Bender shot at two Metropolitan Nashville Police Department officers who were responding to a report of shots being fired.
Bender was indicted by a federal grand jury on May 10, 2017, on charges of being an unlawful drug user in possession of two firearms; possession of a stolen firearm; and obstruction of justice by deleting relevant social media posts with intent to impede a federal investigation. He pleaded guilty to all charges and will be sentenced by U.S. District Judge Aleta Trauger on March 26, 2018.
U.S. Attorney Don Cochran commended the MNPD officers and stated, “These officers were doing their duty to investigate violent crime which has plagued this community when they were shot at by this defendant. They displayed appropriate restraint in not returning fire due to their training and their awareness of the innocent bystanders in the area. In keeping with our zero-tolerance policy regarding violence against law enforcement officers, we will seek an appropriately severe sentence against this illegally armed violent gang member.”
According to the statement of facts presented at the plea hearing, Bender is a Rollin’ 60s Crips gang member and was released from juvenile custody in October 2016. On March 27, 2017, MNPD officers were responding to a report of shots being fired in the area of the J.C. Napier and Tony Sudekum public housing developments. As they were patrolling, two officers heard more gunfire and got out of their patrol car to investigate. While on foot, they heard four to five more shots before seeing Bender, who was armed with two pistols, which were equipped with a laser and a flashlight. Bender raised the pistols towards the officers, fired once, and then fled on foot. The officers did not return fire because there were bystanders behind Bender, and they could not fire without endangering them.
The officers chased Bender, who surrendered a short distance away, after discarding the two pistols, a Glock .40 caliber semi-automatic and a Smith & Wesson .40 caliber semi-automatic, which had previously been reported stolen.
Also according to the statement of facts, Bender is an unlawful drug user and he had taken both pistols from an unknown man selling firearms a few weeks earlier. He was involved in a shooting earlier in the day on March 27, 2017, in which he shot a person who had sold one of his associates some fake cocaine. Multiple other shots struck and heavily damaged an occupied car nearby.
Bender faces a maximum of ten years in prison on each of the firearms charges, and a maximum of 20 years in prison for obstruction of justice.
This case was investigated by the Metropolitan Nashville Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives. Assistant U.S. Attorney Sunny A.M. Koshy is prosecuting the case.
Four Sentenced in Fort Campbell Army Equipment ConspiracyRead the Press Release
Four of the seven defendants charged in a conspiracy to steal and sell U.S. Army equipment were sentenced today in U.S. District Court, announced U.S. Attorney Don Cochran of the Middle District of Tennessee.
John Roberts, 27, of Clarksville, Tenn., was sentenced today by visiting U.S. District Judge Hugh Lawson, from the Middle District of Georgia, to serve 15 years in prison. Roberts was found guilty by a federal jury on August 31, 2017, of conspiracy to steal U.S. Army property and selling that stolen property, 10 counts of wire fraud, and two counts of violating the Arms Export Control Act. Judge Lawson also ordered Roberts to pay $4.2 million in restitution to the U.S. Army.
During the trial, the evidence proved that Roberts conspired with U.S. Army soldiers who stole U.S. Army equipment, often after hours, from the U.S. Army installation at Fort Campbell. Roberts then purchased the equipment from the soldiers, in cash only deals and often in dark parking lots. Roberts then resold this military grade equipment via eBay. Roberts knew that some of the soldiers that he was purchasing the stolen equipment from had financial problems or serious drug addictions.
The U.S. Army equipment listed for sale on eBay included sniper telescopes and other sniper rifle accessories; parts for the M249 machine gun (including barrel assemblies, trigger groups, rail adapter kits, magazine buttstocks, mounts, and heat shields); sights for the M203 grenade launcher; “red dot” sights for the M2 and M4 assault rifles; flight helmets; communications headsets; and medical supplies. Certain equipment sold on eBay was advertised as “Army Special Forces,” “USGI” (U.S. Government Issued), and “New in Package.”
The evidence at trial also proved that Roberts illegally exported certain restricted U.S. Army equipment, including night vision helmet mounts. Roberts sold U.S. Army equipment to eBay customers around the world, including customers in Russia, China, Thailand, Japan, the Netherlands, Australia, India, Germany, and Mexico.
Three other defendants previously pleaded guilty and were also sentenced today, including:
- Alexander Hollibaugh, formerly of Fort Campbell, Kentucky, who pleaded guilty to conspiracy to steal and sell U.S. Army property, was sentenced to time served and placed on probation;
- U.S. Army Specialist Dustin Nelson, 23 of Northville, New York, who pleaded guilty to conspiracy to steal and sell U.S. Army property, was sentenced to three years’ probation; and
- Aaron Warner, of Fort Campbell, Kentucky, who pleaded guilty to conspiracy to steal and sell U.S. Army property, was also placed on three years’ probation.
The four remaining defendants have also pleaded guilty and are scheduled to be sentenced on January 8, 2018. They are Michael Barlow and Jonathan Wolford, both of Clarksville, Tenn., Kyle Heade, of Fort Campbell, Kentucky and Cory Wilson, of Gonzalez, Louisiana. Each faces up to five years in prison and a fine of up to $250,000 on the conspiracy charge. Wilson faces up to 20 years for each count of wire fraud and violating the Arms Export Control Act. In addition, Barlow faces up to 10 years in prison on the theft charge. The defendants also face forfeiture of the proceeds of their crimes.
This case was investigated by the Department of Homeland Security and U.S. Army Criminal Investigation Command. Assistant United States Attorneys Thomas J. Jaworski and Courtney L. Coker prosecuted the case.
Nine More Individuals Sentenced in Multi-State Methamphetamine Trafficking ConspiracyRead the Press Release
Nine more individuals have been sentenced to federal prison for their role in a multi-state methamphetamine trafficking conspiracy, including seven from Middle Tennessee and two from California, announced U.S. Attorney Don Cochran of the Middle District of Tennessee.
During the past week, the following individuals were sentenced by Chief U.S. District Court Judge Waverly D. Crenshaw, Jr:
- Sabrina Boblett, 49, of Castalian Springs, Tenn., was sentenced to 84 months in prison;
- Frank Bishop, 41, of Nashville, Tenn., was sentenced to 100 months in prison;
- Jason Johnston, 49, of Lebanon, Tenn., was sentenced to 84 months in prison;
- Gary Lester, 42, of Lebanon, Tenn., was sentenced to 108 months in prison;
- George Marsh, 52, of Lebanon, Tenn. was sentenced to 106 months in prison;
- Brenda McGinnis, 49, of Bakersfield, Calif., was sentenced to 150 months in prison;
- Herbert McGinnis, 49, of Bakersfield, Calif., was sentenced to 150 months in prison;
- Matthew Peeden, 30, of Lebanon, Tenn., was sentenced to 120 months in prison;
- Robert Pelletier, 34, of Lebanon, Tenn., was sentenced to 120 months in prison.
Brian Randall, 51, of Castalian Springs, Tenn., was previously sentenced in February 2017 to 24 years in prison.
According to court documents, between February 2015 and July 2016, Herbert and Brenda McGinnis shipped numerous kilograms of methamphetamine from California to the home of Jason Johnston in Lebanon, Tenn., and to Brian Randall’s home in Castalian Springs, Tenn., through FedEx and the U.S. Postal Service. Randall then mailed cash payments back to California and sold the methamphetamine to mid-level and street-level dealers in middle Tennessee for resale. During this investigation, agents seized over $60,000 in cash, numerous firearms, seven cars, two boats and approximately 5 kilograms of methamphetamine from members of the conspiracy.
This case was investigated by the Federal Bureau of Investigation; the United States Postal Inspection Service; the Tennessee Bureau of Investigation; the Lebanon Police Department; the Metro-Nashville Police Department; and the 15th Judicial District Drug Task Force. The case was prosecuted by Assistant U.S. Attorney Ahmed A. Safeeullah.
Franklin, Tennessee Man Sentenced to Federal Prison for Transporting Illegal AlienRead the Press Release
Ronald Edward Strickland, 69, of Franklin, Tenn., was sentenced today in U.S. District Court, to 30 months in prison, followed by 3 years of supervised release, for smuggling a Honduran woman into the United States, announced U.S. Attorney Don Cochran of the Middle District of Tennessee.
Strickland was also ordered to pay a $75,000 fine by U.S. District Judge Sean Cox, who remarked that Strickland was a sexual predator who preys on young and vulnerable women and that he gave the families money so that they would allow him to have sex with their daughters.
Strickland, a retired Tennessee Highway Patrol sergeant, was arrested on a criminal complaint on August 1, 2016, and indicted on August 31, 2016. He pleaded guilty to the charge on June 20, 2017.
“The self-serving actions of this individual not only violated our nations’ immigration laws but placed the lives of vulnerable people in grave danger,” said U.S. Attorney Cochran. “We will continue to work closely with Homeland Security Investigations to aggressively pursue those who facilitate the illegal entry of persons into the U.S.”
According to court documents, in early 2016, Strickland devised a plan to smuggle a 22- year-old female from Honduras into the United States. Strickland texted the woman on January 7, 2016, about uniting with him and engaging in a sexual relationship. Strickland then began a series of text communications with an individual in Honduras and others, in which he discussed smuggling the woman into the United States. Strickland maintained the text communications, monitoring the progress of the woman’s journey, until he was notified that the woman had arrived in Houston, Texas.
Additional testimony and evidence introduced during court proceedings established that Strickland caused the woman to attempt to enter the U.S. twice before her third successful entry. He monitored her progress through social media and was aware of the dangers she faced during the journeys, including becoming lost in the desert for days in the middle of the summer with no supplies and being injured after having to jump from a train. During one of the woman’s journeys, Strickland messaged a family member and stated that his “friends” were under control of the Zetas (a violent Mexican criminal organization) and commented that it would be better if the women were caught by immigration officials. During another instance, the woman was not answering Strickland’s phone calls and Strickland threatened that if she had used him, he would obtain an arrest warrant against her alleging that she had stolen money from him and that would cause her to be put in jail and deported.
In July 2016, Strickland drove to Houston, Texas, where he picked up the woman and drove her to his home in Franklin, Tenn.
Acting on a tip, on July 22, 2016, Homeland Security Investigations (HSI) agents went to Strickland’s Franklin home, where they located the 22-year-old female. The subsequent investigation determined that the woman had been illegally smuggled into the United States and that Strickland had paid a coyote $8,000 to smuggle her from Honduras to the United States. The investigation also determined that Strickland maintained an apartment in Honduras and travelled there on a regular basis.
Assistant Special Agent in Charge Robert Hammer, who oversees HSI operations in Tennessee said, “HSI is committed to aggressively investigating those individuals that attempt to smuggle women into the country and illegally harbor them in their homes.”
In considering enhancements to the sentence, Judge Cox found that the perils of the woman’s journey were reasonably foreseeable to Strickland and that he was responsible for intentionally or recklessly creating a substantial risk of death or bodily injury to the woman being smuggled. Judge Cox particularly noted that she was under the control of armed smugglers and gang members; that women in her group were robbed and sexually molested; that she had to jump from a moving train; and that her group was sent into the desert alone, without food or water.
This case was investigated by Homeland Security Investigations and was prosecuted by Assistant U.S. Attorneys Lynne T. Ingram and Henry Leventis.
Former Rutherford County Tennessee Sheriff's Chief Administrative Deputy Sentenced on Federal Corruption ChargesRead the Press Release
A former Rutherford County Sheriff Chief Deputy of Administration was sentenced today to 15 months in prison for operating a private electronic cigarette company in the county jail for personal gain, announced Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and U.S. Attorney Don Cochran of the Middle District of Tennessee.
Joe L. Russell II, 50, of Murfreesboro, Tennessee, was sentenced today by Senior U.S. District Judge Marvin E. Aspen of the Northern District of Illinois, sitting by designation in the Middle District of Tennessee, who also ordered Russell to pay $52,500 in restitution and to forfeit $52,234.41, an amount equal to all proceeds he received from JailCigs. Russell, along with former Rutherford County Sheriff Robert F. Arnold, 41, of Murfreesboro, Tennessee, and Arnold’s uncle, John Vanderveer, 59, of Marietta, Georgia, were named in a 14-count indictment in May 2016 charging them with honest services fraud, mail fraud, wire fraud, bribery concerning federal programs, extortion under color of official right, obstruction of justice and conspiracy.
According to his plea, Russell admitted to forming JailCigs along with Arnold and Vanderveer in 2013; using Arnold’s official position as Sheriff of Rutherford County to benefit JailCigs by allowing the company’s electronic cigarettes to come into the Rutherford County jail as non-contraband and to be distributed by county employees; taking steps to disguise their involvement in the company; and misrepresenting the benefits that Rutherford County was supposedly receiving from JailCigs.
Arnold pleaded guilty in January 2017 and was sentenced in May 2017 to 50 months in prison and ordered to pay $52,500 in restitution and to forfeit $66,790. Vanderveer was sentenced in September 2017 to one year plus one day in prison for attempting to tamper with a key witness in the investigation by asking her to destroy incriminating documents related to the scheme. Vanderveer was ordered to pay $52,500 in restitution.
The FBI and Tennessee Bureau of Investigation investigated the case. Trial Attorneys Mark J. Cipolletti of the Criminal Division’s Fraud Section and Andrew Laing of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Cecil W. VanDevender of the Middle District of Tennessee prosecuted the case.
Former Rutherford County Tennessee Sheriff's Administrative Chief Deputy Sentenced on Federal Corruption ChargesRead the Press Release
Joe L. Russell, II, 50, of Murfreesboro, Tenn., the former Rutherford County Sheriff Chief Administrative Deputy, was sentenced today on federal corruption charges to 15 months for his role in operating a private electronic cigarette company in the county jail for personal gain, announced U.S. Attorney Don Cochran of the Middle District of Tennessee and Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division.
Russell, along with former Rutherford County Sheriff Robert Arnold and Arnold’s uncle, John Vanderveer, were named in a 14-count indictment in May 2016 charging honest services fraud; mail fraud; wire fraud; bribery concerning federal programs; extortion under color of official right; obstruction of justice; and conspiracy. Russell pleaded guilty on January 20, 2017.
The sentence was handed down by Senior U.S. District Judge Marvin E. Aspen of the Northern District of Illinois, sitting by designation in the Middle District of Tennessee, who also ordered Russell to pay $52,500 in restitution and to forfeit $52,234.41, an amount equal to all proceeds he received from JailCigs, LLC, the company at the heart of the fraud scheme.
According to court documents, Russell admitted to forming JailCigs along with Arnold and Vanderveer in 2013, using Arnold’s official position as Sheriff of Rutherford County. The profit-making scheme to derive benefits from JailCigs included allowing the company’s electronic cigarettes to come into the Rutherford County jail as non-contraband and to be distributed by county employees; taking steps to disguise their involvement in the company; and misrepresenting the benefits that Rutherford County was supposedly receiving from JailCigs.
Robert F. Arnold, the former Sheriff of Rutherford County, pleaded guilty in January 2017 and was sentenced in May 2017 to 50 months in prison and ordered to pay $52,500 in restitution and to forfeit $66,790. Arnold’s uncle, John Vanderveer, was sentenced in September 2017 to one year plus one day in prison, for attempting to tamper with a key witness in the investigation by asking her to destroy incriminating documents related to the scheme.
The FBI and Tennessee Bureau of Investigation investigated the case. Assistant U.S. Attorney Cecil W. VanDevender of the Middle District of Tennessee and Trial Attorneys Mark J. Cipolletti of the Criminal Division’s Fraud Section and Andrew Laing of the Criminal Division’s Public Integrity Section prosecuted the case.
Nashville Man Indicted in Drug Distribution ConspiracyRead the Press Release
Walter Jones, 46, of Nashville, Tenn., was indicted yesterday by a federal grand jury for his role in a drug distribution conspiracy, which included the possession and intent to distribute cocaine, heroin and fentanyl, announced U.S. Attorney Don Cochran of the Middle District of Tennessee. The indictment also charged Jones with being a convicted felon in possession of firearms and possessing a firearm in furtherance of a drug trafficking crime.
“The quantity of fentanyl seized, 40 grams or more, as alleged in the indictment, is significant enough to have posed a grave danger to the community,” said U.S. Attorney Cochran. “In the midst of our nation’s opioid epidemic, had law enforcement not seized these illicit drugs, we could have been dealing with numerous overdoses and deaths. I commend the Metro Nashville Police Department and our federal law enforcement partners for their outstanding work in this investigation and preventing these drugs from making it to the streets of middle Tennessee.”
According to the indictment, and documents filed with the court, on February 21, 2017, Metropolitan Nashville police detectives from the East Precinct Crime Suppression Unit were conducting a drug investigation and stopped the car Jones was driving. As the detectives approached the car they smelled an odor of marijuana and observed the juvenile passenger attempting to conceal a pistol in his waistband. Based on evidence recovered from the car, detectives obtained a search warrant for a storage unit located in Antioch, Tenn.
During the search of the storage unit, detectives recovered drug processing materials, two loaded handguns and additional ammunition, approximately 10 kilograms of cocaine and three kilograms of heroin, among other items.
If convicted, Jones faces mandatory minimum sentences of 10 years, up to life in prison.
This case was investigated by the Metropolitan Nashville Police Department, the DEA and the ATF. Assistant U.S. Attorney Amanda Klopf is prosecuting the case.
An indictment is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
Former Investment Advisor Indicted for Defrauding Brentwood WomanRead the Press Release
Jay Costa Kelter, formerly known as Ignatius J. Costa, III, 48, was indicted yesterday by a federal grand jury on five counts of wire fraud, 16 counts of mail fraud, and one count of securities fraud, announced U.S. Attorney Don Cochran of the Middle District of Tennessee.
The indictment alleges that Kelter, who was affiliated with a Florida-based insurance and investment company, defrauded an elderly Brentwood, Tenn. woman out of approximately $1.4 million. Detailed allegations set forth in the indictment include that Kelter convinced the victim to open investment accounts with a discount brokerage company by falsely stating that he was employed with the discount brokerage company. Kelter routinely posed as the victim investor to conduct trades and transfer funds to accounts which he personally owned or controlled. Kelter spent thousands of the victim’s investment funds on expenditures benefitting himself and others, including purchases and payments for luxury cars such as a Mercedes, a Lamborghini and a $101,400 Bentley; and paying more than $21,000 for custom jewelry. The indictment also alleges that Kelter used some of the client funds to repay other investment clients.
If convicted, Kelter faces up to 20 years in prison on each count and up to a $5 million fine.
This case is being investigated by Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Stephanie N. Toussaint.
An indictment is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
Convicted Felon Pleads Guilty to Possessing Firearm Discharged by Juvenile After Being Left UnattendedRead the Press Release
Anthony Patrick Sanders, 27, of Nashville, Tenn., pleaded guilty yesterday in U.S. District Court to being a convicted felon in possession of firearms, announced U.S. Attorney Don Cochran of the Middle District of Tennessee.
Sanders was charged in a criminal complaint on June 14, 2017, after the accidental shooting death of 7-year old Harmony Warfield on June 6, 2017. He was indicted by a federal grand jury on July 12, 2017.
“This is another tragic example of the unintended consequences that result when persons prohibited from carrying firearms choose to ignore the law,” said U.S. Attorney Cochran. “Due to the reckless actions of a convicted felon, an innocent child lost her life. This office and our law enforcement partners will continue to relentlessly pursue those individuals responsible for inflicting violence in our public housing communities and bring the appropriate federal charges and seek harsh prison sentences. There is no parole in the federal system.”
According to court documents, in June 2016 Sanders was released from prison after being convicted of kidnapping in 2008. In or around February 2017 Sanders began frequenting the J.C. Napier Housing Development in Nashville and regularly began selling heroin in the area. Sanders was known to regularly carry a firearm when he was selling heroin in the area and he frequently stayed at 767 Lewis St.
Sanders stayed at the Lewis St. apartment on the night of June 5, 2017. He awoke the following morning and went outside, leaving a loaded pistol within easy access of anyone inside the apartment. Shortly thereafter, a juvenile in the apartment picked up the firearm and discharged the weapon, striking Harmony Warfield in the head and killing her. Sanders then re-entered the apartment and found Harmony laying on the kitchen floor with a gunshot wound to the head. He then retrieved the firearm and fled the area. Court records indicate that three other children, ages 2, 11 and 14, were in the apartment when the incident occurred.
Sanders eventually fled to a community near Columbus, Ohio where he hid the firearm, which was later recovered by ATF agents. It was also determined that Sanders had taken this firearm from an individual in May 2017, after a fight in the Cayce Homes public housing development in Nashville.
The plea agreement calls for the Sanders to receive a 10 year prison sentence, if accepted by U.S. District Judge Aleta Trauger on March 2, 2018.
This case was investigated by the ATF and the Metropolitan Nashville Police Department-Youth Services Division. Assistant U.S. Attorney Sunny A.M. Koshy is prosecuting the case.
Four Men Sentenced in Honduran Heroin Trafficking ConspiracyRead the Press Release
Two men from Honduras and two local men have been sentenced in federal court by Chief U.S. District Judge Waverly Crenshaw, Jr., for their involvement in a Honduran heroin-trafficking conspiracy, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
Andrew Morris, 30, of Hendersonville, Tenn., was sentenced on Friday to 120 months in prison. In October, James Whitley, 24, of Nashville, Tenn., was sentenced to five years in prison and Victor Cardoza, 26, and Diego Hernandez, 31, both of Honduras, were sentenced to 18 months and five years in prison, respectively. Both are subject to deportation at the conclusion of their sentence.
All were indicted in April 2016 and later pleaded guilty to conspiring to distribute 100 grams or more of heroin and distribution of heroin.
“Drug traffickers who continue to fuel the opioid epidemic facing this nation will be aggressively sought and prosecuted by the U.S. Attorney’s Office and our law enforcement partners,” said U.S. Attorney Cochran. “Significant federal prison sentences await those who are convicted of trafficking opioids and there is no parole in the federal system.”
According to court documents, members of the conspiracy utilized a network of telephone numbers which distributors and users would call and request heroin. A dispatcher would then direct them to specific locations in the Nashville area before sending a person to the area to complete the transaction.
During the investigation and while dismantling the operation, investigators seized over $10,000 in cash, seven vehicles, over 7.5 ounces of methamphetamine, 6 ounces of heroin and 15 grams of cocaine during the operation.
This case was investigated by the Drug Enforcement Administration, the Tennessee Bureau of Investigation, the 18th Judicial District Drug Task Force and the Metropolitan Nashville Police Department. The case was prosecuted by Assistant United States Attorney Ahmed A. Safeeullah.
Tennessee-Based Life Care Center of Hickory Woods to Pay $12,000 to Resolve Americans with Disabilities Act ComplaintRead the Press Release
The Antioch, Tennessee-based company that owns and does business as Life Care Center of Hickory Woods agreed to pay $12,000 and to adopt a written service animal policy to resolve an Americans with Disabilities Act complaint, announced Don Cochran, U.S. Attorney for the Middle District of Tennessee. Cleveland, Tennessee-based Life Care Centers of America, Inc. also agreed to adopt a service animal policy at all of the facilities that it owns or operates nationwide, said Cochran.
Life Care Center of Hickory Woods in Antioch provides inpatient and outpatient rehabilitation with 24-hour skilled nursing care. Its parent company, Life Care Centers of America, operates or manages more than 200 skilled nursing and rehabilitation centers in 28 states, including over 35 centers in Tennessee.
This settlement arose from a complaint filed by an individual from Smyrna, Tennessee with the Department of Justice about Life Care Center of Hickory Woods. She alleged that the facility had denied equal access to its physical therapy services for people with disabilities who use service animals. She further alleged that Life Care Center of Hickory Woods failed to modify its policies to permit individuals with disabilities to receive physical therapy while accompanied by a service animal.
According to the complainant, she uses a service dog for assistance in the event of a seizure. While undergoing a ten-week course of physical therapy at Life Care Center of Hickory Woods from November 2014 through March 2015, she alleged that several employees confronted her about her service dog, insisted that she provide its vaccination records and discouraged her from bringing her dog to subsequent appointments. As a result of this treatment, the complainant alleged that she felt compelled to stop bringing her service dog to many of her physical therapy appointments.
Life Care Centers of America has agreed to distribute to, and maintain a new written service animal policy at all of the 200 plus long-term care facilities that it operates in the United States. Under this new policy, Life Care agrees to make reasonable modifications in its policies to permit the use of service animals by persons with disabilities and to welcome service animals into Life Care facilities.
Life Care Center of Hickory Woods also adopted a new written service animal policy, in which it agreed to make reasonable modifications in its policies to permit the use of service animals. Life Care Center of Hickory Woods further agreed to train its employees on the new service animal policy and about their obligations under the Americans with Disabilities Act. The Hickory Woods facility will also post a sign at its facility indicating, “Service Animals Welcome.” Of the $12,000 that Life Care Center of Hickory Woods will pay to resolve this complaint, $7,000 will be paid to the complainant and $5,000 will be paid to the United States as a civil penalty.
Assistant United States Attorney Ellen Bowden McIntyre handled the matter on behalf of the United States.
Middle Tennessee Tax Return Preparer Pleads Guilty to Filing False ReturnsRead the Press Release
Elassia D. Munson, 43, of La Vergne, Tennessee, pleaded guilty yesterday in U.S. District Court to preparing false tax returns for her clients and filing her own false tax returns, announced U.S. Attorney Don Cochran of the Middle District of Tennessee.
According to court documents, from 2010 through 2015, Munson, a tax preparer, prepared and filed materially false tax returns for her clients by claiming false education credits, false charitable deductions, and bogus medical and dental expenses. Munson filed these tax returns with the IRS, generating large tax refunds. Munson diverted a substantial part of the refunds to her E-Trade financial account.
Additionally, Munson failed to report the diversions and her tax preparation fees on her own personal income tax return for years 2011 through 2014. As part of the plea agreement, Munson agreed to pay back approximately $97,000 to the IRS that is attributable to her tax fraud scheme.
Munson will be sentenced on February 26, 2018, and faces a maximum sentence of three years in prison on each count, as well as a period of supervised release and other monetary penalties.
The case was investigated by the Internal Revenue Service – Criminal Investigation. Assistant United States Attorney Ryan R. Raybould of the Middle District of Tennessee is prosecuting the case on behalf of the United States.
Convicted Felon Pleads Guilty to Drug and Firearm Offenses Committed Near Elementary School and Public HousingRead the Press Release
Emmanuel Thirkill, aka Hot Boy, 36, of Nashville, Tenn., pleaded guilty Monday in U.S District Court to drug trafficking and firearms violations, announced U.S. Attorney Donald Q. Cochran of the Middle District of Tennessee.
“As the facts of this case indicate, this defendant seriously miscalculated law enforcement’s interest in his illegal activities,” said U.S. Attorney Cochran. “This office and our law enforcement partners will continue our efforts to safeguard our citizens in these public housing areas by removing the bad actors who are so detrimental to their quality of life. A sentence of more than 21 years will put an end to the defendant’s constant criminal activity, for which he has been in and out of state prison on a regular basis. There is no parole in the federal system.”
According to court documents, beginning in May 2016, after being released from prison, Thirkill began selling cocaine in the Tony Sudekem Public Housing Development on a daily basis. Thirkill became the subject of a criminal investigation by the Metropolitan Nashville Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives as part of a concerted effort to reduce crime in the city’s public housing areas.
The investigation determined that Thirkill was receiving a supply of cocaine on a weekly basis, which he stored in his Antioch home located near Thomas Edison Elementary School. On December 6, 2016, Metro Nashville police officers attempted to stop Thirkill as he was leaving his home, but Thirkill fled and temporarily escaped capture. A search warrant was subsequently obtained and executed at Thirkill’s home and officers found five ounces of cocaine, $15,000 cash and a loaded Glock 9mm pistol, which was determined to have been stolen during a home burglary in Sumner County, Tenn. in 2013.
Metro Police located and arrested Thirkill the following day at a hotel in West Nashville. Court documents reflect that Thirkill admitted ownership of the firearm and cocaine and stated that he believed that federal authorities were only focusing on “gang bangers and murderers” and believed he could continue selling drugs in the area without consequence.
Thirkill has four prior felony convictions in state court, since 2001, for trafficking cocaine; two prior felony convictions for being a convicted felon in possession of a firearm; and a conviction for attempted reckless aggravated assault.
This investigation was conducted by the Metropolitan Nashville Police Department’s Gang Division and the ATF. Assistant U.S. Attorney Sunny A.M. Koshy prosecuted the case.
Since 2015, more than 40 individuals have been identified and charged with federal offenses and removed from Nashville’s public housing areas as part of the violent crime initiative of the U.S. Attorney, the ATF and the Metropolitan Nashville Police Department. On October 5, 2017, United States Attorney General Jeff Sessions announced the reinvigoration of the Project Safe Neighborhood initiative and other actions to reduce the rising tide of violent crime. Read the Attorney General’s announcement here.
Former Owner of Nashville Motor Cars Sentenced to PrisonRead the Press Release
Randl Arthur Roth, 49, of Murfreesboro, Tennessee, the former owner of Murfreesboro-based Nashville Motor Cars Premier car dealership, was sentenced today by Chief U.S. District Judge Waverly D. Crenshaw, Jr., to 24 months in federal prison for defrauding his dealership’s customers and business partners of more than $550,000, announced U.S. Attorney Donald Q. Cochran of the Middle District of Tennessee.
Roth was also sentenced to one year of supervised release at the conclusion of his prison sentence and ordered to pay $595,569.72 in restitution.
Roth, the former owner of now defunct Nashville Motors Cars in Murfreesboro, was charged in April of this year and pleaded guilty on May 31, 2017, to conspiracy to commit bank and wire fraud. According to court documents, beginning in 2014 Roth devised a scheme to defraud the dealership’s customers; the banks that financed customer’s car purchases; and individuals and companies that financed the dealership’s inventory.
Roth and his co-conspirators carried out the scheme by representing to numerous customers and their banks that Nashville Motor Cars had clean titles to the cars they sold when, in fact, Roth knew that there were existing liens on those cars. Roth also represented to private investors, when seeking additional credit, that certain automobiles were part of the dealership’s inventory and would secure the loans, but in fact, the vehicles had already been sold.
Roth also submitted fraudulent, duplicate car title applications to the Rutherford County Clerk’s Office and provided a copy of the applications or duplicate titles to the dealership’s inventory financiers.
This case was investigated by the Federal Bureau of Investigation with assistance from the Murfreesboro Police Department and the Tennessee Highway Patrol Criminal Investigation Division. Assistant U.S. Attorney Henry C. Leventis prosecuted the case.
Lebanon Man Pleads Guilty to Multiple Counts of Production of Child PornographyRead the Press Release
David Hamilton Soderbom, 49, of Lebanon, Tennessee, pleaded guilty in U.S. District Court today to five violations of federal child pornography laws; specifically three counts of production of child pornography, one count of receipt of child pornography and one count of possession of child pornography, announced Donald Q. Cochran, United States Attorney for the Middle District of Tennessee.
According to the indictment and statements made during the plea hearing, the FBI executed a search warrant on Soderbom’s residence in September 2015 in response to Soderbom’s on-line activities on a child pornography website. The FBI located thousands of images and videos of child pornography on Soderbom’s computers and electronic storage devices.
Upon further analysis of the child pornography located in Soderbom’s home, the FBI determined that Soderbom had created multiple pornographic images of a minor. The victim was under the age of 12 at the time Soderbom created the images.
Soderbom faces up to 120 years in prison and over a $1 million fine. United States District Judge Aleta Trauger ordered that Soderbom be immediately taken into custody and held until sentencing on March 9, 2018. His sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Henry C. Leventis is prosecuting the case.
Seven More Defendants Charged in Food Program FraudRead the Press Release
A federal indictment was unsealed today charging seven more individuals for their roles in a conspiracy to defraud the United States Department of Agriculture’s Child and Adult Care Food Program (CACFP), announced Donald Q. Cochran, United States Attorney for the Middle District of Tennessee.
On October 11, 2017, a federal grand jury in Nashville returned an indictment charging the following individuals with conspiracy to commit wire fraud:
Alice Dunlap, 62, of Murfreesboro, Tenn.;
Adrian Jennings, 23, of Madison, Tenn.,
Brian Jennings, 46, of Springfield, Tenn.;
Clarissa Jennings, 35, of Springfield, Tenn.;
Juanita Mitchell, 61, of Murfreesboro, Tenn.;
Nicole Golden, 41, of Hendersonville, Tenn.; and
Patsy Mathis, 73, of Knoxville, Tenn.
According to the indictment, these defendants claimed to be childcare providers and made application to participate as CACFP home childcare providers through All About Giving, Inc., the CACFP sponsor organization. The indictment also alleges that with the exception of Juanita Mitchell, all defendants are relatives or family members of LaShane Hayes, the founder of All About Giving, Inc.
The CACFP was created to reimburse child care providers for meals served to low-income children and other qualifying individuals. The program is funded by the USDA and administered in Tennessee by the Tennessee Department of Human Services (TDHS). The USDA and the TDHS utilize program sponsor organizations to enlist childcare providers into the program; communicate the total amount of reimbursement funds the sponsor organization’s providers were entitled to receive each month to the TDHS; and distribute reimbursement funds to childcare providers.
The indictment further alleges that the defendants and their co-conspirators, including Hayes, defrauded the program in a number of ways, including by overstating the number of All About Giving providers who actually furnished meals to children; by overstating the number of children who received meals from All About Giving providers in order to receive more program funds from the TDHS; and by cashing CACFP reimbursement checks and returning a portion of the money to Hayes.
Finally, the indictment alleges that between March 2015 and July 2016, the number of providers that All About Giving claimed reimbursement for grew from six to 75 and as of July 2016, All About Giving had received a total of $2,114,239 of CACFP funds from TDHS. The indictment alleges that each defendant received between $11,000 and $41,000 during this period.
LaShayne Hayes pleaded guilty to wire fraud and conspiracy earlier this year and admitted stealing more than $1.5 million of program funds. She was sentenced by U.S. District Judge Aleta Trauger in April of this year to three months in prison, to be followed by three years of supervised release and ordered to pay restitution.
If convicted, the defendants face up to 20 years in prison and a fine of up to $250,000. They also face forfeiture of the proceeds of their offenses.
An indictment is merely an accusation and is not evidence of guilt. All defendants are presumed innocent unless and until proven guilty in a court of law.
The case was investigated by the USDA Office of Inspector General and the Tennessee Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Henry Leventis.
Former Spring Hill Police Officer Pleads Guilty to Federal Civil Rights ViolationRead the Press Release
Former Spring Hill Police Officer Christopher Patrick Odom, 27, of Spring Hill, Tennessee, pleaded guilty today in U.S. District Court to one count of deprivation of rights under color of law for engaging in unwanted sexual contact with a female motorist while on duty as a police officer, announced Donald Q. Cochran, U.S. Attorney for the Middle District of Tennessee.
“This office will never tolerate such an abuse of power by a public servant.” Said U.S. Attorney Cochran. “The few who choose to dishonor their badge and violate their oath will be held accountable for their actions. I commend the Tennessee Bureau of Investigation for initiating a swift and thorough investigation which ultimately led to this defendant pleading guilty.”
According to the indictment and statements made during the plea hearing, Odom initiated a traffic stop on the female victim during the late evening hours of June 25, 2016. Upon approaching the victim’s car, Odom ordered her to write her name and phone number or date of birth on a piece of paper. Thereafter, Odom ordered the victim out of her car and brought her to the side of his patrol car. He then tried to kiss the victim and put his hands down her pants. He then grabbed the victim’s hand and placed it on his penis. Odom also lied to the victim about his name before finally allowing her leave the scene.
Odom previously pleaded guilty to state charges of sexual battery and official misconduct regarding other female motorists in Maury County and is facing similar state charges in Williamson County.
Odom faces up to one year in prison and a $100,000 fine. He will be sentenced by United States District Judge Aleta Trauger on March 9, 2018. His sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
This case was investigated by the Tennessee Bureau of Investigation in consultation with the Department of Justice Civil Rights Division. Assistant United States Attorneys Henry Leventis and Sara Beth Myers are prosecuting the case.
Investment Advisor Sentenced to Federal Prison for Investment Fraud SchemeRead the Press Release
Francisco Reynier Arias, Jr., 49, of Winter Park, Florida and formerly of Nashville, was sentenced today to 70 months in prison for operating an investment fraud scheme, which defrauded investors of over $6.5 million dollars, announced U.S. Attorney Donald Cochran of the Middle District of Tennessee.
Arias was indicted in 2011 and pleaded guilty in October 2015 to money laundering and wire fraud. According to court documents and evidence presented at the sentencing hearing, Arias owned and operated Adieus, an investment company in Nashville, which purportedly specialized in foreign currency trading. Arias lied to investors about his abilities as a foreign currency trader by claiming that he had a special insight into the market when in fact he did not. He also lied to investors by claiming that he was a decorated war hero who helped capture Saddam Hussein.
Instead of investing client funds, Arias diverted funds for his own personal use, including paying down the mortgage on his home; paying a family member’s college tuition at Vanderbilt University; family trips, including a gambling trip to Las Vegas; landscaping for his house, including the construction of a swimming pool; and purchasing motorcycles to add to his motorcycle collection. Arias continued his investment scheme by paying off some of the investors with subsequent investments. This scheme caused some of the investors to lose their retirement accounts and life savings.
In addition to the term of prison imposed, U.S. District Court Judge Marvin E. Aspen, ordered Arias to serve three years of supervised release and to pay $6,749,563.50 in restitution to the victims of the offense.This case was investigated by the FBI and the IRS-Criminal Investigation. Assistant United States Attorneys Ryan R. Raybould and Cecil W. VanDevender prosecuted the case.
Tennessee Woman Convicted of Stolen ID Refund FraudRead the Press Release
An Antioch, Tennessee, woman was convicted today by a federal jury sitting in Nashville, Tennessee, of eight counts each of wire fraud and aggravated identity theft, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Donald Q. Cochran for the Middle District of Tennessee.
According to the indictment and evidence presented at trial, in January and February 2012, Monique Ellis, used stolen IDs, including those of prisoners held by the Alabama Department of Corrections, to file tax returns with the Internal Revenue Service (IRS) seeking fraudulent refunds. Ellis directed the fraudulently obtained refunds to bank accounts that she controlled, causing a tax loss of $121,851.10.
Sentencing is scheduled for Jan. 9, 2018 before U.S. District Court Judge Gershwin A. Drain. Ellis faces a statutory maximum sentence of 20 years in prison for each count of wire fraud and a mandatory two year sentence for each count of aggravated identity theft. She also faces a period of supervised release, restitution, and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Cochran thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Henry Leventis, and Trial Attorney Lauren Castaldi of the Tax Division, who are prosecuting this case.
Tennessee Woman Convicted of Stolen ID Refund FraudRead the Press Release
An Antioch, Tennessee, woman was convicted today by a federal jury sitting in Nashville, Tennessee, of eight counts each of wire fraud and aggravated identity theft, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Donald Q. Cochran for the Middle District of Tennessee.
According to the indictment and evidence presented at trial, in January and February 2012, Monique Ellis, used stolen IDs, including those of prisoners held by the Alabama Department of Corrections, to file tax returns with the Internal Revenue Service (IRS) seeking fraudulent refunds. Ellis directed the fraudulently obtained refunds to bank accounts that she controlled, causing a tax loss of $121,851.10.
Sentencing is scheduled for Jan. 9, 2018 before U.S. District Court Judge Gershwin A. Drain. Ellis faces a statutory maximum sentence of 20 years in prison for each count of wire fraud and a mandatory two year sentence for each count of aggravated identity theft. She also faces a period of supervised release, restitution, and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Cochran thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Henry Leventis, and Trial Attorney Lauren Castaldi of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Gang Member Sentenced to Prison After Lying to Grand JuryRead the Press Release
Keno Deandre Lane, aka Savage, 25, of Nashville, Tenn., was sentenced on October 6, 2017, to five years in prison, followed by three years of supervised release, for making a false declaration before a grand jury, announced United States Attorney Donald Q. Cochran of the Middle District of Tennessee.
Lane was indicted in April 2016 and pleaded guilty earlier this year to lying to a grand jury, obstructing justice and being an unlawful drug user in possession of a firearm.
“Serious consequences, including significant time in federal prison, await those who choose to lie during a grand jury proceeding,” said U.S. Attorney Cochran. “The U.S. Attorney’s Office will vigorously prosecute those who impede the grand jury’s work by giving false testimony or otherwise interfere with this critical part of the criminal justice system.”
According to court documents, Lane was a Five Deuce Hoover Crip gang member and on September 11, 2015, Metropolitan Nashville Police officers encountered Lane, who was in possession of a firearm. Subsequent investigation determined that this firearm was originally taken during the armed robbery of a Cricket Wireless store near the J.C. Napier neighborhood on January 22, 2015. This same firearm was later used in three armed robberies, as well as the murder of Isaiah Starks, aka Blue, which occurred on February 9, 2015 in the J.C. Napier public housing development. Lane was later subpoenaed to testify before a federal grand jury investigating those crimes, and intentionally lied to the grand jury about when and how he obtained that firearm.
Three other defendants, Aweis Haji-Mohammed, Marquis Brandon, and Reginald Johnson, are charged in connection with this case and their cases are pending. They are presumed innocent of the charges against them unless and until proven guilty in a court of law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Metropolitan Nashville Police Department – Gang Unit. The case is being prosecuted by Assistant United States Attorney Sunny A.M. Koshy.
Two Murfreesboro Men Indicted for Conspiracy and Civil Rights Violations in Islamic Center VandalismRead the Press Release
A federal grand jury in Nashville, Tennessee, yesterday, returned an indictment charging two Murfreesboro men, Charles Dwight Stout, III, 19, and Thomas Avery Gibbs, 18, with conspiring to commit a civil rights violation and committing a civil rights violation through damaging and defacing the Islamic Center of Murfreesboro.
The indictment was announced by Donald Cochran, U.S. Attorney for the Middle District of Tennessee, and Michael T. Gavin, Special Agent in Charge of the Memphis Field Office of the FBI.
The indictment alleges that Charles Stout and Thomas Gibbs vandalized the Islamic Center by placing bacon, a pork product forbidden by Islam, around an entrance; spray painted profane references to Allah on multiple parts of the Center’s exterior; concealed their identity in the commitment of these crimes by wearing masks; and the mask worn by Stout was a World War II-era Nazi gas mask.
The indictment also alleges that following the vandalism, Stout destroyed the clothing that he wore and permanently deleted the photographs of the vandalism that he took with his cell phone. Stout was previously indicted on August 30, 2017, for obstructing a federal investigation by deleting photographic evidence.
Members of the Islamic Center discovered the vandalism when they attended Morning Prayer on July 10, 2017, and immediately reported it to law enforcement.
If convicted, both men face up to a year in prison. An indictment is merely an accusation and is not evidence of guilt. The defendants are presumed innocent unless and until proven guilty in a court of law.
U.S. Attorney Cochran commended the work of the FBI and the Rutherford County Sheriff’s Office, who worked together to investigate this case and identify the suspects. Assistant United States Attorneys Sara Beth Myers and Henry C. Leventis are prosecuting the case.
Murfreesboro Podiatrist Convicted of 16-Month Scheme to Defraud Medicare and Other Health Care Benefit ProgramsRead the Press Release
Podiatrist John J. Cauthon, 51, of Murfreesboro, Tenn., was convicted today by a federal jury of four counts of health care fraud involving a 16-month scheme to defraud Medicare and other health care benefit programs, announced Donald Q. Cochran, U.S. Attorney for the Middle District of Tennessee. The convictions came after a two-week trial before United States Chief District Judge Waverly D. Crenshaw, Jr. Cauthon was also acquitted of three counts of health care fraud.
According to the Indictment and the evidence presented at trial, from May 2014 to August 2015, Cauthon executed a scheme to defraud Medicare, TennCare, and Blue Cross Blue Shield of Tennessee by submitting false and fraudulent claims for surgical procedures he did not perform. Cauthon traveled around to nursing homes across Tennessee and up-coded routine foot care to nail avulsions, which is paid out a higher rate by Medicare. Cauthon’s former employees testified at trial that they witnessed him prescribe medically unnecessary ankle braces to bed-bound patients and witnessed him pocket Medicare funds after durable medical equipment was returned or never picked up by patients.
Cauthon is scheduled to be sentenced on January 26, 2018. He faces up to 10 years in prison and a $250,000 fine for each count of health care fraud.
This case was investigated by the U.S. Department of Health and Human Services - Office of Inspector General; the Tennessee Bureau of Investigation; and the United States Attorney’s Office for the Middle District of Tennessee. Assistant U.S. Attorneys Henry C. Leventis and Ryan R. Raybould are prosecuting the case.
17 1/2 Year Sentence Imposed on Leader of Mexico-Based Heroin RingRead the Press Release
Jorge Andres Lopez Montiel a/k/a Arturo Jiminez-Lopez a/k/a “Jimmy”, 27, of Nashville, Tenn. and Nayarit, Mexico, a Mexican citizen who had been previously deported from the United States, was sentenced to 17 ½ years in prison for leading a heroin-trafficking conspiracy from Mexico, announced Donald Q. Cochran, United States Attorney for the Middle District of Tennessee.
“This prison sentence reflects the commitment of our prosecutors and our law enforcement partners in bringing major drug traffickers to justice,” said U.S. Attorney Cochran. “The U.S. Attorney’s Office and our law enforcement partners will aggressively investigate and prosecute those whose illegal drug trafficking continues to fuel the opioid epidemic facing this nation.”
Montiel pleaded guilty in May 2017 to possessing heroin with intent to distribute and conspiring to distribute heroin and methamphetamine. According to court documents, Montiel was arrested in September 2009 and was in possession of approximately one-half pound of heroin, a firearm and approximately $20,000 in cash. He was indicted by a federal grand jury in October 2009 but was deported to Mexico before he could be taken into federal custody on these charges. After Montiel was deported to Mexico, he continued to distribute heroin and later methamphetamine, through a network of distributors acting at his direction, who transferred the proceeds of the drug sales to Mexico, often through wire transfers.
Beginning in mid-2013, the Specialized Investigations Division of the Metropolitan Nashville Police Department used undercover officers and confidential informants to repeatedly order heroin from Montiel through calls to Mexico. Montiel sent various co-conspirators to deliver the heroin and the transactions often occurred in restrooms at retail stores. As a result of this investigations, 22 persons were arrested on local charges, and approximately 14 pounds of heroin and one and one-half pounds of methamphetamine was seized.
On March 31, 2015, a confidential informant obtained about one pound of high-purity methamphetamine through contact with Montiel. MNPD officers then obtained a search warrant to search the residence where that transaction occurred. Officers executed the search warrant on April 1, 2015, and were met by gunfire as they entered the residence. Matthew McKervey, 26, of Nashville, was charged with firearm and drug offenses and is currently awaiting trial.
Montiel was arrested on May 30, 2016, as he illegally re-entered the United States from Mexico, and eventually pleaded guilty to the drug trafficking offenses in this case.
In addition to Montiel, four others were charged with federal offenses; Matthew McKervey, 28; Brian Goforth, 44; Daniel Alcala, 29; and David Becerra-Ruiz, 42, all of Nashville. Goforth’s case is pending and Becerra-Ruiz was recently sentenced to 10 years in prison. Matthew McKervey and Daniel Alcala are pending trial on federal charges and are presumed innocent until proven guilty in a court of law.
This case was investigated by the Metropolitan Nashville Police Department – Specialized Investigations Division and the Drug Enforcement Administration. The case is being prosecuted by Assistant United States Attorney Sunny A.M. Koshy.
Former Executive Director of Birmingham Volunteer Lawyer Program Sentenced for Misapplication of Federal Program FundsRead the Press Release
Kelli Hogue Mauro, 48, of Birmingham, Alabama, and former Executive Director of the Birmingham Volunteer Lawyers Program, was sentenced yesterday to five years of probation and five months of home confinement for misapplication of property worth at least $5,000 from a federal program, announced U.S. Attorney Donald Cochran of the Middle District of Tennessee.
Mauro also was ordered to pay restitution in the amount of $10,228.32 to the Birmingham Volunteer Lawyers Program and was fined $10,000. The Court also imposed the following requirements: Mauro must complete a financial responsibility program under the supervision of the United States Probation Office and report back to the District Court Judge after completion of that program; Mauro must write an open letter of apology to the Birmingham Bar Association, the Birmingham Volunteer Lawyers Program and the Cumberland School of Law; and Mauro must complete 20 hours of community service work.
In pronouncing sentence, Chief U.S. District Court Judge Karon O. Bowdre stated, “This crime was one I can only rationalize as being one of greed.” Judge Bowdre observed that Mauro’s license to practice law had been suspended and characterized Mauro’s offense as “a sin against the profession as a whole.”
The criminal information, filed on April 19, 2017, charged that between January 1, 2012 and August 31, 2012, Mauro misappropriated property owned by and under the control of the Birmingham Volunteer Lawyers Program, an organization that received benefits in excess of $10,000 from grants made by the federal Legal Services Corporation through Legal Services Alabama.
According to the court documents, Mauro made approximately 100 transactions that benefitted herself and her family for a total loss to the Birmingham Volunteer Lawyers Program of $35,116. Court documents also reflect that Mauro previously repaid or returned property valued at $21,145 and that Mauro was credited with $3,742.68 for expenses she incurred on behalf of the Birmingham Volunteer Lawyers Program that were not previously reimbursed by the program. Mauro expressed her intention to immediately pay the $10,228.32 in restitution owed to the Birmingham Volunteer Lawyers Program to the District Court Clerk before leaving the courthouse.
The criminal information was filed in the United States District Court for the Northern District of Alabama by the Office of the United States Attorney for the Middle District of Tennessee. The Office of the United States Attorney for the Northern District of Alabama was recused from the matter to avoid any appearance of partiality in the prosecution of Mauro.
This case was investigated by the Office of Inspector General for the Legal Service Corporation. Assistant U.S. Attorney Byron M. Jones of the Middle District of Tennessee prosecuted the case.
Donald Q. Cochran Sworn in as United States AttorneyRead the Press Release
Donald Q. Cochran was sworn in today as the United States Attorney for the Middle District of Tennessee. In a brief ceremony, Chief U.S. District Judge Waverly Crenshaw, Jr., administered the oath of office, making Cochran the District’s top federal prosecutor.
Cochran was nominated by President Donald Trump on June 29, 2017 and he was confirmed by the United States Senate on September 14, 2017.
“I am extremely humbled by the confidence that President Trump has shown in me by virtue of this nomination,” said U.S. Attorney Cochran. “I look forward to serving the people of Middle Tennessee and continuing the fine work of the U.S. Attorney’s Office and our many law enforcement partners in seeking justice on behalf of the American people.”
Prior to his appointment as U.S. Attorney, Cochran was a law professor at Belmont University School of Law and served as an Assistant U.S. Attorney in the Northern District of Alabama. He also served as a Deputy District Attorney in Birmingham and was an Army Ranger and Special Forces Officer.
Clarksville Man Indicted for Making False Statements to Obtain Subsidized Housing BenefitsRead the Press Release
Joseph Fulmore, Jr., 45, of Clarksville, Tenn., was indicted yesterday by a federal grand jury for making false statements in order to obtain public housing benefits, announced U.S. Attorney Mark H. Wildasin of the Middle District of Tennessee.
According to the indictment, on July 6, 2012, Fulmore made application to lease a public housing unit, operated and maintained by the Clarksville Housing Authority (CHA). Federal regulations mandate that applicants for public housing complete an application for admission and continued occupancy as part of an eligibility determination process, which includes disclosing all income, earnings and assets of individuals living in the unit.
The indictment alleges that also in July 2012, Fulmore applied for and obtained an FHA loan to purchase a single family home. The loan application for this property listed income and assets not previously reported to the CHA, including a monthly beneficiary payment in the amount of approximately $2,800.00.
Fulmore subsequently purchased and moved to the single family home and lived there until April 2014, when foreclosure proceedings were initiated against this property. During this time, the indictment alleges that Fulmore continued to make the reduced rental payments for the public housing unit and resumed living there after the foreclosure, until August 2016.
Finally, the indictment alleges that for each of the three subsequent years that Fulmore received the public housing benefits, he submitted annual certifications to the CHA, which falsely reported and concealed his true assets and household income, which allowed him to fraudulently receive a subsidized public housing unit to which he was not entitled.
If convicted, Fulmore faces up to five years in prison and a $250,000 fine.
This case was investigated by the U.S. Department of Housing and Urban Development-Office of Inspector General. Assistant U.S. Attorney Stephanie N. Toussaint is prosecuting the case.
An indictment is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
Nashville Man Sentenced to 25 Years in Prison for Federal Firearms Violations Resulting from Shooting 62 Year-Old ManRead the Press Release
George Ivory aka GI, 27, of Nashville, Tenn., was sentenced today to 25 years in prison, for being a felon in possession of ammunition and other federal drug and firearm offenses, as a result of shooting 62 year-old Cecil Grissette on May 1, 2015, announced Mark H. Wildasin, U.S. Attorney for the Middle District of Tennessee. Although the firearm used during the commission of the crime was not recovered, shell casings found at the scene formed the basis for the charge.
“As this case demonstrates, drug dealing and gun violence are inextricably linked and have serious consequences, said U.S. Attorney Wildasin. “Cases such as this remain a top priority of this office and will be diligently pursued by this office and our law enforcement partners.”
Ivory was indicted on May 27, 2015, and pleaded guilty in November 2016, to possession of cocaine with intent to distribute, attempted Hobbs Act robbery, discharging a firearm in relation to a crime of violence, and being a convicted felon in possession of ammunition.
According to court documents, Cecil Grissette was in the area of 16th Avenue North and Buchanon Street, in Nashville, attempting to buy crack cocaine from an individual when Ivory demanded that Grissette buy crack cocaine from him instead. When Grissette decided to buy the drugs from the other dealer, Ivory shot Grissette in the head, torso, and leg. Grissette survived the shooting but was left blinded and received other life altering injuries as a result.
In pronouncing the sentence, Senior U.S. District Judge Marvin E. Aspen of the Northern District of Illinois, sitting by designation in the Middle District of Tennessee, stated that he hopes Ivory will "smarten up" and decide whether he wants to be involved in street life when he gets out of prison and if he chooses to do so, Judge Aspen warned Ivory that he would spend the rest of his life in prison.
This case was investigated by the Metropolitan Nashville Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorneys Sunny A.M. Koshy and Ahmed Safeeullah prosecuted the case.
Mark H. Wildasin Appointed U.S. AttorneyRead the Press Release
Attorney General Jeff Sessions has appointed Mark H. Wildasin to serve as the U.S. Attorney for the Middle District of Tennessee, following the retirement of Acting U.S. Attorney Jack Smith.
Mr. Wildasin has served as the Civil Chief for the U.S. Attorney’s Office in Nashville since January 2006. As the Civil Chief, Mr. Wildasin oversaw a team of Assistant U.S. Attorneys responsible for litigating civil matters where the United States is either the plaintiff seeking to recover damages on behalf of the United States or acting to defend the government in defensive actions. As the Chief of the Civil Division he was also responsible for asset forfeiture and collecting debts owed to the United States. His team was responsible for collecting and recovering record numbers of debts and financial settlements on behalf of the government.
While serving as the Civil Chief, in October 2011 Mr. Wildasin was detailed to the American Embassy in Baghdad, Iraq, where he served for a year as an attorney advisor in the Office of the Justice Attaché.
Prior to joining the U.S. Attorney’s Office, Mr. Wildasin was a member of the Nashville law firm Waller, Lansden, Dortch & Davis, specializing in commercial litigation including trademark, copyright, antitrust, and other competition issues.
Mr. Wildasin previously practiced antitrust and intellectual property litigation as an associate, then partner, in the San Francisco office of the international law firm Coudert Brothers and was clerk to the Honorable Thomas A. Higgins, U.S. District Judge for the Middle District of Tennessee. He received his A.B. degree in political science from Duke University, and earned his law degree from Vanderbilt Law School in 1991 where he was Research Editor for the Vanderbilt Journal of Transnational Law.
Mr. Wildasin will serve in this capacity for 120 days or until a presidentially appointed U.S. Attorney is confirmed by the United States Senate.