Middle District of Tennessee
Press releases recorded for this federal judicial district.
Seven Individuals Facing Federal Charges in Deadly Fentanyl Distribution ConspiracyRead the Press Release
Seven individuals are facing federal drug distribution charges following an extraordinary number of drug overdoses in July of this year, all in the Murfreesboro area, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Joining Rivera in announcing the charges at a Noon news conference were Assistant Special Agent in Charge of the Drug Enforcement Administration in Tennessee, Christopher Tersigni; Mark Gwyn, Director of the Tennessee Bureau of Investigation; and Detective Sergeant Tommy Massey of the Murfreesboro Police Department.
In early July of this year, during a 24-hour period, law enforcement and emergency personnel responded to numerous overdose incidents in the Murfreesboro, Tennessee area. During this period, at least two individuals died and many others ended up in hospitals as a result of ingesting and overdosing on Fentanyl, a powerful synthetic opioid commonly prescribed for pain management and relief.
United States Attorney David Rivera stated, “This organization is charged with making and distributing a lethal cocktail that poisoned our communities. Today, those named in this indictment are being held accountable in a court of law for infecting our local neighbourhoods. However, the prosecution of these individuals has not put an end to this problem. The unlawful distribution of fentanyl and counterfeit prescription pills continue to pose a serious risk to our communities at alarming rates. The U.S. Attorney’s Office and our federal, state and local law enforcement partners are committed to identifying for prosecution those who place the public’s safety in jeopardy.”
A federal grand jury sitting in Nashville, yesterday, returned a nine-count indictment against the following persons:
Jonathan Barrett, a.k.a. “Punky,” 29, of Murfreesboro, Tennessee;
Eric Falkowski, 34, of Kissimmee, Florida;
Davi Valles, Jr., 25, of Nashville, Tennessee;
Johnny Williams, 30, of Murfreesboro, Tennessee; and
Jason Moss, 26, of Murfreesboro, Tennessee.
Count one of the indictment charged all five with conspiracy to distribute and possess with intent to distribute fentanyl, the use of which resulted in death and serious bodily injury. One additional count charged all five with distribution of fentanyl, the use of which resulted in death. All five were also charged with five additional counts of distribution of fentanyl, the use of which caused serious bodily injury. Falkowski, Valles, Williams and Moss were also charged with one additional count of distribution of fentanyl that resulted in serious bodily injury. Additionally, Falkowski was charged with one count of distribution of fentanyl resulting in death.
Jennifer Dogonski, 33, of Murfreesboro, Tennessee, was previously charged on July 29, 2016, with conspiracy to distribute and possess with intent to distribute fentanyl, the use of which caused serious bodily injury. She has since pleaded guilty and is awaiting sentencing.
Preston Davis, 22, of Madison, Tennessee, was charged on September 13, 2016, with one count of conspiracy to distribute and possess with intent to distribute fentanyl, the use of which resulted in death. Davis was also charged with possession of an AR-15 assault rifle in furtherance of a drug trafficking crime. Davis’ charges are pending.
According to charging documents, in May 2016, Falkowski moved his pill operation to the home of Preston Davis, in Madison, Tennessee, after law enforcement conducted a search of his home in Florida and seized his pill presses. The indictment further alleges that at Davis’ Madison home, Falkowski and Davis possessed, among other things, a pill press, multiple dies used for embedding text onto pills, including a die for “A333,” a pill grinder, fentanyl, alprazolam and other drug manufacturing equipment.
The indictment alleges that Preston Davis, Davi Valles, Jr., Jonathan Barrett, Johnny Williams and Jason Moss all distributed pills produced by Falkowski and that during the period of July 5-6, 2016, they distributed hundreds of counterfeit Percocet pills containing fentanyl, with the markings “A333” in and around the Murfreesboro, Tennessee area. On July 6, 2016, Barrett learned that some individuals who had purchased the counterfeit pills had overdosed, and that one had possibly died, and then continued to distribute the counterfeit pills. In total, the indictment alleges that the distribution of fentanyl caused two individuals to die and six persons to experience serious bodily injury requiring medical intervention.
“Today’s indictment and enforcement related efforts could not have been possible without the strong partnerships and support of our state and local law enforcement partners as well as the office of the United States Attorney David Rivera,” said DEA Assistant Special Agent in Charge Christopher Tersigni. “Let today’s efforts send a resounding shot to be heard by all that of those who profit from preying on the addicted and distribute the poison that continues to plague our communities at epidemic proportions; they will be investigated and prosecuted to the highest extent of the law.”
TBI Director Mark Gwyn said,” Let me be clear: “This is the emerging drug issue in Tennessee, with the potential to be far more destructive and far more deadly than any other drug issue we’ve worked to fight. We’ve warned the public about this issue several times this year and once again, we would urge anyone with a substance abuse issue to seek help. Turning to the streets to find your next fix isn’t the answer. And it might very well cost you your life.”
Six of the defendants are currently in custody. Jason Moss remains at large and is a fugitive.
If convicted, the defendants charged in this indictment face a mandatory minimum term of twenty years in prison, up to life and up to a $1,000,000.00 fine for each count charged.
This case was investigated by the Drug Enforcement Administration; the Tennessee Bureau of Investigation; and the Murfreesboro Police Department. The case is being prosecuted by Assistant U.S. Attorneys Courtney L. Coker and Amanda J. Klopf.
These charges are merely accusations. All defendants are presumed innocent unless and until proven guilty in a court of law.
Nashville Woman Pleads Guilty to Embezzlement SchemeRead the Press Release
Charlotte McEwen, 50, of Nashville, Tenn., pleaded guilty yesterday to eight counts of wire fraud in connection with a scheme to embezzle approximately $466,331 from her former employer, announced David Rivera, United States Attorney for the Middle District of Tennessee. McEwen was indicted by a federal grand jury on March 16, 2016.
In a hearing before U.S. District Court Judge Aleta Trauger, McEwen admitted to engaging in a scheme to embezzle from her employer, beginning in February 2010 and continuing for more than three years. McEwen admitted that while employed as the sole Payroll Garnishment Processor for Ingersoll Rand, Inc. (“IR”) in Nashville, she fraudulently transferred, via electronic transfers, approximately $466,331 from an IR bank account to her personal bank accounts. The funds McEwen transferred to herself were funds she withheld from IR employee paychecks in her position as IR’s Payroll Garnishment Processor, and pursuant to garnishment orders issued by creditors for unpaid debts owed by IR employees. McEwen then created and submitted fraudulent documents to IR in an attempt to conceal her actions.
McEwen faces up to 20 years in prison on each fraud count. She also faces a criminal fine of up to $250,000 for each fraud count, forfeiture of criminal proceeds, and will be ordered to pay restitution in the amount of $466,331. McEwen will be sentenced by Judge Trauger on January 26, 2017. Her sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
The case was investigated by the United States Secret Service. The United States is represented by Assistant U.S. Attorney Thomas J. Jaworski.
United States Attorney Announces Procedures to Handle Election Fraud and Voting Rights AbusesRead the Press Release
United States Attorney David Rivera announced today that Assistant United States Attorneys (AUSA’s) Henry Leventis and Steve Jordan will lead the efforts of his office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections. AUSA’s Leventis and Jordan have been appointed to serve as the District Election Officers for the Middle District of Tennessee and in that capacity are responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
“Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud,” said U.S. Attorney Rivera. “The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
The franchise is the cornerstone of American democracy. The Department of Justice will ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, AUSA’s Leventis and Jordan will be on duty in this district while the polls are open. They can be reached by the public at the following telephone number: 615-289-8574.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public at 615-232-7500.
Complaints about possible violations of the federal voting rights laws can also be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
United States Attorney Rivera said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my office, the FBI, or the Civil Rights Division.”
Franklin Insurance Agent Pleads Guilty to Fraud Against Elderly ClientRead the Press Release
Scott Rolin, 55, of Franklin, Tenn., pleaded guilty today to one count of wire fraud, announced United States Attorney David Rivera. During a plea hearing before U.S. District Court Judge Waverly Crenshaw, Rolin admitted stealing more than $50,000 from an elderly client of Steele Rolin Co., his Franklin-based insurance agency.
Specifically, Rolin admitted that, between 2011 and 2015, he made unauthorized withdrawals from certain annuity policies that he controlled on behalf of this client, and did so without this client’s knowledge or permission. Rolin forged his client’s endorsement signature on the resulting checks, and deposited funds derived from these checks into his personal checking account and into a business account he controlled. Rolin used these embezzled funds to pay various personal expenses.
Rolin faces up to 20 years in prison and a fine of up to $250,000. In addition, the Court will order Rolin to pay restitution to his former client. Rolin will be sentenced by Judge Crenshaw on January 27, 2017. Rolin’s sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
The case was investigated by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Former Pinnacle Director Pleads Guilty to Insider TradingRead the Press Release
Former lead director of Pinnacle Financial Partners Inc. (“Pinnacle”) and Rutherford County Attorney, James Cope, 67, of Murfreesboro, Tenn., pleaded guilty today to insider trading in connection with Pinnacle’s 2016 acquisition of Avenue Financial Holdings Inc. (“Avenue”), announced Jack Smith, Acting U.S. Attorney for the administration of this case.
“Mr. Cope abused his position of trust as a member of Pinnacle’s board of directors to make a quick profit” said Acting United States Attorney Jack Smith. “His actions undermine the investing public’s confidence in our securities markets. This office will continue to vigorously investigate and prosecute all manner of securities fraud in the Middle District of Tennessee.”
“This plea is the outcome of an aggressive investigation by the FBI and our law enforcement partners into the unfair, fraudulent and illegal activity of an individual who abused his position of trust for personal profit,” said Michael T. Gavin, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “Trading on inside information undermines confidence in our financial markets, and the FBI will continue to work to detect, disrupt and dismantle these types of schemes.”
In a parallel case, the United States Securities and Exchange Commission today announced civil charges against Cope.
According to documents filed in this case and statements made in court, James Cope is a licensed attorney with more than 20 years of experience as a bank director. Pinnacle is a publicly-traded bank headquartered in Nashville, Tennessee. The defendant was a member of the Board of Directors of Pinnacle, served as Chair of the Pinnacle Board of Directors Compensation Committee, and had previously served as Lead Director for Pinnacle.
Pinnacle maintained and enforced a policy prohibiting insider trading by its employees and directors. Under Pinnacle’s “Statement of Policy on Prevention of Insider Trading,” utilization of inside information to transact personal investment decisions was expressly forbidden. Pinnacle’s policy specifically stated that “it is illegal to engage in ‘insider trading,’ which is purchasing or selling securities when one is in possession of material nonpublic information relating to those securities.”
In December 2015, executives of Pinnacle and Avenue began discussions regarding a potential acquisition of Avenue by Pinnacle. On December 1, 2015, the Executive Committee of Pinnacle’s Board of Directors, including Cope, was informed by Pinnacle’s CEO that he had reached out to executives at Avenue to express interest in a merger between Pinnacle and Avenue.
In late December 2015, Cope and other Pinnacle directors were provided certain information in advance of an upcoming Executive Committee meeting to be held on January 5, 2016. This material was not publicly available and discussed a potential acquisition of an unnamed bank. This material also discussed a potential price per share of $19.00 for the proposed acquisition.
On January 5, 2016, Pinnacle executives briefed the Executive Committee on a potential acquisition of Avenue, using the aforementioned information. Cope was present for and participated in this meeting. This meeting included discussion of the proposed Pinnacle/Avenue transaction, including discussion of financial specifics of the target acquisition price of $19.00 per share of Avenue stock. During this meeting, all of the Executive Committee members, including Cope, stated that they were in favor of Pinnacle acquiring Avenue.
On the same day, after learning the aforementioned information regarding Pinnacle’s interest and efforts to acquire Avenue, Cope purchased 6,179 shares of Avenue stock. The approximate price per share for these purchased shares was $13.81. Six days later, on January 11, 2016, he purchased another 4,000 shares of Avenue stock.
On January 29, 2016, after Pinnacle publicly announced its agreement to acquire Avenue, Avenue’s stock price rose to $19.24 per share, resulting in an unrealized profit of over $56,000 for Cope.
According to the terms of his plea agreement, Cope will serve two years of federal probation, the first nine months to be served on home confinement. Cope will also pay a fine of $55,000. Cope will be sentenced by U.S. District Judge Aleta Trauger on November 14, 2016.
Pinnacle disclosed Cope’s conduct and cooperated fully with the federal investigation. The investigation did not reveal any indication of wrong-doing by Pinnacle or any of its other board members or employees.
The case was investigated by the Federal Bureau of Investigation, with assistance from the United States Securities and Exchange Commission’s Atlanta Regional Office. The case is being prosecuted by Assistant U.S. Attorney Henry Leventis.
Navy Veteran Convicted of Making False Statement to Receive Disability Benefit PaymentsRead the Press Release
Edmond Deslatte, 46, of Murfreesboro, Tenn., pleaded guilty Friday to making a false statement to a federal agent in connection with an investigation into his disability benefits payments, announced David Rivera, United States Attorney for the Middle District of Tennessee.
During a plea hearing before U.S. District Court Judge Aleta A. Trauger, Deslatte admitted making a false statement during an April 2011 interview with a special agent with the U.S. Department of Veterans Affairs (“VA”) Office of Inspector General (“OIG”). At the time of the April 2011 interview, Deslatte was receiving 100% disability benefit payments from the VA, although he had been working full-time. At his plea hearing, Deslatte admitted that, during his April 2011 interview, he falsely represented to the VA-OIG agent that medication prescribed for his medical condition had rendered him disabled and unable to work. Deslatte further admitted that he had not been taking the medication as he had represented to the VA-OIG agent.
According to Deslatte, he made the misrepresentations in an effort to continue receiving disability benefit payments from the VA. In May 2014 a VA physician determined that Deslatte did not suffer from the medical condition that had supposedly rendered him disabled, and the VA subsequently terminated Deslatte’s disability payments. The intended loss associated with Deslatte’s misrepresentations to the VA was approximately $148,000.
Deslatte faces up to 5 years in prison and a fine of up to $250,000. Deslatte will be sentenced by Judge Trauger on January 19, 2017. Deslatte’s sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
The case was investigated by the VA Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Six Fort Campbell Soldiers and Two Others Charged with Stealing and Selling Sensitive Military EquipmentRead the Press Release
Eight individuals, including six Fort Campbell soldiers, were indicted by a federal grand jury in Nashville, Tenn. yesterday and charged in connection with a conspiracy to steal sensitive U.S. Army equipment which was ultimately sold and shipped to anonymous eBay bidders, including some located in foreign nations.
Federal law enforcement agents began arresting those charged early this morning. Five are currently in custody and two others are expected to surrender later.
This announcement was made by U.S. Attorney David Rivera at a mid-morning press conference in Nashville. Rivera was joined by Robert Hammer, Resident Agent in Charge of Homeland Security Investigations (HSI); and Tracey D. Montan᷉o, Special Agent in Charge of the IRS-Criminal Investigation (IRS-CI) in Nashville.
“The actions of the soldiers charged today should in no way stain the honor of the brave men and women who proudly serve in our country’s armed forces and selflessly give everything to protect America’s freedom,” said U.S. Attorney David Rivera. “To the contrary, we never want to allow the illegal and self-serving actions of a few to cast a shadow on the thousands of military heroes who every day place themselves in harm’s way to protect this great nation. Today we seek both to hold accountable all those who seek to financially profit from the illegal sale of stolen, sensitive and restricted military equipment as well as to thank the U.S. military personnel around the world whose dedication and service safeguards us all.”
Those charged in the indictment are:
- John Roberts, 26, of Clarksville, Tenn;
- Cory Wilson, aka Jason Cory Wilson, 42, of Clarksville;
- U.S. Army Sergeant Michael Barlow, 29, of Clarksville;
- U.S. Army Sergeant Jonathan Wolford, 28, of Clarksville;
- U.S. Army Specialist Kyle Heade, 29, of Fort Campbell, Kentucky;
- U.S. Army Specialist Alexander Hollibaugh, 25, of Fort Campbell;
- U.S. Army Specialist Dustin Nelson, 22, of Fort Campbell; and
- U.S. Army Specialist Aaron Warner, 24, of Fort Campbell.
According to the indictment, the soldiers charged stole more than $1 million worth of sensitive military equipment from the U.S. Army installation at Fort Campbell and sold it to others, including Roberts and Wilson, who then re-sold the equipment on eBay. The items sold included sniper telescopes and rifle accessories, machine gun parts and accessories, grenade launcher sights, flight helmets, communication headsets, body armor and medical supplies. Many of these items were advertised as “Army Special Forces” and U.S. Government Issued (“USGI”).
The indictment also alleges that Roberts and Wilson illegally sold certain restricted U.S. Army equipment, including night vision helmet mounts, to eBay customers located in foreign nations including Russia, China, Hong Kong, Kazakhstan, Ukraine, Lithuania, Moldova, Malaysia, Romania, and Mexico. The indictment also alleges that Wilson sold flight helmet mounts, advertised as USGI, to buyers in Russia, China, and Kazakhstan and Roberts sold advanced communications headset helmets to buyers in Russia and China.
The indictment charges each defendant with conspiring to steal or receive U.S. Army property and to sell or convey U.S. Army property without authority. In addition, Roberts was charged with 10 counts of wire fraud and one count of violating the Arms Export Control Act, and Wilson was charged with 7 counts of wire fraud, one count of money laundering, and one count of violating the Arms Export Control Act. Barlow was also charged with three counts of selling or conveying U.S. Army property without authority.
"As reflected by our name, HSI considers the national security interests of our nation among our top priorities,” said Special Agent in Charge Raymond R. Parmer, of HSI New Orleans. “It's especially disturbing when we identify corrupted members of our military who undermine the welfare of this this country, so we, along with our law enforcement partners, shall continue to aggressively investigate this type of criminal activity." Parmer is the Special Agent in Charge of the New Orleans field office with responsibility for Tennessee, Alabama, Arkansas, Mississippi, and Louisiana.
“The security of our nation is also a top priority for IRS Criminal Investigation,” stated Tracey D. Montaño, Special Agent in Charge, IRS-Criminal Investigation. “Those who compromise the safety of the American public and our military personnel in the interest of greed will be held accountable for their actions. IRS-CI remains committed to its partnership with other law enforcement agencies to investigate these types of egregious acts”. Montaño is the Special Agent in Charge of the Nashville Field Office with responsibility for Tennessee, Kentucky, and Arkansas.
Each defendant faces up to five years in prison and a fine of up to $250,000 on the conspiracy charge. Roberts and Wilson face up to 20 years for each count of wire fraud and violating the Arms Export Control Act and Wilson faces up to an additional 20 years on the money laundering charge. In addition, Barlow faces up to 10 years in prison on each conveying charge. The defendants also face forfeiture of the proceeds of their crimes. Any sentences would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
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 HSI, U.S. Army Criminal Investigation Command, and the IRS-CI. The case is being prosecuted by Assistant U.S. Attorneys William F. Abely and Thomas J. Jaworski.
Six Fort Campbell Soldiers and Two Others Charged with Stealing and Selling Sensitive Military EquipmentRead the Press Release
Indictment Alleges Some Restricted Equipment Sold to Customers in Foreign Nations
Eight individuals, including six Fort Campbell soldiers, were indicted by a federal grand jury in Nashville, Tennessee, yesterday and charged in connection with a conspiracy to steal sensitive U.S. Army equipment which was ultimately sold and shipped to anonymous eBay bidders, including some located in foreign nations.
This announcement was made by U.S. Attorney David Rivera for the Middle District of Tennessee at a mid-morning press conference in Nashville. U.S. Attorney Rivera was joined by Resident Agent in Charge Robert Hammer of Homeland Security Investigations (HSI); and Special Agent in Charge Tracey Montan᷉o of the Internal Revenue Service-Criminal Investigation (IRS-CI) in Nashville.
“The actions of the soldiers charged today should in no way stain the honor of the brave men and women who proudly serve in our country’s armed forces and selflessly give everything to protect America’s freedom,” said U.S. Attorney Rivera. “To the contrary, we never want to allow the illegal and self-serving actions of a few to cast a shadow on the thousands of military heroes who every day place themselves in harm’s way to protect this great nation. Today we seek both to hold accountable all those who seek to financially profit from the illegal sale of stolen, sensitive and restricted military equipment as well as to thank the U.S. military personnel around the world whose dedication and service safeguards us all.”
Those charged in the indictment are:
- John Roberts, 26, of Clarksville, Tennessee;
- Cory Wilson aka Jason Cory Wilson, 42, of Clarksville;
- U.S. Army Sargent Michael Barlow, 29, of Clarksville;
- U.S. Army Sargent Jonathan Wolford, 28, of Clarksville;
- U.S. Army Specialist Kyle Heade, 29, of Fort Campbell, Kentucky;
- U.S. Army Specialist Alexander Hollibaugh, 25, of Fort Campbell;
- U.S. Army Specialist Dustin Nelson, 22, of Fort Campbell; and
- U.S. Army Specialist Aaron Warner, 24, of Fort Campbell.
According to the indictment, the soldiers charged stole more than $1 million worth of sensitive military equipment from the U.S. Army installation at Fort Campbell and sold it to others, including Roberts and Wilson, who then re-sold the equipment on eBay. The items sold included sniper telescopes and rifle accessories, machine gun parts and accessories, grenade launcher sights, flight helmets, communication headsets, body armor and medical supplies. Many of these items were advertised as “Army Special Forces” and “U.S. Government Issued” (USGI).
The indictment also alleges that Roberts and Wilson illegally sold certain restricted U.S. Army equipment, including night vision helmet mounts, to eBay customers located in foreign nations including Russia, China, Hong Kong, Kazakhstan, Ukraine, Lithuania, Moldova, Malaysia, Romania and Mexico. The indictment also alleges that Wilson sold flight helmet mounts, advertised as USGI, to buyers in Russia, China and Kazakhstan and Roberts sold advanced communications headset helmets to buyers in Russia and China.
The indictment charges each defendant with conspiring to steal or receive U.S. Army property and to sell or convey U.S. Army property without authority. In addition, Roberts was charged with 10 counts of wire fraud and one count of violating the Arms Export Control Act and Wilson was charged with seven counts of wire fraud, one count of money laundering and one count of violating the Arms Export Control Act. Barlow was also charged with three counts of selling or conveying U.S. Army property without authority.
“As reflected by our name, HSI considers the national security interests of our nation among our top priorities,” said Special Agent in Charge Raymond R. Parmer of HSI New Orleans Field Office. “It's especially disturbing when we identify corrupted members of our military who undermine the welfare of this this country, so we, along with our law enforcement partners, shall continue to aggressively investigate this type of criminal activity.”
Parmer is the Special Agent in Charge of the New Orleans Field Office with responsibility for Tennessee, Alabama, Arkansas, Mississippi and Louisiana.
“The security of our nation is also a top priority for IRS Criminal Investigation,” said Special Agent in Charge Montaño. “Those who compromise the safety of the American public and our military personnel in the interest of greed will be held accountable for their actions. IRS-CI remains committed to its partnership with other law enforcement agencies to investigate these types of egregious acts.”
Montaño is the Special Agent in Charge of the Nashville Field Office with responsibility for Tennessee, Kentucky and Arkansas.
Each defendant faces up to five years in prison and a fine of up to $250,000 on the conspiracy charge. Roberts and Wilson face up to 20 years for each count of wire fraud and violating the Arms Export Control Act and Wilson faces up to an additional 20 years on the money laundering charge. In addition, Barlow faces up to 10 years in prison on each conveying charge. The defendants also face forfeiture of the proceeds of their crimes. Any sentences would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
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 HSI, U.S. Army Criminal Investigation Command and IRS-CI. The case is being prosecuted by Assistant U.S. Attorneys William F. Abely and Thomas J. Jaworski.
Nashville Woman Sentenced for Aggravated Identity Theft and Former Metro Nashville Police Officer Sentenced for Unauthorized Use of Police ComputerRead the Press Release
Lakenya Anderson, 37 of Nashville, Tennessee, was sentenced today by Chief U.S. District Court Judge Kevin H. Sharpe, to serve 12 months and one day in prison, to be followed by one year of supervised release, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Anderson was also ordered to pay restitution of $4,000.00 to the IRS.
On July 1, 2016, Anderson pleaded guilty to one count of a 16-count indictment filed on December 9, 2015, charging her and co-defendant, Mackovis Peebles, Jr., with conspiracy to commit wire fraud, filing false claims and aggravated identity theft. As part of the plea agreement, Anderson admitted that on March 7, 2012, she asked Mackovis Peebles, an officer with the Metropolitan Nashville Police Department (MNPD), to obtain the social security numbers of her mother and her father so that she could file income tax returns in their names. On or about March 7, 2012, Peebles used a MNPD issued computer to search for information on Anderson's mother and father. After the search, he provided the social security numbers for both individuals to Anderson without any legitimate law enforcement purpose.
On March 8, 2012, Anderson used the social security numbers and birth dates of her parents that were provided to her by Peebles to file tax returns with the IRS for the tax year 2011, in the names of Anderson's parents, falsely claiming a refund was due to each of them in the amount of $1,000. Anderson received the refund from the IRS claimed for her mother in the form of a bank card. The refund claimed for her father was eventually received in the form of a check which Anderson cashed, keeping part of the money for herself.
Anderson also filed tax returns for the tax year 2011 in the names of two other individuals, that she knew, one of whom was living and one who she knew was deceased in 2010, falsely claiming a refund was due to each of them in the amount of $1,000. Anderson received one refund in the form of a check that was cashed for her by Peebles and one in the form of a bank card. Anderson received at least $1,000 in IRS tax refunds to which she was not entitled.
None of the four individuals whose names Anderson used to file the tax returns above gave her permission to file the returns, and none was entitled to the refund claimed on the returns she filed. When Anderson was confronted by law enforcement officers, she admitted that she asked Peebles to run her parents' names in his police computer to get information she could use to file the tax returns.
On May 17, 2016, Peebles pleaded guilty to one count of a Superseding Information charging him with computer fraud, specifically exceeding authorized access. Peebles admitted that, as a Metro Nashville Police officer, he was trained, tested and certified in the use of the National Crime Information Center (NCIC) system which is a data base that includes a wide range of personal information about individuals. Based on this training and certification, Peebles was allowed to access the NCIC system for legitimate law enforcement purposes.
Peebles admitted that he accessed personal information of Anderson’s parents and provided their social security numbers to Anderson without any legitimate law enforcement purpose in order to maintain his personal relationship with Anderson. On August 22, 2016, Peebles was sentenced to 2 years of probation and ordered to pay a fine of $2,000.00.
This investigation was conducted by IRS-Criminal Investigation, the Federal Bureau of Investigation, the Tennessee Bureau of Investigation, and the Metropolitan Nashville Police Department. Assistant U.S. Attorney Jimmie Lynn Ramsaur represented the government.
Two Tennessee Women Plead Guilty to Tax Return Preparation FraudRead the Press Release
A Nashville, Tennessee resident and a LaVergne, Tennessee resident pleaded guilty in separate cases this week to assisting in the preparation of false tax returns, announced U.S. Attorney David Rivera for the Middle District of Tennessee and Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division.
According to documents filed with the court, Tracey Brown, 48, of Nashville, operated a tax return preparation business, Total Tax Services, from her residence. Brown admitted that from at least January 2006 through December 2010, she routinely filed false tax returns on behalf of her clients in order to increase their refunds, without her clients’ knowledge or permission. She further admitted that on these false returns she claimed a variety of false items, such as false medical expenses, charitable contributions and business losses, with an intended tax loss of approximately $443,605.
According to court documents, Michelle Theus, 42, of LaVergne, was a tax return preparer operating under the name Cole Tax Services in LaVergne. Theus admitted that from 2009 through 2012 she filed false tax returns on behalf of her clients for the 2008 through 2011 tax years. Unbeknownst to her clients, Theus routinely reported false items on the tax returns she prepared, such as false dependents and false education and childcare credits, in order to increase her clients’ refunds. Theus further admitted that often she would prepare and provide the client with an accurate return and then prepare and file a false tax return in the client’s name that claimed an inflated refund. In most cases, Theus directed the Internal Revenue Service (IRS) to split the fraudulently-inflated refunds into separate bank accounts, having the portion expected by the client deposited into the clients’ bank accounts and having the inflated portion of the refund deposited into one of her or her family members’ accounts. Theus took steps to conceal her wrongdoing from the IRS and her clients by not signing the tax returns she prepared, which gave the IRS the impression that the clients prepared the tax returns themselves and by listing her and her family members’ addresses on the tax returns to divert correspondence from the IRS away from the clients. Theus admitted that she prepared approximately 206 tax returns for her clients and that the intended tax loss for these returns is approximately $450,959.
In addition to preparing false tax returns for her clients, Theus admitted that she prepared and filed false 2009 and 2010 income tax returns for herself that substantially underreported the income she earned from her tax preparation business. Theus failed to report more than $95,000 in income for 2009 and 2010, which resulted in additional tax loss of $37,275.
Brown is scheduled to be sentenced on December 21, 2016 and Theus is scheduled to be sentenced on January 11, 2017. They each face a statutory maximum sentence of three years in prison, as well as a term of supervised release and monetary penalties.
U.S. Attorney Rivera and Principal Deputy Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who conducted the investigations and Assistant U.S. Attorneys Tom Jaworski and S. Carran Daughtrey and Trial Attorneys Alexander Effendi and Nathan Brooks of the Tax Division, who are prosecuting these cases.
Tennessee Man Charged with Threatening to Murder Member of United States CongressRead the Press Release
A Murfreesboro, Tennessee, man was taken into custody this morning by FBI agents and U.S. Capitol Police, after a criminal complaint was issued, charging him with threatening to murder a United States official and transmitting in interstate commerce, a communication containing a threat, announced U.S. Attorney David Rivera for the Middle District of Tennessee.
Agents arrested Keahiokahouna Stewart, 36, at his Murfreesboro home this morning without incident. Stewart is scheduled to make an initial appearance later today before a U.S. magistrate judge in Nashville, Tennessee.
According to the criminal complaint, beginning in August and continuing through Sept. 12, Stewart sent threatening emails and posted threatening videos to Instagram accounts, which he created. In an email dated on Aug. 19, Stewart specifically indicates that he will fly from Nashville to Honolulu, Hawaii, on Nov. 1, with the intent to shoot people at the Princess Jonah Federal Building. The specific targets of these threats were U.S. Senator Mazie Hirono, who represents the state of Hawaii and Congresswoman Tulsi Gabbard, who represents the 2nd District for the state of Hawaii.
The complaint outlines that beginning in November 2013, Stewart sent a series of “Grievances” to various U.S. officials and departments, including President Barack Obama, Senator Hirono and Congresswoman Gabbard, inquiring about Stewart’s social security number. Stewart falsely believed that his social security number had been duplicated and issued to a fellow soldier he met while stationed at Camp Stanley in Korea, in 2002. In subsequent correspondence to the Social Security Administration and Department of Defense, Stewart demands he be awarded 100 percent disability and $50 billion.
As set forth in the complaint, Stewart’s actions continued to be investigated by law enforcement including a May 2015 visit to Senator Hirono’s office in Washington, D.C., which resulted in the U.S. Capitol Police being called. In subsequent Facebook and Instagram posts, Stewart continued to post comments about the issue and display photos of himself with firearms. In an Instagram video posted by Stewart on Sept. 8, he states that he is flying to Honolulu on Nov. 1, and will be traveling with an AR-15 and two handguns. Stewart further states that he has already shipped a silencer for one of the handguns and that it is stored in a garage in Waianae, Hawaii.
Investigators recently determined that Stewart had purchased an airline ticket to travel from Nashville to Honolulu on Nov. 1, however it had been “exchanged,” which would allow the ticket holder to travel on any other date.
If convicted, Stewart faces up to 10 years in prison on the charge of threatening to murder a U.S. official and up to five years in prison on the charge of communicating threats through interstate commerce.
A criminal complaint is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
This case is being investigated by the FBI and the U.S. Capitol Police. The case is being prosecuted by Assistant U.S. Attorney Van Vincent.
Murfreesboro Man Charged with Threatening to Murder Member of United States CongressRead the Press Release
A Murfreesboro, Tenn. man was taken into custody this morning by FBI agents and U.S. Capitol Police, after a criminal complaint was issued, charging him with threatening to murder a United States official and transmitting in interstate commerce, a communication containing a threat, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
Agents arrested Keahiokahouna Stewart, 36, at his Murfreesboro home this morning without incident. Stewart is scheduled to make an initial appearance later today before a U.S. magistrate judge in Nashville.
According to the criminal complaint, beginning in August 2016 and continuing through September 12, 2016, Stewart sent threatening emails and posted threatening videos to Instagram accounts, which he created. In an email dated August 19, 2016, Stewart indicates that he will fly from Nashville to Honolulu on November 1, 2016, with the intent to shoot people at the Princess Jonah Federal Building. The specific targets of these threats were U.S. Senator Mazie Hirono, who represents the State of Hawaii and Congresswoman Tulsi Gabbard, who represents the 2nd District for the State of Hawaii.
The complaint outlines that beginning in November 2013, Stewart sent a series of “Grievances” to various U.S. officials and departments, including Senator Hirono and Congresswoman Gabbard, inquiring about Stewart’s Social Security number. Stewart falsely believed that his SSN had been duplicated and issued to a fellow soldier he met while stationed at Camp Stanley in Korea, in 2002. In subsequent correspondence to the Social Security Administration and Department of Defense, Stewart demands he be awarded 100% disability and $50 billion.
As set forth in the complaint, Stewart’s actions continued to be investigated by law enforcement including a May 2015 visit to Senator Hirono’s office in Washington, D.C., which resulted in the U.S. Capitol Police being called. In subsequent Facebook and Instagram posts, Stewart continued to post comments about the issue and display photos of himself with firearms. In an Instagram video posted by Stewart on September 8, 2016, he states that he is flying to Honolulu on November 1, 2016, and will be traveling with an AR-15 and two handguns. Stewart further states that he has already shipped a silencer for one of the handguns and that it is stored in a garage in Waianae, Hawaii.
Investigators recently determined that Stewart had purchased an airline ticket to travel from Nashville to Honolulu on November 1, 2016, however it had been “exchanged,” which would allow the ticket holder to travel on any other date.
If convicted, Stewart faces up to 10 years in prison on the charge of threatening to murder a U.S. official and up to 5 years in prison on the charge of communicating threats through interstate commerce.
A criminal complaint is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
This case is being investigated by the FBI and the United States Capitol Police. The case is being prosecuted by Assistant U.S. Attorney Van Vincent.
Pikeville Man Charged with Possessing Explosive Device After Device Failed to Detonate CarRead the Press Release
Mitchell Oakes, 41, of Pikeville, Tenn., was charged Saturday with possessing an explosive device and being a convicted felon in possession of an explosive device, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
Oakes was charged in a federal criminal complaint, after a live explosive device was found Saturday, attached to a vehicle parked at the National Healthcare Corporation (NHC), Cool Springs facility in Franklin, Tenn.
“As with so many cases in this district, anytime an incident requires a coordinated response by local, state and federal law enforcement, our law enforcement partners come together and bring a rapid conclusion to an incident which ensures the safety and security of our communities,” said U.S. Attorney David Rivera. “I commend the agencies involved here for their cooperation and swift action in identifying and arresting the offender.”
According to the complaint, a nurse at the facility arrived at her car in the parking lot, after ending her shift at 7:00 a.m. on Saturday. When she opened the car door, she discovered a device attached to the inside of the driver’s door. She noticed the device had wires attached to it and immediately believed it to be an explosive device.
Subsequent investigation by local, state and federal law enforcement, determined the device was in fact a live explosive. Law enforcement explosive specialists moved the device to a safe area, where it exploded during an attempt to render the device safe.
Further investigation by law enforcement officials determined that the apparent intended victim was estranged from her husband, Mitchell Oakes, and had obtained an Order of Protection against him on June 10, 2016, in Chesapeake City, Virginia. She also told law enforcement officials that Oakes had extensive knowledge and experience in manufacturing and using explosive materials and that she had received a threatening phone call from him earlier in the week.
Law enforcement officials were able to analyze the cell phone GPS data of Oakes’ phone and determined that the phone travelled from the Pikeville, Tenn. area to the immediate area of the NHC facility in Franklin, Tenn. and returned to the Pikeville area during the time period surrounding the incident.
According to the complaint, in January 2007, Mitchell Oakes was previously convicted of solicitation to commit second degree murder in Cumberland County, Tenn. and had been sentenced to four years in prison. Oakes was also convicted of being a felon in possession of a firearm in Bledsoe County, Tenn. in 2014.
If convicted of these offenses, Oakes faces up to 10 years in prison on each charge.
A criminal complaint is merely an accusation and is not evidence of guilt. The defendant is presumed innocent unless and until proven guilty in a court of law.
This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives; the FBI; the Tennessee Highway Patrol; the Tennessee Bureau of Investigation and the Franklin Police Department. Assistant U.S. Attorney Van Vincent is prosecuting the case.
Nashville Man Convicted of Robbing and Shooting Drug DealerRead the Press Release
Montrez E. Duncan a/k/a Money, 33, of Nashville, Tenn., was convicted yesterday by a federal jury, after a 6-day trial, of conspiracy to commit Hobbs Act Robbery, Robbery and carrying, brandishing and discharging a firearm during a crime of violence, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
According to the proof at trial, Duncan and three other men obtained information which led them to believe that a known drug dealer would have a substantial amount of cocaine and cash, derived from prior drug sales, stashed in his home. On September 26, 2012, Duncan and the co-conspirators followed the individual to his home, where they surreptitiously entered the home, tied up the individual, and threatened to kill him while pointing a gun at the back of his head. The robbers then took a substantial quantity of cocaine and cash from the home. After the home invasion and robbery, Duncan and the others kidnapped the individual, forced him into a van, took his car and forced him to contact other people to obtain more cocaine and cash. Duncan and the others then waited and monitored the individual as he took delivery of more drugs and cash from those he was forced to call.
The trial proof showed that after Duncan and the others decided that the individual was of no further value to them, they drove to a field in a rural part of Davidson County. While Duncan attempted to stuff the bound individual into the trunk of his car, the others poured gasoline in the interior of the car in order to light the car and the individual on fire. The individual was able to break free and as he fled, was chased and shot by one of the assailants before he made it to a nearby house, where residents called police.
The evidence also showed that Duncan and the others planned to use the proceeds from this robbery to pay attorney fees for a potential serious state charge which Duncan feared was going to be filed against him and his girlfriend. Duncan provided $20,000 in cash from this robbery to his mother to use for attorney fees, and the co-conspirators then sold the cocaine taken in the robbery.
Duncan is scheduled to be sentenced on December 12, 2016, and faces up to life in prison.
Two of the defendants in this case, Victor Jones, 28, and Raymond Wilson, 26, both of Nashville, have pleaded guilty to charges as a result of this investigation and are awaiting sentencing. The fourth charged defendant, Javonte Fitzgerald a/k/a Pooh Man, 23, also of Nashville, is set for trial in December 2016. Fitzgerald is presumed innocent unless and until found 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. The case is being prosecuted by Assistant United States Attorneys Philip H. Wehby and Sunny A.M. Koshy.
The United States Files False Claims Act Complaint Against Brentwood, Tennessee – Based Vanguard Healthcare, LLCRead the Press Release
The United States has filed a False Claims Act lawsuit against Vanguard Healthcare LLC, and six of its nursing homes and related entities, as well as Vanguard’s Director of Operations, announced David Rivera, U.S. Attorney for the Middle District of Tennessee and Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice Civil Division.
The six Vanguard facilities include Boulevard Terrace, LLC operating as Boulevard Terrace Rehabilitation and Nursing Center in Murfreesboro, Tennessee; Vanguard of Crestview operating as Crestview Health and Rehabilitation in Nashville, Tennessee; Glen Oaks, LLC operating as Glen Oaks Health and Rehabilitation in Shelbyville, Tennessee; Imperial Gardens Health and Rehabilitation, LLC, which previously operated Imperial Gardens Health and Rehabilitation, LLC in Madison, Tennessee and has ceased operations; Manchester Health Care Center, in Manchester, Tennessee, which is operated by Vanguard of Manchester, LLC; and Vanguard of Memphis, LLC, operating as Poplar Point Health and Rehabilitation in Memphis, Tennessee. The lawsuit also names Vanguard’s former Director of Operations, Mark Miller.
“We are committed to combating elderly abuse, neglect and financial exploitation. We will continue to hold accountable those who profit from the care of elderly Medicare and Medicaid beneficiaries, including nursing home operators, while providing non-existent or grossly substandard care.” said U.S. Attorney David Rivera.”“Our seniors rely on the Medicare and Medicaid programs to help care for them with dignity and respect,” said Benjamin C. Mizer, Principal Deputy Assistant Attorney General. “It is critically important that we confront nursing home operators who put their own economic gain over the needs of their residents. Operators who bill Medicare and Medicaid while failing to provide essential services will be held accountable."
The lawsuit alleges that the defendants were responsible for the submission of false claims to Medicare and TennCare for skilled nursing home services that were either non-existent or grossly substandard. The lawsuit also alleges that the defendants submitted required nursing facility Pre-Admission forms with forged physician and nurse signatures. Vanguard Healthcare, LLC is headquartered in Brentwood, Tennessee and has 14 long-term care nursing home providers operating around the United States.
The United States' complaint alleges that between January 1, 2010 and December 31, 2015, five of the Vanguard facilities failed to provide the most basic and essential skilled nursing services to their residents. These facilities include Boulevard, Crestview, Imperial, Glen Oaks and Poplar Point. The lack of adequate care at the Vanguard facilities included chronic staffing shortages and shortages of critical medical supplies, failure to provide standard infection control, failure to administer medication to residents as prescribed by their physicians, failure to provide wound care as ordered by physicians, failure to adequately manage residents’ pain, and providing unnecessary and excessive psychotropic medications to residents and using unnecessary physical restraints on residents. As a result, Vanguard residents suffered pressure ulcers, falls, dehydration, and malnutrition, among other harms.
The United States' complaint further alleges that Mark Miller, who served as the Director of Operations for Vanguard from September 2011 through August 2014, knew that resident care at the Vanguard facilities was non-existent or grossly substandard but failed to correct these problems.
The United States’ complaint also alleges that from September 2012 through April 2014, the Boulevard Terrace, Glen Oaks, Imperial, Manchester and Poplar Point facilities fraudulently submitted falsified pre-admission forms to TennCare, in order to receive payments from TennCare, which the company was ineligible to receive.
On May 6, 2016, the Vanguard corporate entities named in the government's complaint filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code, which were administratively consolidated in the Middle District of Tennessee.
This matter was investigated by the U.S. Attorney’s Office for Middle District of Tennessee, the Commercial Litigation Branch of the Justice Department’s Civil Division, the Department of Health and Human Services’ Office of Inspector General, the Tennessee Attorney General’s Office and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit. This action is supported by the Elder Justice and Nursing Home Initiative, which coordinates the Department’s activities combating elder abuse, neglect and financial exploitation, especially as they impact beneficiaries of Medicare, Medicaid and other federal health care programs. For more information about the Department’s Elder Justice Initiative, see https://www.justice.gov/elderjustice/.
The claims asserted against the defendants are allegations only, and there has been no determination of liability.
The lawsuit is captioned United States vs. Vanguard, et al., case no. 3:16-cv-2380 (M.D.Tenn 2016).
Brentwood Woman Convicted of Criminal Contempt for Violating Court-Ordered Asset FreezeRead the Press Release
Kennan Dozier, 58, of Brentwood, Tenn., pleaded guilty on September 2, 2016, to criminal contempt of court, for violating a Temporary Restraining Order issued by the U.S. District Court, announced David Rivera, United States Attorney for the Middle District of Tennessee.
In a hearing before U.S. District Court Judge Todd J. Campbell, Dozier admitted her role in violating a Temporary Restraining Order issued by the U.S. District Court for the Middle District of Tennessee in connection with a lawsuit brought by the Federal Trade Commission (“FTC”) and the State of Tennessee in 2010.
The FTC lawsuit included allegations that United Benefits of America, LLC, a company controlled by Dozier’s then-husband, Timothy Thomas, made material misrepresentations during telemarketing calls to consumers seeking health insurance. On August 4, 2010, the U.S. District Court issued a Temporary Restraining Order with Asset Freeze (“Asset Freeze”), which found that there was good cause to believe that the defendants of the lawsuit had engaged in acts that violated certain federal and state laws, and that immediate and irreparable harm could result if certain assets were disposed of. The Asset Freeze specifically prohibited Dozier and Thomas from transferring or disposing of certain funds.
Dozier admitted that, after being served with a copy of the Asset Freeze, she and Thomas approached a mutual friend regarding the fact that their assets had been frozen. This friend was asked to deposit certain checks into her own bank account, and to allow Thomas to use the funds from those checks. Subsequently, this friend deposited several checks into her bank account, including a check payable to Dozier for approximately $129,000, which was derived from United Benefits sales commissions. In addition, Dozier admitted cashing a check for approximately $7,800 after the Asset Freeze had been issued and served.
Dozier is scheduled to be sentenced by Judge Campbell on January 6, 2017.Timothy Thomas, 54 of Franklin, Tenn., was charged in the same indictment as Dozier, and faces charges of mail fraud, wire fraud, money laundering, and criminal contempt. He is scheduled for trial on November 22, 2016. An indictment is merely an accusation and is not evidence of guilt, and Thomas is presumed innocent unless and until proven guilty in a court of law.
The case is being investigated by the U.S. Postal Inspection Service, the Federal Bureau of Investigation, and the U.S. Department of Labor, Employee Benefits Security Administration. The case is being prosecuted by Assistant U.S. Attorneys William F. Abely and Cecil W. VanDevender.
Former Executive Director of Upper Cumberland Development District Pleads Guilty to TheftRead the Press Release
Wendy Askins, 55, of Red Boiling Springs, Tenn., pleaded guilty today before U.S. District Judge Aleta A. Trauger, to two counts of theft from a federally-funded entity, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. At the time of the offenses, Askins was the Executive Director for the Upper Cumberland Development District (UCDD), and also oversaw the daily operations of the Cumberland Regional Development Corporation (CRDC) and the Cumberland Area Investment Corporation (CAIC). UCDD and its related organizations received thousands of dollars annually in federal funds during the time Askins led UCDD.
During the plea hearing, Askins admitted that she used UCDD and CRDC funds to purchase a property she named Living the Dream. Living the Dream was supposed to serve as an assisted living facility for senior citizens. Shortly after purchasing the home, Askins and UCDD Deputy Director Larry Webb set up a company called L.A. Management to operate the senior facility. Askins subsequently converted a portion of the property that was owned by the public agency into a home for her daughter and herself. Her upgrades to the property included adding elaborate, luxury showers in the bathrooms used by the Askins; wiring another bedroom to service a tanning bed, and spending an additional $25,000 to erect a double-winding staircase.
Askins admitted she moved money belonging to UCDD and its components to Living the Dream bank accounts, without the approval of the boards of directors. Askins attempted to hide the unauthorized transfer of other UCDD funds by directing an employee to falsify the minutes of a board of director’s meeting, in order to conceal the fact that she had spent a total of $233,000 without board approval. She also admitted that she lied to the media, board directors, and UCDD attorneys about why the meeting minutes were incorrect.
Askins will be sentenced by Judge Trauger on October 28, 2016. Federal program fraud carries a maximum penalty of 10 years in prison, a $250,000 fine, and up to three years of supervised release following a term of imprisonment.
Larry Webb, a co-defendant, pleaded guilty to bank fraud on August 17, 2015, and is currently scheduled to be sentenced on September 19, 2016.
The investigation was led by the U.S. Department of Commerce, Office of Inspector General, with assistance from the Federal Bureau of Investigation; the Internal Revenue Service- Criminal Investigation; the Housing and Urban Development, Office of Inspector General; and the U.S. Health and Human Services, Office of Inspector General. The United States is represented by Assistant U.S. Attorneys Stephanie N. Toussaint and William F. Abely.
Antioch Man Sentenced to 20 Years in Prison for Child Pornography OffensesRead the Press Release
Christopher N. Bonick, 31, Antioch, Tennessee, was sentenced on August 26, 2016, to serve 20 years in prison, to be followed by 30 years of supervised release, for attempting to entice a minor to engage in sexual activity and possession of child pornography, announced David Rivera, United States Attorney for the Middle District of Tennessee. Bonick was sentenced by U.S. District Court Judge Aleta Trauger after having been found guilty by a federal jury following a March 2016 trial.
The evidence at trial showed that in July 2010, Bonick began communicating on-line with an individual that he initially believed to be a 13-year-old girl. In July 2011, Bonick engaged in a lengthy, sexually explicit chat with this person, who, unknown to him, was actually an undercover law enforcement officer in Louisiana. Bonick asked this individual if she would be willing to engage in sexual activity with him and told her that he had previously met a 15-year-old girl online and had traveled to have sex with her. Bonick discussed traveling to see her and continued the sexually explicit conversation.
Other evidence introduced at trial also showed that Bonick had previously communicated with numerous minors online and had solicited child pornography from them and had traded child pornography with other individuals via email.
Bonick was in possession of dozens of images of child pornography when a search warrant was served at his home in Antioch in January 2012, at which time he admitted that he was sexually attracted to minor teenagers.
Testimony presented to the Court during the sentencing hearing revealed that Bonick also had been talking on teen oriented websites to as many as 21 minors between July 2010 and July 2011 and had engaged young girls in chat conversations before turning the conversations to a sexual nature and sending and soliciting explicit images.
The case was investigated by the Metropolitan Nashville Police Department and prosecuted by Assistant U.S. Attorneys Carrie Daughtrey and Henry Leventis.
Former Owner of Preserve Financial Group Pleads Guilty in Insurance Fraud SchemeRead the Press Release
John O. Wilson, 53, of Antioch, Tenn., pleaded guilty today to two counts of wire fraud, in connection with a fraudulent insurance/investment scheme, announced David Rivera, United States Attorney for the Middle District of Tennessee.
At a plea hearing before Chief U.S. District Judge Kevin H. Sharp, Wilson admitted that from August 2005 to November 2014, he devised and engaged in a scheme to defraud and obtain money from his clients and various insurance agencies by making material false representations and using interstate wires to further his scheme. During this period of time, Wilson, a licensed insurance provider in Tennessee, was the owner and operator of an insurance agency known as Preserve Financial Group, Inc. (“PFG”) located in the metropolitan Nashville area. Wilson admitted to operating his fraudulent scheme in at least three ways:
First, in order to obtain increased commissions, Wilson would advise clients to remove their money from their existing tax-deferrable investments and purchase multiple insurance policies. In doing so, Wilson would not disclose to his clients the consequences of the repeated investments including adverse tax consequences and substantial surrender charges.
Second, Wilson would convince some clients to surrender insurance policies or annuities to him for investment in another insurance policy or annuity. Instead of investing the money as promised, Wilson would cause these funds to be deposited into the PFG bank account he controlled, and he would then use the funds primarily for his own benefit.
Third, Wilson would convince some clients to surrender insurance policies or annuities by deceiving them into believing they were investing in PFG by purchasing stock in the company. In truth, there was no such stock and instead, the money was deposited into the PFG account, which was then used primarily for Wilson’s own personal benefit.
Wilson faces up to 20 years in prison on the wire fraud charges. He also faces a criminal fine of up to $250,000, forfeiture of criminal proceeds, and he will be ordered to pay restitution to the victims. Wilson will be sentenced by Chief Judge Sharp on November 23, 2016. His sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
The case was investigated by the Federal Bureau of Investigation. The United States is represented by Assistant U.S. Attorneys Sandra G. Moses and Thomas J. Jaworski.
Tennessee Woman Sentenced to Prison for Filing False Claims for RefundRead the Press Release
WASHINGTON – A Nashville, Tennessee, woman was sentenced today to 18 months in prison for filing false claims for refund, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division and U.S. Attorney David Rivera for the Middle District of Tennessee.
Karen Liane Miller, 61, admitted that from about August 2008 until about July 2009, she knowingly prepared and submitted multiple false federal income tax returns to the Internal Revenue Service (IRS) on behalf of her friends, family and herself. The returns reported false amounts of taxable income on attached Forms 1099-OID (Original Issue Discount) and Forms 1099-A that Miller created and fraudulently represented to have been issued by financial institutions. The returns also reported identical or near-identical false amounts of federal income tax withheld from the fictitious income to generate claims for tax refunds that were significantly higher than what the taxpayers were entitled to receive. Miller filed 48 fraudulent tax returns that falsely claimed more than $19.8 million in refunds. The IRS issued $1,003,238 in refunds for eight of the 48 fraudulent returns.
In addition to the prison term, Miller was ordered to serve two years of supervised release and to pay restitution to the IRS in the amount of $939,835.62.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Rivera commended special agents of IRS–Criminal Investigation, who investigated the case and Trial Attorneys Alexander Effendi and Nathan Brooks of the Tax Division and Assistant US Attorney Carrie Daughtrey, who are prosecuting the case.
Former Executives of Military Contractor Sentenced to Prison for Illegally Exporting Weapons PartsRead the Press Release
Four former employees of Sabre Defence Industries, LLC (“Sabre”), a defense contractor formerly based in Nashville, were sentenced Friday in connection with their role in illegally exporting firearm components and other defense items, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. During sentencing hearings on Friday, August 19, U.S. District Court Judge Todd J. Campbell imposed the following sentences:
- Charles Shearon, 60, of Goodlettsville, Tennessee, the former Sabre President, was sentenced to 18 months in prison;
- Elmer Hill, 69, of Brentwood, Tennessee, the former Sabre Chief Financial Officer, was sentenced to 15 months in prison;
- Michael Curlett, 49, of Wixom, Michigan, the former Sabre Director of Sales and Marketing, was sentenced to 13 months in prison; and
- Arnold See, Jr., 59, of Murfreesboro, Tennessee, the former Sabre International Shipping and Purchasing Manager, was sentenced to 13 months in prison.
All defendants were also ordered to serve one year of supervised release at the conclusion of their prison terms.
Each of the four defendants pleaded guilty to violating the Arms Export Control Act, and to conspiring to do so. Sabre had contracts with the U.S. government valued at more than $74 million for the manufacture of certain military-grade weapons, including the M16 rifle and other semi-automatic and fully-automatic firearms. In pleading guilty, each of these four defendants admitted to conspiring to export firearms and firearm components that were classified as defense articles without first obtaining the required authorization from the U.S. Department of State. The four defendants also acknowledged their role in attempting to conceal Sabre’s illegal exports through the use of falsified shipping documents and, at times, the use of shipping crates with false bottoms. Sabre maintained a fictitious set of business books to conceal its unlawful shipments of firearm parts, lied about the value of items on shipping documents, and illegally imported firearm silencers.
Guy Savage, 47, of London, England, has also been charged in this same case and is facing extradition proceedings. An indictment is merely an accusation and is not evidence of guilt, and Savage is presumed innocent unless and until proven guilty in a court of law.
The case was investigated by the U.S. Department of Homeland Security – Homeland Security Investigations and by the Bureau of Alcohol, Tobacco, Firearms & Explosives, with assistance from the Department of Defense-Defense Criminal Investigative Service. The case is being prosecuted by Assistant U.S. Attorneys William F. Abely and John K. Webb.
Rapper Young Buck Sentenced to Seven Months in Prison for Violating Conditions of Supervised Release and ProbationRead the Press Release
David Darnell Brown aka “Young Buck,” 35, of Murfreesboro, Tenn., admitted violating the conditions of his supervised release and probation in two federal felony cases today. He was sentenced to seven months in prison for those violations and was immediately taken into custody, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
In July 2013 Brown was convicted of two felonies in U.S. District Court; being a convicted felon in unlawful possession of a firearm and being a convicted felon in unlawful possession of ammunition. Brown was sentenced to 18 months in prison and to a 3-year term of supervised release for these offenses. He completed his prison sentence and began his term of supervised release in November 2013. A condition of supervised release required Brown to participate in drug testing and urinalysis to detect illegal drug use.
In August, 2015, Brown pleaded guilty to willfully falsifying, concealing, and covering up by trick, scheme, and device, material facts regarding his possession and use of marijuana, by providing a false urine sample and by falsely telling a United States Probation Officer that he had not used a controlled substance. According to the statement of facts, Brown used a device, consisting of a plastic bag containing another person’s urine, to provide a urine sample as part of required drug testing. Brown was sentenced by U.S. District Judge Todd J. Campbell to serve 18 months’ probation, pay a $7,500 fine; perform 100 hours of community service; and submit to mandatory drug testing and treatment.
Brown then continued to violate the conditions ordered by the Court, leading to his hearing today for violation of his terms of supervision in both those cases. Brown admitted that he had violated supervision in at least three ways.In March 2016, Brown received text messages from the fiancée of the mother of one of Brown’s children. In those text messages, the fiancée told Brown that he was in violation of a state court child support/visitation order, and that he could face state jail time for contempt. Brown then called the victim in this incident various derogatory and racial epithets and threatened him with physical harm.
On March 29, 2016, Brown was summoned to court for his initial appearance and was ordered to comply with conditions, including not violating any law while pending a final hearing on that violation.
On July 20, 2016, another of Brown’s ex-girlfriends obtained an Ex Parte Order of Protection in state court and arrest warrants were issued against Brown based on an incident in which Brown wanted to get certain property out of that woman’s house and was told that the property was not there. He then kicked in the door of the residence and threatened that woman. Brown was arrested for violating his supervision, and was detained pending a detention hearing. After that hearing, the federal magistrate determined Brown could be released pending the final hearing on this incident and the previous March 2016 incident, but ordered Brown not to have any direct or indirect contact with this victim. Brown was released under those conditions on August 1, 2016.
After being released on those conditions, Brown violated the conditions of his release by contacting and attempting to contact that woman over 100 times in violation of the Magistrate’s release order.
This case was prosecuted by Assistant U.S. Attorney Sunny A.M. Koshy.
Tennessee Man Sentenced to 48 Months in Prison for Romney Tax Return Fraud and Extortion SchemeRead the Press Release
A Franklin, Tennessee, man was sentenced late yesterday to 48 months in prison for engaging in an extortion and wire fraud scheme involving former presidential candidate Mitt Romney’s tax returns.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Jack Smith of the Middle District of Tennessee and Special Agent in Charge Todd Hudson of the U.S. Secret Service’s Nashville Field Office made the announcement.
Michael Mancil Brown, 37, was found guilty at trial on May 12, 2016 of six counts of wire fraud and six counts of using facilities of interstate commerce to commit extortion. U.S. District Judge Billy Roy Wilson of the Eastern District of Arkansas, sitting by designation in the Middle District of Tennessee, imposed the sentence and also ordered Brown to pay $201,836 in restitution to PricewaterhouseCoopers LLP.
According to testimony at trial, evidence recovered from a computer seized from Brown’s residence in 2012 implicated Brown in a scheme to defraud Romney, the accounting firm of PricewaterhouseCoopers and others by falsely claiming that he had gained access to the PricewaterhouseCoopers internal computer network and had stolen tax documents for Romney and his wife, Ann D. Romney, for tax years prior to 2010.
In August 2012, a letter delivered to the offices of PricewaterhouseCoopers in Franklin demanded that $1 million worth of the digital currency Bitcoin be deposited to a specific Bitcoin account to prevent the release of the purportedly stolen Romney tax returns, according to trial evidence. The letter invited interested parties who wanted the allegedly stolen Romney tax documents to be released to contribute $1 million to another Bitcoin account. As part of the scheme, similar letters were delivered to the offices of the Democratic and Republican parties in Franklin and similar statements were posted to Pastebin.com.
The U.S. Secret Service’s Nashville Field Office investigated the case with assistance from the FBI’s Nashville Division. Senior Counsel Anthony V. Teelucksingh of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Byron Jones of the Middle District of Tennessee prosecuted the case.
Franklin, Tennessee Man Sentenced to 48 Months in Prison for Romney Tax Return Fraud and Extortion SchemeRead the Press Release
Michael Mancil Brown, 37, of Franklin, Tenn., was sentenced late yesterday to 48 months in prison for engaging in an extortion and wire fraud scheme involving former presidential candidate Mitt Romney’s tax returns, announced Jack Smith, Acting U.S. Attorney for the Middle District of Tennessee; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; and Special Agent in Charge Todd Hudson of the U.S. Secret Service’s Nashville Field Office.
Brown was found guilty at trial on May 12, 2016, of six counts of wire fraud and six counts of using facilities of interstate commerce to commit extortion. U.S. District Judge Billy Roy Wilson of the Eastern District of Arkansas, sitting by designation in the Middle District of Tennessee, imposed the sentence and also ordered Brown to pay $201,836 in restitution to PricewaterhouseCoopers LLP.
According to testimony at trial, evidence recovered from a computer seized from Brown’s residence in 2012 implicated Brown in a scheme to defraud Romney, the accounting firm of PricewaterhouseCoopers and others, by falsely claiming that he had gained access to the PricewaterhouseCoopers internal computer network and had stolen tax documents for Romney and his wife, Ann D. Romney, for tax years prior to 2010.
In August 2012, a letter delivered to the offices of PricewaterhouseCoopers in Franklin demanded that $1 million worth of the digital currency Bitcoin be deposited to a specific Bitcoin account to prevent the release of the purportedly stolen Romney tax returns, according to trial evidence. The letter invited interested parties who wanted the allegedly stolen Romney tax documents to be released to contribute $1 million to another Bitcoin account. As part of the scheme, similar letters were delivered to the offices of the Democratic and Republican parties in Franklin and similar statements were posted to Pastebin.com.
The U.S. Secret Service’s Nashville Field Office investigated the case with assistance from the FBI’s Nashville office. Assistant U.S. Attorney Byron Jones of the Middle District of Tennessee and Senior Counsel Anthony V. Teelucksingh of the Criminal Division’s Computer Crime and Intellectual Property Section prosecuted the case.
Columbia Man Sentenced to 20 Years in Prison for Distribution of Child PornographyRead the Press Release
Chad Allen Martin, 25, of Columbia, Tennessee, was sentenced yesterday by U.S. District Court Judge Aleta A. Trauger to serve 20 years in prison, followed by 20 additional years of supervised release, for possession and distribution of child pornography, announced David Rivera, United States Attorney for the Middle District of Tennessee. Martin pleaded guilty on April 7, 2016.
“The U.S. Attorney’s Office will always be a staunch advocate for innocent children who are victimized by sexual predators,” said U.S. Attorney David Rivera. “We will pursue these predators, prosecute them vigorously and seek their confinement for as long as the law allows.”
According to testimony at the plea hearing, in 2011 Martin was convicted in state court of attempted rape of a child, and served a three- year prison sentence. While on parole for that offense in March 2015, Martin was identified, during an investigation by the Internet Crimes Against Children Task Force, as being in possession of and distributing hundreds of computer files depicting minors engaged in sexually explicit conduct which were being shared from his laptop computer.
On March 20, 2015, a federal search warrant was executed at Martin’s residence in Columbia, Tennessee, where FBI Agents and Columbia Police Department officers found more than 1,000 images and 173 videos of prepubescent minors engaged in sexually explicit conduct on Martin’s laptop computer and an external hard drive. The images and videos seized included depictions of bestiality, bondage, and rape.
The case was investigated by the Winchester, Tennessee Police Department and the Federal Bureau of Investigation, with assistance from the Columbia, Tenn. Police Department. The case was prosecuted by Assistant United States Attorney Lee Deneke.
Local and Federal Law Enforcement Partnerships Continue to Have an Impact on Violent Crime in the J.C. Napier NeighborhoodRead the Press Release
Nineteen additional persons have been indicted by a federal grand jury in connection with an on-going local and federal investigation addressing violent crime in the J.C. Napier public housing development, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Joining the U.S. Attorney in making the announcement are Steven Gerido, Special Agent in Charge of the Nashville Division of the ATF and Chief Steve Anderson of the Nashville Metropolitan Police Department.
The criminal conduct covered by these latest indictments include four murders, multiple armed robberies, illegal firearms possession, unlawful drug trafficking and witness tampering. Seventeen other individuals have previously been charged with federal offenses in connection with this targeted investigation, which has been on-going since March 2015.
“Rising violent crime in this neighborhood prompted a joint federal and local investigation aimed at increasing public safety and improving the quality of life for these residents,” said U.S. Attorney David Rivera. “Three murders occurred in and around the J.C. Napier development in just four months, along with multiple shootings and robberies connected to that area, which only has about 2,000 residents. We will continue our efforts to bring federal charges, when warranted, against those who remain intent on committing violent crime in this neighborhood and in other residential neighborhoods.”
Steven Gerido, Special Agent in Charge, ATF, said, “These arrests show law enforcement’s priority to reduce violent crime. The removal of crime weapons from the streets aid in providing a safe environment to the public.”
“It is very important to me that the hundreds of innocent families in the Napier/Sudekum area know that this police department is committed to their safety and bringing to justice those persons who blatantly threaten that community with violence,” Chief Steve Anderson said. “As Hermitage Precinct detectives and our Gang Unit identified multiple problem individuals, we asked the ATF and U.S. Attorney David Rivera to join us in this investigation. Our partnership and continuing federal prosecution of the defendants has without a doubt made the area a safer place.”
Those charged in the latest phase of the investigation include:
- Reginald Johnson, III, a/k/a Cheefa, 22;
- Aweis Haji-mohamed a/k/a Son Son, 28;
- Marquis Brandon a/k/a Dummy, 22;
- Keno Lane a/k/a Keno Savage, 24;
- Charles Braden a/k/a Manstinka, 22;
- Santez Bradford a/k/a Wacco, 23;
- Martez D. Parham a/k/a Tez, 24;
- Rodrecus M. Smith a/k/a Lil Rod, 27;
- Darryl A. Starks a/k/a Mac, 32;
- Calvin D. Starks a/k/a Crazy, 21;
- Ivy C. Starks, 49;
- Terrance C. Kimbrough a/k/a Lil Chris, 19;
- Tena M. Allen, 29;
- Darren Randolph a/k/a Newk, 27;
- Michael Calloway, Jr. a/k/a Oso, 20;
- Ricky Watkins a/k/a Lil Ricky, 23;
- Brandon Starks a/k/a Hot Boy, 22;
- Michael Burns a/k/a BK Mike, 27; and
- Michael Thompson a/k/a Monkey Man, 35, all of Nashville.
In addition to other offenses, four of these individuals are charged in connection with four homicides, three of which occurred in and near the vicinity of the J.C. Napier neighborhood:
- Rodricus Smith and Martez Parham are charged with the murder of Mario McKnight, which occurred on October 30, 2013, on Argyle St. in Nashville, which the indictment alleges occurred during a drug-related robbery of another person;
- Calvin Starks and Terrance Kimbrough are charged with the murder of Brendon Leggs, which occurred on November 26, 2014, which is also alleged to have occurred during the course of a drug robbery;
- Terrence Kimbrough is also charged with the murder of Monte Watson, which is alleged to have been motivated by a desire to prevent him from cooperating with law enforcement officers about the murder of Brendon Leggs and other criminal activity;
- Aweis Haji-mohamed is charged with being a felon in possession of firearms, with the underlying event being the murder of Isaiah Starks on February 9, 2015;
- Haji-mohamed is also charged with other armed robberies, including an attempt to commit an armed drug-related robbery of Isaiah Starks about one month before Haji-mohamed killed Starks .
Seventeen individuals have been previously indicted in connection with this investigation and charged with various federal offenses including firearms violations, drug offenses and offenses relating to the obstruction of the grand jury’s investigation. They are:
- Deshon Burleson, 29;
- Javonta Campbell, 23
- Ernest Eddie, 26;
- Deunta Finch, 26;
- Ramon Hughes, 27;
- Reco Jones, 28;
- Jacarlvis Marable, 23;
- Robert Moore, 35;
- Kenneth Underwood, 35;
- Charles Woods, 27;
- Joshua Woods, 25;
- Brian Blackman, 25;
- Charles Black, 26;
- Justin Walden, 25;
- Laquisha Hughes, 32;
- Laquanda Boyce, 34; and
- Jeremiah Haynes, 24, all of Nashville.
The indictments are merely accusations. All defendants are presumed innocent unless and until proven guilty in a court of law.
These cases were investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Gang Division of the Metropolitan Nashville Police Department. The cases are being prosecuted by Assistant United States Attorneys Sunny A.M. Koshy and Phillip Wehby.
Serial Bank Robber Indicted by Federal Grand JuryRead the Press Release
Floyd Calvin Clanton, Jr., 58, of Nashville, Tenn., was indicted last week by a federal grand jury on six counts of bank robbery and one count of attempted bank robbery, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
According to the indictment, on April 22, 2016, Clanton robbed the SunTrust Bank, located at 1715 West End Avenue in Nashville. The indictment also alleges that Clanton robbed the Regions Bank at 1140 Nashville Pike in Gallatin, Tennessee on April 25, 2016; the U. S. Bank at 4670 Lebanon Pike, Hermitage, Tennessee, on May 19, 2016; the Wells Fargo Bank at 4740 Lebanon Pike, Hermitage, Tennessee, on May 24, 2016; the Old Hickory Federal Credit Union, 1401 West Main Street, Lebanon, Tennessee, on June 3, 2016, and again on June 10, 2016.
The indictment also alleges that on June 10, 2016, Clanton attempted to rob the SunTrust Bank, 240 West Main Street, Lebanon, Tennessee, minutes before again robbing the Old Hickory Federal Credit Union at 1401 West Main Street in Lebanon, Tennessee.
Shortly after the attempted robbery and robbery on June 10th, Clanton was located at a motel in Lebanon, Tennessee. He was subsequently arrested by FBI agents and Lebanon police officers pursuant to a warrant that had been issued on June 1, 2016, charging him with the robbery of the Regions bank in Gallatin, Tennessee, on April 25th. At the time of this robbery, Clanton was on federal supervised release, after serving a 70-month sentence for committing a bank robbery in Gallatin, Tennessee, in 2009.
If convicted, Clanton faces a maximum of 20 years in prison on each count.
An indictment is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
This case was investigated by the FBI, the Lebanon Police Department and the Metropolitan Nashville Police Department. The case is being prosecuted by Assistant U.S. Attorney William L. Deneke.
Franklin Man Convicted of Making False Statement to Obtain $1.2 Million LoanRead the Press Release
Murray O. Wilhoite, Jr., 68, of Franklin, Tenn., was convicted yesterday of three felony charges, announced United States Attorney David Rivera. Following a trial before U.S. District Court Judge Aleta A. Trauger, the jury convicted Wilhoite of making a false statement to a bank, making a false statement in a federal bankruptcy filing, and making a false statement under oath during a bankruptcy hearing.
Evidence presented during the trial demonstrated that Wilhoite obtained a $1.2 million loan in December 2007 by pledging as collateral a Franklin, Tennessee property that he did not own. During trial, testimony and exhibits proved that Wilhoite knowingly misrepresented to an FDIC-insured bank that he owned certain real property that he pledged as collateral. However, as trial evidence proved, the property was owned at all relevant times by his father.
In documents signed during the closing for this loan, Wilhoite falsely represented that he was the owner and titleholder of the property, and the bank relied on his statements in permitting him to obtain a loan using the Franklin property as collateral in lieu of a down payment. Wilhoite subsequently lied during a 2011 bankruptcy filing, by again misrepresenting that he owned the Franklin property, and did so for the purpose of preventing the bank from foreclosing on this property after he defaulted on his loan. Wilhoite lied again at a 2013 hearing before the U.S. Bankruptcy Court for the Middle District of Tennessee, during which he perjured himself by falsely stating that he had not known that the Franklin property was designated as collateral for the loan. The evidence at trial proved that Wilhoite made the bankruptcy-related false statements knowingly and with the intent to deceive.
Wilhoite faces up to 30 years in prison and a fine of up to $1,000,000 on the false statement to a bank charge, and up to 5 years in prison and fines of up to $250,000 on the other charges. Wilhoite will be sentenced by Judge Trauger on September 23, 2016. The sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
The case was investigated by the Federal Bureau of Investigation and the Office of the United States Trustee. The case is being prosecuted by Assistant U.S. Attorneys Sandra G. Moses and William F. Abely.
Crossville Man Sentenced to 47 Years in Prison for Horrific Assault and Kidnapping During Violent Crime OrdealRead the Press Release
Douglas M. Davis, 46, of Crossville, Tenn., was sentenced today in U.S. District Court to 47 years in prison, for crimes committed in October 2014 during a two-day violent crime spree, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
Davis pleaded guilty in January 2016 to kidnapping; transportation of a stolen vehicle in interstate commerce; being a convicted felon in possession of a firearm and using a firearm during a crime of violence.
During the January plea hearing before Chief U.S. District Judge Kevin H. Sharp, Davis admitted that on October 2, 2014, he was visiting two friends at a house in Crossville, Tenn., when he produced a semi-automatic handgun and forced the female friend to restrain the male friend with duct tape. After securing the man’s hands and feet, Davis forced the woman to help drag the man into the bathroom, where he was left bound and secured. Davis admitted that he then forced the woman to engage in various sex acts and then beat her and raped her.
After raping the woman, Davis admitted that he took $50 from the man’s wallet and assaulted him and left him duct taped in the bathroom. Davis then forced the woman into the man’s car and subsequently drove to a remote location in Hardin County, Kentucky, where he abandoned the stolen car. Davis then forced the victim into a wooded area and raped her repeatedly. Davis raped the victim again in Bullitt County, Kentucky and again at an unknown location.
On October 4, 2014, law enforcement officers located Davis and the female victim hiding behind a trash dumpster at a Pilot gas station in Lebanon Junction, Kentucky. At the time of his arrest, Davis was in possession of a loaded .25 caliber semi-automatic handgun. Davis told law enforcement officers that he had been in love with the victim since he first met her and that he had planned on releasing her and committing suicide.
Davis had previously been convicted of felony burglary in the State of Florida.
In sentencing Davis, Chief Judge Sharp characterized Davis as a predator and noted that the sentence the Court imposed needed to reflect the seriousness of the crimes and also serve as a deterrent.
This case was investigated by the FBI; the Cumberland County Sheriff’s Department; the Kentucky State Police; the Hardin County, Kentucky Sheriff’s Department; and the Bullitt County, Kentucky Sheriff’s Department. Assistant United States Attorney Lynne T. Ingram prosecuted the case.
Spring Hill Man Sentenced in Embezzlement SchemeRead the Press Release
Robert Majors, 58, of Spring Hill, Tenn., was sentenced today to 20 months in prison, followed by two years of supervised release, for embezzling more than $600,000 from his former employer, announced David Rivera, United States Attorney for the Middle District of Tennessee. U.S. District Court Judge Aleta Trauger also ordered Majors to pay $642,500.00 in restitution and to forfeit the proceeds of his crime.
Majors pleaded guilty in March 2015 to two counts of wire fraud in connection with a scheme to embezzle funds from his former employer, Irving Materials, Inc. (“IMI”). During the sentencing hearing, evidence established that while employed as Controller of IMI in Nashville, Tenn., Majors made fraudulent, electronic transfers in excess of $600,000, from an IMI bank account to his personal bank account during a seven-year period. Majors then took steps to conceal his fraud by recording the transfers as company purchases of fixed assets in the company’s journal entries. Majors admitted to using the funds derived from his scheme to, in part, pay his mortgage and other loans, pay credit card bills, make home repairs, and pay for a cruise to Italy.
The case was investigated by the Federal Bureau of Investigation. The United States is represented by Assistant U.S. Attorney Thomas J. Jaworski.
Hendersonville Physician Indicted on Federal Kickback ChargesRead the Press Release
Dr. Hailu T. Kabtimer, 56, of Hendersonville, Tennessee, was indicted by a federal grand jury today, charging him with five counts of violating the federal anti-kickback act, announced David Rivera, United States Attorney for the Middle District of Tennessee.
“Medical providers who break the law to enrich themselves will be caught and prosecuted,” said U.S. Attorney David Rivera. “This office and our law enforcement partners will continue our vigorous efforts to enforce the anti-kickback law and to hold accountable medical professionals who accept illegal cash kickbacks.”
According to the indictment, Dr. Kabtimer entered into an arrangement in March 2013 under which he would be paid cash in exchange for referring patients needing medical equipment to a particular supplier. The indictment alleges that, on eight occasions in 2013 and 2014, Dr. Kabtimer accepted cash kickback payments totaling $3,400 in exchange for referring patients to this medical equipment supplier. The indictment further alleges that Dr. Kabtimer accepted kickbacks of $200 per patient referred for the provision of a CPAP ventilator and $300 per patient referred for the provision of an oxygen unit.
Dr. Kabtimer faces up to 5 years in prison on each count, and also faces forfeiture of any proceeds traceable to the commission of the charged offenses. His sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
An indictment is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
The case was investigated by the Federal Bureau of Investigation, the U.S. Department of Health and Human Services Office of Inspector General, and the Tennessee Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys William F. Abely and Thomas J. Jaworski.
Former Human Resource Manager for Franklin-Based Company Pleads Guilty to Wire FraudRead the Press Release
Kimberly Richardson Bates aka Kimberly D. Richardson, 36, of Spring Hill, Tenn., pleaded guilty yesterday to wire fraud, after being charged with fraudulently transferring money from a Franklin-based company’s employees’ 401k accounts into her personal checking account, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
According to the charging document and plea agreement, Bates was the human resource manager for EML, a calibration and facility support company based in Franklin, Tenn. Bates used her position and authority to access the retirement accounts of other employees and submitted fraudulent withdrawal documents to John Hancock, the company’s 401k service provider. During the period between August 2013 and September 2014, Bates submitted numerous fraudulent withdrawal requests and directed the withdrawals to be deposited into her personal checking account. In total, Bates embezzled $48,411.01 from EML and former EML employees.
Wire fraud carries a maximum penalty of up to 20 years in prison and a $250,000 fine. Bates will be sentenced by U.S. District Judge Aleta A. Trauger on September 2, 2016. Her 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 United States Secret Service and is being prosecuted by Assistant U.S. Attorney Henry Leventis.
Former CEO-Physician and Drug Testing Laboratory Pay $9.35 Million to Settle False Claims Act AllegationsRead the Press Release
Dr. Jonathan Oppenheimer, former owner and CEO of Nashville drug testing laboratory Prost-Data, Inc., d/b/a OURLab (“OURLab”), OPKO Health, Inc. (“OPKO”), and OPKO Lab, LLC, have agreed to pay $9.35 million to resolve False Claims Act (“FCA”) allegations, announced David Rivera, United States Attorney for the Middle District of Tennessee. Pursuant to the civil settlement, Oppenheimer, and OPKO will be jointly and severally liable for the settlement amount. OPKO is a successor to OPKO Lab, LLC, which purchased OURLab from Oppenheimer in December 2012, after OURLab and Oppenheimer instituted the alleged conduct. OPKO Lab, LLC ceased commercial operations in early 2016 and is no longer billing federal payors. Oppenheimer has agreed to an exclusion from participation in all federal health care programs for 5 years as part of the agreement.
“Enforcement of the False Claims Act is a priority of the Department of Justice and this Office,” said United States Attorney David Rivera. “The U.S. Attorney’s Office and our law enforcement partners are committed to protecting the public fisc and protecting the integrity of federal healthcare programs by vigorously investigating alleged violations of the Anti-Kickback Statute and Stark Law.”
The settlement resolves allegations by the United States that Dr. Oppenheimer and OURLab, and OPKO as a successor company, submitted false claims for payment to the Medicare Part B program as a result of violations of the Federal Anti-Kickback Statute (“AKS”) and the Stark Law (“Stark”) from about June 2007 through January 2015. These violations relate to donations that OURLab and Oppenheimer made toward electronic health records (“EHR”) systems purchased by their client physician practices from EHR vendors. OURLab and Oppenheimer ostensibly made these contributions pursuant to the AKS safe harbor and Stark exception that allowed laboratories to contribute to a practice’s purchase of an EHR system from 2006 until drug testing laboratories were removed from the scope of these provisions in 2013. Although these provisions allowed certain entities to contribute up to 85% of the purchase price of an EHR system to a vendor on behalf of a physician’s practice, they placed certain restrictions on such activities. The United States alleged that the conduct of OURLab and Oppenheimer fell outside of the restrictions set forth in the AKS EHR safe harbor and the Stark EHR exception, and constituted violations of those statutes.
Specifically, OURLab and Oppenheimer made monetary contributions toward EHR systems obtained by their client physician practices, and, in making these contributions, they violated the AKS EHR safe harbor and the Stark EHR exception by, among other things, (1) directly considering the volume and/or value of referrals and business, including return on investment, between OURLab and the physicians’ practice when determining whether to make an EHR donation and the amount of the donation; (2) improperly considering the volume of Medicare business supplied by the physician practice when considering an EHR donation; and (3) occasionally withholding previously agreed-upon EHR donation payments until they received a certain number of referrals from the physicians’ practice. These actions placed OURLab and Oppenheimer outside of the scope of the EHR safe harbor provisions for the AKS and Stark, and constituted illegal kickbacks and physician remuneration.
"This laboratory traded physicians free computer software for patient referrals," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "Such quid pro quo arrangements are kickbacks that stifle competition and steer business to the company offering the inducements."
The settlement agreement also resolves allegations that OURLab, and subsequently OPKO Lab, LLC, billed the Medicare and TRICARE programs for fluorescence in situ hybridization (“FISH”) tests despite a June 2012 adverse coverage determination for the particular type of FISH test being used. A FISH test maps the genetic material in human cells. Because FISH tests can detect abnormalities associated with cancer, it may be useful for diagnosing certain types of the disease.
The United States’ investigation corroborated conduct originally alleged in a qui tam complaint filed by a former employee of OURLab pursuant to the FCA. The qui tam provisions of the False Claims Act allows for whistleblowers, or relators, to file suit for violations of the act on behalf of the government. The relator is entitled to a percentage of the amount recovered by the government as a result of the information provided that resulted in the subsequent investigation and resolution. The relator in this case will receive $1.683 million.
This matter was investigated by the Department of Health and Human Services Office of Inspector General and the United States Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorney Christopher C. Sabis.
The case is docketed as United States ex rel. Newman v. OPKO Health Inc., et al., No. 3:13-cv-0700 (M.D. Tenn.). The claims settled by this agreement are allegations only, and there has been no determination of liability.
Tennessee Sheriff Indicted by Federal Grand Jury on Conspiracy, Fraud and Related ChargesRead the Press Release
Chief Administrative Deputy and Sheriff’s Uncle also Indicted
A county sheriff and two other men were indicted for their roles in the formation, marketing and operation of a private company and the concealment and misrepresentation of their involvement with the business, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Jack Smith of the Middle District of Tennessee.
Robert F. Arnold, 40, Sheriff of Rutherford County, Tennessee; Chief Deputy Joe L. Russell II, 49, also of Rutherford County; and John Vanderveer, 58, of Marietta, Georgia, Arnold’s uncle, were charged in a 14-count indictment with honest services fraud, wire fraud, bribery concerning federal programs, extortion under color of official right, obstruction of justice and conspiracy.
The indictment alleges that Arnold, Russell and Vanderveer devised a scheme to exploit Arnold’s and Russell’s official positions to make tens of thousands of dollars selling e-cigarettes in the Rutherford County Jail. Specifically, in October 2013, each defendant allegedly invested $3,000 to start JailCigs LLC, a private company that would allow friends and family members of inmates to purchase e-cigarettes online and have them shipped to the jail for distribution by jail personnel and use by inmates. As part of its marketing strategy, JailCigs allegedly promised a $5 commission for every e-cigarette sold to the jail or detention facility. In late 2013, Arnold and Russell introduced JailCigs into the Rutherford County Jail, JailCigs’s first and largest customer in Tennessee. Over the next year and a half, JailCigs allegedly sold approximately 10,500 e-cigarettes for delivery to Rutherford County Jail inmates, totaling $156,975 in revenue.
Arnold and Russell allegedly used their official positions to make JailCigs profitable, including by allowing the company’s e-cigarettes to be admitted into the Rutherford County Jail as non-contraband; directing jail employees to perform tasks beneficial to JailCigs on county time; promoting JailCigs to other sheriff offices and counties; and waiving Rutherford County’s customary commission from the sale of JailCigs. Arnold and Russell also failed to subject the business arrangement with JailCigs to a competitive bidding process and did not enter into a written contract with the company, despite being advised to do both things by the county attorney, according to the indictment. Between December 2013 and April 2015, Arnold allegedly received $66,790 from JailCigs and Russell and Vanderveer each received roughly $50,000.
On the eve of the 2014 election, in which Arnold was running for reelection as Sheriff of Rutherford County, Russell allegedly emailed a JailCigs customer and reminded the customer that it was Arnold who brought the JailCigs program to the Rutherford County Jail for the enjoyment of inmates and if Arnold was not reelected, the program would come to an end. The indictment alleges that Russell’s email implored the customer to “tell everyone you know to support Sheriff Arnold in his re-election.”
When various people raised questions and concerns about the propriety of the arrangement between JailCigs and Rutherford County, Arnold and Russell allegedly made misrepresentations that the arrangement had been approved by various officials, including the county attorney and the county auditor, and repeatedly denied that they were personally involved with JailCigs or were receiving any benefit from the sale of its product. The indictment also alleges that in an effort to protect JailCigs’s ongoing business, Arnold subsequently made several false and misleading statements to the media about his role in and knowledge of JailCigs, including saying that he was unaware of Russell’s involvement with JailCigs and that he was “shocked” and “taken back” by the discovery. Arnold allegedly also told the media that he had not received any income from JailCigs and had made a mistake when he listed JailCigs as a source of income on his state “Statement of Disclosure of Interests” form. The day before making this statement, however, Arnold allegedly had deposited a $3,900 check from JailCigs.
The indictment also alleges that on April 17, 2015, after learning of the media reports and pending criminal investigation, Vanderveer met with the Tennessee sales representative for JailCigs and told her that “Joe” wanted her to destroy her commission tabulation sheets, which contained evidence of the scheme.
The charges in the indictment are merely allegations. The defendants are presumed innocent until and unless convicted.
The Tennessee Bureau of Investigation and the FBI are investigating this case. Trial Attorney Mark Cipolletti of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Cecil W. Vandevender of the Middle District of Tennessee are prosecuting the case.
Rutherford County Tennessee Sheriff Indicted by Federal Grand JuryRead the Press Release
Robert F. Arnold, 40, Sheriff of Rutherford County, was indicted yesterday by a federal grand jury along with Chief Administrative Deputy Joe L. Russell II, 49, and Arnold’s uncle, John Vanderveer, 58, of Marietta, Georgia, for their role in the formation, marketing and operation of JailCigs, LLC and the concealment and misrepresentation of Arnold and Russell’s involvement with the business, announced Jack Smith, Acting U.S. Attorney for the administration of this case and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Joining Smith in announcing the charges at a mid-morning press conference were Matt Foster, Acting Assistant Special Agent in Charge of the Memphis Division of the FBI and Mark Gwyn, Director of the Tennessee Bureau of Investigation.
The 14-count indictment charges Arnold, Russell and Vanderveer with honest services fraud; mail fraud; wire fraud; bribery concerning federal programs; extortion under color of official right; obstruction of justice; and conspiracy.
“The overwhelming majority of law enforcement officers in the Middle District of Tennessee and across this nation have a deep and abiding sense of duty to the people they serve,” said Acting U.S. Attorney Jack Smith. “We never want to allow the illegal and self-serving actions of a few to unfairly brand the unsung heroes who every day place the safety and security of their communities above their own needs. Today we thank those officers for their dedication and service and for this reason we will always pursue justice for those whose actions attempt to discredit the profession.”
The indictment alleges that the conspiracy and other violations were carried out as follows: In October 2013 Arnold, Russell and Vanderveer each invested $3,000 to start JailCigs, LLC, a private company whose primary business involved selling electronic cigarettes to be used by inmates at jails and other detention facilities. They agreed on a business model which would allow friends and family of inmates to purchase e-cigarettes on-line and have them shipped to the jail for distribution by jail personnel. As part of the marketing strategy of JailCigs, every jail or detention facility in Tennessee that agreed to do business with the company was promised a commission of $5 for every e-cigarette sold. Shortly after the company was formed, Arnold and Russell introduced JailCigs into the Rutherford County Jail. Rutherford County was the company’s first and largest customer in Tennessee. Rutherford County was also the only jail in Tennessee that was not promised and did not receive the $5 commission for every e-cigarette sold.
Arnold and Russell used their official positions to make JailCigs profitable, including by allowing the company’s e-cigarettes to be admitted into the Rutherford County Jail as non-contraband; directing jail employees to perform various tasks beneficial to JailCigs while working on county time; promoting JailCigs to other sheriff offices and counties; and permitting the company not to pay Rutherford County the customary commission from the sale of JailCigs that was made to other counties. Arnold and Russell also failed to subject the business arrangement with JailCigs to a competitive bidding process and did not enter into a written contract with the company, despite being advised to do both things by the county attorney.
During the period from October 2013 to April 2015, JailCigs sold approximately 10,500 e-cigarettes that were delivered to inmates at the Rutherford County Jail. Each e-cigarette sold for $14.95, including shipping and handling, and these sales resulted in approximately $156,975 in revenue to JailCigs.
Beginning in December 2013 each defendant began receiving significant payments from JailCigs, LLC. Between December 2013 and April 2015 Robert Arnold received a total of $66,790; Joe Russell received a total of $52,234.41; and John Vanderveer received $49,545.50. The total payments made to the defendants during this period were $168,569.91.
The indictment specifically alleges that during the period of June and July of 2014, while Arnold was running for re-election as Sheriff of Rutherford County, he received approximately four checks from JailCigs, totaling $22,634.00. Three of these checks were deposited to the bank account of “Arnold for Rutherford County Sheriff.”
On the eve of the 2014 election, Joe Russell sent an email to a JailCigs customer in which he reminded the customer that Sheriff Arnold was the person who brought the JailCigs program to the Rutherford County Jail for the enjoyment of inmates and if Arnold was not re-elected the program would come to an end. The email implored the customer to “tell everyone you know to support Sheriff Arnold in his re-election.”
At various times, several people raised questions and concerns about the propriety of the arrangement between JailCigs and Rutherford County. When questioned, Arnold and Russell repeatedly made misrepresentations that the arrangement had been approved by various officials, including the county attorney and the county auditor and repeatedly denied that they were personally involved with JailCigs or were receiving any benefit from the sale of its product. In an effort to protect JailCigs on-going business, Arnold subsequently made several false and misleading statements to the media about his role in and knowledge of JailCigs, including saying that he was unaware of Russell’s involvement with JailCigs and that he was “shocked” and “taken back” by the discovery. Arnold also told the media that he had not received any income from JailCigs and had made a mistake when he listed JailCigs as a source of income on the “Statement of Disclosure of Interests” form filed with the Tennessee Ethics Commission. The day before making this statement, Arnold had deposited a $3,900 check from JailCigs.
The indictment also alleges that on April 17, 2015, after learning of the media reports and pending criminal investigation, John Vanderveer met with the Tennessee sales representative for JailCigs and told her that “Joe” wanted her to destroy her commission tabulation sheets so that there would not be a record of commission payments from Rutherford County going to “Robert or any of us.”
“The public deserves integrity from its elected officials, and it’s disappointing when law enforcement leaders abuse their position and contribute to public distrust,” said TBI Director Mark Gwyn. “I am grateful for the cooperation with our federal partners in pursuing the facts in this case.”
“We all rely on those who hold positions of public trust to execute their duties with integrity and in the best interests of the public,” said Gerard J. Cocuzzo, Acting Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “The FBI and our law enforcement partners will continue to investigate those who abuse that trust out of personal greed, and bring to justice those who would seek to line their own pockets by ignoring their sworn oath to uphold the law.”
Charges in this case carry maximum penalties of between 5-20 years in prison and a $250,000 fine. An indictment is merely an accusation and all defendants are presumed innocent unless and until proven guilty in a court of law.
This case was investigated by the Tennessee Bureau of Investigation and the FBI. Assistant U.S. Attorney Cecil W. VanDevender of the Middle District of Tennessee and Trial Attorney Mark Cipolletti of the Department of Justice’s Public Integrity Section are prosecuting the case.
Local Construction Company Settles Allegations of Fraud Involving A Disadvantaged Business EnterpriseRead the Press Release
Mountain States Contractors, LLC, an affiliated company of Jones Brothers, has agreed to pay the United States more than $2,250,000 to settle False Claims Act (“FCA”) allegations, announced Jack Smith, Acting United States Attorney for the Middle District of Tennessee for the administration of this settlement. The settlement resolves a civil investigation of Mountain States and affiliated companies for submitting false claims for payment to the United States in connection with the United States Department of Transportation’s Disadvantaged Business Enterprise (“DBE”) Program.
The DBE Program provides a vehicle for increasing the participation by Minority Business Enterprises in state and local transportation projects and ensures that DBEs can compete fairly for federally funded transportation-related work.
“Enforcement of the False Claims Act is a top priority of the Department of Justice and this office,” said Acting U.S. Attorney Jack Smith. “This enforcement effort includes investigating schemes to exploit federal programs aimed to help small and minority businesses to compete in the federal marketplace. The U.S. Attorney’s Office will continue to devote the resources necessary to investigated these and other False Claims Act violations in order to protect taxpayers’ interests and aggressively pursue fraud, waste, and abuse.”
The United States alleged that Mountain States and its affiliated company, HMA, as the prime contractors on a federally-funded construction projects, agreed that they would use DBEs to perform subcontracted work on the projects. For a number of these projects, Mountain States and HMA subcontracted with G&M Associates. Although G&M Associates is a certified DBE, evidence obtained during the investigation indicated that Mountain States had improperly “loaned” its employees to G&M to perform the DBE work on the projects. The entities claimed these employees as DBE employees for purposes of obtaining payment for their work despite the fact that the prime contractors continued to provide their health insurance. The prime contractors also improperly leased equipment to G&M, which the entities then counted against the projects’ DBE goals.
“Fraud schemes like that committed by Mountain States harms the integrity of law abiding, small business contractors trying to compete for contracts on a level playing field,” said Marlies Gonzalez, regional Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General. “Working with our Federal, State, and local law enforcement and prosecutorial partners, we will continue our vigorous efforts to pursue those who violate the law, and hold individuals and companies accountable that choose to illegally take advantage of minority and women-owned business enterprise programs.”
The allegations resolved by today’s settlement were originally raised in a lawsuit filed against Mountain States by a former Mountain States employee who brought his claims under the qui tam, or whistleblower, provisions of the FCA, which 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 $500,000 as his share of the settlement.
In addition to the settlement, Mountain States will enter into a monitoring agreement with the Federal Highway Administration. This agreement will help to prevent similar conduct in the future.
This matter was investigated by the DOT-Office of Inspector General and the United States Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorney Christopher C. Sabis.
This case is docketed as United States ex rel. Meadows v. Mountain States Construction, LLC, No. 3:12-cv-0523 (M.D. Tenn.).
Tennessee Man Convicted for Romney Tax Return Fraud and Extortion SchemeRead the Press Release
Michael Mancil Brown was found guilty yesterday by a federal jury sitting in Nashville, for engaging in an extortion and wire fraud scheme involving former Presidential candidate Mitt Romney’s tax returns, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, First Assistant United States Attorney Jack Smith of the United States Attorney’s Office for the Middle District of Tennessee and Todd Hudson, Special Agent in Charge of the U.S. Secret Service, Nashville Field Office.
Brown, 37, of Franklin, Tenn., was convicted of six counts of wire fraud and six counts of using facilities of interstate commerce to commit extortion.
According to testimony at trial, evidence recovered from a computer seized from Brown’s home in 2012 implicated Brown in a scheme to defraud Romney, the accounting firm of PricewaterhouseCoopers, LLP and others, by falsely claiming that he had gained access to the PricewaterhouseCoopers internal computer network and had stolen tax documents for Romney and his wife, Ann D. Romney, for tax years prior to 2010.
Brown was found guilty of participating in the scheme in which a letter delivered in August 2012 to the offices of PricewaterhouseCoopers in Franklin, Tenn., demanded that $1 million worth of the digital currency Bitcoin be deposited to a specific Bitcoin account to prevent the release of the purportedly stolen Romney tax returns. The letter also invited interested parties who wanted the allegedly stolen Romney tax documents to be released to contribute $1 million to another Bitcoin account.
As part of that scheme, similar letters were delivered to the offices of the Democratic and Republican parties in Franklin and caused similar statements to be posted to Pastebin.com.
“The success of this prosecution is due to the excellent online investigative skill and computer forensic analysis demonstrated repeatedly by the United States Secret Service in this era of increasingly high tech criminal conduct,” said First Assistant United States Attorney Jack Smith. “Hackers, aspiring hackers and identity thieves are identified, caught, prosecuted and convicted because of the work and determination of the Secret Service to stay ahead of people who abuse new technology to commit age-old crimes of fraud and extortion.”
A sentencing hearing will be scheduled for a date likely in August. The defendant faces up to twenty years in prison on the charges of wire fraud, up to five years in prison on the charges of extortion, fines of up to $250,000, and orders of restitution to victims.
This case was investigated by the Nashville Field Office of the U.S. Secret Service with assistance from the Nashville Resident Agency of the FBI. The case is being prosecuted by U.S. Department of Justice Senior Counsel Anthony V. Teelucksingh and Assistant U.S. Attorney Byron Jones of the Middle District of Tennessee.
New Jersey Man Pleads Guilty to Committing Perjury While Testifying Before Nashville Grand JuryRead the Press Release
Michael D. Tangredi, 55, of Toms River, New Jersey, pleaded guilty today to one count of perjury, announced United States Attorney David Rivera. During a hearing before U.S. District Judge Aleta A. Trauger, Tangredi admitted lying to a federal grand jury that had been investigating his son, Michael G. Tangredi, for conduct concerning fraudulent credit card transactions.
In 2013, Tangredi’s son was indicted on various charges, including money laundering, in connection with his alleged use of an American Express card to process more than $1,000,000 in fraudulent transactions. During his trial in April 2014, Michael G. Tangredi pleaded guilty to one count of money laundering, after testimony had shown that he had used funds acquired from the fraudulent American Express transactions to purchase a Maserati, a Bentley, and a restaurant in Hawaii.
During his plea hearing, Michael D. Tangredi admitted that he knowingly gave false testimony before the grand jury regarding the Maserati that had been purchased with fraudulently-acquired funds. Specifically, Tangredi admitted that he lied under oath to the grand jury when he testified that he was the person who had purchased this Maserati, whereas, in reality his son had purchased the automobile with fraudulently-derived funds. Tangredi further admitted that he had intended to testify untruthfully at his son’s trial.
Tangredi faces up to 5 years in prison and a fine of up to $250,000. He will be sentenced by Judge Trauger on August 22, 2016. His sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
The case was investigated by the U.S. Secret Service. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Crossville, Tennessee Woman Indicted in Jamaican Lottery ScamRead the Press Release
A federal grand jury in Nashville, Tenn., returned a 15-count indictment yesterday charging Betty J. Ketchum, 34, of Crossville, Tenn., in connection with the operation of a fraudulent “Jamaican” lottery scheme, Announced David Rivera, U.S. Attorney for the Middle District of Tennessee. The indictment includes charges of mail fraud, wire fraud, conspiracy to commit money laundering and international promotional money laundering.
The indictment alleges that, from February 2013 through January 2016, Ketchum and other individuals with whom she conspired engaged in a “Jamaican” lottery scheme designed to induce elderly victims throughout the United States to send money to cover fees and taxes for purported lottery or sweepstakes winnings. The indictment charged that Ketchum received money from victims of the scheme, sometimes kept a portion for herself, and then forwarded the remainder to co-conspirators in Jamaica. The indictment further alleges that Ketchum used several aliases to conceal her identity from victims and when wiring money to the Caribbean. The victims, who never received any lottery winnings, mailed or wired money to Ketchum from locations across the United States.
The indictment contains allegations of numerous victims sending various amounts of money to Ketchum and in one instance a resident of Tellico Plains, Tenn. sent her a check for $7500.00.
If convicted, Ketchum faces a maximum sentence of 5 years in prison for conspiracy to commit mail fraud and wire fraud. All other charges carry a maximum of 20 years in prison on each count.
An indictment is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
This case is being investigated by agents with the United States Postal Inspection Service. Assistant U.S. Attorney Stephanie N. Toussaint is prosecuting the case.
DEA Nashville District Office to Hold 11th Prescription Drug Take-Back Day This SaturdayRead the Press Release
The Drug Enforcement Administration’s (DEA) Nashville District Office is partnering with national, state, local and tribal law enforcement officials, as well as community coalition groups, to hold its 11th state-wide Prescription Drug Take-Back Day on Saturday, April 30, 2016, from 10 a.m. to 2 p.m. local time.
This one-day event will make it convenient for the public to rid their homes of potentially dangerous prescription drugs. At the event, Tennesseans will be able to drop off their expired, unused, and unwanted pills at sites across the state free of charge, no questions asked. By doing so, they will help prevent prescription drug abuse and theft.
The public can find a nearby collection site by visiting www.dea.gov, clicking on the “Got Drugs?” icon, and entering their zip code into the search window, or they can call 800-882-9539. Only pills and other solids, like patches, will be accepted. Liquids, needles and other sharp objects will not be accepted.
Tennesseans participating in DEA’s last take back event held on September 26, 2015, yielded 17,427 pounds of unwanted or expired medications for safe and proper disposal at collection sites throughout the state. This was the largest amount collected during the 10 previous take back events.
The National Prescription Drug Take-Back Day addresses vital public safety and health issues. Many Americans are not aware that medicines that languish in home cabinets are highly susceptible to diversion, misuse, and abuse. Rates of prescription drug abuse in the U.S. are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs.
Surveys of opioid drug users show that the majority of them get their drugs free from friends and family, including from the home medicine cabinet. This is a unique opportunity for Americans to make their homes and medicine cabinets safe from theft and abuse.
Daniel R. Salter, the Special Agent in Charge of the DEA Atlanta Field Division said, “Drug overdoses are the leading cause of injury-related death in the United States, eclipsing deaths from motor vehicle crashes or firearms. The Prescription Drug Take-Back program will allow Americans to properly and safely dispose of their prescription medication which could otherwise be abused for non-medical purposes. This event is free and anonymous. Simply turn in your unused, unwanted, unneeded medication, no questions asked. This is just one example of how DEA is working hand-in-hand with its law enforcement and community partners in an effort to stem the tide of prescription drug abuse.”
The DEA encourages parents, along with their children, to educate themselves about the dangers of legal and illegal drugs by visiting DEA’s interactive websites at www.justhinktwice.com, www.GetSmartAboutDrugs.com and www.dea.gov.
Hendersonville Attorney Sentenced to 33 Months in Prison in Real Estate Closing SchemeRead the Press Release
Garry Christopher Forsythe, 42, of Hendersonville, Tenn., was sentenced today to 33 months in prison to be followed by two years of supervised release, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. U.S. District Court Judge Aleta A. Trauger imposed the sentence, and also ordered Forsythe to pay $2,249,294.80 in restitution and to forfeit the proceeds of his crime.
Forysthe pleaded guilty to one count of wire fraud in December 2015 in connection with a scheme involving escrow funds held by his real estate closing company, Forsythe Title and Escrow. During the sentencing hearing, evidence established that the company’s escrow accounts developed shortages of more than $2.2 million because Forsythe made inflated or unsupported transfers of funds from the escrow accounts to the company’s operating accounts. Testimony during the hearing also established that, contrary to Forsythe’s position, the escrow shortages were not inadvertently caused by the failure to deposit checks or by bank errors. The evidence demonstrated that, in one instance, funds were transferred from an escrow account at Forsythe Title & Escrow and used for the down payment on a boat purchased by Forsythe. Evidence also demonstrated that the escrow shortages resulted in bounced checks, delays in scheduled real estate closings, and instances in which borrowers were left with two mortgages because Forsythe Title & Escrow failed to pay financial institutions with funds that had been provided for that purpose.
The case was investigated by the FBI and the IRS-Criminal Investigation. The case was prosecuted by Assistant U.S. Attorneys William F. Abely and Cecil W. VanDevender.
Waverly, Tennessee Woman Pleads Guilty to Bank EmbezzlementRead the Press Release
Sheila Burns, 47, of Waverly, Tennessee, pleaded guilty today in U.S. District Court, to one count of embezzling funds from FirstBank, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. During a plea hearing before U.S. District Court Judge Aleta A. Trauger, Burns acknowledged engaging in a five-year scheme to embezzle money by creating and modifying fraudulent loans.
Burns admitted that, between 2010 and 2015, while employed as a loan assistant at FirstBank in Waverly, Tenn., she fraudulently obtained bank funds by falsifying loan documents and by originating and modifying loans, using the names of various FirstBank customers and forging their signatures on the loan documents. In an effort to further conceal the embezzlement scheme, Burns falsified entries on FirstBank’s cashier’s check log, and originated new fraudulent loans in order to make payments due on other loans she had fraudulently obtained. Burns obtained more than $130,000 from this loan scheme and she used these funds to pay personal expenses, including to pay bills and to pay down credit card debt.
Burns faces up to 30 years in prison and a fine of up to $1,000,000 and will be ordered to pay restitution to FirstBank and to forfeit the proceeds of her offense. She will be sentenced by Judge Trauger on July 13, 2016. Burns’ sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
The case was investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Premiertox Pays U.S. and Tennessee $2.5 Million to Resolve False Claims Act LawsuitRead the Press Release
PremierTox 2.0, Inc. has paid $2.5 million to resolve alleged violations of the False Claims Act, announced David Rivera, United States Attorney for the Middle District of Tennessee. PremierTox previously did business in Tennessee under the name Nexus and is a company that provides drug urine screening services to citizens of Tennessee and Kentucky. The government alleged that PremierTox submitted false claims when billing Medicare, TennCare and Kentucky Medicaid for drug urine screening services.
“Enforcement of the False Claims Act continues to be a top priority of the U.S. Attorney’s Office,” said U.S. Attorney David Rivera. “We will continue to intervene in these matters when the protection of taxpayers’ interest and integrity of our nation’s healthcare industry becomes necessary.”
The settlement resolves the government’s allegations that PremierTox and Nexus submitted three types of false claims during the period of September 2011 through June 2014, while PremierTox was under its former ownership and management. The government alleged that PremierTox had a swapping arrangement, in which Nexus gave below cost discounts on its urine drug screen tests to patients in Tennessee without insurance, in exchange for physicians’ referring their patients with Medicare or TennCare coverage to Nexus. The government also contended that, in Tennessee, Nexus submitted excessive claims to Medicare and TennCare for laboratory testing that was beyond what was medically reasonable and necessary. In addition, the government claimed that, in Kentucky, PremierTox provided point of care testing cups to medical offices free of charge to induce those providers to use PremierTox’s services.
“Our office will continue to work with our state and federal partners to combat healthcare fraud,” said Attorney General Herbert H. Slatery III. “In order to protect Tennessee tax dollars, it is imperative that we pursue those individuals attempting to take advantage of the system.”
Under the settlement agreement, PremierTox paid a total of $2,500,000. Of that amount, $2,125,000 covers the conduct in Tennessee, and $325,000 covers the conduct in Kentucky. The United States will receive $1,757,300 under the settlement, and Tennessee will receive $325,200.
"Medically unnecessary lab tests and financial incentives from labs to doctors in exchange for referrals are costing the taxpayers millions of dollars," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "This settlement is one of many that are sending a strong message to the lab industry that they need to clean up their act."
The allegations resolved by today’s settlement were originally raised in two lawsuits filed against PremierTox in Tennessee and Kentucky under the qui tam, or whistleblower provision of the False Claims Act. This provision allows private citizens to bring civil suits on behalf of the government and to share in any recovery.
The lawsuit in Tennessee was filed by a former office manager of a pain clinic in Cookeville. The relator in this case will receive $361,250. The relator who brought the lawsuit in Kentucky is the former CEO of PremierTox and will receive and $56,250.
The Tennessee lawsuit remains pending against several other defendants whom the United States and Tennessee allege violated the False Claims Act and the Tennessee Medicaid False Claims Act. The remaining claims include allegations that Lenoir City chiropractor Matthew Anderson operated the Cookeville Center for Pain Management as a pill mill in which a nurse practitioner wrote prescriptions that Medicare and TennCare paid for, that had no legitimate medical purpose; and that Dr. David Florence likewise operated a pill mill at his Center for Advanced Medicine in Manchester, Tennessee.
This case was investigated by the U.S. Department of Health & Human Services Office of Inspector General and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit. The United States is represented in these cases by Assistant U.S. Attorneys Ellen Bowden McIntyre for the Middle District of Tennessee and Ben Schecter of the Western District of Kentucky. The State of Tennessee is represented by Assistant Attorney General Phillip Bangle.
The two cases are docketed as United States ex rel. Norris v. Anderson, No. 2:13-cv-00035 (M.D. Tenn.) and United States ex rel. Duncan v. Nexus Lab, Inc., No. 1:14-cv-89-R (W.D. Ky.). The claims settled by this agreement are allegations only, and there has been no determination of liability.
Former Nashville Airport Official Sentenced to Two Years in Prison for Fraud and Bribery SchemeRead the Press Release
John T. Howard, Jr., 45, of Nashville, Tenn., was sentenced today to a term two years in prison in connection with his role in a scheme involving fraudulent invoices and the solicitation of a bribe, announced David Rivera, United States Attorney for the Middle District of Tennessee. U.S. District Judge Aleta A. Trauger, who imposed the sentence, also ordered Howard to pay restitution of $1,405,876.07 and to forfeit the proceeds of his crime. The government had sought a prison term of between 57-71 months, in accordance with the U.S. Sentencing Commission Guidelines.
During a hearing on October 1, 2015, Howard, who had been an Assistant Vice President of the Metropolitan Nashville Airport Authority, (“MNAA”) pleaded guilty to one count of conspiring to commit wire fraud, one count of soliciting and receiving a bribe, and one count of money laundering. Howard acknowledged conspiring with certain MNAA contractors to submit fraudulent invoices to MNAA for construction and repair work that they had not performed, overseen, or verified. Howard also admitted asking a contractor to purchase more than $49,000 in airline tickets to Las Vegas for players, coaches, and others affiliated with a youth basketball organization run by Howard, in return for awarding an MNAA cleaning job to this contractor.
On April 4, 2016, Tim Rucker, 49, of Smyrna, Tennessee, was charged with conspiring with Howard to commit money laundering and wire fraud. The charging document alleges that Rucker submitted false invoices to MNAA for work that he had not in fact performed and that he provided the majority of the cash derived from these invoices to John Howard.
The charges against Rucker are merely an accusation and are not evidence of guilt. Rucker is presumed innocent unless and until proven guilty in a court of law.
The case is being investigated by the Federal Bureau of Investigation, the IRS- Criminal Investigation and the Office of the Davidson County District Attorney General. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Nashville Tax Return Preparer Indicted for Tax FraudRead the Press Release
Nicole Bond Hicks, 45, of Nashville, Tenn., was indicted yesterday by a federal grand jury in Nashville, Tenn., on charges related to preparing and filing false income tax returns, announced David Rivera, U.S. Attorney for the Middle District of Tennessee and Tracey D. Montaño, Special Agent in Charge, IRS-Criminal Investigation. Hicks was charged with 14 counts of aiding and assisting in the preparation of false tax returns for other individuals and one count of interfering with the administration of the internal revenue laws.
According to the indictment, Hicks was the owner of America’s Tax Table, a tax preparation business in Nashville, Tennessee. During the period of around 2007 through 2011, Hicks prepared and caused to be filed approximately 3,700 tax returns on behalf of her clients. Specifically, the indictment charges that she aided in the preparation of at least 14 false tax returns for other individuals from January 2010 through March 2011. The fraudulent returns inflated or created fictitious medical and dental expenses, cash charitable contributions, and fictitious, unreimbursed employee business expenses. These fictitious expenses created hundreds of thousands of dollars in false expenses and deductions and allowed clients to obtain income tax refunds they were not legally entitled to.
If convicted, Hicks faces up to three years in prison and a $250,000 fine on each count.
The case was investigated by the Internal Revenue Service – Criminal Investigation. Assistant United States Attorney Thomas J. Jaworski is representing the United States.
An indictment is merely an accusation and is not evidence of guilt. Defendants are presumed innocent unless and until proven guilty in a court of law.
Nashville Tax Preparer Sentenced for Conspiracy and Filing False Tax ReturnsRead the Press Release
Joshua Gotwe Chinamora, 37, of Plano, Texas, was sentenced on April 4, 2016, to 18 months in prison, followed by three years supervised release, on charges of conspiracy and filing false tax returns, announced David Rivera, U.S. Attorney for the Middle District of Tennessee and Tracey D. Montaño, Special Agent in Charge, IRS – Criminal Investigation. United States District Court Judge Todd J. Campbell also ordered Chinamora to pay restitution of $140,705.00 to the IRS.
On November 9, 2015, Chinamora pleaded guilty to two counts of an 11-count indictment, previously filed on March 26, 2014, charging Chinamora and co-defendant, Moven Mpofu, with conspiracy and preparing false tax returns. Chinamora admitted that between January 2007 and April 2010, he and Mpofu operated Acura Tax Service (ATS) in Nashville, Tennessee, and prepared and filed approximately 58 false tax returns. The false returns, which were electronically transmitted to the IRS from the ATS Nashville office, each claimed false refunds ranging from $1,400 to $7,600. The false entries on the returns included filing status, moving expenses, medical expenses, gifts to charity, child and dependent care credits, education credits and dependent credits.
The individuals for whom Chinamora and Mpofu prepared and filed returns did not provide the defendants with the false information and did not know that the returns were falsely prepared.
Mpofu is currently a federal fugitive and his case remains pending before the court. He is presumed innocent until proven guilty in a court of law.
This investigation was conducted by IRS-Criminal Investigation. Assistant U.S. Attorney Sandra Moses represented the United States.
Clarksville Man Pleads Guilty to Bank EmbezzlementRead the Press Release
Eric Williams, 32, of Clarksville, Tenn., pleaded guilty yesterday in U.S. District Court, to one count of bank embezzlement, announced David Rivera, United States Attorney for the Middle District of Tennessee.
According to court documents, Williams was employed by First Tennessee Bank as a Financial Services Representative and later as a Credit Analyst, at a Nashville branch. His duties included meeting with customers who were seeking to open new accounts. Williams admitted that from 2013 to 2015, he embezzled more than $27,000 from customer accounts. He carried out this scheme by targeting elderly customers and without their knowledge, used their information to open bank accounts and apply for ATM cards, changing the mailing address to the bank branch instead of the customer’s home. When Williams received the ATM cards, he used them to withdraw money from the accounts.
Williams faces up to 30 years in prison and a fine of up to $1 million; forfeiture of criminal proceeds; and will be ordered to pay restitution in the amount of $27,387. Williams will be sentenced by U.S. District Judge Aleta Trauger on June 24, 2016.
The case was investigated by the Federal Bureau of Investigation. The United States is represented by Assistant U.S. Attorney Thomas J. Jaworski.
Michigan Man Pleads Guilty to Scheme to Defraud Hospitals and UniversityRead the Press Release
Troy Mitchell McCormick, 50, of Commerce Township, Michigan, pleaded guilty today in U.S. District Court in Nashville, Tenn., to charges of mail and wire fraud, announced Jack Smith, Acting United States Attorney for the Middle District of Tennessee for the administration of this case.
During a plea hearing before U.S. District Court Judge Marvin E. Aspen, McCormick admitted engaging in a scheme to defraud while employed as a sales representative and Vice President for Business Development at Emdeon, a company headquartered in Nashville, Tennessee, that provided data and information services to hospitals, health systems and other customers in the healthcare industry. McCormick was responsible for overseeing the accounts of certain Emdeon customers located in Michigan, including Memorial Health Care, Spectrum Health Systems, CareTech Solutions and the University of Michigan.
McCormick admitted that he fraudulently fabricated contracts between his Emdeon and these client customers and that he forged signatures on these contracts. As a result of McCormick’s forged contracts, these customers were billed inflated amounts and McCormick received more than $100,000 in additional incentive compensation.
McCormick further admitted taking certain steps to conceal his scheme, including posing as fictitious hospital and university employees and using email addresses in the names of these fictitious employees to correspond with his employer regarding the fraudulent contracts. McCormick also acknowledged that he manufactured and mailed a counterfeit check for $77,304.12 in an effort to cover up a forged contract.
After Emdeon learned of this scheme, Emdeon refunded any improper payments to its customers.
McCormick is scheduled to be sentenced by Judge Aspen on September 19, 2016.
He faces up to 20 years in prison and a $250,000 fine on each fraud count, in addition to forfeiture of any money or property derived from the fraud. McCormick will also be ordered to pay restitution to any victims of his offense. McCormick’s 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. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
United States and Tennessee File Suit Against Lenoir City Chiropractor and Manchester PhysicianRead the Press Release
The United States and Tennessee filed suit in U.S. District Court in Nashville today, alleging that Matthew Anderson, a Chiropractor from Lenoir City, Tenn., and David Florence, a Doctor of Osteopathy from Manchester, Tenn., made fraudulent claims to Medicare and TennCare in violation of the False Claims Act and the Tennessee Medicaid False Claims Act, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. The suit also names the Cookeville Center for Pain Management; Preferred Pain Center of Grundy County; McMinnville Pain Relief Center; and PMC Management; and claims that the defendants have been unjustly enriched and caused Medicare and TennCare to pay out money through mistake of fact.
“The U.S. Attorney’s Office will work with our federal and state partners and aggressively pursue those who seek to profit at the expense of taxpayers,” said U.S. Attorney David Rivera. “It is imperative that those who profit from dispensing pain medication always consider the well-being of patients as well as the addiction epidemic facing this country.”
Anderson is a chiropractor who operated four pain clinics in Tennessee. Although several of these clinics changed names at times, they were recently known as Cookeville Center for Pain Management; Spinal Pain Solutions in Harriman, Tenn; Preferred Pain Center of Grundy County in Gruetli Laager, Tenn; and McMinnville Pain Relief Center. Anderson operated these clinics both on his own and later through his management company, PMC Management. All of the clinics are now closed, except that the clinic in Harriman, Tenn. now operates under a new name with new owners.
According to the complaint, Anderson believed that medical clinics had to have a physician owner, so he recruited several physicians to serve as the sham owners of the four pain clinics, while Anderson, and later his company PMC, managed the clinics. In fact, according to the complaint, Anderson was the true owner who controlled the pain clinics during the entire time they were in operation.
The complaint alleges that the four pain clinics engaged in the following fraud schemes:
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Anderson operated Cookeville Center for Pain Management as a pill mill in which a nurse practitioner wrote prescriptions for controlled substances for Medicare and TennCare patients that had no legitimate medical purpose. Medicare and TennCare ultimately paid for those prescriptions, which were not allowable under Program rules.
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Anderson instructed employees at the four pain clinics to upcode office visits, by assigning an inaccurate billing code to increase Medicare reimbursement.
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Anderson continued to allow the pain clinics in Cookeville and Harriman to operate as pain management clinics and bill Medicare for services during a period in 2012 in which medical directors were not on site for the minimum time during operating hours as required by Tennessee law governing pain management clinics.As a result, according to the complaint, Medicare paid for non-reimbursable office visits, injections, and controlled substances prescriptions written by nurse practitioners at the clinics, without the required oversight of a medical director.
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In addition, David Florence, a doctor of osteopathy in Manchester, Tenn., who was one of the sham physician owners, also ran a pill mill out of his Center for Advanced Medicine in Manchester.
According to the complaint, Anderson reaped over $5 million from the four pain clinics, and took over 90% of the pain clinics’ profits, while the sham physicians only earned a salary for their service as medical directors. The government alleges that the scheme defrauded Medicare and TennCare of at least $1 million. The United States and Tennessee are seeking to recover treble damages plus penalties pursuant to the False Claims Act.
"These defendants allegedly supplied narcotics to patients without regard to medical need," said Derrick L. Jackson, the Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "The result was an expansion of abuse and addiction to controlled substances which enriched the defendants at the expense of the taxpayers."
“Our office is dedicated to fighting Tennessee’s prescription drug crisis with every tool at our disposal,” said Tennessee Attorney General Herbert H. Slatery III. “Pursuing individuals who attempt to take advantage of the system serves as a deterrent and helps protect the integrity of our healthcare programs.”
“Like many states, Tennessee is battling a prescription drug epidemic,” said TBI Director Mark Gwyn. “We want to hold those accountable who unnecessarily provide prescription drugs with no regard for the taxpayer’s dime and ensure legal medications get in the hands of citizens who really need them.”
The allegations in today’s complaint were originally raised in a lawsuit filed by the former office manager in the Cookeville pain clinic. She brought her claims under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery.
The case was 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 represents the United States, and Assistant Attorney General Philip Bangle represents 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.
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Federal Jury Convicts Antioch Man of Child Pornography ChargesRead the Press Release
Christopher N. Bonick, 31, of Antioch, Tennessee, was found guilty by a federal jury yesterday of attempting to entice a minor to engage in sexual activity and possession of child pornography, announced David Rivera, United States Attorney for the Middle District of Tennessee. The jury returned a guilty verdict following a 2-day trial before U.S. District Judge Aleta Trauger.
Evidence produced at trial showed that, in July of 2010 Bonick began communicating online with an individual he initially believed to be a 13 year old girl. On July 27, 2011, Bonick engaged in a lengthy sexually explicit chat with this person, who, unknown to him, was actually an undercover investigator in Louisiana. Bonick, who believed the individual to be 14 years old, asked her if she would be willing to engage in sexual activity with him. He also discussed having previously met a 15 year- old girl online and had traveled to have sex with her.
The evidence at trial also showed that Bonick had previously communicated with numerous minors online, had solicited child pornography from them, and had traded child pornography with other individuals via email. Bonick was in possession of dozens of images of child pornography when a search warrant was served at his home in Antioch in January 2012 at which time he admitted that he was sexually attracted to minors.
Bonick will be sentenced by Judge Aleta Trauger on July 11, 2016, at 2:00 p.m. He faces 10 years to life in prison and a fine of up to $250,000.
The case was investigated by the Metropolitan Nashville Police Department and the Louisiana Department of Justice-Cyber Crime Unit. The case was prosecuted by Assistant U.S. Attorneys Carrie Daughtrey and Henry Leventis.