Middle District of Tennessee
Press releases recorded for this federal judicial district.
Columbia, Tennessee Man Pleads Guilty to Methamphetamine Conspiracy and to Threatening to Retaliate Against a Government WitnessRead the Press Release
Justin Harris, 43, a/k/a “Cole,” of Columbia, Tennessee, pleaded guilty today before Chief U.S. District Judge Kevin A. Sharp, to conspiracy to possess and distribute between 150 and 500 grams of methamphetamine, and to threatening to retaliate against a government witness, announced David Rivera, United States Attorney for the Middle District of Tennessee.
According to the facts contained in the plea agreement, Harris admitted to conspiring with others to obtain, possess, and distribute methamphetamine in Savannah and Columbia, Tennessee in June 2015. During the investigation, law enforcement officers obtained evidence that Harris was selling significant quantities of methamphetamine from a residence in Columbia, Tenn. During one of the drug transactions, Harris, who had begun to suspect that the government informant was working with law enforcement, confronted the informant with that suspicion. Over the next several days, Harris repeatedly threatened to kill the informant.
On June 29, 2015, a search warrant was executed at the residence in Columbia where Harris had been selling methamphetamine. During the search, agents recovered numerous rounds of ammunition, drug paraphernalia and prescription pills. Law enforcement officers also searched a truck that was parked in the driveway of the residence. Inside the truck, they recovered a loaded Smith & Wesson, MP 40, .40 caliber firearm, two digital scales, and more than 50 grams of methamphetamine. Harris admitted to owning the gun, paraphernalia, and the methamphetamine.
Harris is scheduled to be sentenced on June 20, 2016 and according to the terms of the plea agreement; he agrees to be sentenced to 168 months in prison.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives; the Tennessee Bureau of Investigation; and the Maury County Sheriff’s Office. The case was prosecuted by Assistant U.S. Attorney Ben Schrader.
Spring Hill Man Pleads Guilty to Embezzlement SchemeRead the Press Release
Robert Majors, 58, of Spring Hill, Tenn., pleaded guilty on March 10, 2016, to two counts of wire fraud in connection with a scheme to embezzle more than $600,000 from his former employer, announced David Rivera, United States Attorney for the Middle District of Tennessee.
In a plea hearing before U.S. District Court Judge Aleta Trauger, Majors admitted that, while employed for more than seven years as Controller for Irving Materials, Inc. (“IMI”), he fraudulently embezzled more than $600,000 from IMI. Majors stated that he used electronic wire transfers from an IMI bank account into his personal bank account to embezzle the funds. Majors admitted that he concealed his fraud by recording the transfers as company purchases of fixed assets, such as concrete, in the company’s journal entries. Majors admitted to using the embezzled funds for a variety of personal reasons, including paying his mortgage and other loans, credit card bills, to make home repairs, and to pay for a cruise to Italy.
Majors faces up to 20 years in prison on each wire fraud count, a criminal fine of up to $250,000 for each count, and forfeiture of any criminal proceeds. He will also be ordered to pay restitution in the amount of $642,500. Majors will be sentenced by Judge Trauger on June 15, 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. Attorney Thomas J. Jaworski.
Southern Tennessee Medical Center, LLC to Pay $2.48 Million to Settle False Claims Act and Overpayment AllegationsRead the Press Release
Southern Tennessee Medical Center, (STMC) located in Winchester, Tenn., has agreed to pay the United States $2,481,856.50 to settle False Claims Act and overpayment allegations, announced Jack Smith, Acting U.S. Attorney for the Middle District of Tennessee. In December 2015 STMC submitted a voluntary self-disclosure to the U.S. Attorney’s Office and to the Office of Inspector General for the Department of Health and Human Services. An investigation by the company’s compliance program into STMC’s billing for in-patient geriatric psychiatric services prompted the self-disclosure.
Based upon an extensive investigation conducted by STMC, the United States alleged that STMC submitted certain claims and received payment for: (1) medically unnecessary days of in-patient geriatric psychiatric services and (2) in-patient geriatric psychiatric services for which a Physician Certification or Recertification was not obtained. The time period covered by the settlement agreement spans January 1, 2009 through December 31, 2014.
“When medical providers self-disclose potential violations directly to the U.S. Attorney’s Office they avoid the costs associated with protracted investigations and minimize the risks of costly fines and exclusion under the False Claims Act,” said Acting U.S. Attorney Jack Smith, for the administration of this settlement. “When potential violations were discovered by this provider’s compliance program, they responded appropriately, avoided harsher penalties and resolved the issue quickly.”
Under the settlement agreement, STMC will pay $1,628,098.50 to resolve the United States’ allegations that it submitted false claims to Medicare primarily during the period from January 2009 to December 2014 for medically unnecessary in-patient geriatric psychiatric services. STMC will also pay $853,758.00 to resolve overpayment allegations relating to the billing of in-patient geriatric psychiatric services for which a Physician Certification or Recertification was not obtained.
"We welcome self-disclosures from the health care community," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. "Working together we can help safeguard taxpayer dollars and strengthen the financial position of the Medicare Trust Fund."
The United States encourages all healthcare providers to self-disclose any known violations that have resulted in the submission of improper claims to federal healthcare programs. This case was investigated by the United States’ Attorney’s Office for the Middle District of Tennessee and the U.S. Department of Health & Human Services Office of Inspector General. Assistant U.S. Attorney Jason Ehrlinspiel represented the United States.
Alabama Couple Pleads Guilty to Bank FraudRead the Press Release
Douglas W. Scott, 46, and Azar Ardestani, 33, both of New Market, Alabama, pleaded guilty on March 3, 2016, to Bank Fraud and Conspiracy to Commit Bank Fraud, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
At the plea hearing, Scott and Ardestani admitted using their respective used car businesses in a criminal scheme to defraud multiple vehicle finance lenders, including federally insured financial institutions, automotive finance lenders, and federally insured credit unions. As part of their scheme, they would secure a loan to purchase a vehicle and thereafter seek subsequent, secured automotive loans on the same vehicle from other financial institutions.
The defendants were able to secure additional loans on the same vehicle by agreeing to provide as collateral a “clean” or “clear” title of a vehicle that they had fraudulently obtained. Often, they provided subsequent lenders with copies of false title applications, unfiled tax returns, and other qualifying information, knowing that the lenders expected to receive title to the vehicle to perfect the lien, and knowing that the lender would not have funded the loan as an unsecured loan. Scott and Ardestani guaranteed subsequent lenders that they would be in first secured position and promised to provide the subsequent lenders with the original title to perfect their liens. Instead, they would submit fraudulent information to the Alabama Department of Revenue to “erase” the lien or falsely show that the lien had been paid off.
Because both defendants were authorized dealers in Alabama, they had the authorization to apply for replacement of lost titles, which they did in order to fraudulently release liens and to secure replacement titles that showed no liens on the vehicles, effectively “washing” the vehicle title. In some instances, they would delay submission to the lender of the promised “clean” title in order to collateralize another loan. They also sold lien-encumbered vehicles “out of trust” after obtaining “washed” titles. As an example, the couple obtained nine loans for a single vehicle, each time, falsely assuring the new lender that the vehicle was free of liens. When a financial institution put sufficient pressure on the defendants about getting the promised titles, the defendants would pay off the loans, usually by obtaining additional loans.
Between May 19, 2010 and January 10, 2015, Scott and Ardestani perpetrated this scheme with well over a hundred vehicles and over 65 victim financial institutions, with a total anticipated loss of approximately $5,900,000.
The sentencing hearings are set for June 16, 2016. Pursuant to the plea agreement, Scott and Ardestani face potential sentences of up to 30 years in prison, restitution in the amount of at least $3,800,000 to victims of the crime and a fine to be determined by the Court.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Carrie Daughtrey is prosecuting the case.
Former CEO of Wellcity, Inc. Pleads Guilty to Defrauding InvestorsRead the Press Release
George David George, 61, of Franklin, Tenn., pleaded guilty today in connection with a multimillion dollar investment scheme, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. In a hearing before U.S. District Court Chief Judge Kevin H. Sharp, George pleaded guilty to securities fraud, mail fraud, wire fraud and money laundering.
“This defendant cheated dozens of investors out of millions of dollars based on lies and deception,” said U.S. Attorney David Rivera. “This office will continue to target fraudulent investment scams and to prosecute those who defraud investors for their own personal gain.”
During today’s hearing, George acknowledged being the founder and CEO of WellCity, Inc., a company based in Brentwood, Tenn. that operated a social network devoted to wellness. George admitted that he solicited millions of dollars from WellCity investors by making misrepresentations regarding the revenue and assets of WellCity, misrepresentations regarding collateral to secure investors’ loans, and misrepresentations regarding the status of a supposed initial public offering. George also admitted that he falsely promised investors that their investments were guaranteed and involved no risk. George further acknowledged that he continued to offer supposed shares in WellCity stock even after the Tennessee Securities Division of the Department of Commerce and Insurance issued a Cease & Desist Order prohibiting him from doing so.
George also admitted using funds that had been provided by investors for his personal use, including depositing funds with Gold Strike casino and making massive cash withdrawals.
“The nation's economy is increasingly dependent on the success and integrity of the securities and commodities markets, and financial investors should not have to fear being deceived in an already risk-filled industry,” said A Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “This plea sends the message that the FBI and its partners will diligently investigate criminal activity involving the deception of investors or the manipulation of financial markets.”
"Investment fraud is like a 'house of cards.' The underlying structure will eventually fall apart and leaves many investors in financial ruin," said Tracey D. Montaño, Special Agent in Charge of the IRS-Criminal Investigation, Nashville Field Office. "IRS-Criminal Investigation is committed to investigating this type of fraud in an effort to protect the financial well-being of the American public. We will continue to work with our law enforcement partners to bring this investigation to a thorough and complete conclusion."
George faces up to 20 years in prison on each fraud count and up to 10 years on the money laundering count. He also faces a criminal fine of up to $5,000,000 and forfeiture of criminal proceeds, and he will be ordered to pay more than $2.3 million in restitution to his victims. George will be sentenced by Chief Judge Sharp on June 10, 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 Internal Revenue Service - Criminal Investigation, and the United States Postal Inspection Service, and the Williamson County Sheriff’s Department, with assistance from the Tennessee Department of Commerce and Insurance. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
South Carolina Man Sentenced to Prison for Role in Nationwide Health Care Benefits SchemeRead the Press Release
Nashville, Tenn. - February 26, 2016 - William M. Worthy, II, 53, of Isle of Palms, South Carolina, was sentenced to 82 months in prison today for his role in a nationwide health care fraud scheme that defrauded over 17,000 victims, announced David Rivera, United States Attorney, and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Worthy was sentenced by U.S. District Judge Aleta A. Trauger, who also imposed a term of three years’ supervised release upon Worthy’s release from prison. A restitution hearing has been scheduled for June 1, 2016. Worthy pleaded guilty on November 3, 2015, to one count of wire fraud and one count of conspiring to commit mail fraud, wire fraud, health plan embezzlement and money laundering.
As part of his guilty plea, Worthy admitted that he participated in a scheme to defraud thousands of individuals who purchased purported health care coverage from Worthy and his co-conspirators, when in fact the health care plans were not backed by insurance companies. The purported health care plans were marketed by Smart Data Solutions, LLC, a company located in Springfield, Tennessee, owned and managed by Bart Sidney Posey, Sr., 48, of Springfield, who is charged as a co-conspirator in this case.
Smart Data Solutions LLC, and related entities, were seized and liquidated by the State of Tennessee in 2010 when the Davidson County Chancery Court found that these entities were acting as an unlicensed insurance company and posed a significant hazard to the public. Worthy also admitted that he and his co-conspirators embezzled funds from premiums paid by individuals who had signed up for these unauthorized health plans, diverting more than $5.4 million in premiums for their own personal use. He further admitted that the majority of claims submitted in connection with these unauthorized health plans were never paid and accepted responsibility for more than $7.3 million of losses from the fraud.
Worthy was charged along with Posey Sr., Richard Hall Bachman, 67, of Austin, Texas, and Angela Slavey Posey, 49, of Springfield, Tennessee, in a 57-count indictment returned on June 26, 2013. The three co-defendants are pending trial. An indictment is merely an accusation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the United States Postal Inspection Service, the FBI, the United States Department of Labor- Employee Benefits Security Administration and Office of Inspector General, the United States Secret Service, the IRS- Criminal Investigation and the Tennessee Office of the Attorney General. The United States is represented by Assistant United States Attorneys Sandra G. Moses and William F. Abely and Senior Trial Attorney Nicholas Acker of the Criminal Division’s Fraud Section.
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South Carolina Man Sentenced to 82 Months in Prison for Role in Nationwide Health Care Benefits SchemeRead the Press Release
A South Carolina man was sentenced to 82 months in prison today for his role in a nationwide health care fraud scheme that defrauded more than 17,000 victims, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David Rivera of the Middle District of Tennessee.
William M. Worthy II, 53, of Isle of Palms, South Carolina, was sentenced by U.S. District Judge Aleta A. Trauger of the Middle District of Tennessee, who also ordered Worthy to pay $6,524,888.86 in restitution and forfeiture. Worthy pleaded guilty on Nov. 3, 2015, to one count of wire fraud and one count of conspiring to commit mail fraud, wire fraud, health plan embezzlement and money laundering.
As part of his guilty plea, Worthy admitted that he participated in a scheme to defraud thousands of individuals who purchased purported health care coverage from Worthy and his co-conspirators, when in fact the health care plans were not backed by insurance companies. The purported health care plans were marketed by Smart Data Solutions LLC, a company located in Springfield, Tennessee, owned and managed by charged co-conspirator Bart Sidney Posey Sr., 48, of Springfield. Worthy also admitted that he and his co-conspirators embezzled funds from premiums paid by individuals who had signed up for these unauthorized health plans, diverting more than $5.4 million in premiums for their own personal use. He further admitted that the majority of claims submitted in connection with these unauthorized health plans were never paid and accepted responsibility for more than $7.3 million of losses from the fraud.
Worthy was charged along with Posey Sr., Richard Hall Bachman, 67, of Austin, Texas, and Angela Slavey Posey, 49, of Springfield, in a 57-count indictment returned on June 26, 2013. The three co-defendants are pending trial. An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The U.S. Postal Inspection Service, the FBI, the U.S. Department of Labor’s Employee Benefits Security Administration and Office of Inspector General, the U.S. Secret Service, Internal Revenue Service-Criminal Investigation and the Tennessee Office of the Attorney General investigated the case. Senior Trial Attorney Nicholas Acker of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Sandra G. Moses and William F. Abely of the Middle District of Tennessee are prosecuting the case.
Nashville Woman Sentenced to Five Years in Prison for Trying to Bribe WitnessRead the Press Release
NASHVILLE, Tenn. – February 25, 2016 – Laquanda Boyce,33, of Nashville, Tenn., was sentenced today to serve five years in prison for her role in attempting to bribe the victim of a shooting, announced David Rivera, United States Attorney for the Middle District of Tennessee. Boyce pleaded guilty on September 4, 2015, to conspiracy to tamper with a witness. The shooter, Michael Calloway, was sentenced last week to serve 15 years in prison for being a felon in possession of ammunition, conspiracy to tamper with a witness and attempting to obstruct justice.
According to the statement of facts, on the morning of April 12, 2015, Calloway and Boyce were assaulting a woman at the J.C. Napier housing development when another person intervened and tried to protect the woman being assaulted. Later in the afternoon, Calloway and Boyce returned with Calloway carrying a firearm. Upon seeing the witness again, Calloway fired eight or nine shots at him, striking him once in the leg. The gunshot victim was treated at Vanderbilt Hospital and subsequently identified Calloway as the shooter.
Calloway was arrested the following day and learned that he would likely face federal firearms charges. He and Boyce then devised a scheme to pay the witness $1200 in exchange for his refusal to testify or for testifying that he had mistakenly identified Calloway as the person who had shot him.
Calloway and Boyce were subsequently indicted on witness tampering and obstruction charges.
These cases were investigated by the Metropolitan Nashville Police Department Gang Unit and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case is being prosecuted by Assistant United States Attorney Sunny A.M. Koshy.
Nashville Gang Member Sentenced to Fifteen Years in Prison for Witness Tampering Connected to A Shooting in Public HousingRead the Press Release
Michael Calloway a/k/a Oso, 21, of Nashville, Tenn., was sentenced Friday to serve 15 years in prison, after previously pleading guilty to being a felon in possession of ammunition, conspiracy to tamper with a witness and attempting to obstruct justice, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
According to the statement of facts, on the morning of April 12, 2015, Calloway and Laquanda Boyce were assaulting a woman at the J.C. Napier housing development when another person intervened and tried to protect the woman being assaulted. Later in the afternoon, Calloway and Boyce returned with Calloway carrying a firearm. Upon seeing the witness again, Calloway fired eight or nine shots at him, striking him once in the leg. The gunshot victim was treated at Vanderbilt Hospital and subsequently identified Calloway as the shooter.
Calloway was arrested the following day and learned that he would likely face federal firearms charges. He and Boyce then devised a scheme to pay the witness $1200 in exchange for his refusal to testify or for testifying that he had mistakenly identified Calloway as the person who had shot him.
Calloway and Boyce were subsequently indicted on witness tampering and obstruction charges.
In imposing the fifteen year sentence, United States District Judge Todd Campbell remarked that the offenses were serious and “goes to the heart of the criminal justice system” and that the fifteen year sentence was warranted by the egregious nature of the crime.
Laquanda Boyce, 33, also of Nashville, pleaded guilty on September 4, 2015, to conspiracy to tamper with a witness and will be sentenced on February 25, 2016.
This case was investigated by the Metropolitan Nashville Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case is being prosecuted by Assistant United States Attorney Sunny A.M. Koshy.
Middle Tennessee Physicians and Owners of Medical Equipment Companies Plead Guilty in Kickback SchemesRead the Press Release
Dr. Bruce Rubinowicz, 53, of Aventura, Florida and previously of Franklin, Tennessee, pleaded guilty today to one count of soliciting and receiving a cash kickback in exchange for patient referrals, announced David Rivera, United States Attorney for the Middle District of Tennessee.
During a hearing before U.S. District Court Judge Aleta A. Trauger, Rubinowicz admitted that, as a physician who operated several sleep labs in Middle Tennessee, he agreed to receive cash kickbacks in exchange for referring patients to Air Affiliates, a Nashville based medical supplier. Rubinowicz admitted accepting a total of $22,900 in cash kickbacks, in exchange for referring patients to Air Affiliates, who provided these patients continuous positive airway pressure (“CPAP”) ventilators. Rubinowicz further acknowledged that some of the patients he referred in exchange for cash payments were Medicare beneficiaries.
Rubinowicz faces up to five years in prison and a $25,000 fine when he is sentenced by Judge Trauger on May 13, 2016. His sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
This guilty plea follows several other recent convictions in this district involving individuals who paid for or accepted cash kickbacks in exchange for patient referrals, including:
- On August 6, 2015, Bradley Sensing, 55, of Nashville, pleaded guilty to one count of paying cash kickbacks in exchange for patient referrals. Sensing was the owner of Air Affiliates, a company that provided CPAP ventilators. Sensing is scheduled to be sentenced by Judge Campbell on May 9, 2016.
- On November 10, 2015, Lane Wilkinson, 67, of Spring Hill, Tennessee, pleaded guilty to one count of soliciting and receiving cash kickbacks from a supplier in exchange for making referrals for medical equipment. Wilkinson was the owner and operator of a medical equipment supply company located in Columbia Tennessee. Wilkinson is scheduled to be sentenced by U.S. District Judge Todd J. Campbell on March 7, 2016. Wilkinson and Sensing also face up to five years in prison and a $25,000 fine.
- On November 12, 2015, Dr. Thomasz Zurawek, 52, of Centerville, Tennessee, was sentenced by Judge Trauger to two months in prison and a term of supervised release in connection with his role in a kickback scheme. Zurawek had pleaded guilty to one count of soliciting and receiving cash kickbacks from a medical equipment supplier in exchange for referring patients to that supplier.
These cases were investigated by the Federal Bureau of Investigation, the Tennessee Bureau of Investigation, and the U.S. Department of Health and Human Services Office of Inspector General. The cases are being prosecuted by Assistant U.S. Attorneys William F. Abely and Thomas J. Jaworski.
Grease Hauling Company and Executives Sentenced for Clean Water Act ViolationsRead the Press Release
Southern Grease Company, a grease hauling company that had been based in Dickson, Tennessee, was sentenced yesterday to pay a criminal fine of $280,000 and to forfeit an additional $113,500, announced David Rivera, United States Attorney for the Middle District of Tennessee. Southern Grease pleaded guilty in May 2015 to four felony violations arising from its illegal disposal of waste grease into municipal sewer systems. U.S. District Court Judge Aleta A. Trauger imposed this sentence and also ordered Southern Grease to make restitution to municipal authorities in Dickson and Clarksville, Tennessee.
Southern Grease, which contracted with restaurants and other customers in Tennessee and Kentucky to collect and dispose of the customers’ waste grease, illegally discharged waste grease into grease interceptors that were connected to the municipal sewer systems. This illegal dumping of grease caused substantial damage to municipal sewer systems by clogging pipes and interrupting the operation of pump stations. In December 2013 Southern Grease dumped waste grease into a grease interceptor in Clarksville, Tennessee, which resulted in the obstruction of pipes within the Clarksville sewer system and damage to a Clarksville pumping station, the operation of which was interrupted for cleaning and repairs.
Previously, on February 1, 2016, Judge Trauger sentenced George Butterworth, 75, of Dickson, Tenn., to serve two months in prison and one year of supervised release. Butterworth was President and an owner of Southern Grease, and had pleaded guilty to violating the Clean Water Act; conspiring to violate the Clean Water Act; and to making false statements to agents with the Environmental Protection Agency. Butterworth was also ordered to pay restitution to municipal authorities in Dickson and Clarksville.
On November 24, 2015, Judge Trauger sentenced Gerald McGee, 51, of Dickson, Tenn., to one month in prison plus two years of supervised release for his role in these offenses. McGee was the Operations Manager for Southern Grease and was also convicted of three felony violations in connection with the illegal dumping of waste grease. He was also ordered to pay restitution to municipal authorities in Dickson and Clarksville.
The case was investigated by the EPA Criminal Investigation Division, with assistance from the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney William F. Abely.
Trustee of Retirement Plan Convicted of Filing False ReportsRead the Press Release
Raymond K. Mays, 52, of Crossville, Tennessee, pleaded guilty today to three counts of making a false statement on forms that were filed on behalf of an employee retirement plan. Mays was an employee of Eye Centers of Tennessee, a medical services company based in Crossville and served as a trustee of that company’s 401(k) retirement plan, and had a fiduciary duty to that plan’s beneficiaries.
During a plea hearing before U.S. District Court Judge Todd J. Campbell, Mays admitted that the employee retirement plan made loans to a limited liability company that he controlled, made payments to another company owned by Mays, and leased property to a third company owned by Mays’ wife. Mays acknowledged he personally oversaw these transactions and that these transactions were prohibited by the Employee Retirement Income Security Act of 1974 (“ERISA”) due to the relationship between Mays and these various companies. Mays further admitted that he took steps to conceal the fact that the retirement plan had engaged in financial dealings with entities that he owned and/or controlled, including failing to disclose his relationship with these entities to the third party administrator that helped to prepare the retirement plan’s ERISA filings.
During today’s hearing, Mays also acknowledged signing three false reports that were filed on behalf of the employee retirement plan with the Internal Revenue Service and the U.S. Department of Labor, including one report that falsely stated that the retirement plan had not made any loans and two reports that falsely stated that the retirement plan had not engaged in any prohibited transactions with an interested party.
Mays faces up to 5 years in prison and a fine of up to $250,000 on each count. Mays will be sentenced by Judge Campbell on May 13, 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 Employee Benefits Security Administration of the U.S. Department of Labor and by the U.S. Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Three Tennessee Men Sentenced for Killing During Home-Invasion RobberyRead the Press Release
Three Clarksville, Tennessee, men were sentenced for shooting and killing a man during a home-invasion robbery, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David Rivera of the Middle District of Tennessee.
Jerry Dinkins, 27, was sentenced today to 300 months in prison by Chief U.S. District Judge Kevin H. Sharp of the Middle District of Tennessee. Cornell Oliver, 24, and Blake Wright, 26, were sentenced on Dec. 2, 2015, to 300 months and 285 months in prison, respectively, by Judge Sharp.
According to the plea agreements, on Oct. 27, 2010, Oliver, Dinkins and Wright planned a home-invasion robbery targeting a Clarksville house where a man was known to cook and sell substantial amounts of crack cocaine and to have large amounts of cash. When the defendants arrived at the house, at least eight people were inside and one of the defendants kicked open the door. The defendants then entered and demanded money and drugs from the victim, and one of the defendants proceeded to hit the victim with a gun. The defendants forced the victim outside after he indicated that he did not have money or drugs. People inside the house then heard multiple gunshots, but did not see which defendant fired the weapon. The defendants then fled, and the victim was pronounced dead at the scene.
The Clarksville Police Department and the Drug Enforcement Administration investigated the case. Trial Attorney Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Lynne T. Ingram of the Middle District of Tennessee prosecuted the case.
Three Clarksville Tennessee Men Sentenced for Killing During Home Invasion RobberyRead the Press Release
Three Clarksville, Tennessee men were sentenced for shooting and killing a man during a home-invasion robbery, announced David Rivera, U.S. Attorney for the Middle District of Tennessee and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division
Jerry Dinkins, 27, was sentenced today to 300 months in prison by Chief U.S. District Judge Kevin H. Sharp of the Middle District of Tennessee. Cornell Oliver, 24, and Blake Wright, 26, were sentenced on Dec. 2, 2015, to 300 months and 285 months in prison, respectively, by Judge Sharp.
According to the plea agreements, on Oct. 27, 2010, Oliver, Dinkins and Wright planned a home-invasion robbery targeting a Clarksville house where a man was known to cook and sell substantial amounts of crack cocaine and to have large amounts of cash. When the defendants arrived at the house, at least eight people were inside and one of the defendants kicked open the door. The defendants then entered and demanded money and drugs from the victim, and one of the defendants proceeded to hit the victim with a gun. The defendants forced the victim outside after he indicated that he did not have money or drugs. People inside the house then heard multiple gunshots, but did not see which defendant fired the weapon. The defendants then fled, and the victim was pronounced dead at the scene.
The Clarksville Police Department and the Drug Enforcement Administration investigated the case. Assistant U.S. Attorney Lynne T. Ingram of the Middle District of Tennessee and Trial Attorney Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section prosecuted the case.
Crossville Man Pleads Guilty to Kidnapping Woman and Other Violent Acts During Two-Day Crime OrdealRead the Press Release
Douglas M. Davis, 45, of Crossville, Tenn., pleaded guilty yesterday in U.S. District Court 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, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
During a 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 beat 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. He will be sentenced on April 25, 2016, and faces a maximum sentence of life in prison.
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.
Two Middle Tennessee Men Sentenced to Prison This Week in Child Pornography CasesRead the Press Release
Two Middle Tennessee men were sentenced to lengthy prison terms this week for their role in child pornography cases, announced David Rivera, United States Attorney for the Middle District of Tennessee.
Joseph S. Nichols, 31, of Nashville, Tennessee, was sentenced on January 11, 2016, by U.S. District Court Todd Campbell, to serve 18 years in prison, followed by lifetime supervision. Nichols pleaded guilty to distribution of child pornography on September 14, 2015.
While on probation for an earlier state court conviction for possession of child pornography, Nichols was required to register as a sex offender and was prohibited from obtaining Internet access on any computer without written permission from his probation officer. However, Nichols admitted that soon after his conviction, he began using the Internet to download and collect vast amounts of child pornography, which he also shared with others.
On March 31, 2011, law enforcement officers discovered that Nichols was illegally collecting and distributing child pornography when they went to his residence to serve him with an outstanding warrant for violating the sex offender registration law. Nichols subsequently admitted that he had collected hundreds of thousands of images and videos of the sexual abuse of children and that he had traded this material with other like-minded individuals. He further admitted his personal attraction to children aged 10 and 11 years, and stated that several years earlier he had fondled two girls under the age of three while working on computers in their homes. Forensic analysis of Nichols’ computer confirmed that he collected well over 40,000 images and 160 videos of child pornography, which included depictions of prepubescent children and violence.
Daniel Bruce LaDeau, 66, of Summertown, Tennessee, was sentenced yesterday by U.S. District Court Judge Kevin Sharp to serve 115 months in prison, to be followed by 10 years of supervised release. LaDeau was found guilty by a federal jury of conspiracy to possess child pornography on May 28, 2015.
"The United States Attorney’s Office will continue to diligently and aggressively prosecute individuals who exploit children, particularly those who are discovered to have been doing so for many years,” said U.S. Attorney David Rivera. “We are grateful for the relationships we have with our federal and local law enforcement agencies who often work jointly to investigate cases that result in the removal of child predators from the community.”
The investigation of LaDeau began in April 2010 when Inspectors at Donald W. Wyatt Federal Detention Center in Central Falls, Rhode Island became aware of coded messages being sent between inmate Daniel LaDeau and his younger brother David Ladeau, who was also incarcerated, pending resolution of federal charges of possession of child pornography.
Between March and August of 2010, the LaDeau brothers exchanged letters in which the two conspired to obtain sexually explicit images and videos of young boys from the Internet. Daniel LaDeau, who was a novice computer user, often lamented of his inability to find images and videos he had previously viewed, which prompted his brother David to provide him with instructions and suggestions about how to obtain such sexually explicit images and videos of young boys from the Internet. In addition to discussing how to find child pornography online, the two brothers also discussed in these letters their mutual sexual interest in young boys, referenced prior sexual contact with minor boys, and shared fantasies about engaging in sexual activity with minor boys.
Evidence during the jury trial and sentencing hearings for Daniel LaDeau revealed his sexual attraction to undeveloped minor boys, and LaDeau admitted to having collected child pornography for decades since he was a young man, and further admitted to molesting approximately 100 minor boys. The court cited numerous reasons for imposing a sentence near the statutory maximum of 10 years, including the history and characteristics of the defendant, the need to protect the safety of the community, and the need to deter others from collecting child pornography. In determining the sentence, the court found that LaDeau had possessed between 300 and 600 images of child pornography, including images of prepubescent boys and images that included depictions of violence.
The Nichols case was investigated by the Metropolitan Nashville Police Department and prosecuted by Assistant U.S. Attorney Carrie Daughtrey. The LaDeau case was investigated by Homeland Security Investigations; the United States Secret Service; the Special Investigations Unit of the Donald W. Wyatt Detention Facility in Rhode Island; and the Franklin, Tennessee Police Department. The case was prosecuted by Assistant U.S. Attorneys Carrie Daughtrey and Brent Hannafan.
Hoover, Alabama Man Charged with Possession of Child PornographyRead the Press Release
Joseph Whitlow Blackburn, 68, of Hoover, Alabama, was charged today and pleaded guilty to a criminal information charging him with possession of child pornography, announced David Rivera, U. S. Attorney for the Middle District of Tennessee.
According to charging documents and the plea agreement, between January 30, 2013 and April 16, 2013, agents with the Internet Crimes Against Children (ICAC) Task Force were conducting an investigation into the sharing of child pornography over the Internet and identified on two separate occasions, video files that depicted child pornography. ICAC Task Force agents subsequently identified the IP address associated with the child pornography downloads and obtained a federal search warrant for the house in Hoover, Alabama where Blackburn lived.
In April 2013 agents executed the search warrant and seized computers and other electronic storage devices. A forensic examination of these devices later revealed pornographic images depicting children. According to the plea agreement entered into with the government, Blackburn admitted that he possessed child pornography and agreed to accept a 3-year prison term, to be followed by 10 years of supervised release. Other conditions of release are also specified in the plea agreement, including requiring Blackburn to register as a sex offender.
This case was transferred to the Middle District of Tennessee due to a potential conflict in the Northern District of Alabama which required recusal. The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Lynne T. Ingram of the Middle District of Tennessee.
Nashville Pharmacy Services Settles False Claims Act LawsuitRead the Press Release
Nashville Pharmacy Services, LLC, and its majority owner Kevin Hartman have agreed to pay up to $7.8 million to settle allegations that they overbilled Medicare and TennCare for pharmacy services, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Nashville Pharmacy Services’ primary location is at 100 Oaks in Nashville, Tenn. and it specializes in dispensing HIV and AIDS-related medications.
“Pursuing individuals and corporations who engage in healthcare fraud remains a top priority of the U.S. Attorney’s Office,” said U.S. Attorney David Rivera. “We remain committed to working with our state and federal partners to hold those accountable who attempt to profit at the expense of taxpayers and compromise the integrity of our healthcare programs.”
The settlement resolves the government’s allegations that Nashville Pharmacy Services submitted false claims to TennCare and Medicare primarily during the period from February 2011 through May 2012. The government’s lawsuit alleged that Nashville Pharmacy Services engaged in the following conduct:
- automatically refilled medications without a request from the beneficiary, their physician, or a person acting as the beneficiary’s agent, in violation of TennCare’s contractual requirements;
- routinely and improperly waived TennCare and Medicare co-payments without an individualized assessment of those beneficiaries’ inability to pay;
- improperly used pharmaceutical manufacturers’ co-payment cards to pay the co-payments of certain Medicare recipients for thirteen Medicare beneficiaries;
- billed Medicare and TennCare for certain medications that were dispensed after the dates of death of 15 beneficiaries with either Medicare or TennCare coverage; and
- billed Medicare or TennCare for medications that lacked a valid prescription from a licensed provider for 22 beneficiaries with either Medicare or TennCare coverage.
“This is a great example of the U.S. Attorney’s Office and our office working together to address fraud in our government healthcare programs,” said Tennessee Attorney General Herbert H. Slatery III. “Pursuing those who knowingly take advantage of the system serves as a deterrent and helps protect funding for our most vulnerable citizens.”
Under the settlement agreement, Nashville Pharmacy Services has already paid $500,000 to the government and will make additional contingency payments to the government for the next five years. The total payments will depend on Nashville Pharmacy Services’ revenue for each year during that period and could ultimately amount to $7.8 million. Of that amount, the United States will receive roughly 49 percent of the recovery, and the State of Tennessee will receive roughly 33 percent of the recovery.
The allegations resolved by today’s settlement were originally raised in a lawsuit filed against Nashville Pharmacy Services by Marsha McCullough, a former order entry technician who worked for Nashville Pharmacy Services from May 2011 through July 2012. 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. McCullough could receive up to $1.4 million as her share of the settlement.
The case was handled by the United States’ Attorney’s Office for the Middle District of Tennessee and the Tennessee Attorney General’s Office and investigated by U.S. Department of Health & Human Services Office of Inspector General and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit. Assistant U.S. Attorney Ellen Bowden McIntyre represented the United States. Assistant Attorney General Mary McCullohs represented Tennessee.
The case is docketed as United States ex rel. McCullough v. Nashville Pharmacy Services, LLC, No. 3:12-cv-0823 (M.D. Tenn.). The claims settled by this agreement are allegations only, and there has been no determination of liability.
Former Drug Kingpin Serving Multiple Life Sentences Receives Additional 20-Year Sentence for Conspiring to Conduct A Continuing Criminal Enterprise While IncarceratedRead the Press Release
Jamal Shakir, 42, of Los Angeles, pleaded guilty yesterday in U.S. District Court in Nashville, to conspiracy and attempting to conduct a continuing criminal enterprise and was sentenced to twenty years in prison, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Shakir is already serving multiple, consecutive life sentences which were imposed in 2009.
This sentence stems from an indictment returned in September 2014 alleging that Shakir, while incarcerated at Nashville’s Criminal Justice Center and awaiting sentencing, attempted to engage in another continuing criminal enterprise and solicited further crimes, including planning his escape with the use of a helicopter, the murder of witnesses who testified against him, armed robberies, fire-bombings, and continued drug trafficking.
Shakir was convicted in 2008 after a lengthy jury trial in U.S. District Court in Nashville, Tenn., which involved a long and complex investigation and prosecution. The crimes for which Shakir was convicted date back to 1994 and included several murders; conducting a continuing criminal enterprise; drug trafficking; money laundering; obstruction of justice; and firearms offenses. In 2009 Shakir was sentenced to 16 terms of life in prison.
The Shakir investigation also led to an investigation of the Rollin’ 60s Crips Gang which resulted in convictions of about 30 individuals for various violent crime offenses.
This multi-year investigation was conducted by the Federal Bureau of Investigation. This case is being prosecuted by Assistant United States Attorney Sunny A.M. Koshy.
Texas Couple Convicted of Drug and Money Laundering Conspiracies Sentenced to Twenty Years and Life in PrisonRead the Press Release
Aldo Villarreal, 46, of McAllen, Texas, and his wife, Juana Edith Vela-Salinas, 41, also of McAllen, Texas, were sentenced on December 21, 2105, by Senior U.S. District Judge William J. Haynes, Jr., announced David Rivera, United States Attorney for the Middle District of Tennessee. In a joint federal jury trial in July 2015 the jury found Villarreal guilty of conspiring to possess and distribute cocaine and marijuana, and found both Villarreal and Vela-Salinas guilty of conspiring to commit money laundering.
The evidence at trial showed that, between 2008 and 2011, Villarreal was a manager in an extensive drug operation that distributed large quantities of cocaine in Nashville and Atlanta, and distributed large quantities of marijuana in Nashville. The evidence at trial revealed that the drugs were imported from Mexico into Texas before being transported to Atlanta and Nashville. The evidence also showed that Villarreal and Vela-Salinas conspired to launder the proceeds of that drug operation through a variety of methods, including the purchase of used vehicles in Nashville and the subsequent sale of vehicles at El Shadai, a used car lot the defendants owned and operated in Edinburg, Texas.
Judge Haynes sentenced Villarreal to a term of life in prison on the drug conspiracy conviction, to run concurrently with a twenty-year sentence on the money laundering conspiracy conviction. Judge Haynes sentenced Vela-Salinas to also serve twenty years on her money laundering conspiracy conviction.
In imposing sentence, Judge Haynes stated that this case involved one of the largest drug conspiracies he had seen in terms of the amount and value of the drugs involved and took notice that both defendants had threatened potential witnesses.
Judge Haynes also found that the defendants must forfeit two pieces of property alleged in the indictment and ordered the defendants to be held responsible for a forfeiture money judgment of $6,000,000.
The case was investigated by the Federal Bureau of Investigation; the Drug Enforcement Administration; the Internal Revenue Service, the Department of Homeland Security; the Metropolitan Nashville Police Department; the Wilson County Sheriff’s Office, and the Lebanon Police Department. The case was prosecuted by Assistant U.S. Attorneys Brent A. Hannafan and Ben Schrader.
Nashville Man Convicted on Federal Fraud Charges in Connection with False Accident Claim SchemeRead the Press Release
UPDATE
The defendant in this case was granted a new trial and in August 2018 he was acquitted of the charges described below.
Jason Glynn, 41, of Nashville, was convicted yesterday by a federal jury of bank fraud, announced United States Attorney David Rivera. Glynn previously worked as a claims adjuster at Western Express, a trucking company based in Nashville, and his responsibilities including adjusting and resolving accident claims involving Western Express trucks.
During the five-day trial before U.S. District Court Chief Judge Kevin H. Sharp, the evidence demonstrated that Glynn submitted falsified paperwork to Western Express concerning false accident claims purportedly arising from automobile accidents that either never occurred or that had occurred but did not involve the named claimants. The evidence also showed that Glynn fraudulently endorsed and deposited checks issued by Western Express in connection with these false accident claims.
The jury convicted Glynn on five counts of bank fraud, and also acquitted him on three counts of the indictment, including conspiracy, mail fraud, and identity theft.
Glynn faces up to 30 years in prison for each count of conviction, and will be ordered to pay restitution to Western Express. Glynn also faces forfeiture of the proceeds of his fraud. Glynn will be sentenced by Chief Judge Sharp in 2016. The sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
Previously, two other defendants were convicted of federal felony charges in connection with this same scheme. Jamie Little, 35, of Nashville, was convicted of conspiracy to commit mail fraud earlier this year, and Leo Rice, 39, also of Nashville, was convicted of this same offense in 2013. Both will be sentenced by Chief Judge Sharp.
The case was investigated by the U.S. Postal Inspection Service. The case was prosecuted by Assistant U.S. Attorneys William F. Abely and Cecil W. VanDevender.
Hendersonville Attorney Pleads Guilty in $2.2M Real Estate Closing SchemeRead the Press Release
Garry Christopher Forsythe, 42, of Hendersonville, Tenn., pleaded guilty on December 11th to wire fraud, announced United States Attorney David Rivera. Forsythe, a licensed Tennessee lawyer and former owner of Forsythe Title and Escrow, a real estate closing company with offices in Nashville, Brentwood, Hendersonville, and other locations, admitted to misusing escrow funds provided by real estate buyers and lenders.
During a hearing today before U.S. District Court Judge Aleta A. Trauger, Forsythe acknowledged that he had violated his duty to maintain funds that had been provided by real estate buyers and lenders in escrow, and to use such funds only to pay the expenses of the specific real estate transaction for which they were provided. Forsythe further admitted that, after shortages developed in Forsythe Title escrow accounts, he concealed these shortages from buyers and lenders and used funds that had been provided by buyers or lenders to pay expenses for unrelated real estate closings, and for other purposes. The total amount of escrow shortages was at least $2,249,000.
Forsythe further acknowledged that his title company was able to continue operating despite the shortage of escrow funds while the real estate market remained strong, as Forsythe Title continued to receive funds from buyers and lenders that could be used to cover the shortfall, but that once the real estate market slowed, his company lacked the funds to pay the closing expenses of various buyers and lenders that had already provided funds. As a result, checks written by Forsythe Title to finalize home purchases and to pay other expenses relating to buyers’ real estate transactions bounced due to insufficient funds in the Forsythe Title escrow accounts.
Forsythe faces up to 20 years in prison and a fine of up to $250,000, as well as forfeiture of the proceeds of his crime. Forsythe will be sentenced by Judge Trauger on March 18, 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 Internal Revenue Service-Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorneys William F. Abely and Cecil W. VanDevender.
Atlanta Man Sentenced in Counterfeit Check SchemeRead the Press Release
Edmond Heath, 27, of Atlanta, Georgia, was sentenced today to serve 24 months in prison, followed by 3 years supervised release, on federal fraud charges, announced David Rivera, United States Attorney for the Middle District of Tennessee. Heath was also ordered to pay restitution in the amount of $21,551.85.
Heath pleaded guilty on August 10, 2015, to two counts of bank fraud and one count of conspiring to produce counterfeit checks. During the plea hearing, Heath admitted taking part in a scam in which he and other individuals from Atlanta would travel to Tennessee and other states, in order to steal checks from local businesses, manufacture counterfeit checks using information derived from the stolen checks, and recruit and pay local individuals to cash the counterfeit checks. Heath acknowledged stealing checks from a business located in Murfreesboro, Tennessee, in December 2014 and recruiting an individual to cash counterfeit checks that appeared to be written on the account of the business. Heath also admitted that he instructed the individual on how to cash counterfeited checks at Pinnacle Bank locations in and around Murfreesboro.
Heath was indicted on the present charges on April 15, 2015, along with Horace Freeman, 52, of Decatur, Georgia and Jennifer Kelson, 25, of Atlanta. On November 9, 2015, Kelson pleaded guilty to conspiring to produce counterfeit checks and is awaiting sentencing. Freeman is presumed innocent unless and until proven guilty in a court of law.
The case was investigated by the United States Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Three Indicted in Medical Equipment Kickback SchemeRead the Press Release
Pamela Gardner 53, and Torvis Gardner, 44, both of Springfield, Tennessee, and Dr. Donald Boatright, 70, of Nashville, Tenn., were indicted on November 18, 2015, by a federal grand jury on federal health care fraud charges, announced David Rivera, United States Attorney for the Middle District of Tennessee. The indictment charges the defendants with soliciting and receiving kickbacks, and conspiring to solicit and receive kickbacks, in exchange for making referrals for the purchase of medical equipment.
“Medical professionals and those engaged in the healthcare industries who receive payments from Medicare and TennCare, will continue to be held accountable when they attempt to enrich themselves by committing dishonest and illegal acts which tend to corrupt our healthcare system and place honest providers at a disadvantage,” said U.S. Attorney David Rivera.
According to the indictment, Pamela Gardner was part owner of Medical Necessities, a medical practice located in Springfield, Tennessee. Dr. Donald Boatright was a physician who practiced at Medical Necessities, and Torvis Gardner was an employee of Medical Necessities. The indictment alleges that the three defendants conspired to solicit and accept cash kickbacks in return for referring patients, who were Medicare or TennCare beneficiaries, to a particular medical equipment supplier. The indictment also charged each defendant with multiple counts of receiving cash kickbacks in exchange for medical equipment referrals.
The indictment alleges that the defendants solicited or accepted kickbacks in the following amounts: Pamela Gardner: $17,200; Torvis Gardner: $21,200; and Dr. Donald Boatright: $17,725.
“Health care fraud schemes are complex investigations and require dedicated focus on the details, especially when the facts lead to multiple wrong doers,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “These indictments represent the concentrated efforts of the FBI and our partners in TBI, HHS-OIG and the US Attorney’s Office, to target those who seek to defraud the government and to fight to protect taxpayer dollars designated to go to those truly in need.”
"When medical professionals sell their integrity, their actions demean the health care industry and expose the serious impact kickbacks can have on the Medicare system," said Derrick L. Jackson, Special Agent in Charge with the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta.
“Health care fraud and abuse not only cost consumers and taxpayers, it also impacts the quality of health care,” said TBI Director Mark Gwyn. “We are fortunate to have a strong relationship with our federal law enforcement partners in continuing to this type of crime in Tennessee.”
Each defendant faces up to 5 years in prison on the conspiracy charge and up to 5 years in prison for each count of receiving a kickback.
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.
This case was investigated by the Federal Bureau of Investigation; the Tennessee Bureau of Investigation; and the U.S. Department of Health and Human Services Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys William F. Abely and Thomas J. Jaworski.
Former Mount Juliet Police Sergeant Sentenced for Federal Program Fraud and Wire FraudRead the Press Release
Jason Ezell, 40, of Lebanon, Tenn., was sentenced today by Chief U.S. District Judge Kevin H. Sharp, to serve six months in prison and one year supervised release, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Ezell, a former sergeant with the Mount Juliet Police Department, pleaded guilty on July23, 2015, to federal program fraud and wire fraud. The Court also ordered him to pay more than $13,000 in restitution.
Ezell was charged on July 10, 2015, with fraudulently preparing time cards and submitting fraudulent overtime logs, falsely claiming that he worked more than 500 hours of overtime in support of and assisting in federal Organized Crime Drug Enforcement Task Force (OCDETF) investigations during the period of January 2013 through April 2015. During that time, Ezell was a sergeant with the Mount Juliet Police Department and supervised the Crime Suppression Unit.
In sentencing Ezell, Chief Judge Sharp noted that “there was an abuse of trust of the position the people placed him in to be a good steward of the public’s money.” Judge Sharp also said the sentence “needs to reflect the seriousness of the offense and send a message that you can’t dip into the public till and receive probation if you’re caught.”
This case was investigated by the Tennessee Bureau of Investigation; the FBI; the District Attorney’s Office for the 19th Judicial District; and the DOJ Office of Inspector General. Assistant U.S. Attorney Thomas J. Jaworski is prosecuting the case.
Former Bookkeeper Pleads Guilty to Defrauding Fort Campbell CharityRead the Press Release
Anita Marshall, 43, of Daphne, Alabama and formerly of Fort Campbell, Kentucky, pleaded guilty yesterday to defrauding a Fort Campbell charitable organization, announced David Rivera, United States Attorney for the Middle District of Tennessee.
“While fraud is always wrong, the theft of charitable funds that were to be used to help military members and their families is particularly troubling,” said U.S. Attorney David Rivera. “Defrauding a charity for personal gain simply cannot be tolerated.”
During a hearing before U.S. District Court Judge Aleta A. Trauger, Marshall pleaded guilty to a charge of bank fraud associated with her theft and subsequent use of checks from the Fort Campbell Thrift Shop, where she served as the assistant manager and bookkeeper. Marshall admitted that she stole blank checks from the thrift shop, issued these checks to herself, forged the signature of the thrift shop manager and then deposited these checks into her own accounts. Marshall’s fraudulent activity occurred from August 2009 until November 2010 and involved 91 checks totaling more than $54,000.
The Fort Campbell Thrift Shop is operated by the Fort Campbell Officers’ Spouses’ Club and donates its proceeds to the club’s Welfare Fund, which funds scholarships for family members of military personnel and donates money to charities, including those supporting military personnel and their families.
Marshall faces up to 30 years in prison and a fine of up to $1,000,000, and will also be ordered to pay restitution to the Fort Campbell charity. Marshall will be sentenced by Judge Trauger on February 5, 2016.
The case was investigated by the Federal Bureau of Investigation, with assistance from the U.S. Army Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Second Person Pleads Guilty in Smart Data Solutions, LLC, National Healthcare Benefits SchemeRead the Press Release
William M. Worthy, II, 53, of Isle of Palms, South Carolina, pleaded guilty today to federal charges arising from a national health care benefits scheme that defrauded more than 17,000 victims, announced David Rivera, United States Attorney.
During a hearing before U.S. District Court Judge Aleta A. Trauger, Worthy pleaded guilty to one count of wire fraud and one count of conspiring to commit mail fraud, wire fraud, health plan embezzlement, and money laundering. At the plea hearing Worthy admitted participating in a scheme designed to defraud thousands of individuals who purchased purported health care coverage from Worthy and his co-conspirators. Worthy acknowledged his role in promoting and selling the health care plans not backed by insurance companies, which were marketed by Smart Data Solutions, LLC (ASDS@), a company located in Springfield, Tennessee owned and managed by Bart Sidney Posey, Sr., who is charged as a co-conspirator in this case. Worthy also admitted that he and his co-conspirators embezzled funds from premiums paid by individuals who had signed up for these unauthorized health plans, diverting more than $5.4 million in premiums for their own personal use. He further admitted that the majority of claims submitted in connection with these unauthorized health plans were never paid and accepted responsibility for more than $7.3 million of losses from the fraud.
Worthy is scheduled to be sentenced by Judge Trauger on January 21, 2016. He faces up to 20 years in prison on the wire fraud charge and up to 5 years in prison on the conspiracy charge. Worthy will also be ordered to pay restitution to the victims of the fraud schemes and will face forfeiture of the proceeds of his crimes.
On August 14, 2015, Kathleen Devereaux Cauthen, 45, formerly a licensed attorney in South Carolina, pleaded guilty to misprision of a felony in connection with this same conspiracy and fraud scheme. During a hearing before Judge Trauger, Cauthen admitted she helped to conceal this fraud scheme by handling certain corporate filings, by posing as counsel for a sham insurance company and by operating and managing bank accounts used to receive health plan payments. Cauthen is scheduled to be sentenced on August 29, 2016, by Judge Trauger and faces up to three years in prison and restitution to the victims of her offense.
Worthy was indicted in connection with this scheme in June 2013. Also indicted were Bart Sidney Posey, Sr., 48, and Angela Slavey Posey, 48, both of Springfield, Tennessee and Richard Hall Bachman, 67, of Austin, Texas. Charges against Bart and Angela Posey and Bachman remain pending.
An indictment is merely an allegation and is not evidence of guilt, and these defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the United States Postal Inspection Service, the Federal Bureau of Investigation; the United States Department of Labor - Employee Benefits Security Administration and Office of Inspector General; the United States Secret Service; the Internal Revenue Service - Criminal Investigation; and the Tennessee Office of the Attorney General. The United States is represented by Assistant United States Attorneys Sandra G. Moses and William F. Abely and by Senior Trial Attorney Nicholas S. Acker of the U.S. Department of Justice Fraud Section.
Government Intervenes in Lawsuits Alleging That Skilled Nursing Chain SavaSeniorCare Provided Medically Unnecessary TherapyRead the Press Release
The government has intervened in three False Claims Act lawsuits and filed a consolidated complaint against SavaSeniorCare, LLC and related entities, (Sava) alleging that Sava knowingly and routinely submitted false claims to Medicare for rehabilitation therapy services that were not medically reasonable and necessary, the Department of Justice announced today.
Sava is one of the nation’s largest healthcare providers, operating approximately 200 skilled nursing facilities (SNFs) in 23 states, including four in Tennessee: Greenhills Health and Rehabilitation Center in Nashville; Lebanon Health and Rehabilitation Center in Lebanon; Newport Health and Rehabilitation Center in Newport; and Norris Health and Rehabilitation Center in Andersonville, Tennessee.
“Enforcing the False Claims Act and combating healthcare fraud remains a top priority of the U.S. Attorney’s Office,” said U.S. Attorney David Rivera of the Middle District of Tennessee. “When healthcare providers subject patients to unnecessary treatment, we will intervene and hold them accountable.”
“The provision of Medicare benefits must be dictated by patient need, not by Medicare providers’ efforts to maximize profits by pressuring their employees to provide medically unnecessary services,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Department of Justice will continue to aggressively pursue companies that seek to engage in this kind of fraudulent scheme.”
The government’s complaint alleges that Sava exerted significant pressure on its SNFs to meet unrealistic financial goals that resulted in the provision of medically unreasonable, unnecessary and unskilled services to Medicare patients. Sava allegedly set these aggressive, prospective corporate targets for the highest Medicare reimbursement rates to significantly increase Sava’s revenues without regard for its patients’ actual clinical needs and then pressured its staff to meet those goals. Sava also allegedly delayed discharging patients from its facilities, even though the patients were medically ready to be discharged, in order to increase its Medicare payments.
The three consolidated lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in these cases. Under the Act, a defendant that is found liable is subject to damages equal to three times the government’s loss plus applicable penalties. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, including the conduct described in the United States’ complaint, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The lawsuits are being handled by the Civil Division’s Commercial Litigation Branch and Assistant U.S. Attorney Christopher C. Sabis of the Middle District of Tennessee. Investigative support is being provided by the U.S. Attorneys’ Offices of the Southern District of Texas and the Western District of Texas; the Offices of Inspector General for the Department of Health and Human Services and the Office of Personnel Management and the National Association of Medicaid Fraud Control Units.
The cases are captioned United States ex rel. Hayward v. SavaSeniorCare, LLC, et al., No. 3:11-0821 (M.D. Tenn.); United States ex rel. Scott v. SavaSeniorCare Administrative Services, LLC, 3:15-0404 (M.D. Tenn.); and United States ex rel. Kukoyi v. Sava Senior Care, L.L.C., et al., No. 3:15-1102 (M.D. Tenn.).
The claims asserted in the government’s complaint against Sava are allegations only and there has been no determination of liability.
Former Woodbury Police Chief Sentenced for Theft of Federal Grant FundsRead the Press Release
Kevin Mooneyham, 47, former Chief of Police for the City of Woodbury, Tennessee, was sentenced today by Chief U.S. District Judge Kevin H. Sharp to serve eight months in federal prison for theft of federal program funds, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Mooneyham was also ordered to serve one year of supervised release and to pay restitution in the amount of $42,171.29. Mooneyham was indicted on April 22, 2015, and pleaded guilty on June 29, 2015.
In sentencing Mooneyham, Judge Sharp noted that there was an abuse of the public position that Mooneyham held which could not be ignored and should be reflected in the sentence imposed.
Mooneyham admitted during the plea hearing that from January 2013 through February 2015, while acting in his official capacity as the Woodbury Police Chief, he submitted fraudulent timesheets for more than $28,000 in overtime hours that he had not in fact worked. The funds used to pay the false overtime hours claimed by Mooneyham were derived from federal grants provided by the National Highway Traffic Safety Administration through the Governor’s Highway Safety Office, specifically for the purpose of enhanced DUI enforcement efforts.
Mooneyham also admitted that he misrepresented to other officers of the Woodbury Police Department that federally-funded overtime was not available, despite the fact that he had been submitting and continued to submit timesheets for such overtime on his own behalf. He also disclosed that he had misrepresented to a Town of Woodbury official that he had received a large percentage of federally-funded overtime pay because no other officers of the Woodbury Police Department were willing to perform the overtime patrols. In fact, several Woodbury Police officers had expressed an interest in performing such overtime patrols.
The case was investigated by the Tennessee Bureau of Investigation. Assistant U.S. Attorney Bill Abely prosecuted the case.
Middle Tennessee Podiatrist Charged with Health Care FraudRead the Press Release
Dr. John J. Cauthon, 49, of Murfreesboro, Tenn., was charged Wednesday in a federal indictment with seven counts of health care fraud, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
Cauthon is a Podiatrist in Murfreesboro who contracted to provide podiatric services to residents of nursing homes located throughout Tennessee.
According to the indictment, between May 2015 and August 2015, Cauthon engaged in a scheme to defraud Medicare, TennCare, and BlueCross BlueShield of Tennessee, by submitting approximately $327,280.24 in fraudulent claims for a surgical procedure for nail avulsions, which he did not perform.
If convicted, Cauthon faces up to 10 years in prison and a $250,000 fine for each count of health care fraud.
This case was investigated by the Tennessee Bureau of Investigation; the U.S. Department of Health and Human Services - Office of Inspector General and the United States Attorney’s Office for the Middle District of Tennessee. Special Assistant U.S. Attorney James S. Seaman is prosecuting the case.
An indictment is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
Former Nashville Airport Official Pleads Guilty to $1.1 Million Fraud and Bribery Scheme Involving Airport ContractorsRead the Press Release
John T. Howard, Jr., 45, of Nashville, Tenn., pleaded guilty today to three felony charges resulting from his role in a fraudulent invoice scheme and his solicitation and receipt of a bribe, announced David Rivera, United States Attorney for the Middle District of Tennessee. Howard was formerly an Assistant Vice President of the Metropolitan Nashville Airport Authority (“MNAA”), a public entity responsible for the operation of the Nashville International Airport.
Howard was charged in a criminal information on September 25, 2015, and pleaded guilty today to one count of conspiring to commit wire fraud, one count of soliciting and receiving a bribe, and one count of money laundering.
“Persons who hold a position of public trust and abuse their position to enrich themselves with taxpayer money will be held strictly accountable,” said U.S. Attorney David Rivera. “The United States Attorney’s Office and our law enforcement partners will aggressively pursue public corruption at all levels.”
In a hearing before U.S. District Court Judge Aleta A. Trauger, Howard admitted 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 instructed one contractor to submit fraudulent invoices to MNAA, and also agreed that this contractor would recruit other contractors to submit fraudulent invoices. Howard approved these fraudulent invoices and then accepted cash payments from the contractors. Howard acknowledged that the total amount paid by MNAA in connection with these fraudulent invoices was more than $1.1 million.
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, Howard awarded an MNAA cleaning job to this contractor.
Howard faces up to 20 years in prison on the conspiracy count and up to 10 years in prison on the counts of bribery and money laundering. Howard will also be ordered to pay restitution to MNAA, and will face forfeiture of the proceeds of his offense. Howard will be sentenced by Judge Trauger on January 28, 2016.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service- Criminal Investigation and the Office of the District Attorney General for Davidson County. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Two Tennessee Men Each Sentenced to 28 Years in Prison for Killing During Home Invasion Robbery in ClarksvilleRead the Press Release
Michael Massey, 26, of Lexington, Tennessee, and Demario Winston, 27, of Clarksville, Tennessee, were each sentenced to 28 years in prison for killing during a home invasion robbery, announced David Rivera, U.S. Attorney for the Middle District of Tennessee and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division. Massey was sentenced yesterday and Winston was sentenced on September 2, 2015. Both pleaded guilty on May 29, 2015, before Chief U.S. District Court Judge Kevin H. Sharp, to conspiracy to commit Hobbs Act Robbery and use of a firearm in a crime of violence resulting in death. Massey also pleaded guilty to a separate count of Hobbs Act Robbery, and was ordered to pay $17,000 in restitution.
According to admissions reflected in the plea agreements, on May 7, 2011, Massey, Winston and others attempted to rob a home in Clarksville, and Massey used a sledge hammer to gain entry. The conspirators previously had been advised that a large amount of cocaine and cash was stored inside a safe in the basement of the home.
The defendants further admitted that, while inside the home, Winston, who was armed with a 9mm pistol, engaged in a gun fight with the homeowner on the first floor as other conspirators attempted to force one of the occupants of the home, Raul Triana, to open the safe, and pistol-whipped him in the face in the process. Evidence introduced in the plea hearing indicated that, in response to the shooting on the first floor, some of the conspirators fled the home, and Massey, who was armed with an assault rifle, fled through the basement where he encountered Triana and shot and killed him.
In addition, Massey admitted that, on Oct. 21, 2011, he and a co-defendant planned the robbery of the owner of a Clarksville-based construction company. Massey, together with two others executed the robbery at gunpoint.
This case was investigated by the Clarksville Police Department and the DEA. The case was prosecuted by Assistant U.S. Attorney Lynne T. Ingram of the Middle District of Tennessee and Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section.
Two Tennessee Men Each Sentenced to 28 Years in Prison for Killing During Home Invasion RobberyRead the Press Release
Two Tennessee men were each sentenced to 28 years in prison for killing during a home invasion robbery, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David Rivera of the Middle District of Tennessee.
Michael Massey, 26, of Lexington, Tennessee; and Demario Winston, 27, of Clarksville, Tennessee, pleaded guilty on May 29, 2015, before Chief U.S. District Court Judge Kevin H. Sharp of the Middle District of Tennessee to conspiracy to commit Hobbs Act Robbery and use of a firearm in a crime of violence resulting in death. Massey also pleaded guilty to a separate count of Hobbs Act Robbery, and was ordered to pay $17,000 in restitution.
According to admissions reflected in the plea agreements, on May 7, 2011, Massey, Winston and others attempted to rob a home in Clarksville, and Massey used a sledge hammer to gain entry. The conspirators previously had been advised that a large amount of cocaine and cash was stored inside a safe in the basement of the home.
The defendants further admitted that, while inside the home, Winston, who was armed with a 9mm pistol, engaged in a gun fight with the homeowner on the first floor as other conspirators attempted to force one of the occupants of the home, Raul Triana, to open the safe, and pistol-whipped him in the face in the process. Evidence introduced in the plea hearing indicated that, in response to the shooting on the first floor, some of the conspirators fled the home, and Massey, who was armed with an assault rifle, fled through the basement where he encountered Triana and shot and killed him.
In addition, Massey admitted that, on Oct. 21, 2011, he and a co-defendant planned the robbery of the owner of a Clarksville-based construction company. Massey, together with two others executed the robbery at gunpoint.
This case was investigated by the Clarksville Police Department and the DEA. The case was prosecuted by Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Lynne T. Ingram of the Middle District of Tennessee.
Dickson Resident Found Guilty of Being in the U.S. Illegally Possessing FirearmsRead the Press Release
Hector Palma Zapien, 43, of Dickson, Tennessee, was found guilty today by a federal jury of illegally re-entering the United States after being deported and of being an illegal alien in possession of firearms, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. After a three-day trial, the jury returned guilty verdicts on both counts against Mr. Zapien.
According to the proof at trial, Zapien was removed from the United States in 2001 after being found here illegally. Zapien was again found to be in the U.S. illegally in February 2014. When federal agents searched his home pursuant to a federal search warrant, agents found 6 firearms, including rifles, shotguns and pistols, along with ammunition, and over $180,000 in cash. Proof and at trial also showed that during the past several years, Zapien had made numerous attempts to enter the U.S. with false identification documents.
Zapien faces a maximum penalty of 20 years in prison and a $250,000 fine on the conviction for illegal reentering the United States. He faces a maximum penalty of 10 years in prison and a $250,000 fine on the conviction for being an illegal alien unlawfully possessing firearms. Sentencing will be scheduled at a later date.
A co-defendant charged with unlawfully possessing firearms was acquitted at the trial.
This case was investigated by the Department of Homeland Security, the IRS-Criminal Investigation and the Tennessee Bureau of Investigation. Assistant U.S. Attorneys Thomas J. Jaworski and Sandra G. Moses prosecuted the case.
Former CFO of Vermeer (Tennessee) Sentenced to 44 Months in Prison for Equipment Lease SchemeRead the Press Release
Bart A. Witsman, 40, of Murfreesboro, Tennessee, former Chief Financial Officer of Vermeer (Tennessee), Inc., was sentenced on September 21, 2015, by United States District Court Judge Todd J. Campbell, to 44 months in prison, to be followed by a three year term of supervised release, for operating a fraudulent equipment leasing scheme that defrauded financial lending corporations of more than $1.6 million. Witsman was also ordered to pay restitution of more than $1.6 million.
Witsman pleaded guilty on September 8, 2014, to seven counts of wire fraud and five counts of money laundering.
Vermeer (Tennessee) specialized in the leasing, renting, servicing and selling of heavy construction-type machinery, and operated several stores in Tennessee, with the main store located in Murfreesboro. Between November 2007 and March 31, 2009, Witsman devised a scheme to defraud and to obtain money from Citicapital and Central Leasing by causing Vermeer (Tennessee) to purchase equipment from various manufacturers, and sell the equipment for a profit. Witsman then obtained loans from Citicapital or Central Leasing on behalf of Vermeer (Tennessee) in the amount of the original purchase price of the equipment that had already been sold. Witsman then used the equipment as collateral for the loans and deceived Citicapital and Central Leasing into believing that the equipment was still in the custody and control of Vermeer of Tennessee.
The case was investigated by the Federal Bureau of Investigation and the IRS-Criminal Investigation. The United States was represented by Assistant U.S. Attorney Sandra G. Moses.
Tennessee Air National Guard Member Found Guilty in Military Recruiting Scheme TrialRead the Press Release
Aaron Osborne, 53, of Clarksville, was convicted by a federal jury yesterday, after a seven day trial, of carrying out a scheme to defraud a military recruiting program, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Specifically, Osborne was convicted of aiding and abetting the theft of government funds.
Evidence presented at trial showed that in 2006 the National Guard Bureau implemented a recruiting program called the Guard Recruiter Assistance Program (G-RAP). Under G-RAP, a guard member acting as a Recruiter Assistant (RA) could receive up to $4,000 in incentive payments if the RA’s recruit eventually joined the guard and went to basic training.
During the time the scheme was carried out, Osborne was a full-time recruiter at the 118th Wing and was ineligible to participate in G-RAP. The evidence showed that Osborne routinely referred to RA Max Andolsek, the names of potential recruits who had already contacted the recruiting office where Osborne worked. Rather than process those recruits through the traditional recruiting channel as required, Osborne referred those recruits to Andolsek, in violation of G-RAP policies.
Five of the recruits testified at trial that they had previously met with Osborne and/or contacted his office about joining the Guard, prior to meeting Andolsek. With Osborne’s assistance, Andolsek collected over $9,000 in G-RAP incentive payments as a result of the fraud. The evidence also showed that Osborne received kickbacks from Andolsek totaling approximately $2,100.
Andolsek previously pleaded guilty on March 24, 2014, to conspiracy to commit theft of government property and conspiracy to make false statements. He is scheduled to be sentenced on November 30, 2015.
Osborne will be sentenced by U.S. District Kevin H. Sharp at a later date. He faces a maximum of 10 years in prison. Both Osborne and Andolsek will be required to pay restitution to the Department of Defense.
The case was investigated by the Federal Bureau of Investigation and the Tennessee Bureau of Investigation. It was prosecuted by Assistant U.S. Attorneys Stephanie N. Toussaint and William L. Deneke.
Nashville Woman Pleads Guilty to Filing False Tax ClaimRead the Press Release
Karen Liane Miller, 60, of Nashville, Tennessee, pleaded guilty yesterday to filing a false claim with the U.S. government, announced David Rivera, U.S. Attorney for the Middle District of Tennessee and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to court documents and statements at the plea hearing, Miller admitted that from about August 2008 until about July 2009, she knowingly prepared and submitted multiple false federal income tax returns to the 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.
The sentencing hearing is set for Jan. 8, 2016. Pursuant to the plea agreement, Miller faces a potential statutory maximum sentence of five years in prison, restitution in the amount of $1,003,328 to the IRS and a fine.
This case was investigated by the IRS-Criminal Investigation. Assistant U.S. Attorney Carrie Daughtrey and Trial Attorneys Alexander R. Effendi and Nathan P. Brooks of the Tax Division are prosecuting the case.
Jamestown Woman Sentenced to 15 Months in Prison on Charge of Making False Bank EntriesRead the Press Release
Debora Huff, 55, of Jamestown, Tennessee, was sentenced yesterday by Chief U.S. District Judge Kevin H. Sharp, to serve 15 months in prison, followed by five years of supervised release, for making false entries in a bank record, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Chief Judge Sharp also ordered Huff to pay restitution to First Volunteer Bank in the amount of $578,000.
Huff was initially charged in March 2015 and pleaded guilty to the charge on June 1, 2015.
During the plea hearing, Huff admitted to having embezzled $578,000 from her employer, First Volunteer Bank, beginning in approximately 2000, when Huff was elevated to Head Teller and Vault Teller for the bank. Huff admitted that she embezzled money at least twice each month, beginning in 2000 and continuing until November 20, 2014, when First Volunteer Bank conducted an unannounced cash audit that uncovered her embezzlement. Huff also admitted that during the unannounced audit, she entered into the bank’s computer system and created two cash out tickets in the amount of $289,000 each. After the cash count was over, Huff went back into the system and prepared two cash-in tickets, each in the amount of $289,000, in an effort to conceal the fact that she had been embezzling money from First Volunteer Bank for approximately fourteen years.
The case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Sandra G. Moses represented the government.
Alive Hospice Pays U.S. and Tennessee over $1.5 Million to Resolve False Claims Act LawsuitRead the Press Release
Alive Hospice, Inc. has paid over $1.5 million to reimburse the government for alleged overbilling of Medicare and TennCare for hospice services, announced Jack Smith, First Assistant United States Attorney for the Middle District of Tennessee. Alive is a non-profit hospice care provider that operates in Tennessee and provides various levels of hospice services.
“The Medicare and TennCare hospice benefits are meant to provide comfort and care to persons who are terminally ill,” said Jack Smith, Acting U.S. Attorney for the Middle District of Tennessee for the administration of this settlement. “We will continue to work to ensure that these benefits are used for these purposes.”
The Medicare and TennCare hospice benefits are available for patients who are nearing the end of their life. Medicare and TennCare reimburse for four different levels of hospice care: routine home care, continuous home care, inpatient respite care, and general inpatient care. General inpatient services are for pain control or symptom management that cannot be managed in other settings, such as a patient’s home. Medicare and TennCare reimburse for general inpatient care at a higher rate than that paid for routine home care or inpatient respite care.
The settlement resolves the government’s allegations that Alive submitted claims to Medicare and TennCare for general inpatient hospice care for patients who did not qualify for that care during the period from June 1, 2010 through December 31, 2012 and for seven patients who did not qualify for general inpatient services on specific dates in 2007 and 2008.
“We are seeing a trend of false claims involving hospice providers,” 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. “Providers are overbilling the Medicare program and taking advantage of patients at a particularly vulnerable point in their lives. HHS-OIG will continue to pursue providers who overbill these programs and will seek appropriate remedies through the U.S. Attorney’s Office.”
“For the benefit of patients and taxpayers, it is critical that we protect against fraud and abuse,” said Attorney General Herbert H. Slatery III. “These programs have limited funds, so we must ensure that every dollar is spent on the care of those most in need.”
Under the settlement agreement, Alive paid a total of $1,548,220.Of that amount, $1,446,132 goes to the United States, and $102,088 goes to the State of Tennessee.
The allegations resolved by today’s settlement were originally raised in a lawsuit filed against Alive by Linda Anderson, a triage nurse who previously worked for Alive.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.Anderson will receive $263,197 as her share of the settlement.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by the Attorney General and the Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act. Since January 2009, the Justice Department has recovered more than $22.75 billion through False Claims Act cases, with more than $14.5 billion of that amount recovered in cases involving fraud against federal health care programs.
The case was handled by the United States’ Attorney’s Office for the Middle District of Tennessee and the Tennessee Attorney General’s Office and investigated by HHS-OIG and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit. Assistant U.S. Attorney Ellen Bowden McIntyre represented the United States. Senior Deputy Attorney General Leslie Bridges represented the State of Tennessee.
The case is docketed as United States ex rel. Anderson v. Alive Hospice, Inc., No. 3:12-cv-00597 (M.D. Tenn.). The claims settled by this agreement are allegations only, and there has been no determination of liability.
Nashville Woman Pleads Guilty to Witness Tampering ChargesRead the Press Release
Laquanda Boyce, age 33, of Nashville pleaded guilty on September 4, 2015, to conspiring with Michael Calloway aka Oso, 20, also of Nashville, to tamper with a witness, announced United States Attorney David Rivera. Boyce and Calloway were indicted in May of this year after trying to pay a witness to change his testimony.
“Witness tampering, whether by bribery as in this case, or through violence as in other cases, are very serious offenses,” said U.S. Attorney David Rivera. “These crimes strike at the heart of our criminal justice system, which depends upon truthful testimony of the witnesses.” As shown by this case, anyone who engages in such conduct can be subjected to substantially more prison time than the original offense.”
According to the statement of facts, on the morning of April 12, 2015, Boyce and Calloway were assaulting a woman at the J.C. Napier housing development when another person intervened. The witness tried to protect the woman as Boyce and Calloway continued the assault and cut hair from her head. Later in the afternoon, Boyce and Calloway were walking together through the housing development and Calloway was carrying a gun in his hand. Upon seeing the witness again, Calloway fired eight or nine shots at him, striking him once in the leg. The gunshot victim was treated at Vanderbilt Hospital and subsequently identified Calloway as the shooter.
Calloway was arrested the following day and learned that he would likely face federal firearms charges. He and Boyce then devised a scheme to pay the witness $1200 in exchange for his refusal to testify or for testifying that he had mistakenly identified Calloway as the person who had shot him. As part of the plan, Boyce coordinated with others to arrange the payments- $600 to be paid after providing the false testimony and $600 to be paid upon Calloway’s release from jail.
U.S. District Judge Todd Campbell scheduled Boyce’s sentencing for January 4, 2016.
The original charge against Calloway of being a felon in possession of ammunition carried a maximum penalty of ten years in prison. The additional witness tampering charges carry up to twenty years in prison for each charge. Calloway is set for trial on October 6, 2015, and is presumed innocent unless and until proven guilty in a court of law.
These cases were investigated by the Metropolitan Nashville Police Department Gang Unit and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case is being prosecuted by Assistant United States Attorney Sunny A.M. Koshy.
Local Construction Company Settles Allegations of Fraud Involving A Disadvantaged Business EnterpriseRead the Press Release
Civil Constructors, LLC, has agreed to pay the United States $400,000.00 to settle False Claims Act allegations, announced David Rivera, United States Attorney for the Middle District of Tennessee. The settlement resolves an investigation of the corporation’s predecessor entity, Civil Constructors, Inc. (“CCI”), 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 U.S. Attorney David Rivera. “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 vigorously protect taxpayers’ interests and aggressively pursue fraud, waste, and abuse.”
The United States alleged that CCI, as the prime contractor on a federally-funded construction project on South Water Street in Gallatin, Tenn., agreed that it would use a DBE to perform subcontracted work on the project. That DBE, Columbia Construction, did not possess the necessary resources to perform the actual work. The subcontracted work was, instead, performed by a company that was not qualified as a DBE. CCI used Columbia Construction as a “pass through” entity on the project, a role in which it did not perform a commercially useful function.
“Disadvantaged Business Enterprise fraud like that perpetrated by Civil Constructors harms both the integrity of the DBE program and law-abiding DBE contractors trying to compete on a level playing field for contracts,” 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, our agents will vigorously pursue those who violate the law, and expose and shut down fraud schemes that adversely affect public trust and DOT-assisted programs.”
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.
Rapper Young Buck Pleads Guilty and Sentenced for Violating Terms of Supervised ReleaseRead the Press Release
David Darnell Brown aka “Young Buck,” 34, of Murfreesboro, Tenn., pleaded guilty today to knowingly and 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 lying to a U.S. Probation Officer, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. 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.
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.
Among other conditions of his supervised release, Brown was not to use or possess any controlled substances, including marijuana, and was required to submit to random drug testing during the period of supervised release.
On May 13, 2015, Brown was subjected to a random urinalysis to determine his compliance with the Court’s order against using controlled substances. Before providing a urine sample, Brown was asked by a U.S. Probation Officer if he had used or possessed any controlled substances and he replied that he had not. Brown then proceeded to supply a urine sample, at which time the probation officer noticed that he was providing the sample from a device designed to provide urine from another person, consisting mainly of a plastic bag concealed under his clothing and an attached tube designed to deliver a stream of urine. Brown used this device in an attempt to conceal his illegal use of marijuana.
In sentencing Brown, Judge Campbell commented that the defendant’s conduct “goes to the integrity of the system.”
This case was referred by the U.S. Probation Office and prosecuted by Assistant U.S. Attorney Sunny A.M. Koshy.
Former Deputy Director of Upper Cumberland Development District Pleads Guilty to Bank FraudRead the Press Release
Larry Gene Webb, 65, of Smithville, Tennessee, former Deputy Director of the Upper Cumberland Development District (UCDD), and former Director of the Cumberland Regional Development Corporation (CRDC), pleaded guilty yesterday, before U.S. District Judge Aleta A. Trauger, to one count of bank fraud, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Webb was indicted in September 2013 for his participation in a scheme to commit bank fraud and to steal federal and state funds intended to promote economic and housing development.
UCDD is a quasi-governmental agency that receives federal and state funds and is responsible for promoting economic development throughout the 14 counties located in the Upper Cumberland Region of Tennessee. CRDC operates under the UCDD umbrella and assists in the creation of affordable housing.
During the plea hearing, Webb acknowledged that he, along with co-defendant Wendy Askins, defrauded the Bank of Putnam County when applying for a loan on May 27, 2010. To obtain the loan, Webb told bank officers that the UCDD and CRDC boards of directors had approved the loan request to fund a UCDD program called “Living the Dream.” Webb submitted fake CRDC resolutions with the loan application stating that he and Askins were permitted to obtain a $750,000 loan for the “Living the Dream” project. The Bank of Putnam County relied upon the fraudulent documents and funded $731,000 for the “Living the Dream” project. Webb admitted that neither UCDD nor the CRDC had authorized a loan for “Living the Dream” and further admitted that a portion of the loan proceeds had been used to build a luxury, personal residence for Wendy Askins.
At the time of the fraudulent loan, Askins was the Executive Director of UCDD and Webb was Deputy Executive Director of UCDD and Director of the CRDC. According to facts set forth in the plea agreement, the bank would not have approved the loan had it known the project was not sponsored by the UCDD and CRDC.
Webb is scheduled to be sentenced on November 24, 2015. Bank fraud carries a maximum penalty of 30 years in prison and a $1,000,000 fine.
Wendy Askins, the remaining defendant, is currently scheduled for trial on September 22, 2015, in the U.S. District Court in Nashville. She is presumed innocent unless and until proven guilty.
The case was investigated by the U.S. Department of Commerce-Office of Inspector General; the FBI; the U.S. Health and Human Services- Office of Inspector General; the Internal Revenue Service-Criminal Investigation and the Housing and Urban Development-Office of Inspector General. The United States is represented by Assistant U.S. Attorneys Stephanie N. Toussaint, William L. Deneke, and Byron M. Jones.
Hanover Postal Employee Charged with Embezzlement of Government FundsRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Janell Williams, age 38, Hanover, Pennsylvania, was indicted late yesterday by a federal grand jury in Harrisburg on a charge of misappropriation of postal funds.
According to United States Attorney Peter Smith, Williams, a United States Postal Service employee allegedly took $5,335.46 in government funds between July 2013 and October 2014 for her own use.
This case was investigated by the United States Postal Service, Office of Inspector General and is being prosecuted by Assistant United States Attorney Daryl F. Bloom.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Federal Jury Convicts Texas Couple of Drug and Money Laundering ConspiraciesRead the Press Release
Aldo Villarreal, 46, of McAllen, Texas, was found guilty today by a federal jury of conspiracy to possess and distribute cocaine and marijuana, and conspiracy to commit money laundering, announced David Rivera, United States Attorney for the Middle District of Tennessee. Villarreal’s wife, Juana Edith Vela-Salinas, 41, also of McAllen, Texas was found guilty of conspiracy to commit money laundering,
The jury returned its verdict following a two-week trial before Senior U.S. District Judge William J. Haynes, Jr.
The evidence at trial showed that, between 2008 and 2011, Villarreal was a manager in an extensive drug operation that distributed hundreds of kilograms of cocaine in Nashville and Atlanta, and distributed hundreds of kilograms of marijuana in Nashville. The evidence at trial was that the drugs were imported from Mexico into Texas before being transported to Atlanta and Nashville. The evidence also showed that Villarreal and Vela-Salinas conspired to launder the proceeds of that drug operation through a variety of methods, including the purchase of used vehicles in Nashville and the subsequent sale of vehicles at El Shadai, a used car lot the defendants owned and operated in Edinburg, Texas.
The underlying federal wiretap investigation was the same investigation about which former Wilson County Sheriff’s Office Deputy John Edwards sought to sell information to targets of the investigation in 2011. Edwards was indicted for obstruction of justice on April 20, 2011, and Judge Haynes sentenced Edwards to serve 220 months in prison on May 2, 2012.
Villarreal faces a maximum penalty of life in prison, and a maximum fine of $10,000,000, for his conviction on the drug conspiracy charge. Both defendants face up to 20 years in prison, and a fine of up to the value of the funds they laundered, for their convictions on the money laundering charge. The parties agreed that the two forfeiture counts alleged in the indictment will be resolved at sentencing by Senior Judge Haynes. A sentencing date has not yet been set.
The case was investigated by the FBI; the DEA; the Internal Revenue Service-Criminal Investigation; the Department of Homeland Security; the Metropolitan Nashville Police Department; the Wilson County Sheriff’s Office, and the Lebanon Police Department. The case was prosecuted by Assistant U.S. Attorneys Brent A. Hannafan and Ben Schrader.
Former Mount Juliet Police Sergeant Pleads Guilty to Federal Program Fraud and Wire FraudRead the Press Release
Jason Ezell, 40, of Lebanon, Tenn., pleaded guilty today before Chief U.S. District Judge Kevin H. Sharp, to federal program fraud and wire fraud, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
Ezell was charged on July 10, 2015, with fraudulently preparing time cards and submitting fraudulent overtime logs, falsely claiming that he worked more than 500 hours of overtime in support of and assisting in federal Organized Crime Drug Enforcement Task Force (OCDETF) investigations during the period of January 2013 through April 2015. During that time, Ezell was a sergeant with the Mount Juliet Police Department and supervised the Crime Suppression Unit.
According to the terms of the plea agreement, the Government will seek a prison term of between 8-14 months and restitution in the amount of $13,100 when he returns for sentencing on November 9, 2015.
This case was investigated by the Tennessee Bureau of Investigation; the FBI; the District Attorney’s Office for the 19th Judicial District; and the DOJ-Office of Inspector General. Assistant U.S. Attorney Thomas J. Jaworski is prosecuting the case.
Three Tennessee Men Plead Guilty for Using A Firearm in Crime of Violence Resulting in DeathRead the Press Release
Cornell Oliver, 23, and Blake Wright, 25, both of Clarksville, Tennessee, pleaded guilty today for their role in the murder of Raymond Caston, during a home-invasion robbery on October 27, 2010, announced David Rivera, U.S. Attorney for the Middle District of Tennessee and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division. Jerry Dinkins, 26, also from Clarksville, previously pleaded guilty on June 26, 2015, for his involvement in the crime. All were charged in a second superseding indictment on April 25, 2014.
According to the plea agreements, on October 27, 2010, Oliver, Dinkins and Wright participated in a home-invasion robbery at a crack house on Elder Street in Clarksville. The defendants targeted Raymond Caston, aka Black, because he was known to cook and sell substantial amounts of crack cocaine at the house and to have large amounts of money.
When they arrived at the house, one of the three defendants kicked open the door and all three entered and went directly to Caston and demanded his money and drugs. One of the robbers proceeded to hit Caston with a gun. Caston was then forced outside where the defendants continued to threaten him. People inside the house soon heard multiple gunshots, but were not outside and did not see which of the three robbers actually fired shots. The defendants then fled, and Caston, who had been shot three times, was pronounced dead at the scene.
DNA and other physical and forensic evidence collected at the scene and eyewitness accounts also connected the defendants to the murder of Caston.
Dinkins will be sentenced by Chief U.S. District Judge Kevin Sharp on October 23, 2015 and Wright and Oliver will be sentenced on November 10, 2015.
According to the terms of the plea agreement, Dinkins and Oliver have agreed to a prison term of 25 years and Wright has agreed to be sentenced to between 22 ½ -25 years in prison.
The case was investigated by Clarksville, Tennessee Police Department and the DEA. The case is being prosecuted by Assistant U.S. Attorney Lynne T. Ingram of the Middle District of Tennessee and Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section.
Four Plead Guilty in Million Dollar Tax Refund Fraud SchemeRead the Press Release
Maria J. Rodriguez, 45, of Smyrna, Tenn.; Regulo Aldama-Olivares, 26, and Carlos Sanchez-Aldama, 30, both of Mexico; and Marcelino Lainez-Villalobos, 38, of Honduras; each admitted conspiring with one other, and with other persons between January 2011 and June 2014 to defraud the United States.
“Those who exploit the vulnerabilities in the federal tax system and steal from the taxpayers will continue to be pursued by the U.S. Attorney’s Office and our law enforcement partners,” said U.S. Attorney David Rivera.”
Each defendant admitted their participation in the scheme, including some who travelled to Tennessee to supply documents and identifications and prepare mail and retrieve the fraudulent tax returns. The defendants worked together to steal or help others to steal over $1 million of taxpayer money.
“Investigating refund fraud and identity theft continues to be a priority for IRS Criminal Investigation,” added Christopher A. Henry, IRS Special Agent in Charge. “Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers. Law enforcement is serious about investigating these crimes and holding those who would defraud the government accountable.”
"Identifying financial crimes that threaten the health of our national economy and exposing criminals who attempt to steal from law-abiding taxpayers will continue to be a major investigative priority for HSI," said Cindy M. Johnson, Acting Special Agent in Charge of Homeland Security Investigations in New Orleans.
Each defendant faces 5 or more years in prison and those from Mexico and Honduras also face deportation.
Aldama-Olivares and Lainez-Villalobos are scheduled for sentencing October 30, 2015. Rodriguez and Sanchez-Aldama are scheduled for sentencing November 6, 2015.
This case was investigated by agents of the IRS- Criminal Investigation; Homeland Security Investigations; and the U.S. Postal Inspection Service. The case was prosecuted by Assistant U.S. Attorney Hilliard Hester.
Former Mount Juliet Police Sergeant Charged with Federal Program Fraud and Wire FraudRead the Press Release
Jason Ezell, 40, of Lebanon, Tenn., was charged in a criminal information on July 10, 2015, with federal program fraud and wire fraud, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
Ezell was a sergeant with the Mount Juliet Police Department and supervised the Crime Suppression Unit. In that position, Ezell was responsible for preparing time cards and submitting overtime logs for officers working in support of and assisting in federal Organized Crime Drug Enforcement Task Force (OCDETF) investigations. The OCDETF Program is a federal program within the United States Department of Justice which aims to focus federal resources to combat the flow of illicit drugs and dismantle drug trafficking organizations.
During the period of January 2013 through April 2015, Ezell fraudulently submitted City of Mount Juliet Time Card Reports and OCDETF Authorized Overtime Logs for payment, representing that that he had worked more than 500 hours of overtime that he did not in fact work. Ezell was paid more than $12,000 for the overtime he claimed.
If convicted, Ezell faces up to 10 years in prison for federal program fraud and up to 20 years in prison for wire fraud and a $250,000 fine for each charge.
This case was investigated by the Tennessee Bureau of Investigation; the FBI; the District Attorney’s Office for the 19th Judicial District; and the DOJ-Office of Inspector General. Assistant U.S. Attorney Thomas J. Jaworski is prosecuting the case.
A criminal information is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
CEO of Diplomat Companies Pleads Guilty to Defrauding InvestorRead the Press Release
R.C. Patel aka Rajesh C. Patel, 55, of Duluth, Georgia, pleaded guilty today in U.S. District Court in Nashville, Tenn., to two counts of wire fraud, for defrauding an investor, announced David Rivera, United States Attorney for the Middle District of Tennessee.
During a hearing before U.S. District Court Senior Judge William J. Haynes, Jr., Patel pleaded guilty to two counts of wire fraud arising from an investment deal involving a mortgage on a hotel property in Atlanta, Georgia. Patel was a hotel owner and developer and was also a substantial shareholder in a community bank in Georgia that was involved in bidding on mortgages being auctioned by the FDIC. Patel admitted accepting $500,000 from a Brentwood, Tennessee investor in connection with an anticipated $3.75M bid on a hotel mortgage. The bid submitted by Patel was not the winning bid and Patel instead, used these funds to pay a debt arising from an unrelated transaction. Patel also admitted making misrepresentations to the investor regarding the outcome of the mortgage auction and concealing the fact that he used the investor’s funds for unrelated purposes.
Patel has already made full restitution to the victim of this fraud.
Patel will be sentenced on October 5, 2015. He faces up to twenty years in prison on each count, in addition to potential fines and forfeiture of any money or property derived from the fraud.
The case was investigated by the Federal Bureau of Investigation. The United States is represented by Assistant U.S. Attorney Bill Abely.